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Socioeconomic.Pdf Study on economics and socio-economics of small-scale marine fish hatcheries and nurseries, with special reference to grouper systems in Bali, Indonesia Susana V Siar1, William Lee Johnston2 and Sih Yang Sim3 [1] SEAFDEC Aquaculture Department, Tigbauan, 5021, Iloilo, Philippines. E-mail: [email protected] [2] AFFS Fisheries and Aquaculture, Queensland Department of Primary Industries. PO Box 5165 SCMC. 91-95 Howard Street Nambour, Qld 4560, Australia. E-mail: [email protected] [3] Network of Aquaculture Centres in Asia-Pacific (NACA), PO Box 1040, Kasetsart Post Office, Bangkok 10903, Thailand. E-mail: [email protected] Background • The development and success of the Backyard Multispecies Hatchery System (BMHS) • NACA in cooperation with Queensland Department of Primary Industries, and SEAFDEC AQD assembled an expert team to evaluate the economic and socio-economic aspects of small-scale hatcheries in Bali • This research was funded by an APEC exchange (FWG 01/2001 Collaborative APEC Grouper Research and Development Network -- administered by Agriculture, Fisheries and Forestry – Australia), NACA and by ACIAR (FIS/97/73 Improved hatchery and grow-out technology for grouper aquaculture in the Asia-Pacific region) Objectives of the study General objectives: – Provide a basis for recommendations to the APEC/NACA grouper network on the potential for small-scale hatcheries to support the development of sustainable grouper aquaculture Objectives of the study Economic objectives: – Document economic structure of small-scale grouper hatcheries – Develop a bio-economic model – Provide a cost-benefit analysis tool to asses R & D options – Provide a decision tool for researchers Social objectives: – Describe the development of the private grouper hatcheries – Assess the benefits to small-scale farmers, and to the wider community Methods Study Methods: – Duration: 2-18 March 2002 – Study carried out in cooperation with GRIM staff and resident JICA Mariculture Expert – Face-to-face interview of owners, staff of hatcheries & nurseries, and brokers – 17 hatcheries, two brokers, and one live fish trader – A questionnaire was used for face-to-face interviews The Development of Backyard Hatchery • Started with the collaboration between GRIM and JICA from 1988, then followed by Multispecies Hatchery Project in 1994 • GRIM’s involvement in the ACIAR project FIS/97/73 Improved hatchery and grow-out technology for grouper aquaculture in the Asia- Pacific region in 1999 Backyard Hatchery for Milkfish • Introduced in 1993 • Initially pickup by GRIM’s staff in collaboration with small farmers • There are two types of milkfish hatcheries in Bali: – Complete hatcheries broodstock maintenance, maturation, spawning, live food culture, fry production and marketing – Partial hatcheries (Backyard hatcheries) hatch fertilized eggs and rear larvae to selling size Backyard Hatchery for Milkfish Technology Transfer of Backyard Hatchery for Milkfish • There are three main factors attributed to the success of technology transfer of backyard hatchery for milkfish by GRIM – The willingness of the GRIM staff to invest in milkfish hatchery, thus shortening the period between technology verification/demonstration and adoption by target beneficiaries – GRIM distributing fertilized eggs for free to backyard hatcheries until breakeven – The availability of technical support from the GRIM staff who may be called upon for advice by small farmers Transfer of the Seed Production Technology for Humpback Grouper • GRIM developed seed production technology for humpback grouper in 1998 • In November 1999, GRIM successfully produced 54,000 humpback grouper fry with backyard hatchery prototype • There were two modifications made from milkfish hatchery to humpback grouper hatchery: – Sand filter – Frequency of water exchange and tank bottom cleaning • November 2000, two hatcheries were able to produce juveniles from the 3 hatcheries trials Prototype of Backyard Grouper Hatchery System From Humpback to Tiger Grouper • The success of humpback grouper hatchery technology also being expanded to other grouper species • Tiger grouper, started to be produced in April 2001 • Farmers, students and other interested persons may come to GRIM to get