Nicaragua Small Shrimp Producer Assistance Program FINAL REPORT March 15, 2002

Transcription

1 Nicaragua Small Shrimp Producer Assistance Program FINAL REPORT March 15, 2002 Michigan Sea Grant College Program

2 Table of Contents Introduction Shrimp Farming Demonstration Project Submitted by Russell Allen, Aquatic Design Inc., with assistance from Michigan Sea Grant Economic Revitalization and Sustainability Submitted by Florida Sea Grant Human Resource Development Submitted by Florida Sea Grant Appendix (hard copy format) Entrenamiento en Suciedad y Otros Aspectos Relacionados con la Calidad del Camaron (Shrimp School agenda) Informacion Adictional Acerca de la Descomposicion (More Information on Decomposition) Suciedad (Filth) FDA Procedure for the Examination of Shrimp for Filth Alan R. Olsen Procedimientos Para la Deteccion de Residuos de Metabisulfito en Camarones (Procedures to Determine Metabisulfite Residuals) Neogen Corporation, Lansing, Mich. Confrontando Problemas en el Puerto de Entrada EEUU (Dealing with Problems at the Port of Entry) FDA La Importancia Relativa del Camaron Cultivado en Nicaragua dentro de la Industria Pesquera Nicaraguense y los Principales Mercados Estadounidenses de Importacion de Camaron: The Relative Importance of Nicaraguan Cultured Shrimp within the Nicaragua Seafood Industry and U.S. Major Shrimp Import Markets: Florida Sea Grant, Sept Presupuestos de Costos e Ingresos para una Granja Camaronera Semi-intensiva en Nicaragua, Cost and Returns Budgets for a Semi-intensive Shrimp Farm in Nicaragua, Florida Sea Grant, Sept Cost and Returns Budgets for an Intensive Zero Water-Exchange Shrimp Culture Demonstration Project in Nicaragua, 2001 Florida Sea Grant, Feb Cultivo Intensivo de Camaron con Sistema Cerrado en Nicaragua: su Factibilidad Economica (Materiales del Taller)

3 Economic Feasibility of Zero-Exchange Shrimp Culture Systems in Nicaragua (Workshop Materials) NOAA, Florida Sea Grant, USAID, Aquatic Design, Inc. Aspectos Economicos de los Sistemas Cerrado-Intensivo y Semi-Intensivo Agenda La Prensa Camarones por monton 12-07, (Web site article: HACCP: Hazard Analysis and Critical Control Point Training Curriculum North Carolina Sea Grant Curso sobre Procedimientos de Control Sanitario para el Procesamiento de Pescados y Mariscos Florida Sea Grant Camaron de Cultivo Buenas Practicas de Acuacultura para la Calidad e Inocuidad del Producto Florida Sea Grant

4 Introduction Shrimp aquaculture is an important part of the world economy. Shrimp farms now produce roughly 40 percent of the total world consumption of shrimp. The majority of shrimp are produced in tropical, developing countries, where the industry has a significant impact on local, regional and national economies. In the Western Hemisphere, the shrimp farming industry spread from its origin in Ecuador to all tropical countries in the hemisphere. In Nicaragua, fishing cooperatives constructed the first aquaculture ponds in the late 1980s. Important developments of the industry began to occur in 1993, as both privately owned companies and cooperatively owned farms saw the benefits of shrimp farming. A growth spurt occurred in the Nicaraguan shrimp farming industry during 1994 and However, the following years resulted in little or no increase. Experts attribute this situation largely to the introduction of the Taura Syndrome Virus (TSV) in the Estero Real watershed, which decimated shrimp stocks. TSV surfaced in Ecuador in the mid 1990s and quickly spread around the hemisphere. Shrimp farming in Nicaragua became unprofitable. This was the situation when Hurricane Mitch struck Central America during late October Hurricane Mitch caused serious damage to many cooperatively owned farms as well as some privately owned operations. Flooding in the Gulf of Fonseca and the Estero Real caused US$8 million in damages to the struggling shrimp farming industry. A second problem concerned financing. Prior to the hurricane, the coops had extended all of their assets to cover working capital loans. The net result is that both working capital and their concomitant loan guaranties were lost to the flooding. Concern began to grow that these farms would be unable to raise capital to remain in business, especially considering the already eroded confidence of the banks and other financial institutions. An almost final blow to the industry occurred in January 1999 with the introduction of White Spot Syndrome Virus (WSSV). The farms not lost to Hurricane Mitch that managed to take advantage of the dry season crop had very low survival rates. Producers realized that unless something was done to restore financial stability in the industry there was no way to regenerate support or to operate a profitable business. As they looked for ways to succeed, producers hit obstacles resulting from an immature industry that relied upon wild shrimp larvae sources and lacked basic support industries such as feed manufacture, disease diagnosis and equipment manufacture. Possible solutions included the use of a certified virus free larvae. However, Nicaraguan shrimp farmers did not have the capability of testing for the virus, diagnosing the new disease or generating certified disease free animals. Modernization of the industry is necessary to exclude diseases and operate a sustainable industry. Specific needs include the following: Shrimp must be isolated to permit the production of certified disease free organisms or genetically selected resistant animals. Farm managers must be trained in best manufacturing practices, as established in other aquaculture industries, to limit the possible exposure to disease and other related problems. The entire food production sequence, from lab to farm to plant, must be consistently monitored and controlled from a food safety perspective to ensure a high quality and safe product. This includes the need for training of food safety professionals in the area. Shrimp sampling.

5 Nicaragua Small Shrimp Producer Assistance Program At the request of the U.S. Agency for International Development (USAID), the National Oceanic and Atmospheric Administration (NOAA) enlisted Michigan Sea Grant to manage a project addressing the concerns mentioned above. Subcontractors include Florida Sea Grant and shrimp aquaculture specialist Russ Allen from Michigan. The goal of the Nicaragua Small Shrimp Producer Assistance Program was to assist Nicaraguan shrimp farmers in modernizing their technologies to help the industry be economically viable. Three of the program s components are covered in this report: Closed Intensive Shrimp Production System. The goal is to assist small and medium size producers by testing new, closed-production farming techniques in areas known to harbor several aggressive viruses. A related goal calls for a strong extension program to teach and familiarize farmers with the concepts and practices of the new technologies. Economic Viability and Financial Access. This component introduces commercial financial institutions, local development agencies and other possible sources of credit for small and medium size farmers to the benefits and results of the project. National Professional Aquaculture Capacity. The goal is to raise the national level of competence within the small and medium farmers with regard to their basic understanding of the industry. A related goal is to create a network of contacts and industry support professionals. The following sections include brief background information, project objectives and accomplishments. Paddlewheel aerators circulate water in the demonstration farm production ponds.

