1. As small-scale fish farming becomes a more fully commercial venture, maintaining detailed and accurate records becomes an important task to be carried out regularly by the farm manager for several reasons.
2. There are several types of records which may be used in managing such an enterprise, covering the following components:
8. A simple record suitable for each pond to be used, together with theprevious Record-keeping Form 1, is shown in Record-keeping Form 2. It consists of two collections of data on:
11. A simple record which can be completed separately for each pond is proposed in Record-keeping Form 3. It makes it possible to keep track of the following:
12. You may need several such forms to record the water quality parameters in a pond during one production cycle only. As for the previous records, use a small pocket notebook to note various data on the spot. Transfer these on to the record form later to maintain good records.
13. Good records of all income from fish sales and various expenditures in cash (costs) are essential to determine at regular intervals whether the enterprise is profitable or running at a loss (see Section 16.7). Good farm management should ensure not only that fish farming is profitable but that its profits remain as high as possible.
14. Daily accounts for the fish farm, set out in a monthly report system as shown in Record-keeping Form 4, include the following.
(a) Fish sales record total quantity (in kg, column 3) and related income (in local currency, column 4).
(b) Variable costs (in local currency, columns 5 to 9) include expenditures for farm inputs such as:
- fingerlings;
- fertilizers, both mineral and organic;
- food Ingredients;
- wages for full-time (e.g. watchman) and casual labour;
- various chemicals, spare parts, and other supplies.
(c) Fixed costs (in local currency, columns 10 to 12) include expenditures regularly incurred such as:
- interests on loans, if you have borrowed any money;
- taxes/licences, for example for water rights or land use;
- others.
(d) Amount of loan, if any, repaid during the month (in local currency, column 13) (see also below).
15. At the end of the month add up each column and note these total incomes and costs on the bottom line.
RECORD-KEEPING FORM 4Daily accounts for commercial farmers |
Annual balance sheet for commercial farmers
16. From these accounts, an annual balance sheet may easily be prepared for the complete year, as shown in Record-keeping Form 5.
17. At the end of each month, transfer the totals for the month from the daily account record (see bottom line in Record-keeping Form 4)) to your annual balance sheet, as follows:
- monthly weight of fish sold (column 2, in kg);
- monthly income from fish sales (column 3, in local currency);
- monthly variable costs: first add up all running costs recorded in Record-keeping Form 4, at the bottom line of columns 5 to 9, then transfer this new total to Record-keeping Form 5, column 4;
- monthly fixed costs: first add up all fixed costs recorded in Record-keeping Form 4, on bottom line of columns 10 to 12, and then transfer this new total to Record-keeping Form 5, column 5;
- monthly amount repaid on loans (column 8).
18. Now you may readily calculate monthly values for:
(a) Total costs (column 6): add variable costs (column 4) to fixed costs (column 5).
(b) Gross profit (column 7): subtract total costs (column 6) from monthly income (column 3). If for the month your total costs are higher than your income, the gross profit is negative (figure written in parentheses), which means that during that particular month you have lost money. This is usual when, during the month, you do not harvest and sell fish to generate sufficient income.
Note: it is best to have several ponds and to plan their management so that you may obtain enough cash money from fish sales regularly throughout the year. Alternatively you will need to have sufficient cash on hand or working capital available from borrowing, or from earlier profits, to cover the periods when there is a loss.
19. At the end of the year prepare the annual balance by summing up all the columns, as shown in Record-keeping Form 5. This will clearly show you the following information.
(a) How many fish you have sold and what income you have made from this. Obtain average fish price per kilogram by dividing total income by total weight sold.
(b) How high your variable costs and fixed costs have been in comparison to previous years.
(c) What are the main periods for earning, and the main loss-making periods.
(d) How profitable has fish farming been. Remember that gross profit is only a rough guide to judge this. Later you will learn about a better estimate, net profit (see Section 16.7).
(e) How much of the borrowed money you have repaid.
RECORD-KEEPING FORM 5Annual balance sheet for commercial farmers |
Recording loan repayment
20. If you have borrowed money from friends or from a bank, you should keep a record of loan repayment, for example as shown in Record-keeping Form 6. Banks are often interested in knowing if you can keep good records before agreeing to lend money.
21. For each loan, carefully note the following:
- name of the person or institution that lends you the money;
- date at which the loan was received;
- duration of the period agreed for complete repayment of the loan;
- rate of interest to be paid for the loan (in percent per year);
- total amount of the loan originally (in local currency);
- amount of the loan still due at 1 January of this year;
- any special conditions, for example if an administrative fee is to be paid, or if repayments are not necessary in the initial period.
22. From this information you can determine the following points.
(a) How much you have to repay each year. Divide the total amount of loan by the duration of the loan. For example if you have borrowed US$10 000 over five years, you should repay US$10 000 � 5 = US$2 000 per year, maybe in two instalments of US$1 000 each.
