AQUACULTURE MANAGEMENT

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1 AQUACULTURE MANAGEMENT

2 AQUACULTURE MANAGEMENT James W. Meade AnaviBook Published by Van Nostrand Reinhold New York

3 An AVI Book (AVI is an imprint of Van Nostrand Reinhold) Copyright 1989 by Van Nostrand Reinhold Softcover reprint of tile hardcover 1st edition 1989 Library of Congress Catalog Card Number All rights reserved. No part of this book covered by the copyright hereon may be reproduced or used in any form or by any means-graphic, electronic, or mechanical, including photocopying, recording, taping, or information storage and retrieval systems-without written permission of the publisher. Van Nostrand Reinhold 115 Fifth Avenue New YOlk, New YOlk looo3 Chapman & Hall 2-6 Boundary Row London SEl 8HN, England Thomas Nelson Australia 102 Dodds Street South Melbourne, Victoria 3205, Australia Nelson Canada 1120 Birchmount Road ScaIborough, Ontario MlK 504, Canada II Library of Congress Cataloging in Publication Data Meade, James W. Aquaculture management. Includes index. I. Aquaculture. I. Title. SH135.M ' ISBN 13: e ISBN 13: : /

4 To my parents, Jim (Wink) and Veda May for the debt unowed I can never repay

5 Preface Although some nations, such as Japan, have invested in aquaculture research and developed major aquaculture industries, the opportunities for similar development in the United States remain largely unnoticed. In a typical recent year the United States, which claims 20% of the world's marine fisheries resources, imported seafood worth $4.8 billion and exported $l.3 billion. In addition to the $3.5 billion deficit in food-fish, was another $2.7 billion deficit for nonedible fishery products. Next to oil, fishery products constituted the second highest drain on the United States balance of payments and accounts for a significant portion of the foreign trade deficit. Furthermore, fish consumption has been increasing in North America. In response to the demand for fishery products, aquaculture managers not only have the opportunity to realize economic profit, but in doing so can make an important contribution to reducing the national debt, providing employment, and enhancing our diet. This book might be considered a farm management text for those in aquaculture. It is intended to provide an introduction to aquaculture principles and an introduction to management, including business and people management, microeconomics, and the concepts of efficiency and productivity. I hope it will bridge the gap between conservationists, the academic community, and commercial culturists. Abundant references should enable the reader to quickly access literature on most topics germane to the management of culture systems. Many scientific names have been omitted, but they can be easily found by cross reference in such publications as Common and Scientific Names of Fishes, American Fisheries Society Special Publication No. 12, 1980 (Bethesda, MD, 174 pp.). Although this is a general or "principles" text, it stresses the component nature of culture systems, each composed of several enterprises that can themselves be studied, managed, and mixed to increase productivity and to maximize returns to the manager's available resources. The concepts are suitable for application by government employees and managers, for university and other not-for-profit organization professionals, as well as for those in the "business end" of the industry. The book is not intended to be a culture techniques manual. The set of culture techniques for red drum, for various algae, for striped bass, oysters, Atlantic salmon, eels, inland trout, abalone, sturgeon, crawfish, mullet, ornamental fishes, lobster, and many others are each topics of books or book-sized vii

6 viii PREFACE manuals. And new techniques and manuals are appearing at an increasingly rapid rate. Not only do the generalized, and currently changing, culture techniques differ among species-related culture systems, but the techniques may be modified for geographic location, specific site features, genetic make-up of stock and enterprise objectives. Although this book identifies sources of information that address the techniques used in various types of culture, it primarily concerns management concepts as applied to aquatic culture in the United States.

7 Acknowledgments I am indebted to the United States Fish and Wildlife Service (USFWS) and Garland B. Pardue, for providing me the opportunity to write this book. Other USFWS personnel were also instrumental. William F. Krise was a principal author of Chapters 1 and 6. Joyce Mann provided administrative planning advice. Susan Bencus not only typed and retyped but provided important technical advice, and Betsy Driebelbies provided technical reprints and library assistance. Lori Redell, Debbie Enderle, and Les Mengel produced the figures. Paul Eschmeyer provided invaluable review and editorial comments. George Ketola provided information on ethics. I am grateful to many other friends and associates for their help. Thomas Young of Mansfield University was principal author of Chapter 7. Sandra Linck and Gale Largey, both also of Mansfield University, gave me direction and advice on "people" issues. Carol Fryday, independent editor of Pittsburgh, PA, and Dick Soderberg of Mansfield University, made important editorial and review comments. I referred to lecture notes from Howard Clontz and Sidney Bell of Auburn University, and Robert S. Pomeroy of Clemson University, provided information and advice. Harry Westers of the Michigan Department of Natural Resources, and David S. Liao of the Marine Resources Research Institute, S.C., also provided technical information. ix