6 Background Shrimp Farming Demonstration Project During the last decade, two issues confronted shrimp farming in Nicaragua that provided the need to investigate alternative methods for growing shrimp. First, the introduction of viral diseases began to slow industry growth in the mid 1990s. The prevalence of Taura Syndrome Virus (TSV) among others graphically demonstrated that traditional semi-intensive shrimp production methods were not adequate to maintain a sustainable industry. Second, the environmental community began voicing concerns about mangrove destruction in the fragile coastal zone and the introduction of nutrients into coastal waterways from shrimp pond discharges. When Hurricane Mitch struck Nicaragua in late 1998, the country s shrimp farming industry was dominated by small, semi-intensive shrimp farms. The majority of these farms were owned by fishing cooperatives and found on the Estero Real estuary system. Following the hurricane, many shrimp farms along the estuary were forced out of production. Soon after Hurricane Mitch struck, the remaining farms faced the introduction of White Spot Syndrome Virus (WSSV). The few farms that recovered from the flooding of Hurricane Mitch and that could afford to re-stock their farms experienced extremely high shrimp mortalities. The combination of virulent diseases, environmental degradation and damage from Hurricane Mitch dictated that new production systems be developed. Project Goals and Objectives The goal of the shrimp farming demonstration project was to design and operate a zero-exchange shrimp production system in Nicaragua to demonstrate the potential of producing shrimp with a higher level of biosecurity and reduced environmental impact. The project focused on two main objectives: 1. Design, construct and operate a cost-effective biosecurity system for incoming farm water. 2. Design, construct and operate an intensive zero-exchange shrimp production unit. These objectives address the major issues facing shrimp farmers in the region, including biosecure operations, elimination of most effluents, and water quality control in an area of poor water quality. The demonstration project was led by Russell Allen of Aquatic Design, Inc., Okemos, Michigan, an aquaculture specialist with experience in developing countries. The project was based upon a 16-acre pilot farm constructed by Allen in 1996 in Belize, which incorporated the zero-exchange concept developed at the Waddell Mariculture Center in South Carolina. Bacteria are the foundation of the zero-exchange shrimp production system. These systems are classified as being heterotrophic (dependent on organic material), as opposed to the semi-intensive systems that are autotrophic (phytoplankton dominated). The principal concept behind the zero-exchange system is efficient recycling of nutrients through the pond that provides for good water quality through nitrification and denitrification. Heterotrophic bacterial communities tend to be very stable. These communities normally develop in about eight weeks and are characterized by floc composed of bacteria and pond nutrients. These floc allow the shrimp to graze directly upon the bacterial biomass, increasing the recycling of pond nutrients and feeding efficiencies. Water circulation in the pond is induced by the operation of paddlewheel aerators. The water movement scours the pond bottom and keeps the feed, feces, and other detritus in the water column. This allows the aerobic, nitrifying bacteria to consume these waste products. Since production water is maintained within the project, this technologically-advanced system does not release effluents (i.e. feces, bacteria) into natural water sources. By filtering and reusing water, the closed system reduces the risk from viruses and eliminates effluent. Site Selection The site chosen for the shrimp farming demonstration project in Nicaragua was the University of Central America (UCA) shrimp farm in Puerto Morazan (west-central Nicaragua, north of Managua) near Estero Real. In early 1999, a field trip to Nicaragua was undertaken by David McKinnie of NOAA, Russ Moll (formerly of Michigan Sea Grant), and Russ Allen and Larry Drazba of Aquatic Design, Ltd. to determine the best site for the closed intensive shrimp production system, herein called the zero-exchange system. 1

7 Figure1 Site Plan SITE PLAN (EXISTING) ZERO-EXCHANGE SITE PLAN RECONSTRUCTED (PILA J AND I DETAIL- SEE ABOVE) TWO SETTLING PONDS FOUR PRODUCTION PONDS 2

8 The project site was one of the first shrimp farms in Nicaragua and had long been used for shrimp farming using traditional extensive and semi-intensive methods. The farm was flooded by Hurricane Mitch and had been out of operation since that event. The physical characteristics of the site presented ongoing challenges for the project. Water quality was a significant factor. Water from the estuary, fed by the Gulf of Fonseca, is of very poor quality, and in fact, contains salmonella. The estuary feeding the ponds is approximately 20 miles from the Gulf of Fonseca and is the primary source of water for the area. Due to this distance and the high tidal fluctuation, there is very little mixing of new, clean water from the Gulf, and the estuary receives contaminated run-off from farms and towns upstream. Lack of elevation was another factor that affected project construction; the farm is located on an estuary where its land is lower than high tide level. Other factors that presented challenges included soil quality, the poor condition of existing dikes and the farm s location amid extensive shrimp ponds that use primarily wild caught post-larvae, resulting in a high incidence of viral diseases. Project Design and Construction Production and Settling Ponds Before project construction began, the site was surveyed by local surveyors. A topographical map was generated by surveying a 20m x 20m grid, with elevations accurate to +/- 4 cm. The map was used to calculate drainage and the cuts and fills for the pond earthwork. The zero-exchange production system consists of four one-half hectare production ponds and two onehectare settling ponds located in the farm s two existing ponds I and J (6.7 ha. each). This arrangement allowed for the system to be located on the highest and most isolated section of the farm and minimally interferes with the existing pond infrastructure. (Figure 1) Due to the low elevation of the site, it was not possible to excavate the pond bottoms for dike construction. Material for dike construction came from the drain excavation and was moved by truck from the sedimentation ponds. Earth was excavated from the bottom of the sediment ponds by a track excavator. Spreading and compaction of the material was done by bulldozer. Dump truck traffic on the dikes during construction also helped with compaction. Total earthwork for the project was approximately 22,000 cubic meters. The production ponds are square, 70.7 meters by 70.7 meters at the waterline, with a center drain. Although a typical zero-exchange farm has ponds over 2 meters deep, it was not possible to achieve these depths given the low elevation of the farm site. The water level was designed to be 1 meter deep at the point of the slope from the dikes and 1.8 meters deep at the center. The ponds were built with a center drain to allow for removal of solids during the production cycle and to permit the harvest of the animals. The dikes were designed with a crown width of 5 meters, with an interior slope of 1:1 and exterior slope of 2.5:1. The settling ponds were designed to hold sufficient water to fill all four production ponds. Once in operation, either of the settling ponds can be used for reception of the pond water and sediments. While one pond is filled with sediments, a second allows continued operation of the farm. One pond may be drained and sediment removed, before returning to service. The settling ponds have two drains, one to release water to the estuary once sediments are removed (if necessary) and another to refill water to the pond. Aerial view of production and settling ponds. 3

