Abstract
The current and anticipated demographic changes worldwide are expected to increase fish and other animal protein consumption. Capture fisheries alone cannot meet these requirements. Aquaculture offers a way out if it can further be developed. However, in most developing countries, aquaculture is still in its infancy and the evidence on the industry is quite thin. We assess the profitability of small-scale aquaculture production in Zambia using primary data collected through a structured questionnaire that was supplemented with focus group discussions with individual fish farmers. The analysis combined descriptive statistics, enterprise budgets, and financial analysis tools. The profitability of the aquaculture venture was determined using the indicators of investment returns including, net present value (NPV), internal rate of return (IRR) and benefit-cost ratio (BCR). The results from the profitability analysis show positive net revenue, NPV and IRR. The Benefit-Cost Ratio is also greater than one, implying that investment in aquaculture production is a profitable and viable business venture for small-scale farmers. The results reveal that over the useful life of the ponds, which is assumed to be 10 years, the estimated NPV is 17,524.13 ZMW and the IRR is 42.38%, measured at the discount rate of 15%. The positive NPV implies that the aquaculture enterprise is feasible and profitable. Key words: Aquaculture, profitability, Zambia
Highlights
Rapid urbanization, a growing population coupled with sustained income growth has led to changes in the consumption patterns in most developing countries (Chisanga and Zulu-Mbata, 2018)
The positive net present value (NPV) implies that the aquaculture enterprise is feasible and profitable
This study has shown that small-scale investment in aquaculture production is a profitable venture and a farmer would require approximately 24,750 ZMW as start-up capital for constructing the pond and other operational costs
Summary
A growing population coupled with sustained income growth has led to changes in the consumption patterns in most developing countries (Chisanga and Zulu-Mbata, 2018). A viable business in the study areas This part of the study presents the estimated gross margins based on the costs and revenue information collected from 100 farmers in the districts surveyed. Studies that have looked at profitability of aquaculture production in Kenya, Nigeria, and Uganda have indicated that the cost of feed and fingerlings are important factors that affect the economic potential of fish farming (Hyuha et al, 2011; Issa et al, 2014; Okechi, 2004; Olaoye et al, 2012; Akegbejo-Samsons and Adeoye, 2012). Investment in aquaculture production is capital intensive especially for the resource-poor farmers and participants from the FGDs indicated that the cost of constructing the ponds and initial operating costs of feed are usually high They indicated that once they started harvesting, they were able to generate enough revenue to cover the cost. As a result, learning from other fish farmers is what most small-scale farmers rely on to gain some knowledge in fish farming
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