I served my cows last year November. How long will they take to be dewormed?
From: Farmer Japheth, County:Kericho, Kenya
Discussion:
Japheth wanted to deworm his three cows which were served on various dates of 16.10.2019, 29.11.2019 and 11.12.2019 and wanted to know whether it would be safe. It is safe to deworm cows during pregnancy but it is advisable to deworm after the first trimester as there are some products like albendazole which are restricted during this period.
Dear Japheth,
It is advisable to deworm pregnant livestock after the first trimester. For the cows avoid deworming the first 3 months of pregnancy. In sheep and goats the critical period to avoid deworming is in the first 2 months in order to avoid abortions and birth defects in lambs and kids. Some dewormers cannot be used just before, during and just after breeding.
Deworm your animals 1 month or 30 days before artificial insemination –A.I. or natural service. Dewormers have conditions of use due to their toxic effects on the developing fetus. Some dewormers are restricted during the first trimester e.g. albendazole based products.
Always consult a veterinarian for advice in determining which dewormer is best to use in your livestock, proper dosages and withdraw period.
Note: To get the correct weight of your cows, measure them with weigh tape , readily available from most agro dealers.
To get the correct weight, do the following:
a) Measure the cow with it’s head up. When the head is down the chest expands and you will get the wrong measurement.
(b) Measure the heart girth region just behind the shoulders, not the abdomen
c) Make sure the tape touches the animal and is not too loose nor too tight as this will give a wrong reading.
Please read the product’s label, understand and follow the manufacturer’s instructions. Do not under dose or over dose when administering a dewormer.
Restrain the animal properly to avoid unnecessary struggles and injuries. Hold cows neck up straight and slowly feed the worming medicine into the side of its mouth. Rub often to allow the cow to swallow. Do not administer the medicine quickly or you may choke the cow. If the medicine gets into the lungs of the cow it may get pneumonia. Be careful.
Ensuring the right dosage is used is both economical and efficient. The wrong dosage may result in ineffective treatment. Overdosage is a waste of your money.
Observe the manufacturer’s recommend withdraw periods for milk and meat after deworming. It is advisable to deworm during morning hours after milking and deworm all your livestock on the farm at the same time.
Worms can be grouped as round worms, tape worms and flukes. They are controlled by good feeding and watering practices and regular use of effective broad-spectrum anthelmintic or dewormers. It is important to make the right choice of the dewormers as some are not recommended for treating pregnant animals.
Deworming dairy cows at early lactation consistently increases milk yields more than any other time of treatment.
Swali. Huu ugonjwa wa vifaranga macho kufura na kupofuka, ni ugonjwa gani na unatibio aje?
(Question, which disease causes chicks eyes to swell and blindness and how is it treated?)
From: Farmer Moses County: Trans Nzoia, Kitale, Kenya
Discussion
The chicken are having discharges from nose and eyes which some are swollen and cannot see. They have difficulty breathing and twisted necks and others have died.
Dear Farmer Moses,
The chicken with nasal discharges, inflammation and swelling of the eyes, swollen heads, depression, torticollis or twisting of the necks could be suffering from Pneumovirus infections or Swollen Head Syndrome- SHS which is caused by a virus. The virus is transmitted by contaminated water, equipment and personnel as well as from bird to bird. Like all other viral diseases there is no specific treatment for Pneumovirus infections. Treatment with antibiotics can be given to control secondary bacterial infections. OTC-Plus may help.
Use of antibiotics should limited to cases that are diagnosed properly by qualified veterinary professional.It is only when bacterial infection occurs one could use antibiotics.
Affected chicken may show swelling of the periorbital and infraorbital sinuses hence the description swollen head syndrome, torticollis, depression and disorientation. And for laying birds there is marked reduction in eggs production.
My chicks are one month and a week old. I have already vaccinated with Newcastle and Gumboro. What vaccine will I give now?
Apart from vaccination what are the best antibiotics?
