Field Technical Report 3
Review of the Economics of Fish Farming and culture-Based Fisheries in Ghana
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1. PURPOSE, ACTIVITIES AND CONTENTS OF REPORT.
1.1 Terms of reference.
3. ECONOMICS OF FARM UNITS
3.1 Species and culture techniques to be
3.1.2 Culture systems
3.2 Income and costs for selected fish farming technologies.
4. ECONOMICS OF CULTURE BASED FISHERIES
4.1 The case of the typical dug-out.
4.2 Magnitude of future developments.
5. REVIEW OF DEMAND FOR FISH AND FISH PRODUCTS
5.1 Demand for fish in Ghana
5.1.1 Apparent past supply
5.1.2 Apparent growth in demand at the national level
5.2 Supply of tilapia and fresh-water catfish
5.3 Demand for farmed tilapia and catfish at district level
5.4 Product form and price
6. REVIEW OF FISH FARM INPUTS
6.1 Purpose and extent of review
6.2 Land and water
6.6.1 Economic availability
6.6.2 Influence of transport costs
7. CONCLUSIONS OF ANALSYIS AT NATIONAL LEVEL
7.1 Nature of likely future fish farming
7.2 Possible scale of development
8. CONCLUSIONS OF ANALYSIS AT DISTRICT LEVEL
In essence, the terms of reference for the economist were to study the present and future markets for aquaculture outputs and inputs, including credit and the capital and operational costs of rehabilitating defunct fish culture units. The rehabilitation has been studied together with the Mission Aquaculturalist and estimates are given in his report. The integration of economic data into the Geographical Information system (GIS) was not completed during the author's stay in Rome. However, guidelines for the work are included in appendices to this report.
After spending three weeks travelling to the different regions of Ghana, and one week in Accra, the Mission returned to Rome on the 28th of April for report writing. A detailed itinerary and enumeration of main activities are provided in Field Working Paper 15. The list of individuals interviewed in the course of the mission is provided in Field Working Paper 16 and the documents reviewed are listed in Field Working Paper 18.
The report contains an analysis of the economic context and content of aquaculture and culture based fisheries (CBF). The purpose of the analysis is to identify an economically sound strategy for the development of aquaculture and CBF in Ghana. This is done through exploratory calculations. These calculations will, when combined, present the possible outcome of different lines of action. A review of the outcomes will indicate the proposed strategy.
The report has three main parts. The first deals with the economics of different fish farming alternatives. The second with the possibilities of pursuing any of these alternatives in order to obtain an increase in aquaculture production of 1,000 tons at the end of a five-year period, the minimum thought to be of interest to the Government of Ghana. The possibility will be established through: (1) a review of the possibilities of disposing that quantity of fish at prices interesting to the producers and (2), a review of the economic availability of the most important inputs ( water/land, labour, seed, feed/fertiliser and credit). The last part of the report draws the conclusions of the economic analysis in terms of strategy alternatives.
Given that social, cultural and institutional aspects of the aquaculture and CBF environment are not considered in this report, conclusions are only partial.
The economic analysis of both fish farming and culture based fisheries possibilities have been carried out in collaboration with other team members. These analyses are presented in Field Technical Reports 1 and 2 and Field Working Paper 1.
There are no marine finfish, molluscs, crustacea or algae, being cultured commercially in Ghana. Neither are there any obvious species with which to develop such cultures.
The arguments against spending considerable hard currency on developing a marine shrimp culture industry are several. The main economic one is that there is only a marginal chance of actually obtaining from such an activity any net foreign exchange earnings during the next decade. The reasons are two. The experience elsewhere in West Africa has not yet proven success in spite of considerable efforts, particularly in the lagoons of Cote d'Ivoire. Second, the market for marine shrimps for the last two years has been feeling the strain of a rapidly increasing production mainly in Asia but also in Latin America.
Culture in fresh water could concern fin-fish and crustacea. Whilst fin-fish is already cultured, the candidates for culture amongst fresh-water crustacea are fresh water prawns.
No fresh-water prawn is being grown commercially Ghana. Attempts have been made to culture both M. rosenbergi and M. vollenhoveni but so far without resulting in sustained, commercial cultures. While M. rosenbergi is being cultured, principally in Thailand, M. vollenhoveni is not known to have been cultured commercially anywhere.
There would seem to be four basic possibilities: (i) do not bother about attempting to culture either; (ii) develop the culture of M. vollenhoveni; (iii) introduce the culture of M. rosenbergi; and, (iv) promote the culture of both.
