Re: How to start fish farming business -- AQUACULTURE DISCUSSION FORUM

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Date Posted: 20:29:39 03/10/07 Sat
Author: lorenzo pacificar (money)
Subject: Re: How to start fish farming business

>>I am interested in starting a business in fish
>>farming. I am a Cameroonian and live in the Southern
>>part of the Country (rain forest). I am interested in
>>tilapia and catfish farming at a small commercial
>>level. What do I have to do first? requirements?
>>How much start up do I need? Open to suggestions.
>
>
>1
>Adoption and Economics of Tilapia Farming Technology
>in the
>Philippines
>Ruben C. Sevilleja
>Freshwater Aquaculture Center, Central Luzon State
>University
>Nueva Ecija PHILIPPINES 3120
>ABSTRACT: This paper examines the circumstances under
>which farmers respond to the introduction of tilapia
>production
>technology, and analyzes the manner in which the
>benefits from such introduction are shared and
>distributed among
>recipients. The hypothesis that the inverse
>relationship between yields and operational land size
>widely observed in
>agriculture is tested whether it also applies in
>aquaculture. The highly differentiated agrarian
>structure of the Philippines
>influences to a high degree the process of freshwater
>aquaculture development. More specifically, farmers
>adopt tilapia
>farming because of financial and economic incentives
>because tilapia production is shown to be profitable.
>The results on the
>differences between farm size in tilapia hatchery
>operation strongly suggest that large farms are not as
>productive as small
>farms. However, the size-productivity relationship
>observed under grow-out operation illustrates a
>situation where the
>productivity of factors is determined by the relations
>of production. Tilapia culture, notably hatchery
>operation, results in
>increasing commoditization and there is growing market
>orientation of aquaculture production. As a
>consequence, the
>benefits from the technology depend upon access to and
>ownership of factors of production resulting in
>variations in the level
>of productivity and an unequal distribution of income.
>Key words: tilapia, aquaculture, technology adoption,
>size-productivity relationship
>1. INTRODUCTION
>The dominant theme in the country�s attempt to attain
>industrialization is the �alleviation of poverty and
>promotion of equity� (NEDA, 1993). To achieve this
>goal, an agro-industrial approach is specified where
>the
>agriculture sector must develop through modernization,
>improvement in productivity and aggressive product
>diversification in order to provide the food
>requirements
>of the population.
>Fisheries, particularly the aquaculture sector, ranks
>high
>in the government�s development priorities (Geron,
>1993). Apart from being an important source of protein,
>aquaculture is recognized as a source of employment and
>an essential component of integrated rural development
>(Roldan, 1983). In the midst of efforts to develop this
>sector is the introduction of tilapia production
>technologies. Tilapia now ranks second to milkfish as
>the
>most important cultured fish in the Philippines
>(Guerrero,
>1994). The popularity of tilapia farming is associated
>not
>only with its potential as a source of food but also
>as an
>attractive investment activity (Bimbao and Smith,
>1988).
>As the industry develops, there are concerns about the
>likely consequences. It is acknowledged that the
>introduction of agricultural and aquacultural
>technologies
>in developing countries leads to significant economic
>and
>social changes, often with detrimental consequences to
>small farmers (Skladamy 1990; Boyce 1993; Naganathan
>et. al. 1995). The focal issue in this development
>process
>deals with the manner in which benefits and welfare are
>produced and distributed.
>In order to have a better insight into the different
>aspects
>of aquaculture development as in the case of tilapia,
>an
>analysis of the farm organization is necessary. It is
>important to have an assessment of the producer as a
>decision-making unit and how decision is influenced by
>socio-economic factors. The analytical procedure
>applied
>in this study only evaluates the static efficiency
>effects of
>aquaculture (tilapia) production. Such analysis
>proceeds
>through comparisons of the relative economic efficiency
>of different components of the agrarian structure
>focusing
>on farm-size and tenancy-output relationship (Boyce,
>1987).