9 Pond Liners The production ponds were designed to be built using high density polyethylene (HDPE) liners. The liners are critical to eliminate erosion from high water velocities generated by mechanical aerators. They prevent any chemical interaction between the bottom soils and the pond water. The use of HDPE liners is essential for creating the directional water flow with high water velocities required to keep solids in suspension. With the interior slopes of the dikes being 1:1, the liners do not allow for predation by birds along the shoreline; the material is too slippery and doesn t allow the birds to hunt. Another major benefit to liner usage is the improvement of pond use efficiency. Utilization of the liners allows for rapid removal of sediments after harvest and permits the pond to return to production almost immediately. This can improve pond use from around 75% in typical semi-intensive ponds to 95% in this super-intensive system. The material chosen was 30 mil avg GSE HD black, smooth rolls 22.5' wide x 143' long. The liners were purchased from GSE Lining Technology, Inc., Houston, Texas. The extrusion welding equipment was also purchased from GSE to allow local installation of the liners and have equipment on site for future repairs. Due to the late shipping of the liners and the early inception of the rainy season, liner installation was difficult and expensive. Drainage and Water Flow After the earthwork was finished, center drains and harvest sluice gates were installed. The center drains were installed with 15" PVC pipe, reduced to 12" at the sluice gate and capped with a 12" gate valve. The center drain was installed with a concrete apron for liner attachment and fitted with a filter cap. The harvest sluice gates were of typical box design, made of formed concrete. They were set into the slope of the dike wall to minimize drain pipe length and allow for bag or pump harvesting of the ponds. Water entering the system through the sluice gate travels through the pond drain to the central pump station. The central pump station is the heart of the water movement on the farm. At the pump station, water is lifted to one of the sediment ponds and filtered to 100 microns. From the sediment pond, water is drained back to the pond drain and pumped into any of the production ponds, again filtered to 100 microns. The pond pump station was constructed of formed concrete. The elevation of the pump was designed for pond drainage and sloped for water to flow through the drain to the pump station. The pump was sized to fill a pond within 24 hours. The pump is a 12" axial flow pump with a 20 hp electric motor, rated at 3, ' TDH, and 1180 RPM. Installation of pond liners. Sluice gate. Pond drain. 4

10 Water distribution from the pump to the ponds was done via 12" PVC pipe buried in the central dike. Each pond inlet was controlled using 12" knife gate valves. The pipe was T d out of the pump, sending water in one direction to the production ponds and in the opposite direction to the sediment ponds. One hundred-micron filter bags were attached to the outlet side of the valve. Electrical The electrical power to the project was provided by diesel power generation. Two Caterpillar generators were installed; one is 60 kw and a second is 125 kw. Power to the pump and mechanical aerators was provided at 480 volts, 60 hertz. The smaller generator was used to operate the farm during the day, the larger generator during the night, which allowed better utilization of fuel. Electrical distribution was accomplished via a buried cable within PVC conduit in the dikes. Control boxes for motor starters that operated the aerators were installed at two opposite corners of the production ponds. Each aerator could be turned on and off individually from the control boxes. Operational Infrastructure Project infrastructure included the construction of the generator shed combined with an office, laboratory, and feed storage. Feed storage was accomplished with a 40' shipping container. The office / generator shed was constructed using state-of-the-art pole barn building techniques and materials from the United States. Construction of the shed was completed in August Biosecurity Measures Although neither TSV or WSSV are harmful to humans, they are deadly to shrimp. TSV may infect the ponds via aerial transmission from insects and birds. Once shrimp are exposed, TSV has approximately a three-week incubation period. TSV is very difficult to control, and the biosecurity measures for this project were principally aimed at WSSV. TSV usually results in a high percent mortality rate (at times greater than 80%). WSSV appears to be principally transmitted by waterborne vectors, but could also be transmitted by land based transmission via walking crabs, raccoons, or infected hosts dropped in ponds by birds. WSSV originated in Asia and spread to other countries in the Americas by several means. Unlike TSV, WSSV dies in birds stomachs and cannot be transferred by droppings. There were four basic biosecurity efforts utilized by the project: 1) Water filtration. 2) Use of resistant or pathogenfree post larvae. 3) Farm quarantine and disinfection of hands and feet upon entrance. 4) Reduction of birds in the pond area. Pond pump station. Operation of generator. Office/generator shed. 5

