The cost of fish production is furnished in Table 1. The variable cost included was fuel cost, cost of human labour and interest on working capital. It could be seen from the Table that the total variable cost was highest for low affected fishermen with Rs. 187250 and it was higher over medium affected fishermen by 102.94 per cent and over serious affected fishermen by 141.13 per cent. The variable cost of fish production was highest for low affected category which was due to the less pollution intensity and the consequent high fish production in that category. Among the components of variable cost, fuel cost accounted for a major proportion and it was 64.02 per cent for low affected fishermen; 64.01 per cent for medium affected fishermen; 57.69 per cent for serious affected fishermen. Cost of human labour formed the next category and interest on working capital formed the last category of variable cost.

Table 1 Cost of fish production

The total fixed cost also was highest for low affected fishermen with Rs. 130239 and it was higher over medium affected fishermen by 137.38 per cent and over serious affected fishermen by 167.52 per cent. The fixed cost included the depreciation and maintenance cost, insurance and interest on fixed capital. The depreciation and maintenance cost was highest for medium and low affected fishermen and it was 60.88 per cent and 59.52 per cent respectively to total of that categories. This cost was highest for these two categories because fish catch was relatively higher in them and consequent usage of boat. Insurance cost was higher in serious affected category with a proportion of 74.40 per cent because of the fear of loss in fish production due to the more presence of negative externalities in that category. Interest on fixed capital was similar in all categories and it was around 11 per cent. The total cost was also higher for low affected category with Rs. 317579 and it was higher over medium affected category by 114.77 per cent and over serious affected category by 150.92 per cent.

2.2 Gross and Net Income

The detail of gross and net income of sample fishermen is presented in Table 2. It could be seen from the Table that the gross income of low affected category was highest with Rs. 468816 and it was higher over medium affected category by 142.30 per cent and over serious affected category by 202.49 per cent. The net income also revealed the same pattern like gross income and it was highest for low affected fishermen with Rs. 151237. It was higher over medium affected fishermen by 286.67 per cent and also higher over serious affected fishermen by 716.80 per cent. Thus the gross and net income was coincided with the pollution intensity.

Table 2 Gross and Net Income of sample fishermen

2.3 Production efficiency of fish production

Cobb-Douglas production function was employed to study the relationship between the fish catch and the inputs used in the fish production for the three categories of serious, medium and low affected fishermen and the results are furnished in Table 3.

Table 3 Production function for total fish production

The ratio between MVP and MIC was also worked out for this category and the results are given in the Table 4. The input is used efficiently if the ratio between MVP and MIC was one. A ratio of more than one and less than one would indicate underutilization and over utilization respectively .It could be seen from the Table that this ratio between MVP and MIC of depreciation cost of boat, fuel cost and human labour was less than one. It indicated that the above resources were over utilized and there exists a possibility for enhancing the fish catch quantity by decreasing the respective inputs from the existing level. The ratio of MVP and MIC of maintenance cost was more than one and it indicates underutilized.

Table 4 Economic efficiency of resource use of serious affected fishermen (MVP/MIC ratio)

Data envelopment analysis was attempted to measure the technical efficiency of serious, medium and low affected fish production. The data envelopment analysis (DEA) is a non - parametric mathematical programming methodology based on the works of Farrell (1957) and Fraser and Cordina (1999). The results of DEA with constant return to scale technical efficiency (CRSTE), variable return to scale technical efficiency (VRTSTE) and scale efficiency (SE) for serious, medium and low affected fish production are given in Table 5. It could be observed from the Table that the level of technical efficiency for serious affected fishermen category was ranged from 94.60 to 100.00 with mean efficiency of 98.00 percent in constant return to scale. The technical efficiency as calculated by using variable return to scale indicated that efficiency was ranged from 95.80 to 100.00 with mean efficiency of 98.00 per cent. Scale efficiency was ranged from 98.10 to 100.00 with mean efficiency of 99.00 percent.

Table 5 Technical Efficiency and Scale Efficiency of total fish production

In the present study, negative externalities and the consequent decline in fish production were analyzed for serious, medium and low affected fishermen. Since the production decline was measurable, the production change technique was employed for the year 2012-2013 and presented in Table 6. It could be seen from the Table that fish production was varied with pollution intensity for both Sardinella longiceps and Rastrelliger kanagurta. In particular, the fish production for Sardinella longiceps was highest for low affected category with the annual fish production of 22593 Kilograms and it was higher over medium affected category by 151.16 per cent and over serious affected category by 210.54 per cent. Likewise, the annual fish production was also highest for low affected category in case of Rastrelliger kanagurta with 22899 Kilograms and it was higher over medium affected category by 159.21 per cent and over serious affected category by 207.87 per cent.

Table 6 Annual Fish Production in the study area

The details of WTP are presented in Table 7. It could be seen from the Table that number of WTP was increased with pollution intensity and it was highest for with serious affected category with 50.00 response followed by medium affected category with 37.50 per cent response and lastly by low affected category with 20.00 per cent response. The WTP amount was also highest for serious affected category with annual amount of Rs. 5850 and it was higher over medium affected category by 163.59 per cent and over low affected category by 491.18 per cent. The preferred mode of payment was monthly payment and was highest among all categories as compared to annual payment. Farmers preferred monthly payment since they felt that fish production was encountered with seasonal fluctuations and also had rest period, it is better to make monthly payment.

Table 7 Willingness to pay of affected fishermen

The case of Willingness To Accept Compensation (WTAC) and no payment is presented in Table 8. The willingness to accept compensation and no payment was lowest for seriously affected fishermen with a proportion of 30.00 per cent and 20.00 per cent respectively. It was highest for low affected fishermen with a proportion of 37.50 per cent and 42.50 per cent respectively. The proportion of compensation was lowest for serious affected fishermen since the fishermen in this category felt that the compensation principle would not be practical and time consuming. They wanted immediate solution since they were affected seriously. On the other hand, for moderately and low affected fishermen due to less pollution intensity, the proportion of compensation and no payment was higher. For all categories of fishermen, there was no limit in accepting compensation.

Table 8 WTAC and No payment of affected fishermen

The Sustainability evaluationwithSustainable Rural Livelihood Framework (SRL) analysis of fisheries production was attempted by assessing the natural capital, financial capital, physical capital, human capital and social capital and the results are furnished in Table 9.

Table 9 Sustainable Rural Livelihood Index for affected Fishermen

The formal credit borrowed by serious affected fishermen was 10.00 per cent with an average amount of  13000 and there was no formal credit borrowing in medium and low affected categories. The informal credit borrowing was ranged with pollution intensity and it was highest for serious affected category with a proportion of 57.50 per cent with an average amount of 161 thousands of rupees.

Venkatesh Salagramma, 2006, Trends in poverty and livelihood in Coastal fishing communities of Orissa State, India, FAO fisheries technical report, Food and Agricultural Organization, Rome