FI:SCA/2001/2

 

TECHNICAL CONSULTATION ON LEGAL FRAMEWORKS AND ECONOMIC POLICY INSTRUMENTS FOR SUSTAINABLE COMMERCIAL AQUACULTURE IN AFRICA SOUTH OF THE SAHARA

Arusha, Tanzania, 4-7 December 2001

STATUS AND POTENTIAL OF COMMERCIAL AQUACULTURE IN SUB-SAHARAN AFRICA



Table of Contents


 

SUMMARY

Commercial aquaculture is defined as an aquaculture system where the objective is profit maximisation. Within the Africa Region in recent years, aquaculture in general and commercial aquaculture in particular have been identified as potential ways of filling the growing fish supply gap as many capture fisheries reach sustainable yields while demand continues to increase with population. However, promotion of commercial aquaculture is not a new idea and commercial operations have been encouraged since the 1970s. Unfortunately, many of these early endeavours were poorly planned or became the victims of changing political economies and today only a handful of African countries have functioning and viable commercial aquaculture enterprises. Nonetheless, the justification for commercial aquaculture continues to grow as fish supplies dwindle and governments look for means to supply local demand as well as opportunities to break into lucrative export markets for luxury products. To foster rational expansion of commercial aquaculture it is necessary to take heed of lessons learned, using these to focus future development efforts. Commercial aquaculture cannot be undertaken everywhere but has a specific set of requirements if it is to succeed. The first prerequisite is a suitable physical environment; acceptable soils and climate with adequate water available. The second is a conducive political-economic environment; relative governmental and fiscal stability combined with affirmative markets. If these essential building blocks are present, the two key inputs required are access to capital and feed. The former can be facilitated by appropriate policies and education, the latter has more stringent requirements if the enterprise is ultimately to be based on locally produced feeds. Industrial production of complete fish feed requires a certain industrial capacity, a relative level of food self-sufficiency and an acceptable availability of feed inputs (principally sources of energy and protein). The process of identifying potential sites for commercial aquaculture is, therefore, one of elimination. If the physical and financial environments are suitable and feeds potentially available, then there is reason to believe that commercial aquaculture may be a viable production option. Given the current status of regional economies, these criteria frequently translate into a scenario where areas/countries favourable for commercial agriculture will also be favourable to commercial aquaculture.

I. INTRODUCTION

1. Sub-Saharan Africa has long been cited as an area with high aquaculture potential. In 1975, the First Regional Workshop on Aquaculture concluded: "Experimental and limited pilot scale operations have demonstrated that small- or large-scale fish farming using indigenous species and feed material can be highly productive and profitable". The Workshop Report continued "The culture of Tilapia nilotica in ponds, fed on pelleted feeds made from locally available agricultural and industrial waste products, yielding three crops and a production of not less than 5 000 kg/ha/year, has already been tested and found to be perfectly feasible and economical in Central African countries." Finally, the Workshop noted: "The mainstay of aquaculture [in Africa] has so far been subsistence level fish farming. Evolution from this to small-scale commercial farming was deemed feasible in a short period of time if the necessary supporting services can be made available by the governments".

2. However, progress was slow. More than a decade later, in 1988, the FAO Expert Consultation on Planning for Aquaculture Development characterised sub-Saharan aquaculture as follows: "Aquaculture production in the [sub-Saharan African] region is still very low. Recorded annual production is estimated to be about 10 000 tonnes, with Nigeria, Cote d'Ivoire, Kenya, and Zambia being the more important producers. Production is characterised by small-scale rural activities rather than intensive commercial operations. Most of the production is provided by small-scale subsistence and semi-intensive farming of tilapia species in freshwater ponds. It is assumed that this will continue to be the principal focus for development activities in the region."

3. The Consultation also stated: "In those countries where there is the need for the aquaculture sector to make a significant contribution to the supply of animal protein and to the national economy, a major policy change is required, giving the sector higher priority."

4. In 1993, the Working Party on Aquaculture of the Committee for Inland Fisheries of Africa (CIFA) concluded that: "Aquaculture is still essentially a rural, secondary and part-time activity taking place in small farms in small freshwater ponds. Extensive to semi-intensive cultural systems produce limited fish yields which are mostly consumed directly, bartered or sold locally as a cash crop." It was further stated that: "Progressive farmers tend to gradually intensify their pond cultural system toward semi-intensive management and a small-scale commercial level, according to markets locally available."