11 Water Filtration Although transmission of the pathogenic shrimp viruses is not completely understood, it is believed that biosecurity against water-borne pathogens (such as WSSV) can be achieved through water filtration. In the zero-exchange system, water flows through a series of filters, 500 to 100 microns, to eliminate hosts that may harbor the viruses. Water is pumped out of the primary pump station located on the Estero Real. The water then flows into the receiving and distribution canal. This canal contains a biosecurity structure to filter the incoming water to 500 microns. The water then passes into the settling ponds to deposit sediments. Water from the sediment basin then passes through a sluice gate, filtered to 300 microns, into the secondary reservoir. From the secondary reservoir, the water then flows through another sluice gate, filtered to 200 microns, into the tertiary reservoir. From the tertiary reservoir, the water enters the demonstration project via one of the original pond entrance sluice gates. At this point the water is filtered to 100 microns. Filtration to 100 microns is labor intensive and requires that workers clean filtration bags constantly and change them frequently. Pathogen-free Post Larvae Most of the shrimp larvae sold in Central America are produced in Panama. These laboratories have worked to develop resistant animals, particularly resistant to TSV. Due to improved results from these animals in the region, it was decided they would be the most appropriate larvae to stock. SPF larvae from the United States had proven to be very productive in Belize and other countries without the presence of TSV, but in the presence of TSV, the SPF animals had very poor survivals, sometimes as low as 5% survival. Shrimp for the project were purchased from Pacific Larval Centre, Inc. and Farallon Aquaculture. Reservoir filter (500 micron). Shrimp larvae. Disinfection Gates were set up at the entrances to the project with an iodine bath placed there. All entrants to the farm were to wash their hands and shoes at the gate before entering the project, thus reducing the risk of contamination from nearby farms and ponds. Bird Predation With the small pond area and the constant presence of workers around the ponds, it was hoped that control of birds would be possible. It appears that workers successfully kept out the major predators, such as cormorants and herons, but small gulls and terns remained a problem. These smaller birds would feed on floating feed pellets and any dead shrimp or detritus in the ponds. Bird feces were seen on the pond banks and the aerators, which were used as perches when not in use. Entrance poster. 6

12 Water Quality Control After filling the settling ponds, water is prepared with a fertilization regime to promote pond production. The water is fertilized with a balanced commercially available nitrogen/ phosphate fertilizer and molasses. Fertilization rates depend upon the nutrient levels of the fresh seawater pumped into the system; fertilization is used to promote a phytoplankton bloom for stocking of shrimp larvae. Mechanical aerators used in the production ponds circulate the water, providing mixing and oxygenation. The production ponds were designed for 40 horsepower per hectare, or 20 hp per pond. Ten (2 horsepower) paddlewheel units were used for each pond. The aerator units are inexpensive and provide maximum flexibility for water movement and operation. Positioning of the aerators is very important in keeping solids in suspension. Having more units of smaller horsepower helps to distribute the water-moving capability more evenly over the entire pond and lets you turn on and off aerators only as you need them, thus conserving energy. Dissolved oxygen, salinity, ph, and pond water temperatures were taken twice daily, once at 6 am, again at 3 pm. Dissolved oxygen levels need to be maintained at or above 4.0 mg/l. This was accomplished throughout the project period using eight horsepower per pond of aeration during the day and 20 hp during the night. Salinity ranged from 16 ppt at stocking to 25 by harvest time. PH levels maintained between Morning temperatures ranged from 29.9 in August down to 25.9 in December. Afternoon temperatures ranged from 33.5 down to Chemical parameters were normally measured once a week, more often if necessary. Alkalinity was controlled with the addition of agricultural lime to the ponds. When alkalinity fell below 120 ppm, lime was added until the alkalinity stabilized. During the first month of operations, lime was added almost daily. After the first month of operations, very little lime addition was necessary. Ammonia-nitrogen levels were monitored and ranged from below.01 mg/l up to 3.5 mg/l, falling normally in the 0.5 mg/l level. Nitrites and nitrates never surpassed 1 mg/l throughout the trial, falling normally at less than 0.2 mg/l. Reduction of Effluents The ponds were designed to be able to remove sediments as they built up during the production cycle. Although with so much activity during the first cycle, it was not possible to begin removing sediments until the last month of production. The center drain was opened during operation of the aerators, removing sediments as they were deposited at the center of the pond. The pump was turned on and the water containing the sediments was pumped out of the drain and into the sediment pond. At harvest, all the water is pumped from the drain into the sediment pond. Very little sediment was left in the ponds after harvest. Once the sediments have settled out, the water can be returned to the production ponds. Pond fertilization. Two-horsepower paddlewheel aerator. Paddlewheel aerators. 7

13 Operation of the Zero Exchange System Larry Drazba, from Managua, Nicaragua, managed the farm s day-to-day operations. Four local workers, including a biologist, an electrical and mechanical specialist and two additional men, assisted in stocking, feeding, fertilizing and maintaining the ponds. The workers fed the shrimp, monitored water quality, operated the aerators and generators, and generally maintained the facility. Workers were paid an average of $3 per day and were supplied with room and board. Pond Preparation Water from the Estuary was pumped and filtered into the reservoir. Water entering the system was filtered to 100 microns and moved to the settling ponds for two weeks. During this period, plankton samples were taken and tested for WSSV. Initially, there were some positive PCR results for WSSV, but it was impossible to determine the actual host. During the second week, all samples tested negative. In order to test the filtration hypothesis for WSSV prevention, the settling ponds were not sterilized. After two weeks in the settling ponds, water was transferred to the production ponds. Ideally, the production ponds should have gone through an additional two weeks of pond preparation with fertilization and lime application. However, due to time limitations, the ponds had to be stocked with shrimp larvae almost immediately after filling. The volume of water available presented another problem. Due to the slow velocities of water moving through the sluice gates (filtered to 100 microns), the sediment ponds could not be filled in a timely manner. Ponds could not be adequately filled to allow optimum operation of the system. Production pond #2 had to be filled directly from the entrance sluice gate, bypassing the sediment ponds and the settling cycle. Because it did not have a two-week resting period, this production pond was chlorinated a week before stocking. Stocking To properly test the production system, it was assumed that the project would be biosecure and free from all viruses, including TSV. Project managers overstock to compensate for TSV-induced mortality. The ponds were stocked at larvae per square meter. The demonstration farm was stocked with shrimp larvae on August 15, 24 and September 5, Pond # 4 was stocked first with pl-10 post larvae from Pacific Larvae at the rate of 109 per square meter. Pond #3 was stocked on August 24 with pl-10 post larvae from Farallon Aquaculture at the rate of 130 per square meter. Ponds #1 & #2 were stocked on September 5 with pl-10 post larvae from Pacific Larvae at the rate of 128 & 130 pl s per square meter, respectively. Feeding The feeding regime for the zero-exchange system was a major consideration in the success of the system. Being a heterotrophic, bacteria based system, the bacteria feed upon the suspended organic material in the pond to establish a healthy bacterial population. The ability to sustain the bacteria depends upon the carbon/nitrogen ratio in the pond water. (High protein feeds provide too much nitrogen, causing ponds to become carbon-limited, thus limiting the bacterial population and reducing water quality.) Feeds for the project were purchased from Zeigler Brothers, Inc. of Gardners, Pennsylvania, U.S. They supplied three feeds for the grow-out phase and three feeds for post larval acclimation and rearing; their production feeds are specifically formulated for the zero-exchange system. The acclimation and larval rearing feeds are standard shrimp production feeds. Installing filter bags. Sampling. Inset, Pond Stim. 8