From: Farmer Japheth, County: Kericho, Kenya
Discussion:
Japheth is following the recommended vaccination program but would still want to use antibiotics to prevent diseases in his chicks. Unnecessary use of antibiotics should not be encouraged as it causes more problems when misused and instead alternatives like biosecurity, nutritional supplements and vaccines should be employed.
Dear Japheth,
Successful rearing of healthy, growing and productive chicken, from chicks to adult birds, depend on; nutritious feeds, clean fresh drinking water, observance of strict sanitary and hygienic measures in chicken house, clean feeders and drinkers which should be free of algae and moulds, keep a clean environment, and vaccinating your chicken against epidemic diseases. The following is a basic vaccination program for some epidemic chicken diseases;
Gumboro vaccine – at 10 days and 18 days of age, given in drinking water.
Newcastle Disease -NCD vaccine (may be available combined with Infectious bronchitis -IB vaccine as, NCD + IB) – is given @ 21days, 8 weeks, 18 weeks, and every 3 months thereafter. Given in drinking water or through eye drops.
Fowl pox vaccine given -@ 3 weeks and 6 weeks of age, and is given by a wing jab.
Fowl typhoid vaccine, given – @ 8 weeks of age and is given by intramuscular injection.
Please follow the recommended chicken vaccination schedule for control and prevention against these diseases. It is the most successful method. At the age the chicks are at now give them Fowl pox vaccine and it is administered by a vet or a paraprofessional and given by a wing jab.
It is not advisable to keep or give antibiotics to your chicken or other livestock when there are no bacterial infections. Alternatives to antibiotics are:
i) Biosecurity measures like observing and practicing strict hygienic and sanitary measures so as to limit disease risk.
ii) Nutritional supplements like multivitamins with amino acids and electrolytes or minerals supplements to boost immunity of your livestock.
iii. Vaccines for preventable diseases.
Please note, it is better to spend more resources on hygiene, prevention and proper management, and very minimal expenses on treatment and curative medicines. It is only when bacterial infection occurs one could use antibiotics. Use of antibiotics should limited to cases that are diagnosed properly by qualified veterinary professional.
How are hatching eggs supposed to be arranged? [Question asked through a phone call on Dr. iCow line].
From: Farmer D. Maket County: West Pokot, Kapenguria, Kenya
Discussion:
David is interested in adding new chicks and would want a clarification on the place the eggs and more so the side of the egg that should face downwards. Fertilized eggs should be taken care of during storage before placing them under a brooding hen or an incubator. Nest boxes should be clean. Hatching eggs are stored only for 7 days, because after this hatchability starts to decline quite quickly. They should be stored with the pointed end facing downwards.
SMS response:
Dear David,
Fertilized eggs should be taken care of during storage before placing them under a brooding hen or in an incubator. They are living and they grow slowly. They should be stored with the pointed end facing downwards and the broad end facing upwards and they should be turned regularly, morning and evening e.g. by tilting the eggs tray or box the opposite way. Nest boxes should be clean, the eggs should be stored in a clean, cool, fairly humid and not too dry place. Hatching eggs are stored for only 7 days and this is because after this time hatchability starts to decline quickly. Eggs which are more than 14 days old from the day they are laid should not be used for hatching. Successful hatching depends on how the eggs are taken care of from laying to sitting or incubating.
Fertile eggs are collected from heathy and disease free hens. They should be collected regularly at least 3 times in a day and are selected from mature hens aged 25 weeks and above, stored in a cool, fairly humid, not too dry place and not more than 20ºC for less than 10 days. For best fertility a ratio of 1 cock to 10 hens is recommended.
Under mixed-sex culture of tilapia, both males and female are cultured together but harvested before or soon after they reach sexual maturity. This minimizes chances of recruitment and overcrowding. The disadvantage in this is that fish are harvested at a smaller size due to the limited growth period. In this culture practice, fish are usually stocked at low rates to reduce competition for food and promote rapid growth. One month-old, 1-gram fry are stocked at 1 to 2 per square meter and grown for about 4 to 5 months. In cold areas where the water temperatures are low and therefore growth is slow, tilapia might not reach marketable sizes in that period.
