InternationalJournalofAgricultural

Transcription

1 IJASVM InternationalJournalofAgricultural SciencesandVeterinaryMedicine ISSN: Vol.5,No.1,February2017

2 Int. J. Agric.Sc & Vet.Med Ochiaka C D and Obasi C E, 2016 Research Paper ISSN Vol. 5, No. 1, February All Rights Reserved COMPARATIVE ANALYSIS OF THE PROFITABILITY OF CATFISH, TILAPIA AND CARP PRODUCTION IN SOUTH-EAST NIGERIA Ochiaka C D 1* and Obasi C E 1 *Corresponding Author: Ochiaka C D, cdochiaka@yahoo.com The study compared the profitability of catfish, tilapia and carp production in South-East Nigeria. Three states, Anambra, Enugu and Ebonyi were randomly selected from the five states that make up the south-east geo-political zone. All the registered fish farmers in three states were selected for the study. This gave a sample size of 192 respondents. Data for the study were collected from both primary and secondary sources. Data collected were analyzed using both descriptive and inferential statistics. Budgetary technique was used to determine gross margin. Profitability ratios were calculated to determine economic performances of catfish, tilapia and carp production. Results show that fish farming is dominated by males (73.0%) with an average age of 47 years. Majority of the farmers (44.80%) have a bachelor s degree /HND. The gross margin analysis and profitability ratios revealed that catfish farming is the most profitable in the area with a net income (profit) of N326,450, and a BCR of High cost of farm input and poor access to credit facilities have greatly discouraged many people from venturing into fish farming it was recommended that more fish hatcheries and feed mills be constructed to reduce the problems fish farmers face in the zone. Keywords: Profitability, Production, fish, cost, gross margin INTRODUCTION Fish production involves raising fish commercially in tanks or enclosures usually for food. It offers an alternative solution to the increasing market demand for fish and fish protein. Fish productions in Nigeria make vital contributions to food and nutrition security and provide income for several people engaged in fish production, processing and trade. Production has increased tremendously in recent times and several studies by Oladejo (2010), Nwibo (2012) and Ochiaka (2015) have shown considerable physical potential for aquaculture. However, with growing urbanization, improving markets and services, better skills and new production technologies, a lot of benefits can be derived from fish production. For many people in Nigeria, especially in southeast states, small scale fish farming is increasing 1 Department of Agricultural Economics and Extension Enugu State University of Science and Technology, Enugu. 1

3 on a daily basis as the business provides an important opportunity to generate income and is a very rich source of protein. (Onyedika, 2010). In the area, an enormous variety of water bodies like rivers, lakes and ponds are dispersed throughout the zone offering considerable potential for fish farming. However, because of poor access to the required resources and inadequate technical knowledge, many farmers are unable to provide all the inputs required for intensive production methods. This is why fish farming in the area is mainly a secondary occupation as most of the farmers are involved in other occupations. The common species grown in the south-east states include catfish, tilapia and carp. However, the selection of a suitable fish to grow will depend on various biological and economic factors such as market price, growth rate and ability to reproduce (Adewuyi et al., 2010). Commercially one can grow fish for sale to restaurants and supermarkets. Fingerlings can also be grown for supply to other commercial fish farmers. Apart from these, there is increasing demand for fingerlings for supply to recreational pond owners and hobbyist. Fingerlings can also be grown for sale as bait. To start a fish farm, an intending farmer may choose one of these production facilities; natural water or artificial system. Natural water means raising the fish in ponds, rivers, streams and lakes. Artificial facilities include tanks, pools, cages and raceways. Water for use may come from springs, wells or surface water. According to Otubusin (2001), in terms of inputs, fish farming range from extensive, semi-intensive to intensive. The extensive system is farming that has low financial and labour inputs. Stocking density is low and the fish is left to nature for sustenance. The intensive system involves high level of capital and labour investment. Stocking density is high and requires the use of equipments to maintain pond operation. The semi-intensive system requires moderate use of inputs. A lot of advantages are derived from growing fish. Apart from the fact that it produces high yield despite small volume of water (Olagunju et al., 2007), fish contains essential nutrients, with high protein value and low to moderate fat in comparison to terrestrial animals (FAO, 2006). Fish are easily maintained, requires much less attention than cattle and other farm animals. Fish farming also come with its disadvantages. High fish farming cost especially in intensive culture tends to discourage prospective farmers. The issue of contamination and pollution of water bodies are serious cases of concern. METHODOLOGY The study was conducted in south-east geopolitical zone of Nigeria. The zone consists of five states namely: Abia, Anambra, Enugu, Ebonyi and Imo. Geographically, the area lies between latitude and North and longitude and east. The area has a population of 16.4 million people (NPC, 2006). Agriculture is the main occupation of the people and the major crops cultivated include cassava, yams, cocoyam, maize, oil palm and fruits. Some of the people engage in animal and fish farming. Three states, Anambra, Enugu and Ebonyi were randomly selected from the five states in the south east zone. All the registered fish farmers in the three states were selected for the study. This gave a total sample size of 192 registered fish farmers. Data for the study were collected from both primary and secondary sources. Data collected were analysed using both descriptive and inferential statics. 2