14 After stocking, the feeding plan for the ponds called for use of a micron diet, at 500 mg per day, four times per day, for six days. This would be followed by another six days with PL Raceway Plus #1 and #2. This was not accomplished; ground Zeigler 30% protein 3/32" pellets were substituted. In order to achieve the carbon/nitrogen balance required, Zeigler provides a feed supplement called Pond Stim, which is principally a carbon supplement. Pond Stim is half the cost of the other two protein based diets, one 25% protein and the other 31%. The first half of the production cycle was fed Pond Stim and 31% feed. Feedings were conducted at 6 am, 10 am, 2 pm, 6 pm, and 10 pm. Feeding was done by hand and food distributed evenly around the pond perimeter. The second half of the production cycle was fed Pond Stim and the 25% protein feed. The feeding tables were provided by Zeigler. Due to the unexpectedly high mortalities, food conversions ranged between 2.5:1 to 3:1. Grow Out Percolation (water leakage) was a persistent problem from the time water was first pumped into the reservoir under the dikes and pond liners. Because this water was filtered to only 500 microns, it may have been a source for virus introduction into the ponds. Liners could not be completely sealed due to installation problems and infiltration of water from the reservoir. Approximately two weeks after stocking, each of the ponds showed signs of TSV infection and mortality. Normally, this would not be seen until three weeks, leading to the assumption that the post larvae may have arrived already infected with TSV. With a typical TSV infection at this stage, mortality is taken and those that survive continue on to harvest without another mortality event. These animals, in all ponds, continued to show signs of TSV infection and low levels of mortality throughout the production cycle. Vibriosis also appeared during the first month of production, causing some mortality. It was assumed this could have been mitigated if there had been ample time for pond preparation and fertilization before stocking. Despite these early disease problems, animal growth was better than expected, with individuals reaching four grams in the first month. Overall growth rates averaged 0.95 grams/week. The shrimp reached 15.5 grams in 16.5 weeks. During the second month of the production cycle, mortality was noticed from Necrotizing Hematopancreatitis (NHP), a gram-negative intracellular bacteria. There appeared to be a general problem with this disease in the Estero Real area, something that had not been common in the past. This disease is treatable with oxytetracycline medicated feed if detected early and treated immediately. However, this treatment is not approved by the FDA in the United States. It took some time after discovery of the infection to get the approval to use medicated feed, as long as its use was stopped at least two weeks before harvest. Medicated feed was located, purchased and sent to the farm. By the time treatments began, significant mortality had already occurred. Another significant problem encountered during this period was the travel ban imposed by the U.S. Embassy in Managua during the month of November. The principal investigator was not able to be in-country during much of the critical grow-out period, and production suffered. The final and optimal orientation of the aerators was not found until late November after the ban was lifted. It was only at this time that experiments could begin with removal of sediments. Harvesting Juvenile shrimp (4-5 grams). Harvesting of the ponds occurred during the second two weeks of December, with a total grow out time of 115 days. The ponds were drain-harvested through the center drain. The shrimp were collected in a bag net connected to the 12" outlet valve. Harvesting of the ponds was difficult for several reasons. First and foremost was the poor welding job done on the liner installation. Water was able to percolate under the liners, causing them to float. As the water level came down, this floating would raise the liner in a bubble that would not allow the pond to drain properly. The liners had to be pierced to allow the water to drain out so that shrimp could be harvested. The second reason for harvesting difficulties was the minimal slope in the pond bottoms. Due to the low elevation of the farm, the bottoms could not be excavated to any great degree. They did, in fact, have to be filled around the perimeter to achieve a minimal slope. It remains to be seen, when the liners are properly installed, if this will continue to be a problem. 9

15 Results Due to the mortalities from the persistent TSV epidemic and the attack of NHP, pond productions were lower than expected. Although this was the first harvest from the system, located in an area with the highest incidence of all diseases, the demonstration project yielded record production for the Country of Nicaragua. An approximate total of 20,000 pounds of whole shrimp were harvested from the four ponds. The best pond yielded about 13,000 pounds per hectare; the worst yielded 7000 pounds per hectare. The overall survival rate was 35%. (Figure 2) Of significant note, and probably the biggest success of the project, was the fact that WSSV was successfully excluded from the project. Samples were taken and checked by PCR throughout the trial, and none ever came up positive, nor were there any clinical or histological signs of the disease at any time. Figure 2 Conclusion The primary objectives for the project have been met. First, principal investigators were able to prove that the system can be built on a typical semi-intensive shrimp farm. The costs for doing so were well within the range for profitable, competitive shrimp farming in the future. Second, the system did work. Principal investigators were able to maintain water quality at full feeding rates. Low production was a result of disease, not water quality. Third, the system did prove to be biosecure against WSSV. There were a number of other disease problems that need to be addressed, but the zero-exchange system has the capacity to manage viruses better than semi-intensive farm methods. In the future, it is expected that the zero-exchange system should be able to achieve the desired performance levels, provided that the shrimp experience a full grow out period of 140 days, the ponds are stocked at a higher rate anticipating a TSV infection, and medicated feed is kept on hand for NHP prevention. The system has shown that it can exclude WSSV and that it has the potential for being the lowest-cost production method for shrimp farming. Additional work with the zeroexchange system is needed to reveal its true capabilities. 10