(b) How much interest do you have to pay regularly. Multiply the amount of loan still to be repaid by the interest rate in percent. For example, if you have paid back US$4 000 of this loan and the interest rate is 7.5 percent/year, you will have to pay US$6 000 x 0.075 = US$450 per year. If you pay interest monthly, you will have to pay US$450 � 12 = US$37.50 each month.
Note: as soon as you repay part of the loan, for example after six months, the interest to be paid will be reduced accordingly (see Record-keeping Form 6).
23. Each time you pay either interest or part of the loan, note down in Record- keeping Form 6 the date and amount of payment. These figures can be easily transferred into the daily accounts (Record-keeping Form 4) as necessary.
24. At the end of the year, add up the two columns to obtain the total amounts of interest and loan repayment. Obtain the balance outstanding at 31 December of that year, by subtracting the total amount repaid from the balance which was outstanding on 1 January. Transfer this balance to the form for the next year.
RECORD-KEEPING FORM 6Repayment of loans |
Recording payment for labour
25. If you have several workers and pay them irregularly on a daily basis, or by piece-work, you can use a labour register as suggested in Record-keeping Form 7. During the month, record each payment made to each worker, either in cash or in kind. At the end of the month add up the payments made to obtain total expenditure for labour during the month.
26. If you pay the workers a monthly wage and give no advances, you can use a simpler form for each month as follows:
27. If you do give advances, it may be simpler to use the labour register described previously. If these are to be set against a monthly wage, make sure each worker signs a receipt for the advances given.
28. These forms can be especially useful if there is a dispute with one of the workers over salary payment.
Note: also do not forget to enter all data on wages into your daily accounts (see Record-keeping Form 4).
RECORD-KEEPING FORM 7Labour register for commercial farmers |
Recording and monitoring fish feed stocks
29. For good management of your farm, you need to store certain quantities of feed for your fish and, if necessary, for other animals, so that you can feed them regularly (see Chapter 10). At least once a week, you should check exactly how much feed you have remaining in stock. This should enable you to replenish your stocks in time, before they become exhausted. Good records will help you with such advance planning.
30. Two types of daily record forms are proposed to record over each week the amounts of feed ingredients:
- taken out of store;
- taken in store.
31. The use of feed ingredients either for direct feeding of fish and other animals or for the preparation of particular feed mixes can be recorded as suggested in Record-keeping Form 8. Complete the top line of the form. A reference number can be based for example on year/month/ week as shown for year 89, month 05, week 2. List the type of feed ingredient in store in the first column. For each type of production, list the amounts of ingredients taken out of store on a particular date in one of the following columns. At the bottom, note total weight (in kg) and type of production (abbreviated). At the end of the week, add up each line horizontally to obtain the total weight of each ingredient used during the week.
32. Data on feed stocks in store can be registered as shown in Record-keeping Form 9.
(a) List the type of feed ingredient in store (column 1).
(b) Enter the stock weight of each ingredient held at the beginning of the week (column 2), transferring this from the previous week's form, column 13.
(c) Each time feed ingredient arrives, use one of the following columns 3 to 9 to note date and amount (in kg).
(d) At the end of the week, add up for each ingredient the amounts taken in stock during the week (column 10) and note their cost (column 11).
(e) Transfer from the previous form (Record-keeping Form 8) completed for the same week (note its reference number at the bottom of this form), the total quantities of each ingredient taken out of store during this week (column 12).
(f) Obtain stock in store at the end of this week for each ingredient (column 13) by adding to initial stock (column 2) the total weight taken in store if any (column 10), and subtracting the total weight taken out of store (column 12). In Record-keeping Form 9, for example, stock in store is calculated as follows:
- cottonseed cake (none taken in during the week): 2 345 kg - 125 kg = 2 220 kg;
- groundnut cake (800 kg taken in): (340 kg + 800 kg) - 90 kg = 1 050 kg.
RECORD-KEEPING FORM 8
Use of feed ingredients |
RECORD-KEEPING FORM 9
Stock of feed ingredients |
Managing stocks of other materials
33. You can manage your stocks of other materials, such as mineral fertilizers and liming materials, in a similar way. As movements for such items are usually less frequent than for feed ingredients, it may be possible to use forms similar to Record-keeping Forms 8 and 9 above, but on a monthly rather than a weekly basis. You may also be able to combine information on a single form, recording initial stocks, daily usage, amounts taken in store, cost and final stocks.
Recording data for the integrated production of meat birds
34. Data concerning the rearing of batches of broiler chickens or meat ducks on the fish farm can be registered on forms such as Record-keeping Form 10.
(a) Use one form per batch of birds.
(b) Each day, note how much feed is distributed and how many birds die.
(c) At the end of the week, obtain total feed given and total mortality.
(d) Under Observations, note data on feed quality, reasons for mortality, health problems, average weight of birds, selling price, etc.