For M. rosenbergi the advantage is a known, and transferable, technology, the disadvantages are uncertain markets, both in West Africa and world wide. For M. vollenhoveni the situation is the reverse: while the culture technology remains to be developed, the market in West Africa seems to be assured. The mission would argue in favour of a double strategy: (a) pursuing the development of a culture technology for M. vollenhoveni; and, (b) test-market imported M. rosenbergi to establish whether this species is a close substitute of M. vollenhoveni in local, luxury markets. If so, then the introduction of the species and its culture could be pursued, ecological aspects permitting.
Probably as much as 95% of the present production of cultured fresh water fish is tilapia, the rest is mainly catfish (Clarias) and Heterotis.
Until more is known of the possibilities of culturing vollenhoveni, or of the local and West African markets for Macrobrachium, there is no reason to undertake tentative cost and earnings projections for their culture. The analysis will continue with fresh water fish only. Before going into the cost-earnings situations in some more detail, a review will be made of the possible culture systems in which the fresh water fish can be cultured, at least in theory.
Oreochromis niloticus, which is the type of tilapia of most interest, could be grown in pond, pens, cages or raceways. The same holds true for Clarias gariepinus, the other major species which can be considered a candidate for a fish farm development strategy in Ghana. Which of these structures are to be preferred?
Cages and raceways on inspection turn out to be expensive methods of culture (see Field Technical Report 2). This is not so much due to the cost of structures themselves, as to the expense which the farmer must incur to obtain a reasonably balanced feed for the fish.
Although the need for feeding fish in pens need not be an obstacle, particularly if the fish is a plankton feeder (like O. niloticus), the environment for the introduction of pens is not ideal. There are two main reasons: the water levels of potential pens sites (reservoirs and Volta lake) fluctuate over the year to such an extent that the pen walls could not reasonably be built so high that one could avoid the need to move the pen as the water level recedes. In addition, at the pen site, or close to it, capture fishermen will be able to offer for sale tilapia and/or catfish at prices with which any cultured fish will find it difficult to compete (Field Technical Report 3).
Thus, it seems to the mission that the pond will be the basis for fish farming development in Ghana during the next decade. This, in spite of the fact that the high opportunity cost of water makes it desirable to use it sparingly, and preferable to use water without preventing its use also for other purposes; that is, to culture fish in cages or pens in existing reservoirs. The latter would require some solution to the problem of fluctuating water levels, and preferably a technology by which it would be possible to stimulate a dense plankton bloom using, e.g., cow manure.
Field Technical Report 2, “Inland Fish Farming Alternatives for Ghana”, contains a detailed analysis of the following eleven fish farming technologies:
The analysis has been done for the best possible circumstances for each alternative. This means in effect that the analysis is based on a minimum of transport costs both for ingredients and outputs. E.g., the Tilapia-with-rice-bran alternative is supposed to be located in an irrigation scheme.
The alternatives are, as can be seen above, “single” input strategies. Thus, only one feed or one fertilizer is used. Generally, at the smallholder level, use might be made of several inputs into the same pond. These possibilities will be considered when the possibilities are analysed by district.
The returns are based on ex-pond prices for tilapia and catfish of C. 350/kg. The analysis supporting this price is given in Field Technical Report 2.
Figure 1, illustrates the result of the analysis. The main conclusion is that the economic result of manures and fertilizers is generally far better than that obtained using agro-industrial by-products. Also, given the general access to fertilizers, the location of fish farming will be determined basically by the interaction of markets with the cost of water.
Also, it should be noted that the price level required by the farmer is such that the fish have to be sold for curing. This means that the government's purpose of promoting fish farming must be that it is a good means through which to earn a living, not primarily a method for producing cheap animal protein. Nevertheless, producers with ideal locations possibly could produce Tilapia at a price competitive with capture fishermen. That, however, would not become the general rule.
Ghana Net profits for selected
fish farming technologies
Source: the Mission
Although dug-outs have been stocked and records kept the mission was not able to piece together enough data to get an idea of the complete costs and returns for a typical dug-out. Nevertheless though “exploratory calculations”, the mission has developed some ideas of what the economic aspect of CBF in dugouts could be like. The information is contained in Field Working Paper 1.
