In Hungary three groups of persons decide how inland fish culture is to develop: officials in the Ministry of Agriculture and Food, staff of the Fish Culture Research Institute (FCRI) and fish farm managers. All in their day-to-day activities allocate public resources to development of fish culture activities.
Since the price of fish was set free, the staff in the Fisheries and Wildlife Department in the Ministry of Agriculture and Food have few direct means of control over the fish culture industry. However, they represent the interest of the industry towards other branches of the Government and it is essential that they are up-to-date on the economic situation of the fish farms and have the means to appreciate effects on the fish culture industries of proposed changes in economic policy.
The management of FCRI periodically considers which aspects of present fish farming technology should receive priority in its development work. Thus FCRI managers perform a more or less formal economic appraisal when they determine the optimum allocation of its own resources to research. The more comprehensive, consistant and rigorous the economic appraisal is the higher is the likelihood that research efforts will lead to benefits for the industry as a whole.
Fish farm managers plan production and analyse investment opportunities. Naturally, also for this category of decision makers, consistency and correct methodology are essential.
The consultant investigated the amount of effort being spent by trained economists on the issue of resource allocation in fisheries. It is very small. Few economists are employed by organizations working full-time with Hungarian fisheries. Probably they number less than half a dozen. Most of them have duties which prevent them from consistently dedicating even a small part of their time to solving, in a systematic manner, problems of resource allocation in fisheries and fish culture. It would be unrealistic to expect this number to increase drastically in the near future.
Considering the need for economic analysis and the likelihood that also in the next few years the means to undertake this analysis would be restricted, it was decided not to concentrate the consultancy on the economic evaluation of any particular farm, or appraisal of any particular technology, but to try and develop a system for economic analysis which could be used with minimum input of economist time. In the consultant's view such a system ought to meet the following requirements:
fit the types of culture presently carried out and those envisaged for the future (effectively this means that the system should be capable of handling all types of species and culture systems);
permit economic analysis of a part of a complicated culture activity, as well as an economic analysis of the operations of a whole fish farm during a longer period (thus the system must be flexibile both with regard to the scope and duration of the activity being analysed);
ensure comparability through consistent application of standard definition of economic concepts (that is, for a certain type of decision situation one analyst should not have the possibility to consider as a cost an expenditure which most analysts would not consider as a cost);
reduce the amount of time (often) spent by economists in performing simple arithmetic (that is, the computer should carry out all multiplications of quantities by unit prices, and all additions of individual cost items to arrive at total costs);
provide numerical estimates of the values of the economic criteria, now in use in Hungary, for all analysed culture activities;
permit evaluation of fish culture activities not only from the point of view of the farm manager, but also from the point of the government's economic policy maker (as factor availability [and need] - and therefore factor prices - at any one farm may differ from the national average);
permit a data base (on fish farms) to be built up:
be so designed as to make collection (and input) of physical and economic data as easy as possible (that is, data collection should be organized to fit the individual who possesses the data. This means that he should not be asked for more than he has, and what he reasonably can be expected to have, should be sufficient for operation of the system).
The next chapter describes a standardized system for economic analysis which meets the above requirements.