4 Budgetary technique was used to determine gross margin which was then used to analyse the profitability level. Profitability ratios were calculated in order to determine and compare economic performances of catfish, tilapia and carp production. The gross margin model is stated as: GM = TR TVC TR = P. Q TC = TVC + TFC NI (Profit) = GM TFC where GM = Gross Margin TR = Total Revenue TVC = Total Variable Cost TFC = Total Fixed Cost TC = Total Cost NI = Net Income P = Price Q = Quantity of fish sold. Profitability Ratios Benefit Cost Ratio (BCR) = TR TC Profitability Index (PI) = NI TR NI Rate of Return on Investment (IRR) = 100 TC Operating Ratio (OR) = TVC TR Rate of Return on Variable Cost (RRVC) = TR TFC TVC TR Rate of Return on Fixed Cost (RRFC) = TFC TFC 100 RESULTS AND DISCUSSION Table 1 displays the socio-economic characteristics of the fish farmers. Majority of the farmers (73.0%) are males with an average age of 47 years. This shows that fish farming business in southeast Nigeria is dominated by men who are still in their active age group. This finding agrees with the works of Bamigboye et al. (2010) and Ogunleye et al. (2010), that more men than women are involved in fish farming. Most of the farmers (71.90%) were married with an average household size of 6. About 44.80% of the fish farmers have a bachelor s degree/hnd. This shows that fish farmers in the area are well educated, thus corroborating the works of Olagunju et al. (2007) and Nwibo (2012). Majority of the fish farmers have a pond size of between 31 m m 2 with an average fish farming experience of 8 years, implying that fish farmers in the zone are well experienced in the business. Table 2 shows the costs involved in fish farming. According to the table, the variable cost (operating cost + labour cost) accounted for 57% percent of the total cost. The operating cost alone accounts for 41.90% of the variable cost. The high operating cost is due to the high cost of feed which is experienced in the study area. This finding corroborates the works of Adewuji et al. (2010), Awoyemi (2011) and Ochiaka (2015) who opined that cost of feed accounted for the largest proportion of the total cost of fish production. The fixed cost accounted for 42.20% of the total cost, with the cost of land accounting for 39.20% of the cost. The cost of land is expected to be high 3

5 Table 1: Socio-Economic Characteristics of Fish Farmers Characteristics Frequency (N = 192) Gender Percentage Male Female Age (Years) Average Table 1 (Cont.) Pond Size (M 2 ) m > Source: Field data (2014) years > Married Single Divorced Widowed No formal education Primary education Secondary education NCE/OND Bachelor s degree/hnd Marital Status Educational Qualification PhD/MSc Fish Farming Experience (years) years > Household Size > Table 2: Total Cost of Fish Production/25 m 2 Cost Item Amount (N) Percentage Variable Cost Operating Cost 5 33, Labour Cost 2 02, , Fixed Cost Land 5 00, Depreciation 38, , Total 1,273, Source: Field data (2014) considering the fact that most of the fish farms are located in the urban or semi-urban areas. Table 3 displays the gross margin and profitability ratios. From the table, 1 kg of catfish, tilapia and carp sell for N800, N450 and N400 respectively. The total revenue from selling 2000 kg of catfish, tilapia and carp is N1,600,000, N900,000 and N800,000 respectively. The table equally shows that catfish has the highest Gross Margin (GM) ofn865,000 while carp has the least GM of N65,000. According to the table, catfish production is profitable in the study area as indicated by the Profitability Index (PI) of This is confirmed by the Net Income (NI) of N326,450 and BCR of Tilapia and carp production are 4

