Stochastic bio-economic optimization of pond size for intensive commercial production of whiteleg shrimp Litopenaeus vannamei

Abstract

Abstract We used a stochastic bio-economic model to define the optimum pond size for intensive, commercial production of whiteleg shrimp Litopenaeus vannamei . Optimization is based on economic performance and minimization of risk of farms (approximately 50 ha each) using pond sizes from 2–8 ha. Ponds of 2 ha maximized Net Present Value (NPV), Internal Rate of Return (IRR) and Return per Unit Risk (RUR). Mean NPV varied from US$ − 59,800 (8 ha pond size and 30% interest rate) to US$ 63,300 (2 ha pond size and 10% interest rate). RUR calculated for NPV varied from − 7.96 (8 ha pond size and 30% interest rate) to 1.79 (2 ha pond size and 10% interest rate). Positive values of mean NPV and RUR were projected for pond sizes lower than 4 ha (20% interest rate) and 5.5 ha (10% interest rate). Negative values of mean NPV and RUR were projected for all pond sizes when the interest rate was 30%. The results, when calculating IRR and the corresponding RUR, confirmed that pond size of 2 ha is optimum. Mean IRR varied from − 11.76% (8 ha pond size) to 25.31% (2 ha pond size), and RUR varied from − 2.62 (8 ha pond size) to 2.87 (2 ha pond size). Attractive values of mean IRR were projected for ponds smaller than 4 ha when the Minimum Attractive Rate of Return (MARR) was 20% and 5.5 ha when the MARR was 10%. No attractive values of mean IRR were projected when the MARR was 30%. Mean negative values of IRR and RUR were projected for ponds larger than approximately 6.3 ha. For ponds of 2 ha, we determined that there are 95, 50, and 5% probabilities of obtaining a MARR of at least 11.8, 25.2, and 34.6%, respectively. Alternative sizes of farms composed of 2 ha ponds indicated that economic risk decreased as farm size increased from 4 to 25 ponds. Despite higher construction costs, 2 ha ponds are recommended because of their better economic performance, due to larger shrimp size and greater biomass at harvest.