>This paper investigates and analyzes the effects and
>consequences of tilapia technology adoption among
>farmers leading to a better understanding of the
>circumstances and motivations that shape farm
>operators�
>decision making processes. Specifically, the study
>aims to
>identify the factors which influence farmers to adopt
>tilapia farming technology; and to compare the
>productivity and efficiency of tilapia farming
>according to
>size of farm and according to tenurial arrangement.
>2. METHODOLOGY
>The purpose of the investigation was premised on the
>general proposition that the existing agrarian
>structure
>2
>influences the manner in which farmers respond to
>aquaculture technology. In order to address this
>issue, the
>productivity or profitability and efficiency of tilapia
>production per unit area of fishpond was compared
>between case studies including owned and tenanted
>farms; and among case studies including different
>fishpond sizes.
>Evaluation of profitability follows the traditional
>procedure for financial analysis (Gittinger 1972). Two
>measures of net income are calculated: net farm income
>defined as total cash income minus total cash cost;
>and net
>profit which is calculated by subtracting total cost
>from
>total income (Brown, 1979). Indicators of factor
>productivity are measured as output per unit of input
>(Lee,
>1982) but are expressed in monetary values. Rates of
>return as a measure of production efficiency were also
>calculated as outlined by Shang (1991).
>Data for this research were collected in 1995-96 from
>two
>case study sites in Southern Tagalog and Central Luzon
>regions in the island of Luzon identified by purposive
>sampling. In 1994, these two regions accounted for 36.6
>and 40.1%, respectively, of the national tilapia
>production
>of 84,493 metric tons from the freshwater aquaculture
>sector (BFAR, 1995). Two groups of farmers selected
>through stratified sampling: 50 hatchery operators in
>Southern Tagalog; and 37 grow-out operators in Central
>Luzon, comprised the respondents for this study. Data
>and
>information were collected by personal interview and
>through participant-observation technique.
>3. ADOPTION OF TILAPIA FARMING
>TECHNOLOGY
>Studies on factors influencing adoption technology have
>economic and social underpinnings. The central focus is
>on variables that might have influenced farmer
>decisionmaking
>processes which include economic and technical
>factors inherent in alternative technologies, and the
>individual�s sociological characteristics. The rate of
>adoption of an innovation depends to a great deal upon
>its
>characteristics. It can be explained by such economic
>variables such as profitability (relative advantage)
>and
>social variables such as compatibility (Rogers, 1983).
>Feder et. al. (1985) also identified other factors
>such as
>capital and credit availability, experience and
>education;
>risk aversion; farm tenurial arrangement; and supply of
>supplementary inputs. In the Philippines, Chong and
>Lizarmundo (1982) found that education was
>insignificant
>in explaining fertilizer use rate among milkfish
>farmers;
>but Padilla (1985) claimed that mastery of new
>fishfarming practice is a function of experience.
>3.1 Operational Strategies
>The role which aquaculture plays and the contribution
>it
>provides to the livelihood patterns of farmers in the
>case
>study areas lead to an understanding of their
>operational
>strategies. Hatchery operation in Southern Tagalog
>fits a
>�focused operation� as defined by Molnar et. al. (1996)
>whose main features include: (a) high degree of
>dependence by operators on tilapia culture for their
>livelihood, although there is a moderate level of
>investment; (b) optimization of input use and adoption
>of
>technologies with moderate levels of financial risk;
>(c)
>fish farming as the only activity of some farmers; and
>(d)
>implementation of intensive practices due to high
>level of
>technical and managerial expertise of farmers.
>On the other hand, grow-out farming in Central Luzon
>corresponds to �residual operation� designed to capture
>benefits such as wastes and by-products of some primary
>activities like rice and animal production. There is
>moderate investment and low dependence of farmers in
>the operation as reflected by the small contribution to
>income compared to other sources. The operation is also
>�complementary� to other activities because it
>completes
>the cycle of input use and resource availability in the
>farm; carried out for ready cash flow; and for its low
>labor
>requirement.
