Milkfish (Chanos chanos) is one of the most important pond-raised finfish in terms of land area used and in quantity of production. Its culture utilizes about 374 000 ha of land, employs about 200 000 people and produced over 160 000 tons of fish in 1973.
The milkfish is an algal feeder and a fast grower, so that it can be produced at relatively low cost to meet the animal protein requirement of people with low purchasing power. In addition, milkfish production can be managed with reliable profit on saline lands unsuitable for agriculture and animal husbandry. It is, therefore, one of the most appropriate measures for animal protein production in those developing countries where such culture is possible.
The major producers of milkfish are Indonesia, the Philippines, and Taiwan, Province of China. Their annual production ranges from 250 to over 3 000 kg/ha due to differences in culture techniques. Reliable cost-return data for commercial-scale milkfish farming under different techniques are difficult to obtain. The results of field surveys in the Philippines and Indonesia are summarized in Tables I–VII. These figures should be considered as indicative of relative trends in costs related to various culture techniques in the areas where surveys were conducted, rather than absolute quantitative figures, because the time spent and localities covered in the surveys were limited. It is evident from the data that costs and returns of milkfish farming vary according to culture techniques and management systems.
2.1.1 The Philippines
2.1.1.1 Intensive versus extensive culture
Two types of techniques are used in the Philippines for milkfish culture; intensive and extensive. Monoculture or polyculture may be practised for each of these techniques.
(a) Monoculture
In the intensive monoculture operation, fertilizer and feed, interest, and marketing are the major cost items, accounting for about 39, 19 and 15 percent, respectively of the total operating cost. In the extensive monoculture operation, interest and land lease are the major cost items, accounting for about 47 and 24 percent, respectively, of the total operating cost.
The annual stocking rate of intensive operation averages about 6 500 fry and fingerlings/ha compared with about 1 500/ha for extensive operations. The stocking rate varies mainly with the fertility of the ponds which can be improved by fertilization and supplementary feeding. The annual cost of fertilizer and feed of intensive operation averages about P.Ps. 4 0001 ha, compared with about P.Ps. 300 for the extensive one. This is one of the major factors allowing the high stocking rate and hence high yield in the intensive operation. The annual yield averages about 3 000 kg/ha in the intensive operation, compared with about 500 kg/ha in the extensive operation. The total cost of production is higher with more fertilizer than with less, but since the level of production is also higher, the cost of production per unit of milkfish is relatively low. The cost of production per kg of milkfish is estimated as about P.Ps. 3.11 in the intensive operation, compared with about P.Ps. 8.17 in the extensive operation. It is profitable to use more fertilizer as long as the cost per unit of fertilizer does not exceed the value of the milkfish product.
1 U.S.$ 1.00 = Philippine pesos (P.Ps.) 7.50
The rate of return on investment in the intensive operation is about 24 percent per annum; it takes about five years to pay off the original investment. In the case of an extensive operation, there is a loss. However, most of the operators interviewed own their land and pay no interest on the initial investment. They are, therefore, on the break-even level after the costs of lease and interest are excluded.
Intensive operation requires more labour than extensive operation due to fertilization and more frequent stocking and harvesting. It is estimated that intensive operation requires about 0.23 full-time man years of labour/ha, compared with about 0.08 in an extensive culture operation. The relative efficiency of labour in the two types of operation can be evaluated by comparing their annual production. A full-time farmer using intensive operation produces about 14 000 kg of milkfish, compared with about 6 300 kg derived by the extensive operator.
(b) Polyculture
In the Philippines, the giant tiger shrimp (Penaeus monodon) has been a popular species to stock with milkfish in a polyculture operation. Fertilizer, marketing and interest, the major cost items in the intensive polyculture operation, account for about 28, 20 and 21 percent respectively of the total operating cost. In extensive polyculture operation, interest and land lease are the most important cost items, accounting for about 40 and 21 percent respectively of the total operating cost. The total stocking rate of intensive operation averages about 6 500 fry and fingerlings/ha compared with about 1 630/ha for extensive operation. The first type of operation uses about 12 times more fertilizer and about 3.3 times more of labour than that of the second. Intensive operation produces about 2 750 kg/ha of milkfish and shrimps compared with about 1 000 kg/ha in the extensive operation. Again, the cost of production/kg of milkfish is lower in the intensive than in the extensive operation, which is about P.Ps. 3.64 and P.Ps. 5.28/kg respectively.
The rate of returns on investment in the intensive operation is about 48 percent: it takes about two years to pay off the initial investment. In the extensive operation, the rate of return on investment is about 20 percent: it takes about six years to pay off the initial investment.