practical training on the seed production technology for humpback and tiger grouper • GRIM also produce manuals on seed production in English and Bahasa Indonesian Humpback and Tiger Grouper Grouper Hatcheries & Nurseries Socio-economic Impact of Milkfish Hatcheries in Bali • Collection of wild milkfish fry was a source of livelihood • With the development of milkfish hatchery technology, new sources of livelihood and employment opportunities were created • Different stages of seed production engaged different groups of people • Created short-term construction works • Fishermen used to catch ornamental fish with destructive methods found employment in milkfish hatcheries • Women also employed for counting and packing fry Socio-economic Impacts of Grouper Hatcheries in Bali • Grouper fry industry in Bali created four distinct groups: – Eggs supply – Hatchery – Nursery – Brokers • Most grouper hatcheries employ at least two workers • Women employed for size-grading Various Groups Working in Backyard Hatchery System Economic Analysis of Backyard Hatcheries • Undertakes a microeconomic evaluation of the small-scale grouper hatcheries • 11 farms out of 17 surveyed provided economic data • Sufficient data collected to develop a discounted cash flow model Methods for Economics Study • Data collection • Data analysis – Discount cash flow analysis – Discounting reduces a time stream of costs or benefits to an equivalent amount in today’s dollar • Profitability measures – Equivalent annual return – measure of annual profit after deducting capital, operating and labour costs generated over the life of the project expressed in today’s dollar – Internal Rate of Return (IRR) – Benefit-Cost Ratio – Payback period Cost Structure Evaluation of Small Scale Hatcheries • The cost structure look at, and evaluate, comparisons between the 11 farms – Capital expenditure and land – Fertilised eggs – Feeds – Labour – Operating expenses • Fuels and oils • Repairs and maintenance • Electricity – Marketing Systems, Packaging and Freight Price Structures of Small Scale Hatcheries in Indonesia Size of Fingerling C. altivelis E. fuscoguttatus 4 to 5 cm AUD 1.20 – 1.40 AUD 0.60 – 0.80 10 to 12 cm AUD 2.40 – 2.80 AUD 1.60 – 2.00 16 to 18 cm AUD 5.00 – 6.00 AUD 3.00 – 4.00 Results of Economics Analysis • Annual return (profit) – AU$ 6,312 (2 tanks) – AU$ 100,037 (12 tanks) • Internal Rate of return (IRR) – 12% - 356% • Benefit cost ration – 1.27:1 – 3.09:1 • Payback period – 7 farms had a payback period of 1 year – 1 farm exceeding 10 years Results of Economics Analysis • Fingerling output – 13,500 to 280,000 • Production cost – AUD 11,433 to AUD 179,187 • Cost per fingerling – AUD 0.25 to AUD 0.85 • Revenue per fingerling – AUD 0.40 to AUD 1.72 Strengths and Weakness of Grouper Hatcheries in Bali • Simple and easy to operate • Relatively low cost • Flexibility – designed for culture of various marine finfish species • Lacking of nursery – leave a gap between 3-4 cm and the stocking size of 10 cm for cage culture • Sole fertilised eggs supply for humpback grouper is GRIM • Prevention and control of virus is weakness • Demands are not recurrent so hatcheries are price takers Conclusion • The potential for small-scale hatcheries to support the development of sustainable grouper aquaculture • Research on the following areas are needed to support the sustainability of there systems: – Establishment of criteria to determine good quality seed – Development of price and market information systems to match supply with demand – Development and pilot-testing of models of farmer-scientist linkages that are appropriate to the socio-political context of each country – Due to clustering of hatchery/nurseries, there is a need for development of carrying capacity models for coastal areas Conclusion • The main constrains to future expansion of grouper hatchery are: – Market demand – Grow out culture – Supply of operating components Acknowledgement • We would like to thank the staff of the Gondol Research Institute for Mariculture for facilitating the visit and hatchery interviews, and for translating the questions and answers, particularly Dr. Adi Hanafi, Director; Ms. Suko Ismi, Mr. Bejo Slamet, and JICA Expert on Mariculture Mr. Shogo Kawahara..
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