From the economic point of view, culture based fisheries in dug-outs and/or dams are characterized by the fact that, while one group enjoys the direct benefits and have some direct costs, a third group - in fact society at large - also have to bear some direct costs.
The two categories of costs are: (i) those incurred by fishermen in extracting the fish from the water and by women (generally) in preserving, curing, transporting, and selling the fish, and (ii) those incurred by government in stocking the dugouts and the subsequent management of the fishery.
Given that the cost structure of both fishing and post-fishing activities is labour-intensive, a large part of the cost of the fish produced through CBF in Northern Ghana will constitute income for the local population. From the point of view of the community as a whole, this is positive as the employment opportunities (and therefore income earning opportunities) are scarce.
It is the public sector cost of CBF that must be scrutinized in order to make certain that the costs have a reasonable relationship to the expected benefits. This is the main thrust of the analysis of Field Working Paper 1. The conclusions can be summarized as follows:
The magnitude of future developments is tentatively identified in the report of the culture based fisheries expert. From the mission's point of view, the limiting factors are: (1) the cost of stocking and managing the dug-outs and (2) the actual number of dug-outs in existence. The costs incurred by the local population in exploiting the resource are going to be relatively low and consist mostly of labour. As a result, it is not likely that there will be any difficulty in disposing of the fish at prices which make the distribution (preservation and processing) worthwhile activities.
In the period 1983–1987 total fish landings in Ghana have been increasing steadily from 251,000 tons/year to 382,000 tons/year. In that year, landings of fresh water fish were estimated at 57,000 tons, the highest recorded during the 1980's. This is equivalent to 16% of total landings.
The share of fresh water fish remains at 16% after deducting exports (only of marine fish) and adding imports. The apparent supply of fish per capita is then 22.7 kgs.
However, in part as a result of the high rate of population growth (about 3% per year), the stagnation of marine capture fisheries and the scarce foreign exchange resources, the supply of fish per capita in Ghana in the late 1980's was well below what it was in the preceeding decade. From 1971 to 1977 the estimated per capita supply was consistently above 30 kgs (Pers. comm. A. Crispoldi-Hotta: Fisheries Department, FAO Rome). The decline is partly explained through the reductions in imports, following the worsening economic conditions of the country in the early 1980's.
The growth in demand for fish in Ghana, at unchanged real prices, is quite high. The population growth will ensure a growth of 3% per year. An expected annual increase in GDP of 5% per indicates an increase in GDP/capita of about 2%. As the average Ghanaian consumer is believed to demonstrate, in the case of fish purchases, an income elasticity1 of close to unity, the growth in volume of fish demanded will be about 5% per year.
1 For every one percent increase in income, the individual tends to also increase fish purchases by one percent.
There is no country-wide statistical coverage of fresh water fish landings. Estimates have to be made on the basis of partial observations and historical data.
Records from fisheries on Lake Volta indicate that tilapias occupied 19% of catches. While catfishes will be caught in river fisheries, tilapias will have a less prominent place in that catch. Overall, the mission has come to the conclusion that, in total fresh water landings, tilapias should be accounting for about 20% and catfishes for 10% of landings.
Given that fresh water fish represents about 16% of the total fish supply, the overall percentage for tilapias and fresh-water catfishes is of the order of magnitude of 5%. This is the national average. It will not be reflected in the pattern of supply at the district level. The share in the coastal areas will be much smaller, while it will be larger in the northern half of the country, and the western part of the forest zone, as well as around Volta lake.
The consumption of fish decreases drastically from the south to the north. The mission has not had access to recent estimates. For the sake of its analysis it has separated the country into three zones, (see Field Technical Report 5, Fig. 15). In the southernmost zone the per capita consumption is put at 30 kgs/person/year, in the middle zone, roughly corresponding to the forest belt, at 20 kgs and, in the three Northern regions, at 10 kgs. The percentage share of tilapias and catfish in this supply has been placed at 40% in the northernmost zone, 15% in the forest belt and 3% in the southernmost zone.
Figure 2 shows a frequency distribution of the number of districts by the additional amount of tilapia and catfish that can be consumed per year, five years from now.
The above figure shows the number of districts which by year 5 (subsequent to a development effort) can absorb the 80 tons/district expected to result from a sustained development effort. Most will be saturated and an effort must be made to export the product to urban areas or neighboring districts.
The analysis to this point has not distinguished between the demand for various types of fish or been concerned with price levels. An examination is thus made of the product forms and price levels. Will it be necessary to modify the above conclusions?
