People are often reluctant to get into aquaculture because projects in this sector have a reputation for failing. But, according to Etienne Hinrichsen, aquaculture expert, this is usually the result of poor planning.
Like any other farming business, aquaculture requires a detailed feasibility assessment.
In the feasibility analysis, ask yourself (and your business partners, if you have any) whether the project is going to be financed or whether capital reserves will be used. You will also need suitable technology, the right skills and human capital, water, species and feed.
“I always say that a good feasibility exercise is to ask yourself if you can sell your product cheaper than (you can sell) chicken,” Hinrichsen says. The economics are all-important: Always conceptualise the business and draw up a good business plan.
WHERE WILL YOU SELL?
- Hinrichsen points out that merely knowing there is a shortage of fish is not enough.
- Farmers need a signed market contract before setting up shop.
- The only way to find a market is to approach businesses and speak to people.
- Consider restaurants too, as they may be willing to commit to a contract.
- Other factors to look at include the form in which the product should be presented in the market, phytosanitary and other legal requirements, market logistics such as handling and freezing, and competition.
WHAT ARE THE COSTS?
Starting up and running an aquaculture business requires a significant amount of capital. In addition to the initial start-up, operating expenses as well as the cost of feed should be calculated. “Fish feed accounts for 55% to 70% of operational costs, so planning for feed costs is critical,” he says.
Consider this example: Trout food costs R8.50/kg and a 1 000 ton/year trout farm will use 120 tons of feed every year – if the farmer’s doing it right. This means that, at any one feeding session, 109.59 kg of feed will be used.
Optimal feed management plays an important role in the profitability and success of the business. Hinrichsen encourages farmers to attend courses on the subject, as feeding fish is a highly skilled job. The ambient temperature, fish behaviour and water quality all affect feed uptake.
“It’s not like feeding cattle; fish have to consume the feed immediately, or it will sink to the bottom and be flushed out of the system, causing a huge waste,” he says. Your proximity to feed suppliers also affects your feed bill.
FINDING A SITE
A new aquaculture venture should have the right site. If you have already identified a location, check that the site is zoned correctly. It should have adequate water resources, as well as electricity, roads, sewerage and refuse services.
“The choice of species should be determined by water availability and quality,” he says. For example, if the site has a high volume of cold water, you could farm trout. Tilapia, carp, catfish, eels, ornamentals and crocodiles are suitable warm water species.
You have also to consider surrounding land use and how this will influence the project, as well as the environmental sensitivity of the area and aquaculture effluent discharge.
SELECT THE RIGHT SYSTEM
Hinrichsen says there are quite a few systems available for aquaculture production, but farmers should choose carefully.
In a cage culture system, a floating structure is placed in an existing body of water such as a dam. Earth ponds dug out of the soil are another option, but he warns that control isn’t that good as fish are more vulnerable to bacteria in such systems.
The most popular and economical system is tank culture. Plastic moulded tanks are more affordable, easier to repair and to clean than building a concrete tank. Tanks are also the preferred system if you want to stock high volumes.
Remember, though, that high stocking densities can be technically complex. “It means higher returns, but also more risks,” he says. Earth ponds can stock no more than 10 kg fish/100 m³ water. In comparison, a tank system can stock between 40 kg and 100 kg fish/100 m³ of water.
THE CORRECT SPECIES
- There’s a wide range of fish species, indigenous and exotic, to farm.
- Production planning depends on what you choose.
- The species must be suited to the area’s climate, the site and the type of water resources.
- The farmer should be clued up about rearing, biology and husbandry techniques, and also about the best production process and facility design for the species.
Also read: Choosing the right fish species to farm
Hinrichsen says that, although the feasibility requirements may seem lengthy and cumbersome, many farmers do succeed in aquaculture. “There are success stories; and your business won’t fail if you do things right,” he says.
- This article was written by Wilma den Hartigh and first appeared in Farming SA.