(e) At the bottom of the sheet, note total feed given and total mortality over the rearing period. If the rearing period is longer than 9 weeks, use a second sheet to reach the end of the rearing period and number your sheets consecutively.
(f) At the end of the rearing period, use the total feed given and total weight of meat produced, to obtain the food conversion ratio and check your feeding efficiency.
RECORD-KEEPING FORM 10
Production of meat birds |
Recording data for the integrated production of egg-laying chickens
35. When egg-laying chickens are raised on the fish farm, their production data may be registered on forms such as Record-keeping Form 11.
(a) Use one form per batch of layers and number each sheet consecutively.
(b) Each day, note how much feed is given and how many eggs are harvested.
(c) At the end of each week, calculate the total feed given and the total number of eggs produced.
(d) Under Observations, note data on feed quality, daily ration, mortality, health problems, selling price of eggs, etc. From time to time check on the average laying rate (in percent), equal to [(number of eggs produced per week x 100) � (7 days x number of laying hens)]. For example, for week 9, average laying rate = [(90 eggs x 100) � (7 x 30)] = about 43 percent.
(e) At the bottom of the sheet, note total feed given and total number of eggs produced during the period. Use a second sheet to reach the end of the production cycle for this particular batch of hens.
RECORD-KEEPING FORM 11
Production of egg-laying chickens |
Recording data for the integrated production of pigs
36. Data on integrated pig production, particularly on food distribution,can be recorded for example on Record-keeping Form 12.
(a) Use one form for each batch of pigs, reared next to a specific pond.
(b) Each day, note how much feed is given.
(c) At the end of the week, obtain total quantity of feed given.
(d) Under Observations, note feed quality, daily ration, health problems, etc. Include data on pig growth and feed conversion (FCR).
(e) At the bottom of the sheet, obtain total feed distribution over the period. Use additional sheets as necessary to reach the end of the production cycle.
RECORD-KEEPING FORM 12Production of pigs |
16.7 Performance evaluation for commercial fish farmers
1. There are several ways by which you can evaluate your performance as a fish farmer. Together with the more detailed knowledge obtained for each pond and for each type of production, these should confirm how well you are managing your fish farm. They can also point out to you the need for some improvement or even changes which could result in increased incomes. The first approach is to calculate your net profit, after depreciation.
Calculating annual depreciation costs
2. You have learned earlier (see Section 16.3) how to calculate the annual depreciation of an item. To calculate total depreciation costs at the end of a particular year, you may use a form similar to Table 46.
(a) List all your long-lasting structures and equipment (column 1).
(b) For each of them, note their effective replacement cost, the actual replacement cost minus the residual value (column 2, in local currency).
(c) Note their useful life, see Table 44 (see Section 16.3; column 3, in years).
(d) Calculate annual depreciation (column 4) as effective replacement cost (column 2) divided by useful life (column 3).
(e) Add up column 4 to obtain the total depreciation costs for the year. In the example, these are equal to FCFA 433 750.
Note: if the inflation rate is significant, you may have to adjust these figures to allow for inflation. Consult an experienced bookkeeper or accountant for advice on local practice.
Calculating net profit of fish farming
3. In Section 16.6 you have learned how to calculate the gross profit of your fish farm (see Record-keeping Form 5). However, if you have invested considerably in construction and equipment, you should deduct the depreciation costs for these items (see Table 46) to obtain net profit, as mentioned earlier (see Section 16.3).
4. For example, if gross profit for 1989 was FCFA 2 352 325 (Recordkeeping Form 5) and depreciation costs amounted to FCFA 433 750, the net profit for that year was FCFA 1 918 575.
Calculating the annual value of your fixed assets
5. At the end of a particular year, the value of all the fixed factors of production - your fixed assets - can readily be obtained from Table 46, on the basis of the annual depreciation for each item listed in it.
(a) List the age (in years) of each item at the end of this year (column 5).
(b) List the value of each asset as calculated at the end of the previous year (column 6, in local currency). Simply transfer the values listed in the last column of the similar table prepared for last year.
(c) Obtain the value of each asset at the end of this year (column 7) by subtracting annual depreciation (column 4) from value at the end of the previous year (column 6).
(d) Add up column 7 to obtain the total value of all fixed assets at the end of this year. Check on your calculations. This total (7) plus total (6) should be equal to total (4). In the example, total fixed assets at the end of 1989 amounted to FCFA 1 566 750.
6. When the age of an asset becomes equal to Its useful life, its replacement value is considered to be amortized. If the asset continues to be used as a factor of production, both its depreciation and its value can be considered as zero. The asset is written off.
7. However, depending on inflation rates and local accounting practice, it may be useful to amend the values to continue to record depreciation and a specific asset value. Consult a local specialist if necessary.
TABLE 46
Annual depreciation costs and value of assets |
Calculating the net worth
8. At least once a year, usually at the end of the year, you should take stock of all you own. The value of this is called the net worth of the fish farm. It shows you how much money your farm would be worth if you were to sell it tomorrow. If you are doing well, your net worth should keep increasing every year. The higher the increase in net worth, the better you are doing financially.