Ghana Tilapia and Clarias
Possible increase in consumption
tons/district in 1995
Source: the Mission
Tilapias appear in four product forms: fresh, smoked, salted and dried, and fried. The most common form is the salt-dried version, locally known as “Koobi”. It is the mission's impression that “Koobi” accounts for at least 80% of the supply of tilapia in open, urban markets. Smoked tilapia can be seen in these open markets, but it is rare. With one minore exception fresh tilapia were not seen in the markets. However, it was reported that consumers purchase this form straight from fishermen. Given the very restricted mobility of the rural population and of retailers, the absence of ice and of insulated boxes, the distribution of fresh fish is certainly limited to a few kilometres from the fish landing centres. Fried tilapia is usually small, palm-sized fish, sold in the street with “Kenke”, a local maize preparation.
“Koobi” was available wherever the mission passed (just as were sardines in tins) and in the coastal markets. It is reported to be considered a delicacy by some people. The mission established the sales price to be of the order of one cedi per gram of fish (see Fig. 3). The price level seems to be somewhat higher in the Southern part of the country than in the Northern part. The figure also shows a small tendency towards increasing per kg price for larger specimens. However, the increase seems comparatively small.
In view of the predominance of “koobi”, its price level is important. It can be converted to fresh weight equivalent, which will be around Cedis 300 per kg (given that dried Koobi weighs about 30 % of the live weight of the same fish). The mission then concludes that the ex-canoe price for the average tilapia at Volta Lake and the major reservoirs is not likely, in April 1990, to have been above Cedis 200 per kg. Anyone establishing a tilapia farm within the walking distance of a major supply of fresh tilapia from capture fisheries would have to count on competing with this price.
Catfishes seem to be exclusively marketed in smoked form. The price level for catfish seems to be above that of “Koobi” - that is, more than cedi 1.0 per gram of fish. However, this is partly a fiction because the water content of the clarias, at least from a superficial inspection, would seem to be generally lower than that of “Koobi”.
The mission does not expect any difficulties in marketing future farmed clarias. The quantities are likely to be relatively small when compared with the possible production of tilapia.
Retail price for “Koobi”; April 1990
Cedis/gram for varying size
The main conclusion of the analysis of future demand for cultured fresh water fish is that the product form is going to be decisive. It will determine not only who, and how many consumers there will be, but also the possibilities to transport the product over longer distances. The implications of transport costs are reviewed below.
Transport is relatively costly in Ghana. For fish, all transport over longer distances is road-transport. Road-transport is relatively costly, per ton-km, as a result of the large import content of transport services and the relatively bad conditions of the road-network.
The need, therefore, to transport as little bulk and weight as possible must have contributed to the prevalence of cured fish products in Ghana. However, as indicated above, the majority of those who will farm fish for sale in Ghana, in years to come, will not be able to compete in terms of price with the fish supplied by the capture fishermen. Farmers who are either far from sources of capture fish or close to a major source of feed/fertilizers which have few alternative uses, may be able to compete. This will not be the situation of the average farmer. Thus, the majority of farmers must obtain access to the high-price, but probably low-volume, market of the major urban areas. The author believes that there is a potential market of this type for fresh fish. Some trials with an improved “Koobi” indicates that it may also be possible to develop such a market (pers. comm.; L.K.A. Awiti).
The cost of transporting fish, cooled by ice and kept in insulated containers, is estimated to be Cedis 20 per kg for the container and the ice. It increases by about Cedis 10 for every 100 kms and kg.2
Given a likely maximum retail price for fresh, un-gutted tilapia of Cedis 500 per kg and a mark-up of 100 cedis for the retailer, who must use cooled display, the “room” for transport cost (given an ex-pond price of Cedis 300 per kg) is Cedis 100. This is equal to a maximum distance of 600 kms. This means that the competition from tilapias caught by Lake Volta fishermen may become strong.
The mission believes it quite to be likely that, once a market for fresh tilapia (whole, gutted, or fillet from) has been developed in the major urban centres, the fish farmer must expect a declining ex-pond price as the capture fishermen, through their fish-mammies, start to exploit the same market.
2 See Field Working Paper 5.
The fact that one particular fish farm activity is economically viable at a particular place, is little, or no indication of the number of such units which in time might become viable over a larger area.