2.1.1.1 Monoculture versus polyculture
(a) Intensive monoculture versus intensive polyculture
Fertilizer and feed, interest, and marketing are the major cost items with respect to both intensive monoculture and intensive polyculture. However, the first type uses more fertilizer and feed than the second. Fertilizer and feed costs about P.Ps 4 000/ha, accounting for about 39 of the total operating cost in intensive monoculture, compared with about P.Ps. 2 535/ha, accounting for about 28 percent of the total operating cost in intensive polyculture. The stocking rates are about the same in both cases. The total costs of production as well as the costs of production/kg of milkfish are also very close. However, the profit is much higher in the case of intensive polyculture (P. Ps. 7 725/ha) compared to that of intensive monoculture (P. Ps. 3 886/ha), mainly because of the high price of shrimp.
(b) Extensive monoculture versus extensive polyculture
Interest, marketing, and land lease are the major cost items in both cases. The stocking rate is higher in extensive polyculture than that in extensive monoculture. The total cost of production in the former is about 29 percent higher, but since the annual production is about 100 percent higher, the cost of production/kg of milkfish is much lower than that of extensive monoculture.
2.1.2 Indonesia
The results of the field survey summarized in Tables V-VII indicate that:
the stocking rate is on the order of 4 000/ha, 6 000/ha, 16 000/ha for extensive monoculture, intensive, and polyculture respectively1. The annual production per ha is on the order of 300, 1 000, and 960 kg respectively. The high yield from intensive monoculture and intensive polyculture is mainly due to the application of fertilizer, feed, and pesticides;
although the total cost of production is relatively higher for intensive monoculture and polyculture than that of an extensive operation, the cost of production per kg of fish is lower. The cost of production per kg of fish is estimated at about Rp. 650 for extensive monoculture, Rp. 260 for intensive monoculture, and Rp. 369 for polyculture;2
the rates of return on investment and on operating capital for polyculture (42 and 70 percent, respectively) are higher than those of intensive monoculture (15 and 34 percent respectively) and extensive monoculture (negative);3
labour, interest, land lease, and fry are the major cost items of milkfish production; and
polyculture requires more labour than monoculture, and intensive monoculture more labour than extensive monoculture.
1 The stocking rate for polyculture consists of 6 000 milkfish and 10 000 shrimp
The above analysis indicates that the application of improved or intensive techniques in Indonesia and the Philippines provides better results than traditional techniques alone, and polyculture is better than monoculture in terms of per unit cost of production and profit rate.
2.1.3 Economies of scale of operations
The size of a farm is another factor affecting the cost of production. A recent study in the Philippines (Carandang and Darrah, 1973) shows that the cost of production of milkfish is about P.Ps. 3.89, P.Ps. 2.31 and P.Ps. 2.09/kg for small, medium and large size farms, respectively.1 The larger the size of a fishpond, the smaller the amount of labour required per ha of pond. However, the optimal farm size to minimize cost cannot be determined without more detailed study.
2.1.4 Inter-country comparison
The annual yield per ha in Taiwan, Province of China averages about 2 000 kg, compared with about 600 kg in the Philippines and about 350 kg in Indonesia. The high yield in Taiwan is mainly due to the relatively high stocking rate which averages about 10 000 fry and fingerlings per ha, compared with about 6 000 in the Philippines and about 2 000 in Indonesia. Fertilization, supplementary feeding, stock manipulation, and control of predators are the major factors which permit the high stocking rate and hence high yield in Taiwan Province (Shang, 1975).
It is estimated that about two thirds of the milkfish farms in the Philippines and the majority of those in Indonesia are extensive operations. Their productivity could be increased many times through adaptive modernization and intensification utilizing the Taiwan Province experience. Since the construction costs of fishponds are very high and since there are shortages of capital in these two countries, the first priority for milkfish pond development would, in the short-term programme, appear to be an increase in productivity of existing fishponds. This would serve to increase the farm operator's income as well as the supply of protein for the expanding population.
The milkfish industry in Indonesia, the Philippines, and Taiwan Province faces two major problems: high cost of fertilizer, and shortage of fish fry. Fish compete with other agricultural crops for fertilizer. The price of fertilizer in the Philippines has increased about 400 percent since 1970 and many fishpond operators continue using traditional techniques because of the high cost of fertilizer.
All milkfish fry are collected from coastal waters and their availability fluctuates widely in time and space. Shortage of fry in some years limits full-scale intensive operation and expansion of the industry. The ultimate solution to this problem appears to be the breeding of milkfish in captivity.