Newly-hatched fry should be used all the time because older ones will reach sexual maturity at a smaller, unmarketable size. They could also be mature fish but stunted. Supplemental feeds with 25 to 32 percent protein are generally used. The average harvest weight is about 250 g and total production about 0.25 kg/sq m for a stocking rate of 1 fish/m2. Higher stocking densities can be employed to achieve higher production but must be combined with very good management. Expected survival is about 80 percent.
Species such as Tilapia zilli, T. hornorum, or T. mossambica are not suitable for mixed-sex culture because they reach reproductive maturity at 2 to 3 months at an unmarketable size of about 30 grams. Those that are suitable for this culture are O. nilotica and O. aurea which reach reproductive maturity at 5 to 6 months. Two to three crops of fish can be produced annually in Kenya depending on the water temperatures.
Mono sex culture
To overcome the problem resulting from prolific breeding of tilapia, ponds are stocked with males only because the males grow almost twice as fast as females. Male fingerlings can be obtained by three methods:
Hybridization
Sex-reversal and
Manual sexing.
None
of these methods is 100 percent effective, and a combination of methods
is recommended. Hybridization can be used to produce better results of
males only. The hybrids can then be subjected to hand sexing and/or
sex-reversal treatment. Sex-reversal requires obtaining recently hatched
fry and rearing them in tanks or hapas where they are subjected to
hormone laced feed for about three weeks.
Hormonal sex reversal
needs a tank-based or hapa-based hatchery that will allow fry to be
collected at the yolk sac or first feeding stages (no later than one
week after they have been released from the female). The healthy fry of
uniform size are transferred to the tank or hapa where you will feed
them with hormone-laced diet for 21-28 days. The feed is prepared as
follows:
Mix 30 – 70 mg of hormone (methyl or ethynyl testosterone) in 700 ml of 95% neutral ethanol
Add
700 ml of hormone solution to each kg of finely ground feed then mix
thoroughly and dry. At this stage you may add any needed supplements
This feed should be kept under refrigeration if it is not going to be used immediately
Feed the fry at a rate of 10 – 30% of body weight per day, at least four times a day for 21 – 28 days.
The fry must eat this feed to sex-reverse
This is not in accordance with the organic principles and therefore cannot be applied.
Manual sexing (hand sexing) involves separating males from females by visual inspection of the external urinogenital openings. Reliability of manual sexing depends on the skill of the workers, the species to be sorted and fish sizes. Experienced workers can easily sex 20-gram fingerling T. hornorum and T. mossambica, 30-gram T. nilotica, and 50-gram T. aurea. Tilapia males are preferred for culture because they grow faster than females. Females use considerable energy in reproduction and do not eat when they are incubating eggs. All-male culture permits the use of longer culture periods, higher stocking rates and fingerlings of any age. High stocking densities reduce individual growth rates, but yields per unit area are greater. If the growing season can be extended, it should be possible to produce fish of up to 500 grams. Expected survival for all-male culture is 90 percent or greater. Females included in a population of mostly male tilapia affects the maximum attainable size of the original stock in grow-out. A stocking rate of 2/m2 is commonly used in Kenya to achieve yields of 1kg/ m2. At this stocking rate the daily weight gain will range from 1.5 to 2.0 grams. Culture periods of 6 months or more are needed to produce fish that weigh close to 500 grams. There are cases in Kenya where stocking densities of 6 juveniles/ m2 is practiced with a production of up to 3kg/m2. Higher stocking densities will require water aeration and sub-optimal feeding rates may have to be used to maintain suitable water quality.
Polyculture
In Kenya tilapia are frequently cultured with other species, mainly catfish (Clarias gariepinus) to take advantage of many natural foods available in ponds and to produce a secondary crop, or to control tilapia breeding. Polyculture uses a combination of species that have different feeding niches to increase overall production without a corresponding increase in the quantity of supplemental feed. Polyculture can improve water quality by creating a better balance among the microbial communities of the pond, resulting in enhanced production.