Government will want to spend public funds on pursuing the growth and development of the fish farm industry, if it is convinced that the result will be of such magnitude and importance that the initial effort is worth-while. Also, the growth and size of the future fish farm industry will depend on its interaction with other producers and consumers by means of the markets for fish farm outputs and fish farm inputs. An indication of this will be found by establishing the share of local inputs that a particular fish farm strategy would demand to achieve a tentative target.
The mission has hypothesized that an increase in production of 1.000 metric tons by the year 2000 is a minimum development objective for government. The review is found in Field Working Paper 6.
Fish ponds, compared to most crops, need considerable quantities of water, need it throughout the year and need to obtain it flowing into the ponds moved along by gravity.
In Ghana a significant proportion of ponds (approx.25 %) are fed by ground-water supplies (and occasional rain water run-offs). As these waters have only limited alternative uses for irrigation, it might be economic to use them for fish farming. However, this is so mainly for those ponds which either dry out or are so situated on hillsides or slopes that they can be drained. Those which neither dry out nor can be drained have disadvantages which are greater than their benefits and the mission considers that in the future they should not be promoted through the extension services. Therefore, in what follows, the interest is on water for fish ponds.
Given the requirements for water, the ideal locations for fish ponds will mainly be located below reservoirs (that is, in irrigation schemes or municipal reservoirs) and along perennial rivers and streams. These areas, however, are also prime agricultural land and the fish ponds must earn a revenue that compares with what can be obtained from this land under one or several crops. This “profit”, when foregone, becomes the “opportunity cost” of engaging in fish farming. This “opportunity cost” varies from region to region as the farmer selects his crop not only according to soil and rainfall, but also as a function of other climactic conditions.
An inspection of crop budgets3 shows that the best alternatives (maize, rice, yam, tomatoes), when modified to take 1990 prices into account, are not competitive with fish farming. Thus, it seems likely that once farmers become familiar with the returns and technologies applicable in irrigated areas, the practice will spread quickly.
In order to farm 1.000 tons of Tilapia and Clarias, integrated with pigs, in irrigated lands, between 100 and 125 hectares would be needed. This is equivalent to about 2 % of the irrigated lands which have been handed over to farmers (Economic and Planning Department, 1988; page 31, see footnote 3).
Labour will only exceptionally become a constraint for the development of fish farming. There are three main reasons: (i) there is believed to be underemployment in farm households, (ii) the fertilizer-based fish farming systems require little labour inputs with very flexible time schedules (that is fertilizers do not have to be applied every day, and not at a specific time of the day); and, (iii) the day-to-day work requires no particular know-how, physical strength or aptitude and can be carried out by any household member.
Furthermore, employment of members of the extended family even by the subsistance households4 is quite common, and most of the fish farming systems can afford to pay a going wage rate of Cedis 500 per day of farm-labour5.
Thus, the mission concludes that there is no particular need to consider availability of labour, when deciding on a strategy for fish farm development.
Fingerling supply need not be a limiting factor for fish farm development in Ghana. The technology needed for producing tilapia and Clarias fingerlings under controlled conditions is known.
Although initially use may be made of fingerlings caught in the wild, any long-term, significant development of the activity will need a steady supply of fingerlings. This can only be obtained by controlled reproduction.
3 Ref. 18, Economic and Planning Department Report of the Special Programming Mission to Ghana" IFAD; July 1988.
4 Those households which sell less than 50 % of the food produced
5 The day typically starts at 7 to 8 am and ends shortly after mid-day.
For O. niloticus this is fairly easy to achieve. A fingerling production unit is needed. The costs of fingerlings produced in such a unit6 will be affordable for the culture systems proposed. There is no reason to expect that the price of fingerlings will increase with an expanding industry, rather the reverse, as only modest quantities of commercially available inputs are needed.
A similar argument applies to the production of fingerlings of Clarias qariepinus. Once the technology is mastered there is no reason to believe that the price of fingerlings will increase once the demand increases. Although fingerlings of Clarias will be slightly more expensive than those of tilapia, the farmers will be able to afford to pay this, given the rather rapid growth of the species.
As argued previously7, manufactured, purchased balanced feeds will not be employed for quite some time in raising tilapias or catfish in ponds. The farmer, if he wants to use feed, will have to make do with agro-industrial by-products or agricultural waste.
A review of possible agro-industrial by-products and agricultural waste8, indicates that the main candidates are: rice bran, palm-kernel press-cake, cassava peels and spent brewer's grain. The principal reason is that a 1.000 ton fish pond development programme would make use of too large a proportion of other agro-industrial by-products. Figure 4 illustrates this.