16 Background Economic Revitalization and Sustainability: Promote Economic Profitability and Access to Credit and Financial Systems for the Nicaragua Shrimp Culture Industry The developing shrimp farming industry in Nicaragua was decimated by Hurricane Mitch in 1998, and by the Taura Syndrome Virus (TSV) and White Spot Virus (WSSV). Banks, lenders and suppliers of inputs to the farming and processing sector have been hesitant to supply the investment capital necessary for industry recovery. Because the industry is of recent origin, there has not been either time or money to provide training to shrimp farming professionals. Funds have not been available to test and demonstrate the most recent advances in shrimp farming technology. Project Goals and Objectives The overall goal of this project was to create more informed decisions regarding public and private investment necessary for the recovery of the Nicaragua shrimp culture industry. This was accomplished by determining the investment and economic feasibility of a zero water-exchange demonstration shrimp culture project, comparing it to existing traditional semi-intensive culture methods, and holding workshops to educate the small-scale shrimp farmers and lenders on the economic feasibility of the system. The specific objectives were: 1. Conduct a financial analysis of a traditional semi-intensive shrimp culture system in Nicaragua. The ability to perform this objective was entirely dependent on obtaining historical revenue, cost and production data from the cooperatives, private shrimp farmers and from the Universidad Centro Americana. The goal was to include capital equipment costs, production cost and returns budgets, break-even analysis, balance sheet, income statements and cash flow statements. 2. Create a financial analysis of the Aquatic Designs, Inc. zero water-exchange demonstration project at the Universidad Centro Americana farm. This includes capital equipment costs, production cost and returns budgets, break-even analysis, and other associated economic measures. The demonstration project consisted of four one-half hectare ponds. The ponds were considered as replicates for the production data and cost and returns budgets for the analysis. Data were to be collected during one summer grow-out cycle. Acquiring data from an additional grow-out cycle in late summer/ early fall of 2001 depended on the success of the demonstration project and the available time and budget left for the project. 3. If available data were sufficient to permit the completion of objective one, a comparison was to be made of the differences in costs and returns between the traditional system and the zero water-exchange demonstration project. 4. Up to four workshops were to be held for growers and financial institution representatives. The exact number of workshops was to be determined based on the success of the demonstration project and the usefulness of the data. Workshops were to focus on simple business procedures, bank requirements for loans and the economic analysis of the demonstration project. Accomplishments 1. Semi-intensive Shrimp Culture Cost and Returns The volume of shrimp imported from Nicaragua into the U.S. has historically been small. Between 1994 and 2000, the highest volume and value year was 4,827MT valued at US$44.1M in Peeled frozen shrimp is the dominant product form. In recent years, cultivated (farmed) shrimp exports from Nicaragua have been the second leading seafood product in value behind lobster tails. The major export markets for cultivated shrimp have been the U.S. and Spain (1). Cost and return budgets were developed for a typical Nicaragua semi-intensive shrimp farm. Data from secondary sources in the literature, from the Universidad Centro Americana, and from interviews with current shrimp farmers in Nicaragua were used to create a base budget (2). Sensitivity analysis was used to vary stocking density, survival rates, and post larvae costs. Changes in shrimp price were then used to demonstrate the effect of changes in these variables on the level of net returns that can be expected from a typical operation and on break-even levels of operation. Budgets were also developed to demonstrate the difference between newer farms and older farms where depreciation may not be a factor. Data from were used in the analysis with the following assumptions determined for the baseline farm: growout (134 days); stocking density (18.16 PL/m2); practical survival rate (32%); animal harvest size (12.98 grams head-on); 11

17 production cycles per year (2.04); feed conversion ratio (1.81 to 1). Based on actual cost and revenue data for this time period, the typical semi-intensive farm using current technology produced shrimp for US$2.00 per pound, sold shrimp for US$2.17 per pound; and received net returns of US$0.17 per pound. The sensitivity analysis was conducted using the following variables: stocking density (10, 20, 30 PL/m2); post-larvae cost (US$2.00, 5.00, 6.00 per thousand); practical survival rate (13, 23, 33, 42%); shrimp price (US$2.50, 3.00, 3.50 per pound). Break-even levels at US$2.17 per pound were as follows: stocking density (15.52 PL/m2); post larvae cost (US$5.42 per thousand); survival rate (28.78). Net returns across the entire range of sensitivity levels can be found in the detailed report (2). Sufficient data were not available to create a break-even analysis, balance sheets, income statements or cash flow statements. 2. Zero Water-Exchange Intensive Shrimp Culture Project The demonstration farm was built during the first half of 2001 by Aquatic Designs, Inc., near Estero Real at the existing Universidad Centro Americana demonstration farm site at Puerto Morazan, Nicaragua. This is a site used for shrimp farming using the traditional semi-intensive method. The project consisted of developing four production ponds of one-half hectare each and two one-hectare settling ponds within an existing farm site. Each of the four production ponds is lined with plastic and aerated. The ponds were stocked in late summer 2001 with the final pond harvested in December One production cycle was achieved. The original plan was to complete pond construction in the first four months of 2001, and achieve two production cycles. Due to shipping and construction delays, this was not accomplished. The entire project was built and managed by Aquatic Designs, Inc., with the University of Florida team doing the economic analysis contained in this report and referenced manuscripts. The analysis represents one production cycle. These data were then projected to two cycles to estimate what could be achieved on an annual basis (3). Total construction cost for the project was US$254,543. Of the total, US$4,100 was for feeding equipment, US$65,416 for permanent equipment and US$185,027 for earthwork, ponds, liners, electrical, water control structures and miscellaneous equipment. Based on the one growout cycle, the following production characteristics were observed: Harvest (10,004 pounds/hectare/ cycle); survival rate (30%); stocking density (115 PL/m2 average across four ponds); average harvest size (13.29 grams heads-on per animal). Production levels, survival rates and harvest size per animal were lower than predicted. However, it is anticipated predicted levels can be achieved as the local operators gain more knowledge about the system and improvements are made based on what was observed during the initial production cycle. It is also felt that locating nearer the Pacific coast may provide better production and higher water quality availability. Based on projecting actual project results (one cycle), to an annual basis (two cycles), and utilizing actual shrimp sales data, the demonstration project resulted in per hectare net revenue of US$20,508, costs of US$30,147, and negative net revenues of US$9,639. However, it should be noted that December 2001 market prices for shrimp were at the lowest level in a number of years. At US$3.00 per pound, net revenues would have been US$30,012 per hectare for one cycle, resulting in a break-even situation. If predicted production levels can be achieved, net revenues per hectare will be US$23,235 (Table 1). Table 1. Cost and returns budget for zero water-exchange UCA demonstration project 12