5. African aquaculture development has thus been typified by an ambivalence where less-than-anticipated results have been tempered with an appreciation of what could have been. Recently a geographical information system was used to evaluate the potential of fish farming in Africa with the outcome that 23% of the surface area of continental Africa was found to be "very suitable" for commercial aquaculture and another 23% "suitable"1; in the aggregate, nearly half the continent's surface judged as having a positive aquaculture potential. With this in mind, the 11th CIFA session suggested to put enhanced emphasis on research and studies in that area .

II. STATUS

6. Aquaculture development has evolved considerably in terms of the approach applied to sub-Saharan Africa. Statements included in the previous paragraphs highlighted the prior importance placed on "supporting" public sector services and the need for positive policy instruments. Conventional wisdom was that an engendering governmental programme would foster a rapid expansion of national aquaculture, individual producers progressively moving along a continuum leading to higher and higher levels of productivity (i.e., intensity).

7. It is generally accepted that this approach, if applicable to the political economies of previous decades, is no longer appropriate. The earlier paradigm revolved around high levels of external financial support leading to donor dependency. Today's economic realities dictate that external support is declining and national agencies are having increasingly difficult times making ends meet with solely national funding. The result is a down-sizing of nearly all agencies and a marginalisation of some. Aquaculture, as a relatively new introduction, has a comparatively small constituency which has resulted in the de-prioritisation of this activity by some governments and a significant reduction of support by others.

8. Adding to effects of changing macro-economies are the empirical observations of practitioners assessing several decades of aquaculture promotion. Dwindling support has led to an overall reduction in the number of fish farmers, but most countries maintain an active core which has now translated fish farming into a more-or-less "traditional" enterprise or, at the very least, has ensured that the agrarian population is now well aware of aquaculture. However, these steadfast fish farmers have not advanced through increasing technical intensity with time but have "stabilised", practising a form of aquaculture that fits their needs and expectations; often a form that is quite extensive and viewed by some outsiders as inefficient or sub-standard. This observation has prompted some to propose that many farmers will not advance through a series of steps from extensive to intensive and from small production areas to larger ones. Indeed, many farmers change their aquaculture systems only slightly through time and those who have larger operations today very probably started with larger operations when they first adopted aquaculture.

9. Converting to a new general aquaculture development paradigm which takes into consideration the current consciousness regarding changes in the political economy of the region combined with a more complete appreciation of the target population has been a difficult task and is still an on-going process. This process was facilitated by the Africa Regional Aquaculture Review organised by FAO in 1999. Relevant conclusions of this review are presented in Box I.

10. With specific regard to commercial aquaculture, these categories of aquatic production systems have been defined as those enterprises that seek profit maximisation, with no specific reference to scale or intensity. However, from the preceding section it can be noted that scale and/or intensity are frequently referred to as important descriptors; in some cases, measures of progress. Thus, within the context of this accepted definition, a threshold may need to be applied to further delineate the systems being analysed and focus the discussion. Based on pragmatic examination, "commercial" systems could be considered as those having either 5 hectares in production or producing a minimum of 5 tons per year where the underlying basic concept should be aiming at the efficient use of resources. These are somewhat arbitrary parameters but do reflect the very important consideration that certain scales of operations require significant quantities of inputs while smaller ones, even with profit maximisation objectives, have more flexibility since their overall requirements are less.

11. This differentiation is in no way intended to minimise smaller operations. In fact, several current and planned interventions in C�te d'Ivoire, Nigeria and Guinea intentionally target smaller systems (e.g., with production areas of 0.5 - 1.5 ha) to avoid some of the hurdles facing larger production units.

12. Yet scale and/or intensity are essential considerations for those considering investing in commercial aquaculture: how large and how intensive? The level chosen will need to fit the physical and economic resources of the specific farm site. Although some large and extensive farms may not be constrained by the "feed factor" (e.g., integrated farms where nutrient inputs are generated on-site through another sister enterprise or very extensive farms such as those managed at levels approaching natural productivity), would-be producers that envision the use of supplemental or complete feeds will be confronted with the issue of securing necessary nutrient input supplies; supplies which need to expand with increasing scale and/or intensity.