9. There are two measures commonly used:
- net worth exclusive of fish and animal stocks;
- total net worth, including stocks.
10. While the total net worth gives a more complete picture of the state of your farm, the net worth exclusive of stocks is often used, for example by banks, as a safer measure of the recoverable value of your farm (seeing that stock can die). In some cases, banks will allow you to include a percentage of the value of your fish and animal stocks.
11. Calculate your total net worth at the end of a particular year as follows.
(a) From your records of fish stocks (see Record-keeping Form 1 for each pond), estimate the total fish standing crop (in kg) present in your ponds. Multiply it by the current price per kilogram of fish to obtain the total value of your fish stocks.
(b) Do the same for other animal stocks, if any (for example, Recordkeeping Forms 10 to 12), to obtain the total value of your other animal stocks.
(c) From your records of stores (for example, Record-keeping Forms 8 and 9) estimate the values of all supplies in stock. Add up these values to obtain the total value of your stocks in store.
(d) Obtain the total value of your fixed assets:
- if investments are relatively small there is no need to take depreciation into account. Give an actual value to each asset separately as shown in the example (Table 47).
- if investments are important, obtain the total value of your fixed assets from the bottom of column 7 in Table 46.
(e) If you have a bank savings account to hold your farm's proceeds,list the total in the account. Similarly assess the cash currently on hand at the farm.
(g) Add the debts of your clients and all the other money owed to your farm. You may need to reduce this amount if you think some of this may not be paid (bad debt).
(h) Introduce the above values in the left column of Table 47. Add them up to obtain the credit or positive part of your not worth.
(i ) Introduce the values of all your debts such as unpaid bills and outstanding loans (Record-keeping Form 6) into the right column of Table 47. Add them up to obtain the bebit or negative part of your net worth.
(j ) Calculate your net worth as equal to the difference between these active and passive parts.
Example
A small-scale commercial fish farmer has three ponds, one chicken house, a house and a small store. She stocks chicken feed, cottonseed cake, veterinary medications/vaccines and some disinfectants. She owns some tools, small equipment and miscellaneous effects used around the farm (bicycle, radio, furniture, kitchenware, clothes, etc.). Some friends owe her fish worth FCFA 1 500. Her own debts include invoices for a total of FCFA 12 000 and an outstanding loan of FCFA 20 000. The not worth of this farmer on 31 December 1986 is calculated from Table 47 as follows:
- Credit total = FCFA 564 370
- Debit total = - FCFA 32 000
- Net worth = FCFA 532 370
12. In some cases it may be convenient to include the complete household in the calculation, also its possessions and personal savings. More strictly the net worth of the fish farm business should be separated from that of the household. Whichever method you choose should be continued in successive years otherwise you may get misleading results.
TABLE 47
Net worth of a commercial fish farmer with limited investments (FCFA) |
Calculating the cost and profit of a specific part of production
13. If your farm produces several production lines such as different fish species, pigs, hens, ducks, etc., you may want to know the costs and profit levels for each of these items. The difference between the selling price and the cost of production gives you the profit margin for each item. If you know profit margins for various types of production, you can compare them and select those which give you most profit, subject to the resources available.
14. To calculate the cost of production, you should use your most recent data as shown in your daily records. The method to follow for a single production item is illustrated in the example below.
Note: for a multiple-product farm, items such as feeding, labour and depreciation will have to be shared according to their relative contribution to each production line.
Example
A small-scale farmer produces Nile tilapias in a 400 m2 pond. After six months, he harvests 100 kg of fish; calculate the cost of production of one kilogram of tilapia as follows:
| (a) Cost of juveniles: 8 kg at 600 FCFA/kg (b) Cost of feeding: - compost is free, from wastes
| = FCFA | 4 800 |
- cottonseed cake: 200 kg at 50 FCFA/kg
- transport of cottonseed cake:
| = FCFA
= FCFA | 10 000
2 000 |
| (c) Depreciation cost of pond: | | |
- FCFA 100 000 in 20 years for 6 months
| = FCFA | 2 500 |
| (d) Depreciation of tools/small equipment: | = FCFA | 2 000 |
(e) Labour (over 6 months, at FCFA 600/day):- composting: 1 day/month = 6 days
- feeding: 15 min/day = 6 days
- maintenance: 0.5 days/month = 3 days
- harvesting: 4 workers/0.5 days = 2 days
- repair pond: 2 days
- marketing fish: 1 day
- total = 20 days
| = FCFA | 12 000 |
| (f) Cost of production: | | |
- total (for 100 kg fish)
- for 1 kg tilapia = FCFA 33 300/100
| = FCFA
= FCFA | 33 300
333 |
If this farmer ran sell his fish at an average price of FCFA 600/kg, his profit will be FCFA 600 - FCFA 333 = FCFA 267/kg or FCFA 26 700 per production cycle of six months in a 400 m2 pond.
