AQUACULTURE ECONOMICS. Review and Analysis Method at Farm Level. Pongpat Boonchuwong. Fisheries Economic Division Department of Fisheries. Contents. Introduction Economics of Aquaculture: Classification and Factors Affecting Tools of Research: Record, analysis, and Survey.
Review and Analysis Method at Farm Level
Fisheries Economic Division Department of Fisheries
The producers’ profit or net income per unit (Y) of land or water area is mainly affected by production (Q), the cost of production and marketing (C), and the price received (P), as shown in the basic equation below:
Y = Q.P - C
Y = Q . P - C
(Increase in Production)
(Reduction in Cost)
(Increase in farm Prices)
Fertilization & Feeding
- Multiple size
- Same size in a system
- Double cropping
Good pond Management
Correct stocking rate
Right kind and amount feed/fertilizer
Proper water quality
Prevent diseases & parasites
Elimination of predators
1. Increasing Stocking Rate
S = stocking rate (number)
A = size of fish pond (ha)
Q = expected yield per ha based on experiences of previous
W1= average weight of individual fry or fingerling when
stocking ( kg)
W2= expected average weight of individual fish
when harvesting ( kg)
H = harvesting rate (percent)
Water temperature and dissolved oxygen are two major factors that affect the water quality, and hence the survival and growth rates of fish.
The amount of dissolved oxygen needed by fish usually varies according to the species. The oxygen content of a pond depends on the quantity of organic matter, the submerged aquatic vegetation, and the water temperature.
Diseases, parasites, predators, and competitors are factors that inhibit successful pond production. Certain diseases cause considerable losses of the crop, especially under intensive farming. High-stocking density, water pollution, and inefficient farming conditions promote fish diseases.
1. Cost of Construction
The economic principle of feeding is that the amount of feed should be at a level where the additional cost of feed equals its additional revenue.
Sepat SiamThailand11OAE, 1995
Silver BarbThailand35OAE, 1995
Catfish (Pangasius)Thailand38OAE, 2000
Nile TilapiaThailand39 OAE, 2000
Catfish (Clarias)Thailand73OAE, 2000
Striped Snake-headThailand74 OAE, 2000
assembly market , wholesale market
retail market , export
CHART: MARKETING CHANNEL OF CULTURED FRESHWATER FISH IN THAILAND (From survey, 1999)
Differences b/t prices paid by consumer (retail P.) and prices received by the producers (farm gate P.)
1. Improvement in the Quality of Fish
TOOLS OF RESEARCH Record, Analysis, and Survey
Record Keeping and Analysis for Fish Farms
The Socioeconomic Survey
The collection and analysis of data on costs and earnings based on farm records provide the information necessary
Depreciation = (Initial cost – Salvage)/ economic life
a Each fish pond, or group of ponds in similar condition, should have a record of inputs.
b Item of variable input, such as seed, feed, fertilizer, electricity, water, fuel, and oil, etc.
c Kind of each input item. For instance, kind of send may be tilapia fry, or Chinese carp fingerlings, etc., or a combination of them; kind of feed may be rice cake, or soybean cake, or trash fish, etc., or a combination of them. Each kind of input item should be listed.
d Quantity of each kind of input and its unit used such as kg , ton, etc.
e Such as cost per kg, per ton, per 1000 fry, etc.
f Quantity multiplied by unit cost equals total cost of each input at a time.
a Each fish pond, or group of ponds in a similar condition, should have a record of labor input.
b Economic activities of fish farming can be classified as: pond preparation, fertilization, stocking materials acquistion, stocking, feeding, maintenance, harvesting, and marketing.
c Such as adult, child, male, female, etc.
d Number of man/day or man/hour should be specified.
e Wage rate per man/day or per man/hour. Wages in kind should be imputed into value by using the market price of the product.
a Item of fixed input such as rent, tax, salaries of manager and technicians, insurance premiums, etc.
b Monthly salaries of the manager and technicians should include the cost of fringe benefits and exclude the portion worked on other activities not related to fish farming.
a It is better to keep a separate record of each loan.
b Such as pond construction, purchase of particular equipment,
operating expenses, etc.
