ECONOMIC ASPECTS OF INTEGRATED LIVESTOCK-FISH PRODUCTION SYSTEM IN COMPARISON TO LIVE-STOCK AND FISH MONOCULTURE SYSTEMS

Ruangrai Tokrishna
Department of Agricultural and Resource Economics
Kasetsart University,
Thailand.

ABSTRACT

Integrated livestock-fish production system can be recommended for small scale owner-operator farms. High feed costs of the livestock system will be offset by the low cost and high return fish system. Attention has to be given on extension since farm yields are sensitive to physical factors, farm size, farm type, and stocking rate. More information is needed on the interaction between the systems in order to determine the optimum size. Tools of economic analysis are, for examples, cost and returns, cash flow, internal rate of return, and linear programming.

ECONOMICS OF INTEGRATED LIVESTOCK-FISH PRODUCTION SYSTEM

There are various factors that have to be considered in determining the economics of the integrated livestock-fish production systems. Some of these factors are discussed below.

Physical Factors

To obtain an efficient integrated production system, attention to physical factors, including environmental conditions of the farm area, is needed. Yields can vary in different topographies (source of water supply, water quality, type of soil, weather, etc.), types of fish pond (excavation, levee, water system, etc.), and farm sizes. It is recommended that these characters be considered in detail, and clearly defined in determining the economics of an integrated production system.

Stocking Rate

It is not difficult to get information on recommended stocking rates, both for livestock and fish for integrated production systems. Nevertheless, the recommended rate should be slightly adjusted according to different physical conditions of the farm.

It will be useful if information on the volume of manure per animal and the relation between fish yield and manure load is available. Hopkins and Cruz (1982) estimated functional relation between fish yield (kg/ha/day tilapia/carp) and animal manure (kg/ha/day duck/chiken/pig manure). This together with the information on growth rate, water and soil chemistry and plankton induction, they were able to recommend stocking rates.

Economic Analysis

Costs and returns should be calculated with respect to farm type, farm size, and physical condition. In an integrated livestock-fish production system, it is useful to divide the items into cash and noncash beside variable and fixed as is generally done since some of the costs and returns in the system are nonpecuniary.

It will be useful if cash flow analysis can be calculated since such pattern of payments and receipts will be important for small farm operation which is not likely to have easy access to sources of farm credit. The net cash flow from the system should be high enough to allow adequate revenues for the farmers and their families.

Since yields can very among farms of different sizes, the relation between costs and farm size should be estimated within a certain range of farm size and specific type of farm. This information can be useful for interpolation to find the cost of production.

Net income can be calculated from the difference between total revenues and variable (in some cases, cash) costs. Net profit is the difference between total revenue and total cost.

From the data on costs and returns, internal rate of return can be computed. In their pilot project, Hopkins and Cruz (1982) defined the internal rate of return as the ratio between operating profit (total revenues - operating costs) and the summation of total capital costs and average working capital.

From the above information economics of the different types of integrated livestock-fish production systems can be determined. The selected type should be the one which gives the highest net profit or highest internal rate of return.

Beside the aforementioned analysis which provides adequate information for certain farm types, the optimum production can be estimated using linear programming techniques to find the level of “maximum” profit.

Marketing

It seems that integrated livestock-fish production system is more recommended for relatively small scale farms. Production from these small farms can be used both for home consumption and/or sold to the market where market access exists. Nevertheless potential market should be considered if the objective is to increase farm income.

Consumer preference should also be considered. Fish in integrated systems are fed on animal wastes which may not be acceptable among consumers in the production area.

COMPARISON OF COSTS, RETURNS AND YIELDS OF INTEGRATED AND MONOCULTURE SYSTEMS

In Table 1, costs and returns from selected integrated livestock-fish production systems in Thailand are given.

The first example is the integrated system in Central Region in 1985 (Office of Agricultural Economics, 1986). This form in Chainart was an experimental one. Total farm area was 1.44 ha of which the main area (0.96 ha) was paddy field and 0.1 ha was fish pond, where striped catfish were stocked. Over the pond there was a hen house with 204 birds. Near the pond there was also a pig house over an area of 0.11 ha with 34 pigs and 5 breeders. This farm also grew vegetables in an area of 0.28 ha. Pig and chicken manures were washed into the fish pond and water outlet from the pond drained into the vegetable beds. The farm was able to earn a net farm income of US$1,215.7/ha. Net profits as generated from pig and chicken systems were relatively low (9 % and 22 % of the total costs) but were very high from the fish system (more than 7 times) and moderately high for the vegetables (33%) while the net return from paddy was almost nill.

The second example is the integrated duck-fish system in the Central and Northeast in 1981 (Edwards, 1983). Pond area was 0.02 ha of which about 30 % of the area was a duck house. Stocking rates were 5 ducks per sq m and 4 fingerlings per sq m of the pond. There were losses from the duck system due to low egg productivity and high costs of duck feed while the profit rates from the fish system were quite high (115 % and 50 % of the total costs in the Central and the Northeast respectively).

The third example is chicken-fish system in the Central region in 1976 (Wetchagarun, 1980). In this farm only variable costs per unit of production were available. Initial investment for this 2.4 ha farm was US$268.95/ha. The net incomes were quite high for both systems (169 % and 188 % of the variable costs for chicken egg and fish accordingly).

Costs of fish production in integrated systems are usually lower than those in monoculture systems especially for striped catfish and tilapia. Costs of omnivorous species like walking catfish and cross-bred catfish are high due to feed costs, thus, not being recommended for small farms.

Table 1. Costs and returns from integrated livestock-fish and monoculture systems.

*   Office of Agricultural Economics, 1986
**     "      "          "                 "          , 1991
*** Watchagaram, 1980Values are averages

Table 2. Farm sizes stocking rate, yield, cost and price per unit of production in integration and monoculture systems.

In Table 2, size of farm, stocking rate, yield, cost and price of the production are given for pig, chicken egg, duck egg, and fish from integrated and monoculture systems. Costs of livestock production in integrated systems seem to be higher due to the disadvantage in scale of operation. Such disadvantage can be corrected by the high net return from the fish system.

REFERENCES

Edwards, Peter et al., (1983). A feasibility study of fish/duck integrated farming at the family level in Central and Northeast Thailand. Asian Institute of Technology, Research Report No. 163.

Hopkins, K.D. and E.M. Cruz (1982). The ICLARM CLSU integrated animal-fish farming project: final report. ICLARM, Manila, Philippines.

Office of Agricultural Economics (1986). Integrated farming system in Chainart Farm Development Unit: Result of the study on the 5th year. Agricultural Economics Report No. 64. [In Thai].

Office of Agricultural Economics (1991). Alternatives on agricultural production Activities. Agriculture Economics Report No. 58. [In Thai].

Wetchagarun, K. (1980). Integrated agriculture-Aquaculture farming studies in Thailand with a case study on chicken-fish farming. In: Integrated Agriculture-Aquaculture Farming System. Edited by R.S.V. Pullin and Z.H. Shehadah. ICLARM, Manila, Philippines.