Other possible polyculture combinations that can be done in Kenya include:
Tilapia and prawns (Macrobrachium rosenbergii): In this case, survival and growth of tilapia and prawns are independent. Feed is given to meet the requirements of the fish. Prawns, which are unable to compete for the feed, utilize wasted feed and natural foods that result from the breakdown of fish waste.
Tilapia and large mouth bass (Micropterus salmoides): The bass which is carnivorous, control the breeding of tilapia in mixed sex culture. This allows the original stock to attain a larger market size. Predators must be stocked at a small size and percentage to prevent them from depleting the tilapia stock.
Growth and yields
Under proper management and optimal conditions, 1-gram fish are cultured in nursery ponds to 20 to 40 grams in 5 to 8 weeks and then stocked into grow-out ponds. In mono-sex, males can reach 200+ grams in 4 to 5 months, 400 + grams in 5 to 6 months, and 500+ grams in 8 to 9 months. Dress-out percentage on tilapia is low compared to species such as trout and catfish. Tilapias have a dress-out of 51 to 53 percent of live weight for whole-dressed fish (head-off) and 32 to 35 percent for filets.
Tilapia is the generic name of a group of cichlids endemic to Africa. The important aquaculture genera in Kenya are Oreochromis, and Tilapia. All tilapia species are nest builders; fertilized eggs are guarded in the nest by a brood parent. Sarotherodon and Oreochromis are mouth brooders; eggs are fertilized in the nest but parents incubate them in their mouths including several days after hatching. For the Oreochromis, only females practice mouth brooding, while in Sarotherodon, either the male or both male and female mouth brood.
Tilapia farming involves the culture of following species: i. Oreochromis niloticus ii. Oreochromis mossambicus iii. Oreochromis aureus iv. Oreochromis spilurus v. Oreochromis andersonii vi. Tilapia zillii. vii. Tilapia rendalli
Feeding Habits
Tilapias are heterogeneous in their feeding. They and have ability to consume and efficiently assimilate a wide variety of foods. Various species are omnivorous; others are phytoplanktonous while others are macrophyte feeders.
Omnivorous are: O. mossambicus, O. niloticus, O. spilurus, O.andersonii and O. aureus.
Phytoplankton feeders: O. leucostictus, O. macrochir, O. esculentus, O. alcalicus grahami, and S. galilaeus
Macrophytes (feed on larger plants) feeders: T. rendallii and T. zillii.
Maturation
In natural water bodies, tilapias mature in about two to three years. Under culture they tend to mature early. Sexual features distinguishing males from females are clear when fish mature (about 15 cm in Tilapia zillii and 10 cm in Oreochromis niloticus). Males have two orifices situated near the ventral (anal) fin, one is the urinogenital aperture and the other is the anus. The females have three orifices, the genital opening the anus and a urinary orifice (but difficult to visualize with the naked eyes). Separation of males and females can be made easier by applying dye (India ink, indigo, etc.) to the papilla with a cotton swab to outline the male and female openings.
Fecundity
Fecundity refers to the number of eggs produced by a fish in a spawn. This applies well for monocyclic species, that is, once a year breeders. Tilapias are polycyclic (many times breeders) and their ovary may contain eggs at different stages of maturity. In substrate brooding (nest building) tilapias, fecundity is much higher than mouth brooders. Other characteristics that differentiate substrate brooders (Tilapia) and mouth brooders (Oreochromis) are:
Characters
Tilapia
Oreochromis
Fecundity
high
low
Egg diameter (mm)
1-1.5
up to 5.0
Yolk percentage
less than 25%
up to 45%
Yolk colour
pale yellow
orange
Size of fry at feeding
5-6 mm
9-10 mm
Courtship
prolonged (monogamous)
brief (polygamous)
Juvenile mortality
high
low
Longevity
up to 7 years
over 9 years
Environmental requirements
Optimal Temperature
Temperature affects fish distribution, survival and growth, rate of development, reproduction and even susceptibility to diseases. Various species and strains of tilapia differ in tolerance to low temperatures, but growth is generally limited at water temperatures below 16degC and most become severely stressed at 13degC. Death occurs from 12degC with few surviving temperatures below 10degC. Most will not feed or grow at water temperatures below 15degC and will not spawn below 20degC. The normal water temperature should be between 20 to 30degC. Metabolic rate rises at higher temperatures which lead to death.
