The economic viability of a given aquacultural practice is dependent upon the many technical, social and economic factors peculiar to a country or region. The blueprint for a profitable operation in one country is no guarantee of its successful application in another socio-economic setting. However, based upon the experience achieved in many countries on various species, it can be summarized in a general way that the profitability (V) of aquaculture production can be improved if: (i) the yield per unit of land (or water surface) (Q) can be increased; (ii) the cost of production (C) can be reduced; and (iii) the price received (P) can be maintained in a high level as shown in the formula: V = QP-C. Many disciplines, including biology, genetics, nutrition, ichthyopathology, engineering and economics contribute to the attainment of this profitability.
The major factors used in estimating productivity per unit of fishponds (Q) are stocking rate (N), survival rate (R), and average weight of the individual fish at the time of harvesting (W).
Q = (N R ) W
Therefore, increase in stocking rate, survival rate and growth rate are the major elements to increase production.
3.1.1 Increase in stocking rate
(a) Fertilization and supplementary feeding
The stocking rates used and growth rate obtained are generally much higher with fertilization and supplementary feeding than without. The total costs of production are also higher with fertilization and feeding than without, but since the level of production is also higher, the cost/ ton of fish production may be lower, thus enabling the operators to benefit. Intensive milkfish farming is a good example in this case.
(b) Polyculture
A significant increase in carp production is often obtained through polyculture in which the rearing of several species together makes more efficient use of the growing space and the total pond environment. Milkfish polyculture in Indonesia and the Philippines increases the profit of operations due to the stocking of high-value species together with milkfish.
(c) Multiple-size stocking
Chinese milkfish culturists have also increased the stocking rate by multiple-size stocking, i.e., stocking the same species but in different size groups to make more efficient use of water space. The carrying capacity of a pond for different size groups is considerably greater than its capacity for any size group alone.
3.1.2 Increase in survival and growth rate
(a) Good pond management
The survival and growth rates are dependent mainly on adequate pond management and the control of parasitism and diseases. Catfish farming in the United States furnishes good examples of the economic benefits of these practices.
(b) Genetic improvement
The survival and growth rate can also be increased by genetic improvements, such as selective breeding and hybridization.
The cost of production data collected in this study indicate that feed and fertilizer, fry, labour, marketing and interest are the major cost items.
3.2.1 Reduction in cost of feed and fertilizer
Fish culture competes with other agricultural activities for feed and fertilizer. The recent rapid increase in the price of feed and fertilizer has imposed a serious problem on the fish farming industry. As mentioned previously, the stocking rate can be increased through supplementary feeding and fertilization. It is also noted that additional fertilization will be profitable as long as the cost per unit of fertilizer does not exceed the value of the product. The high prices of fertilizer and feed may discourage fish operators from adopting these improved farming techniques and a search for suitable feeds and fertilizers at reasonable costs has high priority. Feeds prepared with locally available by-products are sometimes cheap. Philippine milkfish operators have also found the application of small amounts of fertilizer at more frequent intervals increases the efficiency of fertilization and reduces the cost. Sewage recycling for fish culture and the joint culture of ducks, poultry and pigs in combination with fish culture also reduces the cost of feed and fertilizer (Woynarovich, 1976).
3.2.2 Reduction in cost of fry
Milkfish and to some extent catfish culture systems are dependent on the collection of fry from natural sources. The availability of fry fluctuates in time and space. In years of scarcity, the price of fry is high. A high price for fry means a high cost for fish, which either is transferred to consumers by charging a high price for fish, or reduces the producer's profit. The price of fry is expected to increase in the future due to increase in demand. The ultimate solution to the shortage of fry appears to be the breeding of these species in captivity. Meanwhile, short-range efforts should be made to increase the supply of fry by conducting surveys to locate new spawning grounds and improvements in the efficiency of capture, distribution and fry survival.
3.2.3 Reduction in labour and facility cost
Milkfish farming in the Philippines demonstrates the economies of scale for different sizes of culture operations. The larger the farm size, the less the cost of labour and facility cost. Mechanization also reduces labour costs, but it may not be preferable in many developing countries where there is a good supply of available cheap labour and shortage of capital.
3.2.4. Reduction in marketing cost
As in agriculture, there is often a feeling that the producers of raw materials are not adequately rewarded for their labour, while wholesalers and brokers receive more than their share of the profit. For example, milkfish operators in the Philippines pay as much as 11 percent of their gross income for marketing cost (commission, transportation, ice, containers, etc.). Cooperative marketing is likely to reduce the cost and is worth further study.
3.2.5 Reduction in interest cost
Fish culture, like other business, faces some risks. Initial construction costs are high and, in some cases, capital is less available for the production of relatively low-priced fish used for domestic consumption. Interest rate on loans for such purposes range from 12 to 30 percent per annum. Government-sponsored long-term and low-interest loans with simplified borrowing procedures would reduce the cost of production and stimulate expansion of the fish farming industry.
In a competitive market, the price level is mainly determined by supply and demand for fish in a particular market. However, price levels received by fish operators can be increased in the following ways:
3.3.1 Improvement in quality
High-quality fish commands a higher price. Most of the production from fishponds in Asian countries is sold in the fresh form. The quality of such fish can be improved through proper icing during transport and storage.
3.3.2 Seasonality
The price of fish usually fluctuates seasonally. Phased stocking so that harvesting occurs at desirable times with respect to demand and price of fish can increase the average price received.
3.3.3. Cooperative marketing
Individual fish operators are usually in a weak bargaining position and often receive very low prices. This situation may be improved through collective bargaining by fishpond operator's associations or cooperatives.
3.3.4 Sale in different forms and markets
Fish can be marketed fresh, frozen, cured, smoked, salted, canned, etc. The elasticity (price and income) of demand for different forms of fish are different. In addition, there are several types of market for fish: urban, rural, domestic, and foreign. The elasticity of demand for fish in these different types of market is also different. Allocation of fish to different market channels and selling it in different forms according to the elasticity of demand increases the average price and maximizes the revenue. This can also be done through organized cooperative marketing or fishermen's associations.