It should be remembered that the agro-industrial by-products considered above, without exception, can serve as livestock feed. Livestock in Ghana are malnourished and the Ministry of Agriculture is considering how to make better use of agroindustrial by-products as livestock feed. Naturally, this means that the cost to the fish farmer can also be expected to rise.
In conclusion, it seems clear that none of the agro-industrial by-products now produced in Ghana, on their own, can serve as the main source of feed for a fish farm development strategy aiming to produce 1.000 tons of farmed tilapia and catfish.
6 Described in Field Working Paper 2.
7 See Field Working Paper 4.
8 See Field Working Paper 14.
Ghana Access to feed.
Agro-industrial by-products. Share
needed to produce 1000 tons tilapia/year
Fertilizers for the fish pond can be obtained in three forms: chemical fertilizers, manures and compost. The mission has reviewed their suitability as the “back-bone” of a strategy to develop a fish farm “industry” capable of producing 1.000 metric tons of tilapia and Clarias9. Initially the review considers their availability at a national level, and as “single” fertilizer strategies. That is, the farmer uses only the particular fertilizer to grow his fish and nothing else.
An analysis of the possibilities of using compost indicates that it might be an excellent method to use for the small, subsistance farmer who uses a few hundred square metres of ponds. For the larger farms, the labour costs of producing the compost, in all likelihood with hired labour, will become prohibitive, as the compost preparation for one hectare of fish ponds will need about one man-year of effort.
Chemical fertilizers are expensive, in terms of their per kg cost because of the foreign exchange needed to buy them, but cheap in terms of labour. An analysis of their possible use as single “fertilizer” strategy10 indicates that it is possible and quite profitable. It seems quite plausible that chemical fertilizers can become the main source of fertilizer for ponds, followed by pig slurry.
The main livestock in Ghana are: cattle, chicken and pigs. The manures from these animals have been considered as possible sources of fertilizers for fish ponds. Figure 5 shows the percentage of present national availability that would be required to achieve a 1.000 m tons additional production.
As can be seen the share needed is minute. Thus, at the national level there is no reason to expect that the use of manures for fish farming will cause pressure on the quantities available. Nevertheless, manures are felt also to be a possible remedy for soil subject to exhaustion or degradation. Manures are presently not used for that purpose, but the Ministry of Agriculture is considering popularizing their use for soil improvement (Economic and Planning Department, 1988; page 41, see footnote 3).
The conclusion of Figure 5 is, however, that at the national level any of the three fertilizers could serve as a base for the national strategy.
9 See Field Working Papers 6 and 9.
10 See Field Technical Report 2, Tables 17, 18 and 19.
Share needed to produce 1000 tons of
Source: the mission.
In pursuing a “single” fertilizer strategy for fish farm development, the cost of transport will influence the choice of fertilizer/manure. Different quantities of fertilizers are needed to produce a given quantity of tilapia. This means that the strategies display differing sensitivities to the cost of transport.
It has been argued in Field Working Paper 5 that, most likely, pig manures will not be transported over longer distances by road because of the work involved. For other reasons, cow manures are neither likely to be transported by truck over longer distances. The mission believes though that chicken droppings might be so transported.
Farmers raising tilapia using chicken manure as a fertilizer, according to mission calculations, can afford to pay up to Cedis 300 per kg of chicken manure and still break even11, assuming that the chicken droppings are free of charge, which they will not remain for long of course. Therefore, in these very favourable circumstances the droppings could be transported as far as 6000 kms12 - that is, brought from anywhere in Ghana.
The banks are willing to lend for the construction of fish ponds but the conditions for the loans are strict and make them suitable mostly for those who already are well established economically13.
Guarantees are no longer accepted as collateral. Inmovable property, in the form of farms, buildings, deposits, bonds are accepted. Generally the estimated market value of the collateral has to be at least equivalent to the amount of funds loaned.
Interest rates, in April 1990, can be set by the banks. For fish ponds, classified under agriculture, they were generally reported to be about 26 % per year. This, it was noted by one bank manager, is more favourable than the rate of 30 % which is applied to the credits to the marine fishery sector.