Average profit from fish produced on your farm
15. In a similar but simpler way, you can judge the performance of your fish farming by calculating the following average values for one financial year.
(a) Average cost of fish production: add up total production costs (Record-keeping Form 5, column 6) and total depreciation costs, if any (Table 46, column 4), to obtain total costs. Divide this value by total weight of fish produced (Record-keeping Form 5, column 2), including weight of fish given away, if any, to obtain average cost of one kilogram of fish during this year.
(b) Average selling price of fish: divide total income from sales (Record-keeping Form 5, column 3) by total weight of fish sold (Record-keeping Form 5, column 2) to obtain average selling price of one kilogram of fish during this year.
(c) Average profit: subtract average cost of production from average selling price to obtain average profit gained per kilogram of fish during this year. This profit should be positive and as high as possible.
Example
From previous example shown in Record-keeping Form 5 and Table 46, obtain the following averages for year 1989:
(a) Average cost of production:
- total production costs
- total depreciation
- total costs
- total fish production
- average cost of production
| = FCFA
= FCFA
= FCFA
= kg
= FCFA/kg | 2 148 375
433 750
2 582 125
6 418
402 |
| (b) Average selling price: | | |
- total income
- total fish sales
- average price
| = FCFA
= kg
= FCFA/kg | 4 500 700
6 418
701 |
| (c) Average profit per kilogram of fish: | | |
FCFA 701 - FCFA 402
| = FCFA | 299 |
Average annual production and food conversion ratios
16. The average annual production rate (in kg/ha/year) provides a means of comparing average fish production on your farm with that obtained on other farms under similar conditions. If you are not doing as well as your neighbours, you should try to find out why and improve management accordingly.
Example
- Total annual weight of fish produced (Record-keeping Form 5) = 6 418 kg;
- Total area of production ponds = 1.5 ha;
- Average annual production rate = 4278 kg/ha/year.
17. The average food conversion ratio FCR (in kg per kilogram fish produced) measures the efficiency with which the feed distributed to the fish is utilized. It should be as low as possible, depending on the feed ingredients you have been using (see Section 10.3). Again, its value can be compared with similar values from other farms and management practices changed accordingly, if necessary.
Example
- From Record-keeping Form 8, for each week of the year, obtain total amount of feed distributed in fattening ponds as equal to 40 430 kg.
- From Record-keeping Form 5, total fish production was 6 418kg.
- Average FCR = 40 430 kg � 6 418 kg = 6.3.
Estimating the breakeven output for your fish farm
18. You have learned earlier (see Section 16.3) that both total costs of production and sales income increase as the annual output of the fish farm increases. Bear in mind the following reservations.
(a) At low levels of production on a given farm, fixed costs per kilogram produced are very high. As production increases, fixed costs decrease, and the overall cost of production per kilogram decreases.
(b) As long as income remains lower than costs, there is no profit and the farm loses money.
(c) As soon as income becomes greater than costs, there is profit. Within the capacity of the farm, this profit keeps increasing as the output increases, as long as the price of fish does not drop.
19. The output for which total costs equal sales income is called the breakeven output. At this point, there is neither loss nor profit at the end of the year.
Profit is the difference between sales income and total costs |
20. To estimate the breakeven output for your particular conditions of fish farming, proceed as follows (see also example).
(a) For a series of increasing outputs (in kg of fish), estimate how much the total costs of production would amount to (fixed costs and variable costs); in a two-way graph draw line AB, where B represents total costs for the potential maximum output of your farm.
(b) For this same series of outputs, estimate the equivalent sales incomes. Draw line OC.
(c) Determine point P at the intersection of these two lines, at which costs equal sales revenue. This point corresponds to an output which is the breakeven output of your farm.
Note: if the business is being run by the farmer, and the family is being supported from the profits, it is useful to include in the total costs a minimum amount for salary or family support. This gives a more accurate idea of the minimum output necessary to run the farm successfully (line A'B' and point P').
21. The value of the breakeven output compared to the maximum output of the farm shows you two important features:
- how likely it is that your fish farm will be profitable;
- how much margin there is for unexpected problems, for example if there are fish losses or if their growth is held back.
22. The closer the breakeven output is to the maximum production possible, the riskier the farm's operation will be.
Example
A Central African fish farmer owns 1.5 ha of ponds and intends to produce Nile tilapia commercially. Before adopting any type of management, she determines the breakeven output as follows:
- fixed costs are FCFA 860 000 per year (point A);
- maximum annual output expected is 4 000 kg/ha x 1.5 ha = 6 000 kg;
- corresponding variable costs are FCFA 1 392 000/year;
- maximum total costs are FCFA 860 000 + FCFA 1 392 000 = FCFA 2 192 000 (point B);
- maximum sales income at FCFA 700/kg is FCFA 4 200 000 (point C);
- draw lines AB and OC point P. This point corresponds to a breakeven output of 1 750 kg/year;
- if a potential salary of the owner (FCFA 720 000/year) is taken into consideration, total costs become represented by line A'B' which intersects line OC at P'. The breakeven output is then increased to 3 250 kg/year;
- even then, it is still about half the maximum output. This shows that the fish farm has great chances, at the actual fish price, to remain profitable even if unexpected production problems arise.
