Economic feasibility of small-scale mabé pearl production in Tonga using the winged pearl oyster, Pteria penguin

Abstract

Mabé pearl culture is an increasingly important rural livelihood in south Pacific countries as it offers a low-cost, low-tech alternative to round pearl culture. Mabé pearl production can be achieved by local people with appropriate training, and the products offer further livelihood opportunities through value-adding and local production of jewellery and handicraft items. The Kingdom of Tonga is unique among south Pacific pearl producing countries in focusing primarily on mabé pearl, not round pearl, culture using the winged pearl oyster, Pteria penguin. The Tongan mabé pearl sector has developed rapidly over recent years and is sustained by routine hatchery production of spat and recently improved pearl culture methods. This study determined establishment and operational costs of a subsistence-level mabé pearl farm in Tonga and developed an economic model to assess potential profitability of such operations. The representative mabé pearl farm modelled in this study targeted annual mabé pearl production from 100 oysters. Estimated capital cost (US dollars; USD) was USD 2,027 and major production costs were labour (29%), marketing (24%), and capital purchase and replacement (16%). Annual production of 231 saleable mabé pearls generated a net present value (NPV) of USD 107,101. The modified internal rate of return (MIRR) and benefit-cost ratio of the modelled mabé pearl farm were 20.46% and 4.86, respectively, with a payback period of 4 years. Given the average annual income in Tonga is USD 4,020, the modelled mabé pearl farm offers significant economic opportunity (USD 9,338 annual profit after all costs, including owner/operator wages) and supports additional socio-economic benefits for rural communities involved in downstream activities relating to handicraft and jewellery production, and tourism. The findings of this study assist stakeholder understanding of costs, risks and production levels required for profitable mabé pearl production.