Optimal Dissolved Oxygen (DO)
Tilapias are able to tolerate low levels of ambient oxygen. Usually, well fertilized ponds will have low levels of oxygen early in the morning. Night activities are dominated by respiration and decomposition which reduce DO. Larger fish are less tolerant than juveniles. This could be due to the difference in their metabolic demand. The optimal DO for tilapia culture is 4 mg/litre (50%) and should not go below 2.3 mg\litre.
Salinity
The Nile tilapia is the least saline tolerant of the commercially important species, but grows well at salinities up to 15 ppt. The Blue tilapia grows well in brackish water up to 20 ppt salinity, and the Mozambique tilapia grows well at salinities near or at full strength seawater
pH
Tilapia can survive in pH ranging from 5 to 10 but do best in a pH range of 6 to 9.
Ammonia
Massive tilapia mortality will occur within a few days when the fish are suddenly exposed to water with unionized ammonia concentrations greater than 2 mg/l Prolonged exposure (several weeks) to un-ionized ammonia concentration greater than 1 mg/l causes deaths, especially among fry and juveniles in water with low DO concentration.
Nitrite
Nitrite is toxic to many fish and chloride ions reduce the toxicity. Tilapia are more tolerant to nitrite than many cultured freshwater fish. In general, for freshwater culture the nitrite concentration should be kept below 27 mg/l.
TILAPIA FARMING
Pond culture is the most popular method of growing tilapia. They are grown in fertilized ponds where the fish utilize natural foods from ponds. Management practices of the systems ranges from extensive; using only organic or inorganic fertilizers, to intensive systems, using high-protein feed, aeration and water exchange. The major problem to overcome in this system is the prolific breeding of the fish that occur in ponds under mixed sex culture. This breeding if not controlled results to overcrowding in the ponds. The end result is stunted growth yielding small size fish (less than 100 g) which may not be of market value. In mixed-sex populations, the biomass of juveniles can make up to 70 percent of the total harvest weight. Therefore strategies for producing tilapia in ponds should aim at controlling spawning and recruitment. For easy management and economical operation in Kenya, grow out ponds should be about 1 to 2 metres deep and at least 300 sq metres for semi-intensive production of tilapia. A harvesting sump in the pond behind the drainage outlet is needed to concentrate the fish in the final stage of drainage. The pond should be drained completely and be allowed to dry to eradicate any fry or fingerlings that may interfere with the next production cycle. This will also kill some parasites, frogs’ egg and other unwanted organisms that may be in the ponds.
One way of evaluating whether an opportunity such as a new aquaculture investment is worthwhile in the long-term, or to choose between aquaculture opportunities which vary in size, is by use of capital budgeting. Popular methods of capital budgeting include net present value (NPV), and internal rate of return (IRR). Pay-back period (PBP) and the break even point (BEP) are also used as indicators of feasibility of investments.
Net Present Value (NPV) is used in the analysis of the profitability of an investment or project to give indication of the today’s value of what will be earned in future. It is the futures net cash inflows discounted to today’s value. If the NPV of a prospective project is positive, the project is profitable but if it is negative, the project should be abandoned because cash flows will also be negative. The higher the NPV value, the more profitable an investment is.
NPV is given as:
Where: P = The net cash flow i = The interest rate or the marginal cost of capital t = Expected project life INV = Initial investment
In addition to the formula, net present value can be calculated easily using tables, and much easier by use of computer soft wares like the Microsoft Excel spread sheet.
Internal Rate Of Return (IRR) indicates the estimated rate of return that a project is expected to generate to an investment. This can be viewed as the efficiency of an investment to turn profit.
IRR is the interest rate at which the NPV is zero. It equates the present value of the expected future cash flows or receipts to the initial investment. Equation used for IRR is that for NPV, it is solved for i, the interest rate at which NPV = 0.
