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XVIII. Socio-economic aspects of aquaculture

1. Major socio-economic problems of developing countries

Overpopulation; malnutrition; un- and under-employment; migration; marginalization; low level of education; low agricultural productivity; unequal distribution of income; low internal capital accumulation.

2. Possible contribution of aquaculture in solving the problems

Generation of employment in the rural sector; supply of relatively cheap protein food; improvement of living conditions; better distribution of income; diversification of agrarian production; curbs on migration.

3. Socio-cultural constraints in relation to aquaculture

Attitude towards innovations; food habits; taboos; lack of tradition of animal husbandry.

4. Major economic constraints

4.1 Lack of credit

Paucity of credit due to assumed or real high risk; high interest rate; lack of collateral (particularly in respect of farms on leased land or farms operated by landless labourers/tenants); availability only of short-term credit, etc. Possible improvement measures: arranging institutional credit to potential small-scale aquaculturists not served by commercial banks; concessional rate of interest during initial stage; simplified procedure for fast service; tagging of recovery with harvesting; credit supervision by trained staff; financing of support services.

4.2 Marketing problems

Poor returns on account of weak bargaining power of small-scale aquaculturists; monopoly of middlemen in credit supply and marketing; inadequate marketing and service facilities and consequent wastage, unstable price and high cost; low demand for new and less preferred species, etc.

Competition with conventional fishery products; need to schedule marketing during off-season for fishing; consumer preferences in respect of aquaculture products.

Possible improvement measures: establishment of government supported marketing services or fishery cooperatives in strategic areas; advantages and disadvantages of cooperatives; improvement of market-related facilities and services; market development and promotion of less preferred species; development of marketing information on consumer preferences, prices trend, seasonal pattern of demand, demand forecast, etc. in local and/or international markets.

5. Appraisal of feasibility of aquaculture

(a) Resources feasibility;

(b) Environmental and bio-technical feasibility, and

(c) Economic feasibility - price and volume demand, competition with capture fisheries and other regions, profitability of investment, social benefits, cost analysis, etc.

6. Methods of investment evaluation in aquaculture

(a) Pay-back period method;

(b) Simple rate of return method, and

(c) Present value method - net present value, break-even estimates, internal rate of return and benefit-cost ratio.

7. Book-keeping

7.1 Purpose of book-keeping

7.2 Assets and liabilities accounts

(a) Assets:

(i) Fixed assets - properties, tools, equipment, etc.;
(ii) Stocks - fish, feeds and other materials in stock, and
(iii) Current assets - cash in hand, bank deposit, claims on customers, etc.

(b) Liabilities:

(i) Long-term liabilities - loans, mortgages, bonds, etc., and
(ii) Short-term liabilities - debts, salaries, interest, etc.

7.3 Cost-return account (in physical and value terms)

(a) Total revenue: sales in cash and credit; computed value of production consumed on farm and given away; adjustment for inventory change in fish stock; subsidies and governmental support.

(b) Total cost:

(i) Fixed cost - amortization, maintenance, interest, salaries of management personnel, rent, depreciation, etc.

(ii) Variable cost - seed, feed, fertilizer, fuel, electricity, wages of temporary labour (in cash and kind), marketing, etc.

(iii) Administration cost - travelling, telephone, insurance, advertisements, etc.

(c) Profit

(d) Taxes

(e) Net profit

7.4 Analysis of cost-return account

Profit per ha; rate of return on investment; rate of return on operating cost; yield (or value of output) per unit of major input; amount (or cost) of input per unit of output; amount of input per unit of land or water surf ace; amount of input per unit of protein output; comparisons of the above indicators with regard to different sizes of farms and different farming systems.

Practicals

Exercises in investment evaluation methods, book-keeping and cash-return analysis.


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