Determining the breakeven point for a theoretical fish farm in Central Africa |
16.8 Fish marketing for commercial farmers
Selling more table fish at better prices
1. As the production on the farm starts to exceed the immediate local demand for fresh fish, various ways have to be found to sell additional quantities of fish and still obtain a fair price. Good marketing then becomes essential for the commercial fish farmer to remain economically successful. If this is of special interest to you, obtain and study carefully the simple manual written by S.A. Shaw, entitled Marketing the products of aquaculture (FAO, Fisheries Technical Paper 276, 106 pp., 1986).
2. To sell more table fish at better prices, check on the following possibilities:
(a) Where can you sell your table fish:
- on the farm itself: easier, but usually at a lower price;
- at the local market: easy but limited demand;
- at more distant markets: more difficult and costly, but offers increased possibilities for sales.
(b) Which kind of fish do the consumers prefer:
- which species: with scales or without, fatty or lean, etc.;
- which size: any size from very small to larger or minimum size is essential, are large fish acceptable;
- which quality: fresh or processed, gutted or not, with head on or off, alive or dead.
(c) To whom to sell your fish:
- to the consumers directly: higher price but time consuming;
- to traders or wholesalers: lower price but can be simpler;
- to hospitals, canteens, other institutions: good price but delivery should usually be regular;
- to a marketing cooperative, as a member: better price perhaps, but needs active cooperation and good management.
(d) How to sell your fish:
- in a shop, on your farm or in town: additional costs involved;
- at an auction sale at the farm: very risky;
- through a contract at an agreed price: easy if well organized.
(e) When to sell your fish:
- regularly, every day or week; at longer intervals;
- irregularly, concentrating on a particular season or period when prices are best.
(f) At which price to sell your fish:
- free or fixed price;
- insufficient supply may justify higher price;
- poor quality may reduce price;
- larger quantities sell at lower price;
- what is your minimum price allowing for total production and marketing costs (remember that transport can be expensive);
- surplus fish might be sold cheaply and still make a profit, if variable costs can be covered.
3. When analysing these various marketing possibilities, keep in mind the aspects of fish farm management. If necessary, adapt them to your marketing needs, if the resulting net profits are worthwhile (see Section 16.7).
Diversifying your fish production
4. Raising more than one type -of fish may help contribute to the economic viability of your fish farm. So, in addition to raising fish only for table consumption, you may choose to raise other types of fish as well. The following are some examples:
- juvenile fish to be sold to other fish farmers: the production cycle being relatively short, profits can be good and risks relatively low;
- selected broodstock, with improved genetic characteristics: prices are usually high but so are the risks taken over a production cycle which can be rather long;
- sport fish: sell fish for stocking in sport fisheries; keep attractive fish in a separate pond and sell the fishing right to anglers for a nominal fee; or have them buy the fish they catch on a weight basis, at a good price;
- ornamental fish such as goldfish, koi carp, or other colourful wild fish from local bodies of water: sell them alive to a pet shop or sell them directly yourself.
Marketing fresh fish of good quality
5. Local sale of fresh farmed table fish is the simplest and cheapest way of marketing. Usually people prefer fresh to processed fish. But to ensure good quality and a good price, your fish should be handled properly.
(a) Before harvest: remember to stop feeding them at least one day beforehand. Stop applying chemicals for prevention or treatment of diseases at least one month earlier. Plan your harvest properly.
(b) During harvest (see Chapter 11): handle the live fish carefully. If necessary transfer them quickly to a storage facility, for example, to remove any unwanted muddy flavour or to simplify or make more attractive selling arrangements.
(c) After harvest: if muddy, rinse them well in clean water. It is best to kill the fish quickly with minimum stress, for example by chilling them in very cold water (about 40�C) or crushed ice. Prepare your fish, if needed, according to customers' preferences, which may include operations such as sorting/grading (see Chapter 12), gutting, decapitating, splitting, scaling and filleting.
Preventing rapid deterioration of fish quality
6. As soon as a fish dies, it starts to decompose. This process is mainly caused by the increased activity of bacteria (see Section 15.3), which rapidly multiply within the fish under favourable conditions of food, temperature and humidity. Bacteria are especially numerous in pond. water as well as on the gills and in the digestive tract of live fish. It is from there that decomposition will quickly spread to the whole body as soon as a fish dies, unless good handling prevents it.