18 A sensitivity analysis was also conducted to show variations in the zero water-exchange intensive culture system as follows: harvest levels per hectare per cycle (15,000 to 40,000 pounds in 5,000 pound increments); shrimp prices (US$2.50, 3.00, 3.50, 4.00). The intensive farm returned positive net revenue for each of these sensitivity combinations. 3. Comparison of Semi-intensive and Intensive Culture Systems One of the objectives of this project was to compare traditional and zero water-exchange systems (3). Thus, a zero waterexchange system using actual production rates from the demonstration project was designed to achieve a production level of 1,033,661 pounds, an average level of production for existing Nicaragua shrimp farms (2). A 26-hectare zero water-exchange system would be required to generate this level of production. Total investment requirements for feeding equipment, permanent equipment, and other costs associated with the construction of a 26-hectare zero water-exchange farm (52 one-halfhectare ponds) amounts to US$2,815,622 or US$108,957 on a per hectare basis. Total annual depreciation for this system is US$386,152 and per hectare depreciation cost equals US$14,943. Total initial investment requirements may vary from producer to producer. For instance, earthwork cost could increase or decrease depending on the existing land characteristics. Utilizing the levees of an existing farm system would decrease the cost of pond construction. The per hectare cost of building a pond system utilizing the semi-intensive technology has been estimated to be between US$4,000 and US$10,000. The assumptions used for estimating production costs and revenues for the hypothetical zero water-exchange farm and the typical semi-intensive farm are shown in Table 2. It was estimated that the 20,000 pounds/hectare cycle-production level might be achieved if optimum production management practices for the zero water-exchange intensive technology are employed. The total area utilized by each of the two systems was determined dependent on the production objective (1,033,661 pounds annually) and the production variables after implementing the corresponding production strategies. With the zero water-exchange technology, a 26 hectare farm with 52 one-half-hectare ponds is needed to produce the desired annual production with a survival rate of 55 percent and average harvest size of grams (heads-on). In contrast, a 324 hectare farm using the semi-intensive technology will be required to produce the 1,033,661 pounds annually. For the semiintensive farm, survival rate is percent and average harvest size is approximately 13 grams (heads-on). Stocking density varies as well between the two systems: 122 PL/m_ for the zero water-exchange system and 18 PL/m_ for the semiintensive system. The selling price used in this comparison is US$3.00 per pound of shrimp. Table 2. Production assumptions for the 26 hectare zero water-exchange farm and the 324 hectare semi-intensive farm. Costs vary between the two systems mainly due to the total area needed to produce the desired production. The costs for each system are compared on a total, per harvested pound of shrimp, and per seeded hectare basis (Tables 3-6). The cost of post larvae (PL) per pound harvested for the zero water-exchange system is lower than for the semi-intensive technology. However, PL cost per hectare is greater for the zero water-exchange system since stocking density (PL/m_) is much higher. Feed cost, on the other hand, is greater in both per pound harvested and per seeded hectare for the zero water-exchange system. The estimated value was calculated using the feed conversion ratio of 2.44; however, this ratio should decrease significantly if more efficient production strategies, such as a better assessment of the actual survival rate, are used. The cost of chemicals and fertilizers per pound harvested is lower and on a per seeded hectare basis this cost is much greater for the zero waterexchange system. When considering this cost in total U.S. dollars, the zero water-exchange system costs less than the semiintensive system. Direct labor for the hypothetical farm using the zero water-exchange technology is always greater (on per seeded hectare, per harvested pound, and in total U.S. dollars) than for the semi-intensive system. With respect to indirect costs, it was not accurate to make a comparison between the two systems since the variables included in this cost category vary for each system. Nevertheless, total operating costs clearly indicate that the zero water-exchange system can be more cost efficient than the semi-intensive system. 13

19 Table 3. Annual financial comparison for the 26 hectare zero water-exchange farm and the 324 hectare semi-intensive farm. Table 4. Detailed annual operating expenses for the zero water-exchange and semi-intensive systems (on a per harvested pound basis). Table 5. Detailed annual operating expenses for the zero water-exchange and semi intensive systems (on a per seeded hectare basis). Total revenue, total operating costs and gross profit summarized per harvested pound and per seeded hectare for the two systems are also estimated (Table 6). Even though the zero water-exchange system provides a small profit (10 cents) difference on per harvested pound when compared to the semi-intensive system, gross profit generated by the zero water-exchange technology on per hectare basis is significantly higher. Annual profit per seeded hectare for the zero water-exchange system was US$21,989, whereas the same value for the traditional system was US$1,

20 Table 6. Annual financial comparison for the 26 hectare zero water-exchange farm and the 324 hectare semi-intensive farm (per harvested pound and per seeded hectare). Cost and Revenues Zero Exchange System Semi-Intensive System Per Harvested Lb. Per Seeded Ha. Per Harvested Lb. Per Seeded Ha. Annual Production per ha. 40,000 3,133 Total Area (ha) Pounds Harvested 1,033,661 1,033,661 Shell-On Price (US$/lb) Total Revenue US$ , ,608 Total Operating Expenses US$ , ,076 Gross Profit US$ , ,532 Advantages and Disadvantages of the Zero Water-Exchange System Disadvantages The zero water-exchange system requires a very large initial investment which may discourage many potential investors from considering the system as a profitable alternative to traditional semi-intensive shrimp farming. This may be particularly true for those semi-intensive farmers who might wish to retrofit a portion of their existing farms. Given the relatively large initial investment, the financial risk associated with a crop failure is much higher with the zero water-exchange system. Advantages The zero water-exchange technology can result in sustained higher yields. The yields are higher due to high survival rates because of the biosecurity practices implemented and the high stocking density. The zero water-exchange system also reduces the amount of nutrients released into the environment since no water is exchanged. These technical advantages can lead to lower operating costs in total U.S. dollars and per pound harvested. The feed conversion ratio should be better for the zero water-exchange system due to high levels of aeration, which creates a current that suspends solids for shrimp grazing. Thus, feed costs should be reduced. Another advantage of the new system is the use of less land to produce the same desired production objective. This should result in lower annual concession fees. Due to lower operating costs, the zero water-exchange system generates slightly higher profits per pound harvested, but much higher profits on a per hectare basis when compared to the semi-intensive technology. Another advantage of the zero water-exchange system is the reduction in the amount of time required to prepare pond water for stocking. By using both the recycled water and the ponds lined with plastic, restocking can take place as soon as five days after a pond is harvested. A more efficient use of the available growing season is allowed. 4. Workshops It was determined that two workshops was the optimum number to provide adequate training and exposure to interested shrimp farmers and bankers. The workshops were held at the Universidad Centro Americana shrimp culture demonstration farm at the site of the intensive shrimp culture demonstration project at Puerto Morazan, Nicaragua on December 4 and 5, One workshop was held for bankers, lenders and agency representatives and one was held for shrimp farmers. However, a mixture of each attended each day. The workshop was presented in Spanish and all workshop materials were distributed in both English and Spanish. The workshop notebook contained the agenda, a Spanish copy of the presentation materials (4) and copies in English and Spanish of the semi-intensive cost and returns budgets and Nicaragua shrimp import-export data. Preliminary results on the costs and returns for the intensive system were provided in the presentation materials. One of the four one-half hectare ponds was harvested prior to the workshop, with estimates presented based on that harvest. The three other ponds were harvested in the following two weeks. Actual results (3) were very close to those used in the workshop, and all attendees will be provided the final project analysis (3). 15

