3. FRY PRODUCTION CENTRES

The project activities are supported by 7 Fry Production Centers: Kibos, Alupe, Lugari, Borabu, Rongo, Chwele and Yala. The function of those centers is to supply fish-farmers with fingerlings required for stocking their ponds. Kibos, Yala, Rongo and Borabu serve the Nyanza province while Alupe, Chwele and Lugari serve the Western province. Kibos also serves as a research station. So far, fingerlings have been supplied by Kibos, Borabu, Rongo and Chwele, which were built during Phase 1 of the present project. These are the FPCs visited by this mission, whose cost-benefit situation has been examined.

Analyzing the cost-benefit situation of the 4 FPCs was made difficult by the lack of reliable data, even more so than in the individual farms. FPC managers are new on the job and there are no complete accounts on a FPC by FPC basis.

The only available production data were fingerling production by FPC, given for the whole project period, from 1988 until the first seven months of 1991. Only partial data were provided on production of table-size fish. In order to estimate a sales figure for each FPC, it was assumed that all fingerlings produced would be sold at the on-going price of 2 K.Sh./piece, leaving no fingerlings for production of table-size fish, which is an optimistic assumption as production of table-size fish is not as profitable as fingerling production. This estimate is referred to as “Income from sales I”. The cost of delivering fingerlings to the fish-farmers is not included in the operating costs of the FPCs.

The project evaluation mission has later estimated that project figures on fingerling production were overstated and that, at best, the project was production 18% of the fingerlings it claimed to be producing. This would account for the fact that almost all individual farmers interviewed rely on a FPC for initial stocking of mixed fingerlings but use their own fingerlings for later stocking. In order to take this situation into account, alternative sales forecasts have been included in this analysis: “Income from sales II” and “Income from sales III” are 50% and 25% respectively of the base assumption “Income from sales I” (see Table 3.1).

For the data on use of fertilizers and feed, figures on monthly consumption were provided by the coordinator of FPCs. Figures on yearly consumption of supplies could also be provided for Kibos. For the other FPCs, yearly purchases of supplies (hoes, nets, pails, etc..) were estimated from the Kibos FPC figures, based on the proportion of the FPC's last year production of fingerlings, compared to Kibos FPC fingerling production for the same year.

Figures on labour costs were easy to obtain as FPC personnel are civil servants who receive a fixed pay according to their personnel classification.

Depreciation was calculated on a straight line basis, based on the following lengths of useful life:

For pond construction, the cost of building Kibos Phase II was used as basis for estimating the cost of building the other FPCs. Thus, the actual cost of constructing the ponds for Kibos-Phase II, that is 361,826.90 K.Sh. was used as a basis for computing a cost per m² of water area and deduce a pro forma construction cost for the other FPCs.

3.1 Kibos

Kibos FPC is located near Kisumu, in the Western province. It was built in 2 phases: Phase I completed in 1984, allowed to build 9 ponds with a total area 8,100 m²; Phase II, completed in 1990/91, added 18 new ponds with a total area of 5,487 m². The cost of building Phase I could not be given. The cost of building Phase II came to 1,409,582 K.Sh. Phase I ponds are used for fingerling production and storage, except for one 1,200 m² used for production. Phase II ponds are used for research except for a 720 m² pond used for production.

For Kibos, it is not always possible to separate inputs used for fingerling production and table-size fish production, as opposed to inputs used for research activities. It was done for feed and fertilizer but not for other inputs. It is reasonable to assume however that most inputs would be used for fingerling production, which is more intensive than research activities.

Sales

In 1990, the Kibos FPC had produced 233,153 fingerlings (11,604 kg) at 40 K.Sh./kg, for a potential sales income of 464,160 K.Sh. Production between January and July of this year have amounted to 222,769 fingerlings. At this rate, production for the whole year would be 381,890. Assuming that this level of production could be sold at the new price of 2 K.Sh./fingerling, total income from sales this year would amount to 763,780 K.Sh. (see Table 3.1).