13. With this added delimitation of scale and intensity, it can be stated that sub-Saharan Africa has had numerous experiences regarding commercial aquaculture over the past three decades. Projects included the full gamut of production systems; concrete raceways (Kenya, Nigeria, Republic of Congo, Zimbabwe, Benin, Burkina Faso, South Africa), cage culture (Gabon, C�te d'Ivoire, Niger, Zimbabwe), pen culture (C�te d'Ivoire, Nigeria), mariculture (Gambia, Guinea, Kenya, Tanzania, South Africa, Namibia, Mozambique, Nigeria, Madagascar) and earthen pond culture (Nigeria, C�te d'Ivoire, Zambia, Democratic Republic of Congo, Rwanda, Malawi).

14. However, most of these efforts have proven to be unsustainable; frequently due to financial non-viability (Box II provides a common scenario in the development of commercial aquaculture). Among the wide spectrum of commercial attempts, those enterprises currently in operation and which seem to have established a level of profitability include: Crysichthys pen culture in C�te d'Ivoire; Clarias and Heterobranchus pond and raceway culture in Nigeria; tilapia (Oreochromis) pond and raceway culture in Nigeria, Malawi, Zambia and Zimbabwe; tilapia cage
culture in Zimbabwe; mollusc and seaweed cultures in Namibia, South Africa and Tanzania; trout raceway culture in Kenya, Zimbabwe, Malawi and South Africa; and, shrimp culture in Madagascar and Mozambique.

15. Many of today's commercial operations are situated in a delicate balance between success and failure, operating in volatile markets where fish and feed prices can fluctuate dramatically. Several of those operations cited above have still to demonstrate their long-term sustainability as infrastructure continues to be amortised.

16. Frequently these operations have targeted a niche market that changes through time. This was demonstrated by the demise of the once vibrant Clarias industry in South Africa; other farms producing luxury or speciality items are also susceptible to the whims of the consumer and alterations in procedures (e.g., import/export regulations, etc.). The industry is also under increasing scrutiny for its potential negative environmental impact; this subject all the more sensitive given the unexpected affects of commercial aquaculture in other regions of the world.

BOX I. AFRICA REGIONAL AQUACULTURE REVIEW

The Africa Regional Aquaculture Review was convened with the goals of evaluating the past 30 years of aquaculture development efforts in the region, identifying those elements that were sustainable and those that were not, elaborating lessons learnt, reviewing the present status, identifying trends and preparing an outline for a development strategy for the way forward. The key elements of the strategy are:

1. establish national development policies and an aquaculture development plan in consultation with stakeholders;

2. reduce expensive and unsustainable aquaculture infrastructure, specifically with a reduction of at least 50 percent of government fish stations within five years;

3. promote and facilitate the private sector production of feed and seed;

4. encourage credit for medium- and large-scale producers;

5. revise aquaculture extension, establishing a flexible and efficient structure that can meet producers' needs;

6. advocate farmer-friendly existing technologies that use readily available culture species and local materials;

7. promote collaboration, co-ordination and information exchange between national and regional aquaculture institutions and agencies; and

8. facilitate the formation of farmers' associations.

 

17. In spite of all the real and perceived impediments to establishing viable and sustainable commercial aquaculture enterprises, interest remains high and across the Region entrepreneurs are evaluating ways of entering into production. When the prerequisites of suitable physical and political-economic environments are met, including a positive analysis of market demand for the crop(s) to be raised, most often the two recurrent constraints to establishing viable commercial aquaculture enterprises encountered are access to necessary quantities/qualities of capital and feed.

18. Capital is most critical for would-be medium-scale investors who require commercial bank (or other lending institution) loans. Larger corporate concerns tend to have access to capital when needed but individuals often encounter barriers when pursuing commercial credit for fish farming.

19. Reluctance on the part of lenders is principally a result of poor understanding of, or appreciation for fish farming. Aquaculture is a relatively new introduction into the agricultural scheme and few lending institutions have the technical expertise to be able to satisfactorily vet loan requests. If freer access to credit is to be achieved, mechanisms need to be established for technical appraisal of commercial aquaculture proposals.

