TCP/MAL/4403 TECHNICAL REPORT 4
A CASE STUDY ON COMMERCIAL CAGE CULTURE OF FIN FISH IN PENANG
FAO TECHNICAL COOPERATION PROGRAMME ON “ASSISTANCE TO
THE MALAYSIAN FISHERIES DEVELOPMENT AUTHORITY
(LEMBAGA KEMAJUAN IKAN MALAYSIA)”
Tan Cheng Eng
Tan Bian Hooi
Low Tung Wang
The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.
The Project entitled "Assistance to the Malaysian Fisheries Development Authority or Lembaga Kemajuan Ikan Malaysia (LKIM) was implemented by the FAO from November 1984 to November 1985 under the financing of the FAO Technical Cooperation Programme (TCP/MAL/4403). The Project was based in Kuala Lumpur, Malaysia.
The broad objective of the Project was to assist LKIM in the preparation of a long-term plan and strategy for the development of a fishermen relocation programme. The issue of surplus fishermen is not a new area of concern in Malaysia. The Department of Fisheries (DOF) already indicated in 1971 that there was a surplus of about 19,300 fishermen in Peninsular Malaysia. The problem of too many fishermen in relation to the capital investment and the resources available has become more noticeable in recent years. In addition, the lack of institutional arrangements to limit new entrants into the fishing sector has accelerated the enhancement of under-employment, low productivity and income among traditional fishermen, Fishing communities have long acted as a traditional reservoir for the unemployed. Under these circumstances, the Government has launched a programme to combat the problem of surplus fishermen with more careful planning and realistic and systematic approaches.
The Project has produced four technical reports. This report has been prepared as a supplementary report to Technical Report 2, i.e. “A Review Study Of The Sungai Merbok Floating Cage Culture Project”. It was felt useful to compare the performance between the government sponsored projects and private ventures from the viewpoint of technical and economic viability.
Malaysia is viewing aquaculture as the primary means of achieving increases in fish supply to overcome constraints that capture fisheries are confronted with. Particularly, cage culture has been receiving strong attention in recent years because landownership is not required; investments are generally small; and there are many suitable areas on both the East and West Coast. While further growth of the cage culture is possible, the high cost of production and market outlets are the severe constraints to the expansion of cage culture. A full analysis is given in the report.
The Project has led to the design of a new project proposal for continuing support to LKIM with regard to the development of the Fishermen Relocation Programme (FRP) which includes the component of cage culture development.
This document was prepared by the following authors:
Mr. Tan Cheng Eng, Director of Planning (LKIM) coordinates and evaluates the on-going projects undertaken by the agency.
Mr. Tan Bian Hooi, Development Officer (LKIM) has managerial and technical experience in cage-net fish culture and aquaculture in general and is presently attached to the Planning Division.
Mr. Low Tung Wang, Technical Assistant of FAO TCP/MAL/4403 was involved in the enumeration work, data processing and the project's financial analyses.
The authors would like to thank Mr. Khalil Hassan, the Director-General of the Malaysian Fisheries Development Authority for his encouragement and support in carrying out this study.
The authors also would like to extend their gratitude to the group of fish farmers in Weld Quay, Jelutong and Bukit Tambun who had willingly given all the information sought from them during the field survey.
Cage-culture of fin fish in the marine and brackish waters is relatively a new aquaculture activity. The last few years witnessed its rapid expansion along the coastal waters of Peninsular Malaysia, notably in estuaries and protected waters near the coasts, islands or promotories. According to the Department of Fisheries estimate, there were 128 marine and brackish water cage culturists of fin-fish in 1984. The majority of the fish cage culture farms operated on a commercial basis, a few of which received partial Government subsidy prior to 1982. The second type of farms were Government sponsored projects. Other than the Penang east coast and Bukit Tambun areas, the commercial fin fish cage culture areas were also located in Langkawi and Sg. Merbok in Kedah, Sg. Udang in Seberang Perai, Kuala Kurau and Sepetang in Perak, Pulau Ketam in Selangor, Kukup in Johor and Semerak in Kelantan.
For the purpose of this study, only 6 commercial cage culturists were chosen, 3 from Bukit Tambun area and 3 from Penang east coast area.
Generally, all culturists interviewed adopted good culture techniques. This can be observed through their daily culture activities such as feeding, cleaning of nets, grading and stocking. These good practices had enabled them to achieve a relatively high survival rate.
In addition, the urge for cost-minimization had led the culturists to use cheaper materials whenever possible. Converting used ultra-violet light stabilized plastic containers into floats was one example.
Sales of fish were mainly on a live basis due to the premium price fetched. However, chilled and frozen fish were also sold.
Owing to the difference in location of the Bukit Tambun culturists and the Penang east coast culturists, some difference also prevailed between the methods of sale.
The majority of the culturists showed an efficient and good management system both in cage-culture and human resource management. Tight security in the form of night watch and use of guard dogs alleviated much of the problem of theft.
Delegation of jobs was not carried out. However, cooperation between each partner to carry out the daily chores was very common. There seemed to be an implied responsibility on the part of each partner to do the job well.
Financial management was lacking with most culturists except for one or two in the Bukit Tambun areas. This is expected as most of them operated as a family business. However, they did keep sufficient financial records to enable them to determine the exact profits derived.
All the respondents except one received a high profit margin of 30% and more.
The Respondent with the low profit margin experienced a severe loss of fish stock due to floods in 1983. This huge loss had drained a large portion of the Respondent's financial resources and as a result, the Respondent experienced difficulty to sustain the operation.
