4.1.1 The need of the aquaculture industry to prove its economic viability with only limited public support will determine its future. The performance of an economic sector must be measured, on the one hand, in macro-economic terms, i.e., the total benefit derived by the society through private and public investments.
On the other hand, the micro-economics must also be considered, i.e., the conditions required to maintain a rate of return on the invested capital in order to keep or increase the total amount of capital invested in the industry. Both levels are related. The condition for a healthy industry is the profitable management of production units, should they be private or public.
4.1.2 Production of aquatic animals and plants in controlled or semi-controlled conditions is not equivalent to an ordinary manufacturing sector. Each component of the aquaculture industry has specific characteristics. Defined under economic criteria, extensive aquaculture requires low investments, or investments to be supported by the public or by cooperatives, for example for lagoon management. Extensive aquaculture with even a limited production can provide a living to a great number of people. Other extensive activities, such as shellfish culture, can easily be managed by small scale units and with a small scale of investment. At the other end, intensive marine fish culture represents a large amount of capital and high production costs. In the wider sense, both social and economic criteria are needed to provide useful comparisons and decision-making at the farm level, regional and national levels.
4.1.3 Regarding the economic characteristics of any aquaculture development, a three-stage approach can be used. The first is a market and price analysis of technically feasible aquaculture products. Average, minimum and maximum prices of the marine species cultivated in Greece are listed in Appendix 2. Then, by considering separately each sector or type of culture, the second and third stages are respectively a cost and benefit analysis and a constraint analysis.
4.1.4 Cost and benefit analysis is a widely used technique in which project development costs are related to the expected benefits of the project. Methodologies for financial and economic analysis have been described previously in various reports (e.g., FAO, 1983) and are not repeated here. The main data required are:
detailed investment costs and duration of life
detailed fixed and variable costs of production, unit prices of input
technical data such as water area used, growth rates, feed conversion rates, density, mortality
production and marketing
expected project returns and outputs
general economic information, such as interest rates, inflation, etc.
A simplified form of this uses NPV (net present value) or IRR (internal rate of return) values to assess the relative advantage of investment in the project concerned.
4.1.5 The constraints analysis is designed to ascertain the level of risk and uncertainty in developing aquaculture production. The main constraints to consider are:
technical constraints
factor availability
legal constraints
economic constraints, such as charging input costs, competition from other countries and from other products.
As part of this, the initiatives taken or needed to remove the constraints must be described. Only qualitative considerations are discussed here.
4.1.6 Six sectors are discussed in the present report: 1) lagoon management; 2) semi-intensive earth ponds - polyculture; 3) trout culture; 4) freshwater fish culture; 5) shellfish culture; and 6) marine fish culture. Outlines of typical cost structures are given in the appendixes. Other sectors such as shrimp or prawns, clam culture or lake cage culture are planned or already exist. Due to lack of time and the limited information available they were not analysed.
Each new type of production (by species, by scale or by technique) calls for a complete analysis and should not be rejected a priori.
4.1.7 Figures referred to in the following discussion should not be considered by the authorities as standards, as these are based on observations by the consultant or individual cases and are used only as illustrations.
Surveys and processing of such data on sample farms are still needed to produce a more precise analysis. Descriptions and constraints quoted in other consultants' reports are not repeated here.
4.2.1 Total production from lagoons in Greece is 2 500 t, for an approximate value of Dr 1 500 million. The main species are mullet (over 80%), sea bream, sea bass and eels. The main production from the lagoons is in the winter. If lagoon production of these species can be increased there do not seem to be problems for their marketing. A recent report (FAO/ADCP, 1987) indicates that there is a large demand in the European market and that this demand can be expanded further.
4.2.2 Price for sea bream at the producer's level is Dr 1 200–1 800/kg, according to the size, season and place. Average price for sea bass is Dr 1 300 - Dr 1 000 for fish less than 250 g and Dr 1 500 for over 500 g. There are three categories of mullet, ranging from an average price of Dr 600 for the largest size to Dr 200 for the smallest. The average price of mullet in 1986 was Dr 346/kg. The value of this species is very different from area to area. The higher price for eels in 1987 was Dr 1 280/kg. Marketing of eels is very specific. Pre-sale of about 400 t is arranged through auctions; one under the Cooperative Federation authority and the other one organized by ETANAL, the management authority of fish markets.
4.2.3 The assessment of costs and benefits to develop aquaculture in Greek lagoons is very difficult. The actions can range from a simple water flow control to partial feeding or restocking with hatchery-produced fry. The investment cost must generally be shared among potential beneficiaries/investors or be supported by the public. Lack of international experience, except in Italy, calls for very progressive and scientifically controlled actions. A good knowledge of the lagoon is required, as well as a methodology to assess the effects of human intervention on the ecosystem.
4.2.4 The sharing of the benefits among local groups must be managed to avoid conflicts. Cooperatives are a good way to organize this. Presently the lack of support for lagoon management action and high taxation prevent any positive cooperation between local groups.
4.2.5 The projected value of lagoon production for 1992 is Dr 5 000 million. This figure seems high in view of the amount of work (lagoon improvements, traps, canals, etc.) that would be required and the planning and development involved. Planned investments for lagoon improvement is Dr 9 000 million through 1992.