The total world production of carps is estimated at over two million tons. Several species of carps are cultured intensively. The common carp and Chinese carps have a long history of cultivation and their use is widespread, but the Indian major carps have not yet become as popular for culture outside their native habitat.
2.2.1 Intensive versus extensive culture
The merits of feeding as against not feeding in carp culture are related primarily to the economics of the culture operations. Table VIII gives a sample comparison of costs and production of fed and unfed common carps in Israel. The total operating cost with feeding is about 57 percent higher than without, but since the yield is over 100 percent higher, the cost of production per ton of carp is about 40 percent lower.
Table IX shows the yield of common carp in various countries under different culture methods. Intensive culture with feeding or fertilization increases the production many times over that of extensive culture. Additional fertilization and supplementary feeding should be undertaken, however, only if the resulting increase will more than offset their costs.
2.2.2 Polyculture
The practice of polyculture with carps results in a significantly higher yield than that of monoculture.
In Chinese fishponds, a significant increase in production has long been obtained through polyculture. In Israel, polyculture using common carp and tilapia has increased total yields by 13–35 percent over that of monoculture. Polyculture without feeding of grass carp, silver carps, bighead and common carp in ponds formerly used for the monoculture of common carp, has resulted in production increases of 400–600 kg/ha in central U.S.S.R. and 600–1 000 kg/ha in the south. With feeding and intensive pond fertilization, increases of 3 000–4 000 kg/ha have been achieved.
The cost-return data in Tables X-XIV show that profit rates of carp culture in Poland, India, Hong Kong, Malaysia and Japan are favourable under proper management. Feed and/or fertilizer, fry, and labour constitute the major cost items. The cost of feed and fertilizer can be reduced through the following measures: (i) use of sewage-enriched water; (ii) use of feed formulae made with local materials (e.g., in China, use is made of grain bran, duckweed, fly pupa powder, silkworm pupa powder, and snail shell powder); and (iii) fish-cum-animal farming.
2.2.3 Fish-cum-animal farming
Joint culture of ducks, poultry and pigs in combination with aquaculture on a commercial scale reduces the cost of fertilizer and feed and increases the production of animal protein per unit area. In addition, the environmental pollution after resulting from warm-blooded animal husbandry can be avoided and the wastage utilized with high effect for an increase in the fish crop. It has been calculated that one duck produces about 6 kg of droppings during 30–40 days on a pond (Woynarovich, 1976). One ha cna maintain at least 500 ducks/year, which produce about 3 tons of duck manure, and may increase the fish meat production by 120–180 kg.
Experiments in the German Democratic Republic have shown that an average of 100 kg of extra carp meat was obtained by keeping 300 ducks on a 1-ha fishpond. The average annual production of carps in a fish-cum-duck farm in Taiwan Province is about 3 500 kg/ha. The daily supply of duck droppings is sufficient to fertilize the pond to promote and maintain a rich growth of natural fish food organisms. At the same time, part of the dropping is eaten by fish directly. Therefore, application of fertilizer and/or supplemented fish feed is not necessary, thus greatly reducing the cost of production.
Thailand, the United States, and a number of Latin American countries are the major catfish-producing countries. Cost-return on catfish farming is only available from the first two countries.
2.3.1 Thailand
Clariid catfish are a popular and highly desirable freshwater fish in Thailand. The demand for catfish is expected to expand as the urban population is growing rapidly and as per caput income is also increasing. However, the number of catfish ponds has increased so rapidly since 1967 that by 1969 the supply of catfish exceeded the demand. The price fell dramatically and many pond operators were forced out of business. From 1970–73, however, the price of catfish recovered and increased at an average of about 22 percent per year. A detailed market potential study seems necessary to guide future production.
Feed, the most important cost item, accounts for about 75 percent of the total annual operating cost (Table XV). Trash fish, which has been the most important feed used, accounts for about 57 percent of the total operating cost. The price of trash fish has almost doubled from 1970 to 1975. There is some evidence that the supply of trash fish may decline in the future due to increasing exploitation as well as man-made habitat modification. In addition, the main competing use for trash fish, making fish meal, is causing an upward trend in trash fish prices since world prices for fish meal have been rising dramatically. If the price of trash fish rises faster than the price of catfish, and if there is no further improvement in culture technique to offset the increased cost of production from this source, the profit will be reduced. This could be a limiting factor to the expansion of the industry.
2.3.2 U.S.A.
Channel catfish farming is a growing industry in the United States. The major incentive for this growth has been the excellent return on investment achieved by some producers - sometimes as high as 55 percent.