>In tilapia hatchery operation, the high degree of
>specialization and relative absence of diversification
>implies that the question of access to and control over
>land is crucial in determining the well-being of the
>rural
>population. The limited land resources led farmers to
>adopt an available land-augmenting technology such as
>tilapia fingerling production. On the other hand,
>better
>access of grow-out farmers to land enables them to
>generate income from other sources. As shown by Ahmad
>and Hussain (1991), the guaranteed access to land in
>rural
>areas guaranteed the success of China in substantially
>protecting the population from deprivation.
>3.2 Motivational Factors
>Farmers provided several reasons and motivations
>governing their decisions to shift to or start tilapia
>production. Although the relative importance of reasons
>given by the farmers somewhat varies between hatchery
>operators and grow-out farmers. The over-riding
>motivation is profit and income incentive. These
>results
>are consistent with the findings of Marzan et. al.
>(1995)
>that fish farming provides additional income to
>operators.
>Among hatchery operators, 90% of the farmers are
>engaged in tilapia farming because it is more
>profitable
>(Table 1). It is also interesting to note that 68% of
>the
>farmers prefer tilapia culture because it provides a
>regular
>income. The frequency of income and the regular flow of
>cash to farm household is important to farmers whose
>only source of livelihood is hatchery operation. For
>growout
>operation, the major reasons for adopting tilapia
>farming technology are the need for additional income
>(81%); the use of water for irrigation purposes (78%);
>and
>the desire to produce fish for home consumption (68%).
>3
>Another prominent motivation is the aspect related to
>risk.
>Among hatchery operators, 56% consider tilapia culture
>as less risky compared to rice production; 43% among
>grow-out farmers regard tilapia farming as a means of
>spreading risk. The technology is also easier to manage
>and requires less labor.
>Table 1. Motivations and reasons of hatchery and
>grow-out
>farmers for starting or shifting to tilapia production
>Motivation/Reason Hatchery Grow-out
>No. of farmers 50
>(% of
>37
>farmers)
>More profitable 90 62
>Additional income 10 81
>More regular income 68 -
>Easier to manage 42 38
>Use of water for irrigation - 78
>Food for home
>consumption
>- 68
>Less expenses/less labor 50 41
>Less risk/spread out risk 56 43
>Note: Farmers provided multiple reasons
>3.3 Acquisition of Technical Knowledge
>Most hatchery operators (74%) acquired their farming
>expertise through experience as shown in Table 2.
>Relatives and friends (32%) are also significant
>sources of
>information. On the other hand, seminars and training
>(67%) provided the initial information for grow-out
>farmers. About 51% learned from their own experiences
>while about 46% obtained information from technicians.
>Other knowledge sources were fellow farmers; and radio
>and television programs. Very few reported obtaining
>information from books, brochures and video due to the
>cost and their limited availability.
>3.4 Adoption Patterns
>Studies of the Green Revolution show that bigger farms
>adopt technologies ahead of smaller farms (Farmer,
>1979;
>Griffin, 1979). In this research, the case studies on
>tilapia
>technology adoption indicate a similar pattern.
>To illustrate this, the length of experience is used
>as an
>indication of the time of adoption. As shown in Table
>3,
>farmers with bigger landholding adopted the technology
>ahead of farmers operating smaller land area. Among
>tenure groups, sharecropping hatchery farmers are found
>to have adopted the technology at a later time compared
>to owner-operators who adopted the technology ahead of
>the leaseholders.
>As had been established in studies regarding the
>introduction of new rice technology, access to land
>explains this trend in the pattern of adoption.
>However,
>the observation that early adoption is broadly
>correlated
>with farm size is not in itself an explanation of the
>process
>of innovation (Harriss, 1982). There are other factors
>such
>as structural conditions, including access to water and
>other markets, and the manner of diffusion of
>information
>influenced the total pattern of innovation which are
>evident in this study.