Purchases

Monthly consumption of feed and fertilizer for the Kibos FPC (Phase I ponds) amounts to 100 kg of DAP and 250 kg of Dairy Meal, which is the standard feed. At a price of 9.10 K.Sh./kg for DAP and 4.52 K.Sh./kg for Dairy Meal, yearly purchases of feed and fertilizer amount to 24,480 K.Sh.

Supplies

Supplies include nets, jembes (hoes), pails and slashers. Based on a discussion with management, annual requirements are estimated as follows:

Labour

The Kibos FPC is staffed as follows:

Thus annual labour costs amount to 240,000 K.Sh.

Depreciation

Net income

The expected income for Kibos FPC in 1991 is thus 385 425 K.Sh. (see Table 3.1). This performance would be possible if all fingerlings expected to be produced this year, based on the recorded performance of the first seven months, are sold at the on-going price of 2 K.Sh./piece.

3.2 Rongo

The Rongo FPC is located in the Nyanza province, North of Migori. Its total area under water is 2,343 m², with 5 spawning ponds covering 1,451 m², 2 nursery ponds covering 703 m² and 1 production pond of 189 m².

Sales

In 1990, the Rongo FPC sold 171,839 fingerlings (9,623 kg) at 40 K.Sh./kg, for a total sales income of 384,920 K.Sh. Sales between January and July of this year have amounted to 127,200 fingerlings. At this rate, sales for the whole year would be 218,057. Assuming that all sales this year have been at the new price of 2 K.Sh./fingerling, total income from sales this year would amount to 436,114 K.Sh.

Purchases

Monthly consumption of feed and fertilizer amounts to 50 kg of DAP and 75 kg of Dairy Meal, which is the standard feed. At a price of 9.10 K.Sh./kg for DAP and 4.52 K.Sh./kg for Dairy Meal, yearly purchases of feed and fertilizer amount to 9,528 K.Sh.

Labour

The Rongo FPC is staffed as follows:

Thus annual labour costs amount to 228,000 K.Sh.

Supplies

The consumption of supplies for Rongo, Chwele and Borabu had to be estimated. It was assumed to be directly proportionate to the sales of fingerlings. Based on fingerling production in Rongo for 1990 as compared to what was produced in Kibos, it is estimated that supplies-requirements for Rongo would be 20,231 K.Sh.

Depreciation

Net income

The expected income for Rongo FPC in 1991 is thus 161,940 K.Sh. As for Kibos, this performance would be possible if all fingerlings expected to be produced this year, based on the recorded performance of the first seven months, are sold at the on-going price of 2 K.Sh./piece.

3.3 Chwele

Chwele FPC is located North of Bungoma, in the Western province. The Chwele FPC has 8 ponds totalling 6,950 m².

Sales

In 1990, the Chwele FPC sold 116,250 fingerlings (6,510 kg) at 40 K.Sh./kg, for a total sales income of 384,920 K.Sh. Production between January and July of this year amounted to 100,955 fingerlings. At this rate, sales for the whole year would be 173,066. Assuming that all sales this year have been at the new price of 2 K.Sh./fingerling, total income from sales this year would amount to 346,132 K.Sh.

Purchases

Monthly consumption of feed and fertilizer amounts to 100 kg of DAP and 250 kg of Dairy Meal, which is the standard feed. At a price of 9.10 K.Sh./kg for DAP and 4.52 K.Sh./kg for Dairy Meal, yearly purchases of feed and fertilizer amount to 24,480 K.Sh.

Labour

The Chwele FPC is staffed as follows:

Thus annual labour costs amount to 132,000 K.Sh.

Supplies

Based on fingerlings production in Chwele for 1990 as compared to what was produced in Kibos, it is estimated that supplies requirements for Rongo would be 13,687 K.Sh.