a Acquisition cost may be used to calculate depreciation for short-lived assets and for assets constructed or purchased recently.
a Prevailing market value should be used to calculate depreciation for those assets that were constructed or purchased long ago.
c The estimated salvage value of the assets at the end of their economic life.
d The differences between columns (1) and (3) or (2) and (3)
e The number of useful years of the asset.
f The proportion of the asset used for fish farming or for a given pond operation.
g Depreciation is calculated by diving column 4 by column 5 and then multiplying by column 6.
a Such as fry, fingerlings, growers market size, etc.
b Number or kg of each type stock in the pond.
c Difference between the values of beginning and ending inventories.
Based on annual records, several indicators that evaluate the performance of an operation can be calculated.
Profit = TR – TC
TR = Gross revenue
TC = Total cost of production
Average rate of return = Profit/Initial investment
It represents the average earning power for the investment. This measure is useful for those fish farmers who invest a substantial amount in capital items.
Rate of return on operating cost = Profit/Operating cost
This is a useful measure for those fish farmers who farm on rental basis.
Amount of Major Input per Unit of Area
Amount of Major Input Unit of Protein Output
• The basic premise of the survey is that the
data furnished by the respondent represents
an honest effort to answer the questions
that are asked in a personal interview or
a mail questionnaire.
• The survey is an extremely important method
of providing basic information about current
status, problems, and constraints on
aquaculture development and on policymaking.
Procedure of Socioeconomic Survey
• Define the problems and objectives
• Determine the sample plan
•Develop a questionnaire
• Gather the data
• Analyze the data
- To examine the socioeconomic status and practice of the aquaculture industry (by species) from fry gathering (or production) through pond rearing, harvesting, processing, and marketing;
- To analyze the details of production costs (fixed and operating) and the returns from different culture techniques and systems (intensive versus extensive, monoculture versus polyculture, etc.) used on various farm sizes and in different locations;
- To identify the major factors affecting the productivity and profitability;
- To study the market potential and to examine the market structures and channels; and
- To identify the socioeconomic constraints on development.
The method best suited to the survey should be selected.
- Simple words and sentences should be used;
Principles in creating a questionnaire
• It is very important that it be tested in the field before beginning the general survey.
• This initial test will determine the weaknesses in the questionnaire; thereafter, further testing and revising should be continued until test questionnaire is perfected.
The accuracy of the survey will be enhanced if the interviewers are well trained. All interviewers must fully understand the purpose of the survey, the sample plan, and the questionnaire itself. They should be carefully instructed on conducting the interview, the meaning and reasoning behind each question, and the manner of recording specific comments.
(1) Name of respondent
A. General Information
(2) Address of respondent
(3) Location of Pond
(4) Pond areas:
(5) Water Supply
(6) Experience: Years farm in operation
(7) Pond ownership
B. Stocking/Pond No.
(1) Beginning inventory
(2) Cost or fry per crop
(3) Source of stocking materials
(4) How is price of fry/fingerlings determined
(5) Number of stocking per crop
C. Feed/Fertilizer/Pesticides/Pond No
D. Labor/Pond No.
Repair and maintenance
E. Harvesting/Pond No.
(1) Channels and costs
(2) Method of payment: Cash, Credit
(3) Sale to same buyers
(1) Loans borrowed for initial capital
(2) Sources of loans , amount of loans and interest
(3) What factors accounted for the choice of the particular source
(4) What problems do you encounter in borrowing
H. Other farm expenses for entire farm
Fuel and oil
I. Inventory of Assets
Residence (on farm)
J. Problems and Other Information
(1) What problems are encountered in the industry?
Unfavorable price structure
Lack of proper infrastructure
Unavailability of credit
Shortage of fry
High price of inputs such as feed, fertilizer, ice, Fuel.
Lack of extension service
Lack of skilled workers
(2) Can government help to improve the industry?
(3) Percentage of operator’s income from fish culture
(4) Source of other income (specify)
(5) Mortality rate from stocking to harvesting (percent)
(6) Number of harvests per crop
(7) Reason for harvesting schedule:
To optimize production
To get highest price
Availability of fry restocking
Need for money
(8) Method of harvesting