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A Financial Analysis of Fish Seed Farms in Some Selected Areas of Bangladesh

M. A. Islam
Scientific Officer, Agricultural Economics Division,BRRI, Gazipur-1701

M. Shahe Alam
Chief Scientific Officer, Agricultural Economics Division,BRRI, Gazipur-1701

R.K. Talukder
Professor, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh.

Abstract/ Executive Summary:

This study has dealt with the profitability of hatchery operations in Bangladesh. Cross section data exclusively generated from fish hatchery farms under four districts namely Jessore, Chandpur, Bogra and Mymensingh were analysed to achieve the objectives of the study. The sample of the study consisted of fifty six fish hatchery farms comprising 15 from Jessore, 10 from Chandpur, 16 from Bogra, and 15 from Mymensingh districts. Three major discounting measures (BCR, NPV and IRR) were employed in analyzing the data. The results indicated that investment in fish seed hatchery farms was highly profitable from the view points of individual producers. The results of sensitivity analysis suggested that a fishery enterprise would also be profitable with 20 percent increase in operation and maintenance costs as well as production costs considering the present condition of farms under ceteris paribus assumption. Lack of quality brood fish, high price of various inputs, infestation of virus, problem of selling spawn/seed and problem of getting pond for culture were identified as the major constraints to conducting fish seed hatchery operation. For overcoming the problem of inbreeding, the hatchery owners could exchange brood fish among their hatcheries. To arrest the problem of inbreeding, it may be advisable to set up Brood Bank for successful hatchery operations. Credit for hatcheries as reported by small holders was not adequately available. For the development of fisheries sector, measures should be taken for provision of adequate credit from institutional sources, particularly for the small producers.

Keywords: Financial analysis,Fish seed farm

Location:

Start Date: 00-11-2005

End Date: 00-12-2005

Program Area: Socio-economic and Policy

Commodity: Fish

Objectives:

1To.examine the discounted measures of costs and benefits associated with running the fish seed hatchery,

2.To identify the major problems and constraints related to fish seed production

3.To suggest some policy guidelines and recommendations based on the findings of the study.

Methodology:

DATA AND ANALYTICAL TECHNIQUE
A reasonable size of sample which could at least satisfy the objectives of the study was taken into consideration. During the research period, a total of 168 private fish seed hatcheries were; found in the study areas. It is to be noted that the scope of this research was confined with the farms keeping hatcheries with brood ponds. A sample of 56 was randomly selected taking 15 from Jessore, 10 from Chandpur, 16 from Bogra, and 15 from Mymensingh district. A systematic sampling technique was followed in which one out of every three hatcheries was selected as sample. For hatchery operation is such an enterprise that the owners have to be involved for a specific period of the year to produce spawn. Production season for fish seed starts from March-April and continues till September-October every year. Data used in the present study covered the period March-April to September-October, 2005. However, the survey for collection of data was conducted during November-December, 2005. Data were collected from primary sources,and it was accomplished by direct interviews with the hatchery owners, managers and technicians.

Analytical Technique
    Three discounted measures were employed in this study. These are:

        a. Benefit-cost ratio (BCR)

        b. Net present value (NPV)

        c. Internal rate of return (IRR)

    The BCR is a relative measure, which is used to compare present worth of gross benefits with   that of gross costs. The rationale used is to accept a project when BCR is greater than 1 when     discounted at the opportunity cost of capital. The NPV, on the other hand is an absolute     measure which is obtained by deducting the present worth of cost from the present worth of     benefit. The principle is to accept a project when NpV is greater than zero (0) if discounted at
    the opportunity cost of capital. The IRR is defined as the average earning power of the money     invested in a project over the project life. The IRR is that discount rate, which just makes the     NPV of project equal to zero, and the BCR equal to l.

Source of Information: Bangladesh J. Agric. Econs. XXXII, 1 & 2 (2009) 75 – 87

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The results indicated that investment in fish seed hatchery farms was highly profitable from the view points of individual producers. The results of sensitivity analysis suggested that a fishery enterprise would also be profitable with 20 percent increase in operation and maintenance costs as well as production costs considering the present condition of farms under ceteris paribus assumption. Lack of quality brood fish, high price of various inputs, infestation of virus, problem of selling spawn/seed and problem of getting pond for culture were identified as the major constraints to conducting fish seed hatchery operation. For overcoming the problem of inbreeding, the hatchery owners could exchange brood fish among their hatcheries. To arrest the problem of inbreeding, it may be advisable to set up Brood Bank for successful hatchery operations. Credit for hatcheries as reported by small holders was not adequately available. For the development of fisheries sector, measures should be taken for provision of adequate credit from institutional sources, particularly for the small producers.

Knowledge Management: Journal