 

BOX II. Case Study in Commercial Aquaculture: Aviara Fish Farm

Aviara fish farm, located in the Niger Delta area of south-eastern Nigeria, was in operation from the mid-1970s until the early 1980s. The farm was one component of an agri-business scheme focusing on cereal crops at a larger sister farm, the fish farm serving in a complementary role whereby crop residues/culls could be profitably converted into fish feed. The farm relied on the delta's aquifers for water. Ponds were constructed by heavy machinery, sizes varying from one to nearly ten hectares. The farm had a total water areas of 100 ha of ponds in production and in construction, with additional area for expansion. The technology employed was that imported from the Mississippi Delta of the United States where fish farming was a rapidly expanding industry. Aviara initially concentrated on raising common carp.

Raising these fish in the relatively constant temperature regimen of the Niger Delta posed some early challenges for propagating such a temperate climate animal, but seed production technologies were developed and refined such that the farm ultimately produced a net surplus of fingerlings.

Fish were fed a commercial pelleted feed; two manual feedings a day supplemented by demand feeders in each pond. Original stocks of this feed were imported with much of the farm material and subsequent supplies were to come from the integrated farming operations. Feed was used at an average rate of one ton a day with a storage capacity for 30 tons of reserve to cover any period when there could be breaks in supply.

Carp were sold live at an average weight of 400-500 grams and at an approximate price of $US 3.30 per kilogram. This price exceeded the break-even cost for variable expenses. Yields were in the nature of 1,200 kg/ha.

Farm operations eventually suffered from many of the ills that have encumbered the development of commercial aquaculture throughout the Region. These included:

  • lack of a comprehensive market analysis to determine customer preference and price structure;
  • reliance on undependable feed sources; and
  • over capitalisation.
  • A fundamental assumption of the founders of the operations was that there was a high demand for fresh carp (particularly in the restaurant market) and that fish feed would be supplied by the sister cereal farm. Unfortunately, the Niger Delta has abundant supplies of fish, with even potential over-supply at some seasons, and the company's feed mill was never put in operation.

    Adjustments were made in the marketing strategy and production expanded to include tilapia. Three local sources of acceptable quality feed were identified, although feed from all the three suppliers could be unavailable at the same time due to delivery troubles. The farm also dealt with problems regarding land and water use relating to conflicts with surrounding villages and had difficulties in obtaining spare parts for imported machinery items.

    At the end of its operations, Aviara had succeeded in adopting imported technologies to local conditions and developing marketing and management strategies that allowed for supply of inputs and sale of product. Nonetheless, the precarious political economy of the operation combined with marketplace competition with cheaper imported (frozen) and capture fishes let to the final closure of the farm.

     

    20. Feed is an ever-present predicament in terms of its quality, price and availability. In most cases, commercial fish farming requires feeding complete feeds (some exceptions do exist where fish production operations are closely integrated with other systems such as pigs or chickens where by-products from these livestock enterprises constitute important nutrient inputs for the fish). These feeds require the existence of a feed manufacturing industry which in turn requires a supply of raw materials to be able to produce cost-effective feeds. In many countries there is competition between human consumers and the feed mills for these raw materials (cereals and oilcakes) such that the production of fish feed is difficult to justify at the expense of taking food off peoples' tables unless there are extenuating economic and/or nutritional considerations.

    21 In many respects, the availability of suitable fish feeds is the linchpin for the development of commercial aquaculture; fish feed availability directly linked to a country's relative state of agricultural development and food security.

    III. POTENTIAL

    22. Few would contest that a physical potential for commercial aquaculture exists in sub-Saharan Africa. Much of the region is occupied by the warm tropics with elevated temperatures and abundant rainfall (Figures 1 and 2).

    23. Added to these natural resources, the region has comparatively large areas of un- or under-utilised land and low-cost labour. When a high demand for fishery products is added to the equation, an almost ideal aquaculture environment appears to be readily available.