7. As soon as the fish are harvested you can reduce bacterial activity and thus prevent deterioration of fish quality:
- keep the fish clean, avoiding bacterial contamination;
- if acceptable to consumers, gut the fish, removing all internal organs and blood, and/or cut off the gills (or the head);
- reduce the temperature of the fish, either by simply keeping it cool (away from direct sun rays) or better, by chilling it with ice;
- expose the fish to very high temperatures such as boiling in water or cooking over a fire;
- reduce the water content of the fish by drying, salting or smoking (see paragraph 15).
8. Thus, to ensure that your harvested fish will remain fresh and in good condition until they are sold, make sure of the following.
(a) Sell them as soon as possible. Harvest only the quantity of fish that you expect to sell on the same day.
(b) Keep them cool, in the shade and under a wet cover of sisal bags, banana leaves, grass, etc. If at all possible, use ice (see paragraphs 9 to 11).
(c) Keep them clean. Wash them with clear water. Keep them off the ground and protect them well, for example in wooden boxes or plastic/sisal bags, from mud, dust, insects, etc.
(d) Never keep dead fish in water. They will spoil rapidly.
(e) To transport them avoid the warmest hours of the day, travel early in the morning or even at night. If at all possible, use crushed ice and an insulated container (see paragraph 10).
Using ice to preserve fish quality
9. Fish can be simply preserved with ice, whenever it is readily available in sufficient quantities and at a reasonable cost. Iced fish should also be acceptable to the consumer at a price covering the extra costs involved. The use of ice will also allow you to reach more distant markets with good quality fish.
10. For best results, apply these simple rules.
(a) Use clean ice, made from good water, and not contaminated by handling, crushing, etc.
(b) Ice clean fish while it is fresh, as soon as possible after harvest and preferably within one hour of death.
(c) Use an insulated container. A simple one can be made from a beer crate lined on the outside with sheets of styrofoam, at least 3 cm thick. Cover this with plywood and add an insulated lid.
(d) Wash these containers well between use, for example with a chlorine bleach solution or another non-toxic kitchen disinfectant. Rinse thoroughly with clean water.
(e) Use plenty of ice: in hot weather at least as much ice by weight as fish. In cooler weather a ratio of one part ice to two to three parts fish may be feasible. This depends also on the length of icing desirable and on the insulation quality of the boxes.
(f ) Use the ice properly so that it is in close contact with all fish:
- first place a layer of ice on the bottom of the container;
- add a layer of fish, separating them with ice;
- add ice along the sides of the container;
- make other layers in a similar way;
- top the container when nearly full with a last layer of ice;
- close the container tightly and keep it in a cool place.
(g) For best results gut the fish, remove their gills and wash them well before icing.
11. In the tropics, well-iced fish can last for many days. If your fish is tobe kept for such long periods, you should add extra ice to each containerfrom time to time, depending on the conditions of transport and storage.
Processing fish to preserve its quality
12. Although your first choice should be to sell your fish fresh (or iced fresh if feasible), there may be instances when processed fish might be preferable. Generally, fish processing itself is done by specialized traders. You should think carefully before deciding to process fish yourself.
13. If you decide to do so, for example as an additional source of profit, get the practical assistance of some knowledgeable person such as a fishery extension agent. Obtain and study also the numerous training materials produced by the FAO Fisheries Industries Division, for example the filmstrips and commentaries about fish preservation: (1) salting (2) smoke-drying and (3) drying.
14. Before processing, the fish is usually prepared as follows.
(a) Gutting: cut the belly open from anal vent to throat with a sharp knife. Remove the internal organs. Cut the head off or cut the throat open to remove gills and blood vessels.
(b) Cleaning: carefully remove in clean water all traces of blood and mucus. In tilapia, brush off the black membrane from the inside of fish.
(c) Splitting: open fish with a deeper cut along the backbone, being careful not to cut through the outside skin.
(d) Scoring fish longer than 25 cm or thicker than about 2 cm by making cuts along the length of the fish at intervals of 2 to 4 cm.
(e) Salt the fish directly, or to prepare for further processing, especially if fish are large and/or fatty, soak them for 60 minutes in a salt solution, called brine, made by diluting 1 to 2 kg salt per 10 l water. Drain/dry the fish in a cool place for about one hour before further processing (see paragraph 15).
Note: to avoid breeding of flies and bacterial contamination of your fresh fish, keep the fish offal, together with spoiled fish and trash fish, in a well-covered container to be processed later (see paragraph 20).
15. There are three main processing methods:
- drying: the removal of most of the water both from the surface and the deeper flesh of the prepared fish;
- salting: the replacement and removal of most of the water present in the flesh by salt;
- smoking: the removal of most of the water from the flesh and the depositing of preserving chemicals on it.
16. A brief overview of useful methods is given in Table 48. Simple equipment is illustrated on the following pages. When selecting a processing method, remember to take into account the type of fish to be preserved. Lean fish such as tilapias are much easier to process than oily/greasy fish such as catfish. Large, deep-bodied fish are more difficult to process than small, slender fish.