11 See Table 2 Field Technical Report 2.
12 The basic charge is C 50 per ton-km.
13 See Field Working Paper 7 for details.
The Agricultural Development Bank has a few loan (project) officers with educational and practical experience from the fisheries sector. The practical experience of these officers in commercial aquaculture is weak. Thus, in effect, the aquaculture know-how is quite low. Most bank managers say they will refer any loan request by a fish farmer to headquarters in Accra, before deciding on the credit.
It is the view of the mission that it would be unrealistic to expect the banking system to provide credit on more favorable terms to fish farmers than to other farmers. The fish farmers are not a sufficiently strong group to be able to obtain preferential treatment.
It does not seem to the mission that credit need be a constraining factor for the commercial farmer, the category which will be in most need of credit. The subsistence farmer, more likely to use ponds of a few hundred square metres, will most likely also construct his ponds by hand, using family labour, and will not expect, or require, any credit of a long term nature.
In the light of the preceding review of markets for farmed fish, of availability of inputs and of the cost-income relationships for the most common combinations of species and cultures systems, the mission concludes as follows:
Markets. At the end of the 1980's almost all farmed tilapia14, are bought by consumers in fresh or fried form. This will continue to be so. However, if additional supplies of farmed tilapia expand rapidly (say by about 100 tons) in a district within the next 5 years, it will become increasingly difficult for the producers to sell the tilapia produced in the local district markets at prices postulated in this report.15.
Farmers will then be forced to ensure that the fish reaches the high priced (fresh fish) markets in major/towns. Farmers who have access to free water and manures/feed will be able to compete with fresh water fishermen in local markets also in the long run. Tilapia and catfish originating in capture fisheries16 will ensure that prices of farmed fish will remain under pressure. Few farmers indeed will be able to produce tilapia so cheaply that they can sell to the existing “koobi” producers. The price would have to be of the order of maximum C. 200/kg for tilapia of about 200 grams or larger.
Economics of different culture systems. The elaboration of farm budgets for different culture systems show that even at relatively low profits likely ex-farm prices generally are so high (C. 150 to 250/kg) that it is unrealistic to expect fish farming to provide food cheap enough to make a difference for the poorest sections of rural and urban populations.
Inputs. A review of the availability of land/water, labour, fingerlings, feed/fertilizer, credit indicates that it is primarily the cost and access to land/water (and then primarily water) and feed/fertilizer which will determine which culture systems are most likely to be successful and therefore should be promoted.
14 Officially about 500 tons, the author believes this to be an overestimate.
15 See Field Working Paper 8 and 9.
16 At the end of the 1980's about 15.000 to 20.000 tons.
At the time of writing it seems reasonable to the mission to adopt a strategy which aims to ensure the following fish farm development by the end of the present decade:
A strategy incorporating these four culture systems could yield a total of 5 000 metric tons. This is equivalent to about 10 times the present production of farmed fresh water fish, and would represent an increase in the national supply of tilapia and clarias by about 1/3. The extension effort needed to achieve this production will be substantial. A few years will be needed to get the message across to the first farmers. In the mission's opinion, it would not be realistic to expect a production of this magnitude much before the second half of the present decade.
17 (5000 × 0.1 × 360 × 0.4 × 2);
18 Farmers selling less than 50 % of their food crop production.
Would such a development be reasonable also when considered at the regional level?
It would be ideal to be able to repeat, at a district level, the analysis carried out for Ghana as a whole. For each district an attempt would be made to relate the availability of resources and access to market outlets to the possible culture systems and to transport costs. As the relationships between the quantities of inputs used (in standard culture systems) and outputs produced, the problem can be abstracted and formulated in a set of linear relationships19. However, the mission has not found an algorithm to solve the problem formulated in this fashion. A modified/adapted linear programming technique should be able to solve the problem.
An alternative approach is to use the Geographical Information System (GIS). The characteristics of the GIS is that it can sum numeric information for any polygon identified in a map. However, this means that the numbers to be added, to make sense, must be expressed in the same units.
For the particular problem at hand it means that such parameters as population size, demand for farmed fish, access to agro-industrial by-products, cost of transport, distance, etc. must be expressed in terms of a standard weight. Once that is done the individual weights for a district can be summed. If the weights have been expressed so that the higher the value of the combined weights the better, then the districts with the highest combined weights are those which have the highest likelihood of demonstrating a positive and sustained response to a fish farm development effort.
The results are in Field Technical Report 5 “Where are the Best Opportunities for Fish Farming in Ghana? The Ghana Geographical Information System as a Decision-Making Tool”.
19 See Field Working Paper 9 for a description of the problem