>Table 2. Sources of tilapia farming information
>Sources
>Hatchery
>(% of
>Grow-out
>response)
>Own experience 74.0 51.3
>Relatives/friends 32.0 27.0
>Training/seminars 30.0 67.6
>Other farmers 14.0 8.1
>Technicians 16.0 45.9
>Books/brochures/video 6. 5.4
>Radio/TV 10.0 16.2
>4
>Table 3. Tilapia culture experience of farmers by size
>of
>farm and by tenure
>Size of Farm and
>Tenure Groups
>Hatchery
>(years of
>Grow-out
>Experience)
>Size of farm (ha):
>< 2.5 11.0 1.9
>2.5 to 5.0 - 2.6
>> 5.0 12.5 4.9
>Tenure groups:
>Owner-operators 12.1 2.8
>Leaseholders 12.2 2.6
>Sharecroppers 6.9 -
>3.5 Farmers� Perception of the Technology
>Adoption of innovation or introduced technology can be
>facilitated only if the perspective of the farmers is
>taken
>into account. Grassroots decision making provides
>farmer
>opportunities to have access to and control over
>resources
>according to accepted norms within the community.
>Majority of the farmers irrespective of the nature of
>operation expressed satisfaction with the tilapia
>technology. Most of them intended to continue their
>present scale of operation while an average of 21% of
>the
>farmers plan to expand their operations.
>The foregoing responses were influenced by the degree
>of
>awareness of the operators regarding developments in
>the
>tilapia industry. The high demand for tilapia
>encouraged
>86% and 49% of the hatchery and grow-out operators,
>respectively, to expand and continue producing tilapia
>(Table 4). The availability of improved breeds is
>favorable to 72% of the hatchery operators, although
>this
>is not as important to grow-out farmers. Other factors
>such as availability of technology and the supply of
>commercial feeds are also mentioned favorably by the
>farmers
>Table 4. Encouragement factors for tilapia farming
>Factors Hatchery
>(% of
>Grow-out
>responses)
>Rapid growth of industry 62 38
>Availability of technology 44 41
>Improved breeds 72 22
>High demand of product 86 49
>Availability of commercial
>feed
>58 32
>4. ECONOMICS OF PRODUCTION
>The essence of the problem of aquaculture development
>is
>that of enabling traditional fish farms produce a cash
>surplus. The development of commercial farms which are
>capable of producing a surplus that the farmer can save
>and reinvest, is therefore a key in this process.
>There are many factors which contribute to the
>establishment of viable fish production units. Shang
>(1991) mentioned economic factors which affect
>profitability as the amount and value of output, and
>the
>cost of production. Thus, an increase in income can be
>achieved by higher production; a decrease in the cost
>of
>production; or a combination of both. To achieve this,
>a
>farmer must have sufficient knowledge about the various
>aspects of the production system. As Pillay (1990)
>emphasized, the application of efficient farm
>management
>is a key element to successful aquaculture operation.
>4.1 Factor Productivity and Efficiency
>The comparison on the productivity and efficiency of
>factor use among various categories of farms relate
>only
>to the sample considered in the case studies; thus, the
>results are only suggestive of a wider pattern. The
>productivity of a factor depends not only on the
>quantity
>and cost of a specific factor but also on the
>quantities and
>cost of other resources utilized in the production
>process.
>Table 5 compares the level of input use and factor
>productivity for tilapia hatchery and grow-out systems.
>Data shows that labor and capital are utilized more
>intensively for hatchery farming. The average annual
>labor use of 160 days/ha for fingerling production is
>2.6
>times greater than the 62 days used for grow-out
>operation. Material and investment costs are also
>higher
>for hatchery compared to grow-out.
>Land productivity values or the gross income derived
>from the operation are USD 3,649 and USD 1,574/ha/yr
>for hatchery and grow-out operations, respectively.
>This
>is due to the nature of the operation where there is
>faster
>and more frequent turnover of income in hatchery
>operation. However, labor is utilized more
>productively in
>grow-out operation.