Problems And Constraints
The high cost and the seasonality of fish fingerlings were the major problems faced by the culturists. Presently fingerlings are mainly imported from Thailand and Philippines rather than from the local coastal areas. This situation resulted in the high price of fingerlings and also caused them to be more vulnerable to attack by disease due to transportational stress.
Other problems faced by the culturists were the rising costs of construction materials such as nets and floats, and the decrease in supply of trash fish which was the only type of feed used by the culturists.
Sensitivity analysis shows that the selling price of marketable fish and the survival rate were the major factors affecting the profitability of the cage culture operation followed by stocking density and fingerling price.
Potential For Future Development
The cage culture of fish can be a profitable venture provided there is availability of market for live fish.
Potential for expansion of cage culture seems limited. This can be gathered from the facts that a) average cost of production was relatively high; M$7.901 for grouper, M$4.60 for sea bass and M$3.60 for golden snapper; b) the sales were mainly confined to live fish, and c) the marine capture fish of the same species were cheaper. In addition, owing to its high cost of production, seasonality of peak production and the limited capacity of production, the culturists will have difficulty in exporting their fish. A traditional export market i.e. Singapore is now receiving fresh chilled cultured fish, especially the grouper at a much lower price from Thailand thus by-passing the Malaysian market.
1 M$ = Malaysian ringgit
In view of this, the cage culture of fin-fish can only be undertaken on a limited scale on a profitable basis if the farms are located near urban centers where high prices for live fish is offered by restaurants catering the needs of more effluent consumers. In order to go into large-scale expansion of the industry, it is necessary to reduce the cost of production and to develop a larger market either domestically or overseas.
To reduce the cost of production, local production of sea bass fry and nursing of the fry to fingerlings is strongly recommended. Incentives should be given to fishermen to collect fingerlings of grouper, golden snapper and the red snapper.
Improved techniques in feed formulation should be looked into to supplement trash fish as well as to shorten the culture period of the fish.
To reduce the number of man-hours spent on cage culture, some form of mechanization such as the use of mechanical pump for cage-net cleaning and electric cutter/mincer for food processing is recommended.
Finally as there were complaints by culturists about the shortage of small mesh size cage nets 1 owing to import restrictions, it is suggested that this problem should be discussed with the authority concerned. It may be necessary to ease the import restrictions so that the culturists are exempted from them.
1 The small mesh size net is essential for stocking fingerlings of less than 15 cm.
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2. METHODOLOGY OF STUDY
3. CULTURE OPERATION
3.1 Farm Size
3.2 Cage Size
3.3 Cage Frame
3.6 Cage Net
3.7 Maintenance Of Net
3.8 Fish Fingerling
3.9 Nursing Of Fish Fry
3.10 Fish Grading
3.11 Survival Rate
3.12 Fish Diseases And Treatment
3.13 Length Of Culture Cycle
3.14 Stocking Density
3.15 Multispecies Culture
3.17 Fish Feed
4.1 Marketing Strategies
4.2 Market Price
5. TRAINING AND EXPERIENCE
6.1 Man-Hours Worked
6.2 Assignments of Duties
6.3 Management Decisions
6.5 Stock Taking
7. FINANCIAL ANALYSIS
7.1 Cost Of Investment
7.2 Financial Performance
7.3 Cost Of Production
7.4 Breakdown Of Cost Of Production
8. PROBLEMS AND CONSTRAINTS
8.1 Culture Technique
9. SENSITIVITY ANALYSIS
APPENDIX I: QUESTIONNAIRE
LIST OF TABLES
1 : Estimated Number Of Fish Cage Culturists In Malaysia
2 : Farm Size Of The Respondents
3 : Relationship Between Fish Size Total Length (T.L), Mesh Size And Number Of Ply Of Cage Nets
4 : Price Of Fish Fingerlings By Size, Species And Sources (M$)
5 : Stocking Density By Fish Size, Cage Size And Respondents
6 : Relationship Between The Average Stocking Density Of Marketable Fish And Survival Rate With The Productions
7 : Weight Of Daily Feed In Relation To Fish Size And Stocking Density
8 : Feed Conversion Ratio
9 : Price Of The Marketable Wet Fish And Live Fish Per Kg
10 : Manpower Requirement Of The Fish Farm Under Study
11 : Computation Of Average Man-Hours Worked Per Month
12 : Average Man-Hours Spent On Night Duty
13 : Cost Of Investment Of Cages And Working Platform
14 : Cost Of Cages (M$)
15 : Financial Performance 1984 - (I)
16 : Financial Performance 1984 - (II)
17 : Cost Of Production By Species Of Fish (M$/kg)
17A : Breakdown Of Cost Of Production Of Grouper (M$/kg)
17B : Breakdown Of Cost Of Production Of Sea bass (M$/kg)
17C : Breakdown Of Cost Of Production Of Golden Snapper (M$/kg)
17D : Breakdown Of Cost Of Production Of Red Snapper (M$/kg)
18 : Financial Model Of A Cage Culture Operation
19 : Sensitivity Analysis
LIST OF PHOTOGRAPHS
1. A Floating Platform In The Bukit Tambun Fish Cage Cultue Farm
2. A Platform On Stilts In The Penang East Coast
3. A Commercial Fish Cage Culture Farm In Bukit Tambun
4. A Commercial Fish Cage Culture Farm In Penang East Coast
5. Cleaning Of The Cage Nets
6. Fish Traps Or "Bubu"
7. Grading Of Fish Fingerlings
8. Grading Of Marketable Fish
9. Fish Feed Preparation
10. Guard Dog On The Fish Cage Culture Farm
1. LOCATION OF THE COMMERCIAL FISH CAGE CULTURE FARMS IN PENANG MALAYSIA