4.3.1 Greece has numerous areas of highly productive brackishwater marshes and wetlands. Earth ponds could be constructed in such areas. Polyculture of species such as carp, mullet and eels can be developed in semi-intensive culture in large, simple earth ponds.
4.3.2 Carp has a very limited market, mainly in northern Greece. Locally cultured carp must compete with very cheap imported carp from the Central European countries. The best way to receive a good price is to provide the market with live carp. The price of live carp on the Ioannina market is Dr 270. Marketing action by all producers is needed to promote carp in other regions of Greece.
4.3.3 In favourable conditions a basic investment of Dr 100 million on pond preparation (150 ha) can yield a production of 100 to 150 t of carp in semi-intensive conditions with an average production cost of Dr 200–250/kg (feed representing 50% and labour 30%). This cost means that this production technique can compete with imported carp. It also gives a very good profit for the culture of mullet. However, the equitable cost of ponds, relative to site conditions, has to be considered carefully. The main management problems are the maintenance of the ponds, the need to design easy to handle fishing techniques and the control of predators.
4.4.1 At present 115 farms are engaged in trout culture. The total production is less than 2 000 t. After a very good start, mainly by a majority of small farms, trout culture had a setback due to poor quality control (use of low quality feed and bad handling). The price has decreased in constant price, bringing the farms' management to the break-even point. Trout are presently sold for Dr 300–350/kg for a 300 g size fish (see Appendix 7).
4.4.2 In a small scale, 0.2 ha, concrete raceway trout farm, the cost of production was Dr 240 (plus Dr 80 given to the cooperative for transportation, marketing and other services). The imported feed accounted for Dr 200 of the production cost.
A larger farm, using earth ponds, showed better results -selling the fish to a smoking company. However, there are no clear demonstrations - especially given the small sample size, and varied site conditions, of economies of scale.
Investments under such conditions are difficult, and only the long duration life of facilities and their small scale allows these farms to survive. Unless market prices improve in real terms, it is unlikely that further investment will be attractive.
4.5.1 Limited eel culture is practised in Greece at present. Each of the three producing or planned units in the Arta area have chosen different techniques. The projected figures for intensive culture in concrete raceways give an average production cost of Dr 700/kg (Appendix 6). For less intensive production, the total investment cost is Dr 30–40 million to build one hectare with a production capacity of 50 t.
4.5.2 A significant constraint to eel culture is the supply of elvers. Collection of young eels from lagoons can supply a few farms. To expand, the industry will have to import elvers initially. Ideally the collection of large numbers of wild elvers from lagoons would be better. This would require basic research on elver distribution. In case of importation, the cost of elvers will significantly increase the production cost.
4.6.1 Shellfish culture is limited to mussel farming with pergolari (an Italian technique). Recently, longline culture has been introduced. The price for mussels, mainly consumed in Greece from Easter to summer, is low despite the shortage of supply in Athens. This situation is due to a quasi monopoly of a few buyers in the Thessaloniki area. Flat oysters are exported to France via Spain, where no regulations exist. The price for flat oysters in France is very high, due to reduced stocks.
4.6.2 The figures for investment and production costs for the two main techniques are summarized in Appendix 3. They show a good profitability, but the projected increase in production raises questions regarding marketing and demand. There are limited economies of scale for each of the techniques. Especially in the case of export, transportation costs must be reduced by combining the exports of several producers.
4.6.3 Oyster culture techniques are easy to transfer. The management of spat collection can be a difficulty.
4.6.4 Three constraints must be considered regarding shellfish culture in general. The first arise when important stocks are located in a small area. This could lead to (1) the risk of too high a density, resulting in poor growth rates; (2) poor condition of the oysters; and (3) an increase in production costs. The second constraint is the need for strict sanitary controls to avoid poor quality oysters. The third constraint is poor extension services. Small oyster farms can easily manage shellfish culture techniques but they need efficient and close cooperation with local extension officers.
4.7.1 The main marine species cultivated in Greece are sea bream and sea bass, which use the same technology. There are two basic types of management units: (1) integrated hatchery and on-growing facilities, and (2) cages for fattening with no hatchery facilities. The prospects for marketing these species are very good and the demand is high. Some farms have already experienced a steady increase in buyer price as a result of being able to supply the market with a high quality product in the required quantities and at the right period.
4.7.2 Some reference figures for investment costs and production costs are quoted in Appendix 4. The main problems in practice have developed form a difficulty in projecting the actual build-up of production and in evaluating the difficulties in starting with a new technology such as that of marine hatcheries. From the time of the investor's decision to start preliminary study to full completion of an integrated unit, an average of four years is needed. An additional five years are normally required for full scale production. Such a lengthy period to start-up puts these units in a very difficult situation regarding management.
4.7.3 Small scale on-growing farms must rely on a regular supply of high quality juveniles. Uncertainty of fry supply is a major constraint to the development of this activity, which shows the highest rate of profit in aquaculture and the quickest return on capital investment. A routine supply of high quality fry can be a main problem. Poor quality fry result in high mortality rates and poor growth. The high cost of importing fish oil and meal makes it difficult at present to develop domestic production of food (pellets) with a quality/price ratio better than imported feeds.