>5
>Table 5. Factor use and productivity in tilapia
>production
>by nature of operation
>Hatchery Grow-out
>Labor input, N 160 62
>Total cash cost, C 1,050 642
>Total cost, TC 1,256 743
>Capital investment, K 2,087 1,278
>Land Productivity, I 3,649 1,574
>Labor productivity, I/N 23 25
>Capital productivity,
>I/K
>3.48 2.45
>N = number of days in man-days (md/ha/yr)
>C = total cash cost (USD/ha/yr)
>TC = total cost (includes imputed cost of owned labor),
>USD/ha/yr)
>K = investment for pond construction, tools and
>equipment,
>from buildings and others (USD/ha)
>I = annual gross income (USD/ha)
>USD = US dollar equivalent to 40 Philippine pesos
>Comparison by tenure is presented in Table 6. For
>hatchery operations, farms operated by leaseholders are
>the most intensive with respect to use of labor,
>material
>inputs and capital per unit area of fishpond.
>Leaseholders
>have the highest and productivity of USD 11,423/ha.
>This could be attributed by the fact that leased farms
>have
>the most intensive level of operation. The slightly
>higher
>land productivity of share cropped farms compared to
>owner-operated farms is due to the higher use of labor
>in
>tenanted farms. For grow-out operation, owner-operated
>farms are more productive compared to leased farms in
>terms of land and labor utilization. These results can
>be
>explained by the higher level of factor use by
>owneroperators.
>The utilization of resources in hatchery operation
>illustrates a negative relationship between size and
>the
>quantity of labor, the amount of cost and level of
>capital
>investment with fishponds within the smallest category
>the highest amount. However, the opposite is observed
>in
>the use of labor as shown in Table 7.
>The productivity of land decreases as the size of a
>hatchery farm increases. The smallest farms have the
>highest productivity of USD 22,233 compared to only
>USD 887 for the biggest farms. However, labor
>productivity is positively related to size. This
>pattern is
>due to the very high level of labor use in smaller
>fishponds.
>For grow-out system, the pattern of input use
>(expressed
>in cash cost) appears to decrease initially then
>increases
>with size. The biggest farms have higher intensity of
>input use compared to all the smaller groups. Access to
>water explains this observation because bigger farms
>have
>access to tube wells and pumps which also resulted to
>higher land and labor productivity.
>Table 6. Factor use and productivity in tilapia
>production
>by tenure
>Item Owner
>operated
>Leasehold
>Sharecropping
>Hatchery:
>Labor input 125 582 195
>Total cash cost 984 2,277 850
>Total cost 1,122 3,058 1,202
>Capital investment 2,335 2,775 1,080
>Land productivity 3,152 11,423 3,660
>Labor productivity 25 20 19
>Capital productivity 3.20 5.02 4.30
>Grow-out:
>Labor input 61 67
>Total cash cost 662 571
>Total cost 699 627
>Capital investment 1,331 1,053
>Land productivity 1,620 1,410
>Labor productivity 26 21
>Capital productivity 2.45 2.47
>Table 7. Factor use and productivity in tilapia
>production
>by size of fishpond
>Size (ha)
>(< 0.10) (>.1 - <.2) (>.2 - <.3) (> 0.30)
>Hatchery:
>Labor input 1,501 642 197 31
>Total cash cost 4,566 2,504 1,729 293
>Total cost 1,730 3,535 1,983 316
>Capital investment 3,131 2,520 2,613 1,823
>Land productivity 22,233 12,282 4,785 887
>Labor productivity 15 19 24 28
>Capital productivity 4.87 4.91 2.77 3.03
>Grow-out:
>Labor input 171 102 64 26
>Total cash cost 505 490 581 885
>Total cost 527 515 605 926
>Capital investment 3,687 2,056 1,539 964
>Land productivity 1,388 1,259 1,254 2,117
>Labor productivity 8 12 20 83
>Capital productivity
>2.75 2.57 2.16 2.39
>6
>4.2 Profitability
>Tilapia production in general is a profitable
>enterprise.
>Higher profit is obtained in hatchery operation
>compared
>to grow-out operation with annual net farm income of
>USD 2,600 and USD 932/ha, respectively (Table 8).
>Among tenure group, hatchery farms operated by
>leaseholders are the most profitable generating an
>annual
>farm income of USD 9,147/ha (Table 9). They are also
>the most efficient having the highest rates of return
>on
>cost and to capital investment. On the other hand,
>owned
>farms have the lowest net income and rates of return.