    24. Yet, the track record seems clear and more failures than successes have been recorded to date.

    25. Benefiting for the existing physical, human and economic potentials for successful commercial aquaculture requires careful selection of the specific farm site. There has been considerable discussion as to the need for conducive government policies and regulations, adequate infrastructure, suitable markets along with sufficient water and acceptable material conditions (e.g., soils, temperature, etc.). Fitting sites are those situated at the conjunction of these preconditions. A GIS-based study concluded that the proportion of the total area potentially suitable for commercial aquaculture ranged from 21% in Tanzania to 34% in Malawi. Approximately 23% of the land area in southern Africa is suitable for commercial tilapia and African catfish farming, but less than 5% are being used.

    26. As previously mentioned, the availability of capital or credit may be crucial for some developers and the methods of appraising requests for fish farm funding need to be critically reviewed and modified to allow access to more potential entrepreneurs.

    27. The pivotal point of feed remains. All other prerequisites can be met but, if reliable supplies of good quality feed cannot be guaranteed the project is questionable. Even if imported feeds are employed during the preliminary stages, the farm must eventually have access to feed locally; either producing this itself from available raw materials or purchasing it from local mills.

    28. In this light, countries that are very food insufficient will have difficulties in providing the inputs required for fish feeds. It has been demonstrated that the central regions of the continent are reported to be more food secure and would, hence, have higher probabilities of being able to offer the necessary feed ingredients (Figure 3).

    29. This analysis can also be viewed from the information presented in Table 1 where the per capita availability of potential feed raw materials is compared for countries in sub-Saharan Africa considered as being in general "non-water-stressed" (e.g., mean annual precipitation > 450 mm).

    30. Referring to Table 1 and Figure 3, it can be noted that among those countries with comparatively high per capita availability of possible feed inputs, the prime commercial aquaculture candidates are; South Africa, Zimbabwe, Malawi, Nigeria, Zambia, Madagascar and C�te d'Ivoire -- countries already cited as having current commercial aquaculture operations. To these seven countries, Togo, Benin and Guinea can be added as possible candidates when considering potential per capita feed availability.

    31. Water shortages in the "drier" countries refers principally to inland (fresh) water supplies. Coastal areas of Guinea-Bissau, Gambia and Senegal should also be considered in the present analysis as should the riverine and floodplain areas of Burkina Faso and Senegal. In this latter group it is likely that the aquaculture systems compatible with the prevailing conditions would fall under the category in integrated irrigation and aquaculture and not necessarily be considered as commercial operations, although commercial dimensions should not be excluded.

    IV. CONCLUSIONS

    32. It is undeniable that ever-increasing populations and waning fish catches will put more and more pressure on aquaculture to fill the widening fish supply gap. This is especially true for sub-Saharan Africa where many are under-nourished or malnourished and where fish traditionally is an important ingredient in the diet.

    33. It is equally apparent that there must be a shift from public to private sector support for, and involvement in aquaculture. This transformation applies to all aquaculture production systems including commercial production units.

    34. For this transformation to be effective it must be accompanied by companion policies that allow the public sector to assume this new role and facilitate the necessary private investment.

    35. With appropriate supportive policies, the scene should be set to harness existing natural endowments of land and water and the accompanying human and economic assets for the development of sound commercial aquaculture operations.

    36. Yet, the constraints of capital/credit and feed exist as essential factors for the success of any commercial venture. The former can be accommodated in most countries by adjusting current lending schemes, educating lenders and providing technical assistance; the latter is more challenging if the prerequisites do not exist at the national level. Food insecure and/or food deficit countries with little or no agricultural surplus, few agricultural by-products and keen competition for whatever is available will have difficult times in producing reliable quantities of good quality fish feed at cost-effective prices. Accordingly, commercial aquaculture development will need to focus on those sites where acceptable feeds can ultimately be obtained locally. Without this facility, the enterprises will operate at continual risk. However, this does not imply that commercial aquaculture cannot flourish in regions without food surpluses.

    37. In the final analysis, commercial aquaculture is intrinsically linked to commercial agriculture if it is to be assured needed feed inputs. The existence of commercial agricultural operations presupposes a conducive policy and investment environment. Thus, at a primary level, countries with viable commercial agriculture should be able to support commercial aquaculture if they have the required natural resources.