The cost-return data in Table XVI shows that managerial skill is the major factor affecting the cost and profit. The cost of production is U.S.$0.73/kg with average management, compared with only U.S.$ 0.53/kg with superior management. With expansion of the industry and improvements in culture techniques, the American catfish could become a food staple.
The U.S. catfish industry is, however, facing strong competition from lower-priced imported catfish, especially from Brazil, the major exporting country to the United States.
Tilapia (there are many species) is a widely cultured pond fish both along and in combination with other fishes. Inclusion of a predator is one form of polyculture, a practice which is becoming more popular in raising tilapia. In many cases, when tilapia is added to the existing pond culture community total production rises without reducing production of the other fish species cultured. Tilapia is also often stocked in ponds to help control growth of weeds, which may interfere with fish culture.
Evaluation of tilapia culture in experimental farms in northeast Brazil indicated that the annual net profit/ha can reach B.Cr. 4 6681 with an annual rate of return of 33 percent to the total cost of production (before tax) (Greenfield, Lira and Jensen, 1974). Feed and fertilizer, the most important cost items, account for about 46 and 17 percent respectively of the total operating cost (Table XVII). The annual production reaches 4 870 kg/ha. Experiments with tilapia culture in Alabama, Central Africa, and Israel have also resulted in a production of 4 000–6 000 kg/ha.
Research into tilapia nutrition is greatly needed to determine which feeds are the best, cheap, and easily available and what feeding rates are most effective especially in countries where little money is available to purchase feeds.
The grey mullet (Mugil cephalus) is predominantly a plant feeder and, therefore, a desirable species for pond culture. It is found in tropical and sub-tropical waters around the world. The biggest problem for the expansion of the industry is the uncertainty of the supply of naturally produced fry. As practised today, commercial mullet culture, is a low-intensity operation dependent on an unpredictable natural supply of fry. Mullet are often reared in polyculture with milkfish.
Experiments to breed this species under controlled conditions have been conducted in many areas. Artificial spawning has been successful in Taiwan Province, Israel and Hawaii and there are indications that commercial production of fry may be possible shortly.
Cost-return data of mullet culture in Hong Kong shows that labour and feed are the major cost items accounting for 25 and 22 percent respectively of the total operating cost (Table XVIII). Since the fixed cost is very high, the rate of return on fixed capital is only 4.5 percent.
Eels have been cultured commercially in Japan, Taiwan Province, and Korea, and attempts to initiate eel culture are underway in many other countries. Japan appears to be the most important eel-producing and consuming country in the world. However, the production of eel from both inland waters and culture ponds has declined because of water pollution, poor catches of eel seed (elvers), and diseases. The growing demand for eel in Japan has increased the acreage of eel farming in Taiwan Province from 148 ha in 1969 to about 1 200 ha in 1973. Many paddyfields have been converted into eel ponds. Over 90 percent of the eel production in Taiwan Province has been exported to Japan. At present, the eel industry in Taiwan Province earns about U.S.$ 30 million and has a significant impact on the local economy. This is one of the good examples of how a cultured luxury fish can earn foreign exchange.
The cost of production of eel is available only from Taiwan Province (Table XIX). Here, eel ponds are constructed with bricks or concrete; therefore, the initial construction cost is as high as U.S.$24 000/ha of pond. Seed eel and feed, the most important operating cost items, account for about 53 and 27 percent respectively of the total operating cost. The rate of returns on initial investment is as high as 100 percent if the survival rate is over 70 percent and if the price of elvers does not exceed U.S.$ 0.25 each. The supply and the price of elvers fluctuate annually and, in years of scarcity, the price can increase from U.S.$0.03 to U.S.$0.55 each. The shortage of elvers has been a limiting factor to the expansion of the eel industry not only in Taiwan Province but also in Japan.
Eel farming is a very profitable business, but it is also a risky venture. The mortality can be as high as 100 percent if ponds are not properly managed.
Trout culture has a long history in the United States and some European countries due largely to the popularity of trout as a sport fish. The rainbow trout is among the major species used for commercial culture. Less difficult to feed and less demanding with regard to temperature and water quality than most other salmonids, they are to be found in coldwater fish farms throughout the world.
Cost-return data on rainbow trout culture is available to the authors at this time only from Ireland. Feed and labour are the major cost items; they account for about 52 and 17 percent respectively of the total operating cost (Table XX). The rate of return on investment is about 36 percent.
Increased economic yield in the trout farming industry can be obtained through better application of existing feed manufacturing techniques and closer control on feeding.