>These results suggest that in hatchery operation,
>tenancy
>does not have a negative effect on profitability and
>efficiency. What this illustrates is that non-owner
>cultivators of fishponds are driven to maximize the
>benefits from their temporary use of somebody else�s
>land. However, sharecropping farmers, although
>efficient, still have the disadvantage of getting only
>a
>share of the benefits from the operation.
>In grow-out ponds, owned farms are more profitable
>compared to leased farms with annual net farm income of
>USD 958 and USD 839/ha, respectively. However, the
>efficiency of both farms appear to be similar with no
>significant differences.
>Profitability by size is presented in Table 10. The
>data
>show that farm income decreases as the size of hatchery
>ponds decreases. Farms with the smallest size generated
>annual net farm income of USD 17,666/ha compared to
>UD 594 for the biggest farms. These results indicate
>that
>the inverse relationship between productivity and size
>commonly observed in agriculture applies in aquaculture
>as well; that is, as far as tilapia hatchery operation
>is
>concerned.
>In grow-out operation, farms within the biggest size
>group
>earned the highest level of annual net farm income with
>USD 1,282/ha, with varying efficiency rates. The
>nonuniform
>picture regarding the inverse relationship
>between size and productivity illustrates the
>diversity of
>tilapia grow-out operation. As farmers adopt a
>technology, uncertainty of productivity responses
>increases because they are not yet familiar with the
>various aspects of tilapia production. Imperfect
>knowledge about the new technology would make
>achievement of an optimum combination of inputs
>difficult.
>Table 8. Profitability of tilapia production by nature
>of
>operation
>Hatchery Grow-out
>Net farm income, NFI 2,600 932
>Net profit, NP 2,393 832
>Return to cash cost (NFI/C) 2.48 1.45
>Return to total cost (NP/TC) 1.90 1.12
>Return to capital investment
>(NFI/K)
>1.25 0.73
>NFI = annual gross income (I) less total cash cost (C),
>USD/ha/yr
>NP = annual gross income (I) less total cost (TC),
>USD/ha/yr
>Table 9. Profitability of tilapia production by various
>tenure groups
>Item Owner
>operated
>Leasehold
>Sharecropping
>Hatchery:
>Net farm income 2,165 9,147 2,810
>Net profit 2,030 8,365 2,458
>Return to cash cost 2.20 4.02 3.30
>Return to total cost 1.81 2.74 2.06
>Return to capital investment 0.93 3.30 2.60
>Grow-out:
>Net farm income 958 839
>Net profit 922 783
>Return to cash cost 1.45 1.47
>Return to total cost 1.32 1.25
>Return to capital investment 0.72 0.80
>7
>Table 10. Profitability of tilapia production by size
>of
>fishpond
>Size (ha)
>(< 0.10) (>.1 - <.2) (>.2 - <.3) (> 0.30)
>Hatchery:
>Net farm income 17,666 9,779 3,057 594
>Net profit 15,502 8,747 2,802 571
>Return to cash cost 3.87 3.91 1.77 2.03
>Return to total cost 2.30 2.47 1.41 1.81
>Return to capital
>Investment
>5.64
>3.88
>1.17
>0.33
>Grow-out:
>Net farm income 883 769 673 1,282
>Net profit 861 744 649 1,241
>Return to cash cost 1.75 1.57 1.16 1.39
>Return to total cost 1.63 1.45 1.07 1.34
>Return to capital
>Investment
>0.24
>0.37
>0.44
>1.33
>5. CONCLUSION
>The study is premised on the general preposition that
>the
>agrarian structure affects aquaculture development. In
>particular, it is designed to explore answers to the
>question on how the participants of the development
>process relate to changes in production and
>distribution
>of shares from increased income. The study investigated
>the relationship of tenancy and farm size to tilapia
>technology adoption; resource use; and land
>productivity
>and efficiency.