IRR can be calculated easily by use of computer software like the Microsoft Excel spread sheet.
When evaluating possible investments options, it is important to remember that the NPV method is better that the IRR. The major limitation of IRR measurement is that it uses one single discount rate to evaluate every investment. However, discount rates do change significantly and therefore without modification, IRR evaluation will not be adequate for long-term projects for which discount rates are expected to vary.
Pay Back Period (PBP) is the time required to recover the cost of an investment through the net cash revenues it generates. It is calculated by dividing the initial investments cost by the accumulated profits before depreciation. However, this analysis does not take into consideration cash flow after the payback period. This method should only be used therefore as a first approach at the initial stages of evaluation to give an indication of the payback period and may not be relied upon to rank investments on basis of viability. PBP is given as:
PBP=I/E
where: PBP = payback period in years I = initial investment E = Accumulated profits before depreciation
Break even Point (BEP) describes how much a project must produce to cover for the total cost of production. At the BEP, the revenue generated by a project equals the total cost incurred. An investor will need to know this to weigh this against production possibilities available. However, this method like the PBP should only be used as a first approach before proper evaluation is conducted because it does not show profitability of projects.
BEP considers the Economics of Scale which means the quantity of fish needed to be produced and sold at the current market price to pay all cost of the operation and make enough profit for the owner. In general the smaller the system, the more it costs to build and operate per quantity produced. This is because certain fixed costs remain the same no matter how much fish are produced.
For aquaculture investment, BEP can be derived for production quantities and produce prices. BEP analysis for production quantities is derived by calculating how much an enterprise should produce per hectare, considering the estimated market prices for the products, to be able to cover for the total production cost. The BEP for the produce prices is calculated by deriving the price at which the produce must be sold to cover the total cost of production.
BEP for production quantity is given as:
BEP for produce price is given as:
Financial ratios are used to give an indication of not only how likely a project will turn a profit, but also how that profit relates to other important investment characteristics of the project. High revenues alone do not necessarily translate into profits for the investor. A project must have the ability to clear all of its expenses and costs. These ratios are used to assess a business’s ability to generate earnings as compared to costs incurred during a specific operation. They provide a comparison of profits generated and what have been invested in a project. For most of these ratios, having a higher value is an indication that the investment is good. Such ratios will include return on investment, return on equity, return on asset and operating profit margin ratio.
i). Return On Equity (ROE) indicates how much profit an investment generates with the equity. ii). Return On Assets (ROA) is an indicator of how profitable an investment is relative to its total assets. iii). Operating Profit Margin Ratio (OPMR) gives an indication of how much of the gross income is actually profit. iv). Return On Investment (ROI) gives an indication of how an investment returns relate to the total invested capital.
These ratios are derived as:
i). ROE: Net income from operations divided by total equity ii). ROA: Net income from operations divided by total iii). OPMR: Operational gains plus interest divided by Gross income iv). ROI: Net income from operation divided by Debts plus capital
Sensitivity of
an investment to aspects of production is very important. Some of these
aspects can be very volatile and their changes might have enormous
effects on the profitability of projects. For investors to be able to
make choices on where and how to invest, they need to know how likely
variations on production output, cost of inputs or even changes in the
market prices for the products will affect their future cash flows and
net incomes. To be able to carry out a proper sensitivity
analysis, an entrepreneur needs the following information for each of
the investment type:
Capital investment costs estimates:
a) Cost of land
b) Cost of construction of buildings and fish production facilities
c) Cost of acquisition of equipment and machinery
Operational investment that included the cost incurred during production. These included:
a) Quantities of inputs used in production
b) Cost of inputs of production
c) Payment of salaries and wages
d) Costs of taxes, depreciation, permits and licenses
e) Cost of acquisition of financing
Operational incomes that included:
a) Products and production quantities
b) Market price of products per unit value of product
For aquaculture investments, sensitivity can be analyzed by simulating changes (but not limited to) in:
a) Produce prices
b) Cost of feeds
c) Production quantities
d) Food conversion ratios and
e) Survival rates of fish species under culture
It is important to point out that there are experts in aquaculture economics in Kenya who can do these analysis for potential investors. Unless the investors are themselves conversant with the analysis, they need not struggle to do them but consult the experts.