6 Table 3: Gross Margin and Profitability Ratios Catfish Tilapia Carp The cost of 1 kg of: N800 N 450 N 400 Total Revenue (TR) for 2000 kg of: N1,600,000 N900,000 N800,000 Gross margin GM = TR - TVC N865,000 N165,000 N65,000 NI = GM TFC N326, BCR = TR/TC = PI = NI/TR = RRI = NI/TC x 100 = 25.60% - - OR = TVC/TR = RRVC = TR TFC/TVC x 100 = 144% 49% 36% RRFC = TR TVC/TFC x 100 = 160% 30% 12% Source: Field data (2014) not profitable ventures in the area when they are sold fresh. The RRI is 25.60% for catfish. Tilapia and carp have negative RRI values implying that their production is not profitable in the area. It is important to note that the demand for fresh tilapia and carp in the area is low when compared to catfish. As such farmers prefer to grow the fish which has high demand and brings in more money. According to the farmers, consumers prefer processed (dried) tilapia and carp. The farmers equally confirmed that tilapia and carp production are very profitable when the farmer in addition to growing them also process them. However an Operating Ratio (OR) of 0.46, 0.81 and 0.91 for catfish, tilapia and carp respectively are all less than 1 thus indicating greater Total Revenue (TR) over Total Variable Cost (TVC) which is good business. According to the OR, catfish, tilapia and carp production are all profitable. This is because when tilapia and carp are processed, more value is added and more profit is made by the farmer. The Rate of Return on Variable Cost (RRVC) was estimated to be 144%, 49% and 36% for catfish, tilapia and carp respectively. Comparing this with the Rate of Return on Fixed Cost (RRFC) of 160%, 30% and 12% obtained for catfish, tilapia and carp respectively, it can be inferred that improving profitability in fish production will require that more effort be put into increasing the efficiency of use of variable inputs. CONCLUSION In the southeast zone of Nigeria, fish farming is still in its infancy. Catfish farming is the most profitable in the area when compared with tilapia and carp. Apart from very few well established fish farms that employ some form of modern technology, majority still use crude and unproductive methods of grow fish. Provision of credit facilities training and effective extension service world improve and ensure adequate fish production. This will encourage more people to take up fish farming thus improving food security and livelihood of the farmers. It was recommended that more commercial hatcheries and feed mills be established so that farmers can get quality seed and feed at fair prices. REFERENCES 1. Adewuyi S A, Philips B B, Ayinde I A and Akerele D (2010), Analysis of Profitability of Fish Farming in Ogun State, Nigeria, Journal of Human Ecology, Vol. 31, No. 3, pp Awoyemi T T (2011), Analysis of Profitability of Fish Farming Among Women in Osun State, Journal of Economics and Sustainable Development, Vol. 2, No Bamigboye E O, Kuponiyi F A and Yusuf O J (2010), Analysis of Farmers Utilization of Fish Farming Technologies in Ekiti State, Nigeria, Agricultural Society of Nigeria, Proceedings of the 44 th Annual Conference, Ogbomoso. 4. National Population Commission of Nigeria, 5

7 NPC (2006), National Population Figures, Abuja. 5. Nwibo S U (2012), Economics of Catfish Production in Ebonyi North Agricultural Zone of Ebonyi State, Nigeria, in Proceedings of the International Agric. Conference ANSUIAC, May Ochiaka C D (2015), Economic Analysis of Fish Farming in Southeast, Nigeria, Unpubished Ph.D Thesis, Dept. of Agric Economics, Management and Extension, Ebonyi State University, Abakaliki. 7. Ogunleye K Y, Ojo T Y and Oyewo T (2010), Training Needs of Fish Farmers in Ibadan North L.G.A. of Oyo State, Proceedings of the 44 th Annual Conference of Agricultural Society of Nigeria, October 18-22, LAUTECH. 8. Oladejo J A (2010), Economic Analysis of Small Scale Catfish Farming in Ido L.G.A. of Oyo State, Nigeria, Agricultural Journal, Vol. 5, No. 6, pp Olagunju F I, Adesiyan I O and Ezekiel A A (2007), Economic Viability of Catfish Production in Oyo State, Nigeria, Journal of Human Ecology, Vol. 21, No. 2, pp Onyedika J C (2010), Fish Production in Southeast Nigeria, World Aquaculture Society, Vol. 41, No. 4, p Otubusin S O (2001), Economics of Small Scale Tilapia Production in Floating Net- Cages, NAGA ICLARM Quarterly, Vol. 2, pp

8