    38. The Technical Consultation is requested to consider the above discussion on the potential for commercial aquaculture in sub-Saharan Africa with particular reference as to how the constraints of capital and feed availability can best be addressed and how investors interested in starting commercial operations can assess the possible impact of these constraints in their specific locales.
    Undisplayed Graphic

    Figure 1. Light shaded area designates the warm topical climatic area of the Africa Region.

    Undisplayed Graphic
    Figure 2. Average precipitation in sub-Saharan Africa with light grey zones ranging from 474-2,474 mm/yr

    Undisplayed Graphic
    Figure 3. Estimates of food self sufficiency in terms of kilograms of food available per person. Green areas indicate more than 500 kg/person with sequentially lower values going from brown to pink to red, with yellow areas less than 50 kg/person. Self sufficiency is greatest from 10_ north latitude to 20_ south. (Source?)

    Table 1. Relative evaluation of the availability of raw materials for the potential production of fish feeds in terms of weight of product available per person per country for countries with mean annual precipitation > 450 mm. Feed ingredients, representing the food groups (e.g., protein and energy sources) most often chosen when blending fish feeds, are given in metric tons produced per year and the population is the 1999 estimate in thousands of inhabitants [Irrigation in Africa in Figures, 1995 and FAOSTAT, 2001].

      Country Cereals Fish meal Oilcake Population Cereals per caput Oilcake per caput
    1 South Africa 13,244,849 32,296 459,559 39,900 332.0 11.5
    2 Zimbabwe 2,512,629 0 295,155 11,529 231.5 5.4
    3 Malawi 2,463,000 0 57,738 10,640 217.9 25.6
    4 Burkina Faso 2,453,000 0 177,565 11,616 211.1 15.3
    5 Nigeria 22,405,000 0 2,027,190 108,945 205.7 18.6
    6 Guinea-Bissau 211,552 0 16,917 1,187 178.2 14.2
    7 Togo 759,376 0 68,975 4,512 167.4 30.6
    8 Benin 871,691 0 169,822 5,937 159.9 7.6
    9 Zambia 1,435,200 0 68,015 8,976 158.7 1.9
    10 Madagascar 2,459,900 242 29,503 15,497 146.8 28.6
    11 Guinea 973,013 0 107,534 7,360 128.4 4.1
    12 Cote d'Ivoire 1,826,536 4,000 163,682 14,526 114.0 22.0
    13 Gambia 144,269 0 48,943 1,268 113.8 38.6
    14 Ethiopia 7,844,509 0 252,480 61,095 108.4 4.6
    15 Cameroun 1,489,400 0 175,353 14,693 104.2 35.4
    16 Senegal 963,090 4,718 326,769 9,240 104.2 35.4
    17 Tanzania 3,555,570 1,530 149,613 32,793 101.4 11.9
    18 Uganda 2,111,000 0 234,700 21,143 101.1 1.0
    19 Ghana 1,685,990 0 130,210 19,678 82.3 1.1
    20 Swaziland 73,000 0 10,690 980 76.5 5.8
    21 Mozambique 1,475,772 0 112,667 19,286 74.5 10.9
    22 Kenya 2,196,800 40 43,236 29,549 74.3 1.5
    23 Central Afric. Rep. 175,550 0 90,058 3,550 70.5 0.0
    24 Liberia 200,000 0 9,622 2,930 68.3 3.3
    25 Lesotho 148,550 0 0 2,108 49.5 25.4
    26 Sierra Leone 221,672 0 18,028 4,717 47.0 3.8
    27 Angola 549,781 0 20,608 12,479 44.1 1.7
    28 Burundi 245,173 0 4,855 6,565 37.3 0.7
    29 Congo, DRC 1,621,485 0 218,740 50,335 33.1 1.4
    30 Rwanda 239,705 0 9,783 7,235 32.3 1.6
    31 Somalia 312,800 0 15,672 9,672 32.2 4.3
    32 Gabon 31,800 0 8,562 1,197 26.6 7.2
    33 Congo, Republic 2,300 0 12,173 2,864 0.8 4.3
    34 Equitorial Guinea 0 0 1,780 442 0.0 4.0

    1

    Suitability was a result of multi-criteria evaluation processes taking into consideration such factors as water requirements, soil and terrain suitability, input availability, farm-gate sales and infrastructure.