Depreciation

Net income

The expected income for Chwele FPC in 1991 is thus 152,509 K.Sh. As for Kibos, this performance would be possible if all fingerlings expected to be produced this year, based on the recorded performance of the first seven months, are sold at the on-going price of 2 K.Sh./piece.

3.4 Borabu

Borabu FPC is located to the South-East of Kisii in the Nyanza province. It was built in 1986 and completed in 1987. The Borabu FPC has 7 ponds totalling 4980 m². However, 3 of those ponds covering 3675 m² were built on an undrainable site (the canal is to high) with unstable soil. Those ponds are stocked for production and partially harvested.

Sales

In 1990, the Borabu FPC sold 10,903 (567 kg) fingerlings to local fish-farmers. As the sales price was then 40 K.Sh./kg, those sales represented a total income of 22,680 K.Sh. Between January and July of this year, the Borabu FPC sold 4,750 (228 kg) fingerlings. Assuming that all those fingerlings were sold at the new price of 2 K.Sh./pc established in February, this would represent total sales of 16,286 K.Sh. for 1991.

Purchases

Monthly consumption of feed and fertilizer amounts to 75 kg of DAP and 150 kg of Dairy Meal, which is the standard feed. At a price of 9.10 K.Sh./kg for DAP and 4.52 K.Sh./kg for Dairy Meal, yearly purchases of feed and fertilizer amount to 16,326 K.Sh.

Labour

The Borabu FPC is staffed as follows:

Thus annual labour costs amount to 144,000 K.Sh.

Supplies

Based on fingerlings production in Borabu for 1990 as compared to what was produced in Kibos, it is estimated that supplies requirements for Borabu would be 1,284 K.Sh.

Depreciation

Net income

In 1991, Borabu FPC is expected to run a deficit of 161,590 K.Sh. Like Kibos, this performance would be possible if all fingerlings expected to be produced this year, based on the recorded performance of the first seven months, are sold at the on-going price of 2 K.Sh./piece.

The Borabu FPC is far from producing a positive net income. In fact, it is barely covering the cost of feed and fertilizer and the cost of personnel is 8 times the sales income. One obvious reason is the low output. If a female is expected to produce 2,400 fingerlings per year, assuming a stocking density of 3 ♀ and 1 ♂ per 25 m², a 230 m² breeding pond should have a yearly output of 66,000 fingerlings. Therefore, the 230 m² pond, which is the smallest pond of this 4,980 m² station could produce 6 times as many fingerlings as were produced last year by the whole FPC. The maximum number of fingerlings recorded to have been produced by the Borabu FPC was 35,177 in 1989.

3.5 Financial situation of FPCs

Based on existing production figures and information provided by project management, Kibos, Rongo and Chwele FPCs are profitable. Borabu FPC, which is producing a fraction of what the other FPCs are producing is in deficit.

Under the most optimistic assumption (present production is equivalent to last year's recorded sales), the unit cost of producing fingerlings in the 4 FPCs would be as follows:

The least optimistic assumption (present production assumed to be 25% last year recorded sales) would multiply by 4 the unit cost of each FPC.

Those results however would have to be audited as the production figures used for this analysis have been put in question by the evaluation mission. When using less optimistic assumptions for income from sales, the net income is reduced accordingly. Thus, if income from sales is 50% of assumed trend (Income from sales II), only Kibos is showing a positive net income. If income from sales is 25% of assumed trend (Income from sales III), all FPCs are in deficit.

While for individual farmers, feed and fertilizer are the main cost, for FPCs, labour is by far the most important cost, being over 5–20 times the cost of feed and fertilizer for all centres except Chwele. Even producing fingerlings is more labour intensive than producing table-size fish, each center could be operated on a much leaner basis than at present.

TABLE 3.1: DEVELOPMENT OF SMALL-SCALE FISH-FARMING
IN THE LAKE BASIN AREA

COST-BENEFIT ANALYSIS
FRY PRODUCTION CENTRES (K.Sh.)