TABLE 48
Fish processing methods |
A smoker made from sections cut from an oil drum |
Note: four or five smoke chambers can be used, but move the topmost chamber to the bottom position from time to time during smoking |
A smoker with a masonry firebox and a sheet metal
smoke chamber (Altona smoker) |
Note: walls can also be built of clay or bricks |
A smoker with a wood and metal smoke chamber
and an oil-drum firebox (Ivory Coast smoker)Note: move the topmost tray to the bottom position from time to time during smoking |
Note: move the topmost tray to the bottom position from time to time during smoking
Notes for storing fish after smoking:
- stack trays 60 to 90 cm above the ground;
- enclose trays with black plastic sheets tied in place
- build a roof of plywood or thatch over the stacked trays
Storing processed fish
17. Store your dried or smoked fish properly:
- keep it cool and dry;
- pack it tightly to protect it from air moisture (mould) and to delay the onset of rancidity of fish fat;
- protect it from insect infestation, for example by placing it in woven baskets lined with plastic or strong paper; if you use plastic bags, keep them away from direct sunlight to avoid moisture building up inside.
18. Store your salted fish either in dry salt (kenching) or in a clean brine (pickling/brining).
19. Check regularly on the quality of your stored fish and reprocess itas necessary.
(a) If dried or smoked fish gets mouldy, wash it in a 20 to 25 percent brine and dry it well in the sun.
(b) To preserve the quality of your hot-smoked fish, resmoke it regularly at low temperature (40 �C to 50 �C) for about four hours; do this every two or three days in humid tropical climates. In drier climates, a weekly treatment should be sufficient.
(c) Dried or smoked fish infested with insects can be cleaned and well disinfected in a solar dryer where the air temperature is maintained high enough (above 40 �C) for a few hours (see end of Section 10.6).
(d) Check on the salt concentration in which your salted fish are being preserved. Readjust it and renew old brine as necessary.
Using fish wastes efficiently
20. Fish wastes available from your farm such as trash fish, spoiled fish and fish offal can be used efficiently in several simple ways.
(a) You may add wastes to your compost plies as an additional source of nitrogen (see Section 6.4).
(b) You may chop the wastes into small pieces and feed them raw to your animals, especially poultry.
(c) You may produce highly nutritional cooking oil together with excellent feed for your fish (especially juveniles) and other animals. Simply proceed as follows:
- half fill a metal drum with water;
- start a fire under it and bring the water to a boil;
- finely chop fresh fish wastes and throw them into the boiling water until the drum is three-quarters full;
- boil for about 20 minutes;
- take the drum off the fire;
- as the fish oil rises to the surface, skim it off and keep it in a clean container for later use; keep this container tightly closed;
- when the water has cooled down, drain it from the drum and collect the fish waste residue from the bottom; it is an excellent ingredient for mixing in animal feeds; you may also dry waste residue, for example in a solar dryer (see Section 10.6) to make a simple fishmeal.
16.9 How to increase profits from commercial fish farming
1. From what you have learned above, you may aim to increase profits by, for example, considering the following.
2. Reduce your fixed costs:
- through good planning, reduce construction costs (see Construction, 20/1 and 20);
- through good maintenance, reduce major repair and depreciation costs;
- look for loans at a lower interest rate;
- look for ways to improve the use of the facilities you have.
3. Reduce your variable costs:
- produce your own juveniles at reduced price;
- increase the survival rate of your fish;
- through good design of facilities and advanced planning, reduce labour and transport costs;
- reduce feed costs by producing food ingredients on your farm at reduced cost and by improving food conversion ratios (see Section 10.3);
- upgrade efficiency by integrating animal production with your fish farm.
4. Saving can be important, especially if the cost of the item saved makes up a large proportion of the total variable costs. The relative importance of the variable factors of production varies with the culture system as shown in the chart below. In general, supplementary feeds, stocking material, and labour are the items that represent most of the variable costs.
5. You can easily define this relative importance in your own fish farm from the data recorded in your daily accounts (Record-keeping Form 5). Sum up the various variable costs by category for one year and calculate the percentage cost of each category. Try to save on those categories on which you spend most of your money.
Examples of the relative importance of variable factors of production
(as a percentage of total variable costs) |
6. Increase your sales income
(a) Increase average production rate (monosex tilapia, polyculture, etc.).
(b) Increase fish price through improved marketing planning (seasonal sales, spread of production, wider market, etc.).
(c) Diversify production: juveniles/food fish, fish/other animals, animal/other products, sport fishing, etc.
(d) Improve quality of fish produced according to market demand (larger size, other species, processed fish, etc.).
7. You should build up knowledge from experience. Until you have acquired enough of it, do not hesitate to consult more advanced fish farmers and local extension staff to help you evaluate your performance and advise how to improve it.
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