8 Contents Preface / vii Acknowledgments / ix PART ONE: PERSPECTIVES / 1 Chapter 1. PRINCIPLES OF FISH CULTURE AND AQUACULTURE SYSTEMS / 3 Definition, Principles, and Need for Management / 3 The Culture System Spectra / 5 World Overview / 5 Freshwater / 8 Saltwater / 10 Temperature / 10 Organizational Systems / 11 Operational Systems and Degree of Intensification / 11 Summary / 14 Chapter 2. PRINCIPLES OF CULTURE SYSTEMS MANAGEMENT / 17 Management Definitions and Approaches / 18 The Job of Management / 18 Management Functions and Activities 18 Planning and Organizing / 20 Decision Making / 21 Control and Evaluation / 21 Accepting Responsibility / 22 Management Styles and Attributes of Successful Managers / 22 Scope of Aquaculture Management / 24 xi

9 xii CONTENTS Bottom Line / 24 Managing to Achieve Objectives / 24 Financial Analyses Miss the Point in the Public Domain / 26 Sometimes Financial Analyses Do Not Miss the Point / 28 Summary / 28 Chapter 3. APPROACHES TO PEOPLE (USING HUMAN RESOURCES) / 30 Contingency Theory / 30 Management Skills / 31 Leading and Motivating / 31 Motivating (Maslow) Needs Hierarchy / 31 Communicating and Active Listening / 32 Using Performance Plans and Examples of a Performance Standard / 33 Productivity / 36 What is Productivity? / 36 The Manager's Mandate and Enhancing Effectiveness / 37 Beginning / 42 Summary / 43 Chapter 4. MARKETING / 45 Introduction / 45 Functional and Institutional Aspects of Marketing / 46 Performance / 47 Cooperatives / 48 Marketing Studies and Test Marketing / 49 Strategies for Cultured Products / 49 Summary / 51 Chapter 5. LIFE CYCLES AND PRODUCTION STRATEGIES / 54 Enterprises and the Concept of Mixing / 54 Energy Flow / 56 Summary / 57 Chapter 6. WATER AND HEALTH MANAGEMENT / 59 Water Management / 59 Quality / 59 Aeration, Oxygen Injection, Atmospheric Exchange / 60

10 CONTENTS xiii Metabolites / 61 Buffering and Toxicity Mediators / 61 Complementary Use / 62 Effluent: Environmental Impacts and Treatment / 62 Managing Metabolites / 62 Site Selection / 63 Health Management / 63 Recognition / 64 Planning: Management of the Water Supply / 64 Design / 65 Management / 66 Chapter 7. ETHICS / 70 Business and Government / 70 Environmental Ethics: From Management of Scarce Natural Resources to Commodity Production for Human Consumption / 71 Moral Standing / 72 Animal Rights / 74 Preserving Rare Species / 75 Conclusions / 77 Professionalism and Legislated Ethics (for Public Domain Managers) / 77 PART TWO: QUANTITATIVE APPROACHES / 83 Chapter 8. PRODUCTION ECONOMICS / 85 Microeconomic Principles / 85 Fixed and Variable Costs / 85 Marginal Analysis / 87 Cost Concepts (in Decision Making) / 88 TimidCosts of Ownership / 88 Taxes / 88 Interest / 89 Maintenance / 90 Insurance / 90 Depreciation / 90 Total Ownership Costs / 92

11 xiv CONTENTS Chapter 9. RECORDS FOR MANAGERIAL ANALYSES / 94 Record Keeping / 94 Enterprise Budgets / 95 Cash Flow / 96 Financial Statement / 97 Chapter 10. PRODUCTION SYSTEM LIMITS / 100 Capacity Estimates / 100 A Fairyfish Tail / 101 Dissolved Oxygen and Metabolites / 101 Production Capacity Assessment (PCA) / 106 Detailed Procedure for PCA / 107 Chapter 11. DECISION-MAKING TOOLS / 111 Partial Budgeting / 112 The Delphi Technique / 112 Benefit-Cost Analysis / 112 Present Value Analysis / 114 Five Additional Analysis Techniques / 117 Sensitivity Analysis / 126 Decision Trees / 129 Chapter 12. COMPUTER ASSISTED DECISION SUPPORT SYSTEMS / 131 Analytic Hierarchy Process / 131 AHP Decision Analysis for Procurement, Installation, and Use of Oxygenation Equipment / 132 Linear Programming / 138 APPENDIXES / 147 Appendix I. MANAGER ATTRIBUTES AND EXPECTATIONS / 147 Appendix II. Appendix III. SUGGESTED STEPS FOR LEARNING TO READ PEOPLE / 151 EXAMPLES OF ENTERPRISE BUDGETS, CASH FLOW, AND CREDIT REPAYMENT SCHEDULES / 152

12 CONTENTS xv Appendix IV. LIFE-CYCLE COSTING / 161 Appendix V. Appendix VI. Index / 169 SAMPLE CALCULATION TO DETERMINE THE NUMBER OF FISH THAT CAN BE REARED IN A UNIT (TANK) THAT RECEIVES 5 GALLONS PER MINUTE (GPM) WATER FLOW / 163 SAMPLE PROBLEMS ON PRODUCTION CAPACITY ASSESSMENT (PCA) / 166