21 The agenda for the two one-day workshops was as follows: Description of the zero water-exchange project A discussion of the physical setup Special issues that need consideration Recommendations for changes based on the information learned in the demonstration Tour of the ponds Lunch Economic Analysis Capital Costs Cost and Returns Budgets Comparison to Traditional Semi-intensive Systems Russ Allen, Larry Drazba, Aquatic Designs, Inc. Demonstration and description of the physical characteristics of the system Mayra López Chuck Adams Don Sweat Jim Cato Food & Resource Economics Department, Florida Sea Grant College Program University of Florida The workshops were advertised in Nicaragua by Ms. Monica Drazba, NOAA Hurricane Mitch project coordinator. Ms. Drazba also coordinated the local arrangements for projectors, workshop notebooks and other support needs. Twenty-five people attended the first workshop and 16 attended the second. The attendees who chose to sign in for the workshop were: December 4 participants (female participants italicized) 1. Juana Francisca Tellez URCOPANIC 2. Jose Angel Orozco URCOOCAM 3. Jesús A. T. (name not complete) Cooperative Gracias A Diós 4. Mariel Gonzalez (name not complete) 5. Alvaro Rojas N. Frixsa 6. Luis Alberto Ordóñez URCOOCAM 7. Lilliam Sandoval URCOPANIC 8. Alejandro Garcia URCOPANIC 9. Reyes de los Santos UNICANH 10. Narciso Cáceres URCOPANIC 11. Mariano Icaza Granja Santa Rosa 12. Delazkar Gutierrez Granja Santa Rosa 13. Franklin Lin Camaronera Calinsa 14. Laura Martínez UCA 15. Cesar García Frixsa 16. Alejandro Frixione Frixsa 17. Roberto Pineda Belice Aquaculture 18. Jose A. Díaz Aquatic Design 19. Julio Ramirez Martinez Aquatic Design December 5 1. Ana Isabel Horviler BanExpo 2. Alex Peña R. 3. Gonzalo Alvarez San Miguel 4. Reynaldo Zúñiga San Miguel 5. Ariel Moran Zamorano University (Honduras) 6. Francisca Palacios Zamorano University (Honduras) 7. Juan Ramón Bravo UCA 8. Gary Cummings Sahlman Seafood 9. Luisa Ocon Sahlman Seafood 10. Carolina Portobanco Banco de Finanzas 11. Luis E. Morales BanExpo 12. Julio Juárez Sahlman Seafood 13. Mario Callejas Nicaragua Camaronera 14. Alfonso Callejas Penn, SA 15. Alfonso Callejas, Sr. A y A, SA Ms. Drazba also distributed evaluation forms at the conclusion of the workshop (second day only) and 13 people completed evaluation forms. Eighty-five percent said they would use the information at their workplace during the next year, and 15 percent said they would not. One-hundred percent said the course materials were very effective or effective, and 100 percent indicated the instructors knew the materials well. 16

22 The workshop and information was also covered by the media. An article in the Managua, Nicaragua newspaper appeared two days after the workshop. A copy of the internet version of the coverage is attached along with a partial copy from the print version. Some of the workshop attendees and Mayra Lopez, one of the instructors at Puerto Morazan, Nicaragua Shrimp Culture Workshop, December 4th, 2001 (Photo by Jim Cato). Materials Developed and Cited 1. López, Mayra, Charles Adams, James C. Cato and Donald Sweat The relative importance of Nicaragua cultured shrimp within the Nicaragua seafood industry and U.S. major shrimp import markets: Florida Sea Grant College Program manuscript. Gainesville: University of Florida. 16 pp. (Appendix) La importancia relativa del camarón cultivado en Nicaragua dentro de la industria pesquera Nicaragüense los principales mercados Estadounidenses de importación de camarón: (Spanish version). (Appendix) 2. López, Mayra, Charles Adams, James C. Cato and Donald Sweat Cost and returns budgets for a semi-intensive shrimp farm in Nicaragua, Florida Sea Grant College Program manuscript. Gainesville: University of Florida. 59 pp. (Appendix) Presupuestos de costos e ingresos pura una granja camaronera semi-intensiva en Nicaragua, (Spanish version). (Appendix) 3. López, Mayra, Charles Adams, James C. Cato and Donald Sweat Cost and returns budgets for an intensive zero water-exchange shrimp culture demonstration project in Nicaragua, Florida Sea Grant College Program manuscript. Gainesville: University of Florida. 29 pp. (Appendix) English version is currently being translated into Spanish. (Not included). 4. Materiales del Taller. 4-5 de diciembre de Cultivo intensivo de camarón con sistema cerrado en Nicaragua: su factibilidad económica. Puerto Morazán, Nicaragua. (Appendix) 5. Camarones por Montón. La Prensa, El Diario de los Nicaragüenses. Viernes 7 de December del 2001/Edición No (Appendix) 17