Profitability Analysis of Small-Scale Cage Aquaculture Farms in the Volta Lake of Ghana

Abstract

In Ghana, aquaculture offers acceptable opportunities for generating income. Cage aquaculture has a lot of potential for growth in Lake Volta. In this region, cage aquaculture farmers perform aquaculture in a variety of ways that fall into three major groups: commercial, medium scale, and small scale. In this study, the profitability and production economics of small-scale aquaculture operations in Lake Volta were examined. The average total revenue accrued and the average total costs of production were Gh₵395231.25 and Gh₵267970.15, respectively. The overall gross margin and net return for all the farms were Gh₵130294.02 and Gh₵127,261.10 per cycle, respectively. The overall assessment of the profitability performance indicators such as the benefit-cost ratio (BCR), the return on investment (ROI), the net present value (NPV), the operating expense ratio (OE), the operating profit margin (OPM), and the gross margin ratio (GMR) were 1.47, 47.49%, Gh₵407625.47, 0.77%, 32.20%, and 33.00%, respectively. These indicators showed that small-scale cage fish farming in the study area is profitable. The sensitivity analysis further demonstrated that small-scale cage fish production was robustly profitable. In light of this, the study suggests that stakeholders educate small-scale cage aquaculture farmers on the profitability of the business and make a concerted effort to teach and equip farmers with best management practises (BMPs), water quality management, feeds, and feeding management.