>5.1 Tilapia Farming Technology and the Farms
>The research considered the different motivational
>factors
>which influence farmers to adopt tilapia farming
>technology. In general, the decision to adopt the
>technology is mainly based on the availability of
>resources to the farm household. The overriding
>motivation is to earn more income. This means that
>farmers respond to prices and market forces. In this
>respect, it is argued that farmers who adopt tilapia
>farming are capable of making rational decisions
>disputing claims as to the irrationality of small
>farmers
>(Stevens 1977).
>The study also reveals that tenure does not impede the
>adoption of tilapia farming technology. This finding
>disputes the theory proposed by Marshall (1958) and
>Bhaduri (1973) that tenancy is an obstacle to the
>adoption
>of technological innovation which improve production
>and income.
>The adoption pattern of tilapia farming technology can
>be
>illustrated by differences in size of landholding.
>Large
>farms tend to adopt early, but smaller farms follow
>suit.
>These results are consistent with that of other studies
>which find that farm size is not a serious barrier to
>adoption (Berry and Cline 1979). However, the unequal
>distribution of ownership of land means that the total
>benefits which can be derived from tilapia farming are
>biased in favor of large farms. Herein lies the
>problems
>and dilemma which small farmer-adoptors of tilapia
>culture are confronted with.
>5.2 Adoption Constraint and Problems
>Technology adoption depends upon the cultivators�
>access
>to various factors of production; his knowledge level
>at
>adopting modern or scientific information to existing
>farming practices; and his capacity to integrate with
>the
>market. Results of this study show that the problems
>and
>constraints to the adoption of tilapia farming
>technology
>are mainly economic and technical in nature. With
>tilapia
>farming, producers become increasingly dependent on the
>market for their production inputs. Thus, the ability
>of the
>farm household to purchase the materials required in
>the
>production process depends on their access to cash,
>whether from their own savings or credit. In relation
>to
>this, the foremost constraint of farmers is lack of
>capital
>and the difficulty of getting access to it.
>Analysis of the technical constraints reveals strong
>complementary among the major material inputs (feed,
>fertilizers and fingerlings) and water. Access to and
>management of water, opens up opportunities for farmers
>to culture tilapia. The lack of expertise is also
>identified
>as a constraint towards the application of better
>management techniques.
>5.3 Farm Profitability and Income Differential
>Results of the study show that land productivity for
>hatchery operation in tenanted farms exceeds that of
>owner-operated farms. This contradicts the common
>prediction that tenancy leads to allocation
>inefficiency
>and low productivity (Marshall 1965). In general, the
>higher land productivity and production efficiency
>observed in tenant farms compared to owned farms is in
>accord with the theory of �equal efficiency� (Cheung
>1968). The study further shows that the intensity in
>the
>use of inputs is the major determining variable as far
>as
>farm productivity is concerned. This result
>illustrates a
>situation where tenancy does not limit output, but the
>tenure system pushes the cultivator to produce beyond
>the
>income level which satisfies the consumption needs of
>the
>family.
>The hypothesized inverse relationship between size and
>productivity does not seem implausible in the light of
>the
>case study on hatchery operations. As far as can be
>ascertained, the difference in productivity by size is
>attributed to higher cropping intensity. In the case of
>8
>grow-out operations, the direct relationship between
>size
>and productivity is explained by the more intensive
>use of
>non-labor inputs in large farms. In general, grow-out
>operation results in greater benefits for big farms on
>account of their better access to production resources.
>5.4 Implication of Results
>Tilapia production has provided investment
>opportunities
>to farmers because of the high rates of returns to such
>investments. But while the benefits of increased income
>became possible with the adoption of tilapia
>technology,
>the distribution of such benefits is influenced by the
>agrarian structure and nature of production relations.
>In
>terms of economic feasibility, and relative cost and
>returns to investment, the big farmers are placed in a
>superior position than their smaller counterparts for
>exploiting the benefits of tilapia farming. The big
>farms
>stand to gain more from the introduction of the
>technology. Consequently, the inequality among farm
>facilities in terms of farm income are bound to grow
>under the impact of tilapia technology adoption.
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