Enterprise budgeting
Commercial aquaculture can result in good profits but it can also result in meaningless gains or huge losses. The reasons for failure are diverse but include:
Over-capitalization
Improper practices
Poor planning
Lack of foresight
Lack of hindsight
There is no need to start something that you do not know whether it will make intended gains. It is therefore important to find out in general terms, the costs and returns of the proposed aquaculture venture before investment is done. To do this, you need to do a budget of your enterprise to see how it will operate.
An enterprise budget provides information on annual cost, annual returns and capital investment requirements for a particular enterprise. Many farmers budget in their heads and end up making wrong decisions. Good budgets should be written so that they can be reviewed as times goes by. Most of the information needed for a good budget is available locally e.g. past experience, farm plan, agricultural input dealers for input costs, aquaculture product dealers for fish prices etc.
Uses of an enterprise budget;
It is used by Farm manger as a plan of operation before production
Can be used as reference during production or after marketing
It forms basis of a comparison of what really happened versus what was planned so as to inform on improvement
Aid in cash flow planning, in controlling production costs and in determining the Break Even Prices and Yields
The basic structure of an Enterprise Budget consists of:
i) Gross Receipts
This refers to gross returns or total sales from the farm. It is the income generated from the sale of farm produce e.g. fish, fingerlings etc. They are estimated by multiplying the total expected harvest weight (quantity) with the expected price per unit weight (kg).
ii) Variable costs
This is also referred to as operating costs. These are costs that vary with production or expenses related directly to the quantity of fish produced for market.All production costs/expenses are itemized and they include; Cost of fingerlings, feeds, labour, interest on operating capital etc.Interest on operating capital is a variable cost and is a charged for a loan required to purchase production inputsTotal Variable costs (TVC) is the sum of all variable costs
iii) Fixed costs
These are costs that are incurred regardless of the level of production (operation). They include; depreciation, interest on investment capital and other costs not related to active production of the business e.g. insurance. They are also referred to as ownership costs.
Depreciation refers to an expenditure allocated to a tangible asset’s cost over its useful life. Depreciation is a non-cash expense and therefore it increases free cash flow while decreasing reported earnings. It is used in accounting to match the expense of an asset to the income the asset helps an investment earn. For example, if a farmer buys equipment for KShs 10,000 and expects it to have a useful life of 10 years, it will be depreciated over 10 years. Every year, the farmer will expense KShs 1,000 (assuming straight-line depreciation), which will be matched with the money that the equipment helps to make each year. Depreciation applies only to items that have a definable useful life.
Total fixed costs is the sum of all fixed costs.
Net returns: This is the difference between gross receipts and total costs which is the indication of the amount of profit earned.
Returns above variable costs
This is the difference between the GROSS RETURNS and the TOTAL VARIABLE COSTS.
If
this figure is positive, it means that all variable expenditures are
covered and the enterprise is profitable at least in the short run.
If they are negative, it is advisable to close the business if you can not reduce on the variable costs
Net returns
This is the difference between the TOTAL COSTS and the GROSS RETURNS.
Positive
returns indicate that the enterprise is profitable even in the long
term while negative returns indicate that the enterprise is not viable
and should be abandoned if you cannot reduce on the costs.
Table 1: An enterprise budget for a hypothetical fully operational tilapia /catfish farm
Farm size: 0.5 Ha
Productivity: 3 kg/m2/year
Av price of fish in KES/Kg: 250
Item
Description
Unit
Unit price (KES)
Quantity
Total Amount
Gross Receipts
Tilapia
Whole fish
kg
200
12,000
2,400,000
Catfish
Filet
kg
300
3,000
900,000
Gross Receipts
3,300,000
Variable Costs (VC)
Tilapia fingerlings
1 month old
No.
3
30,000
90,000
Catfish fingerlings
1 month old
No.
5
10,000
50,000
Wheat bran
kg
30
35,000
1,050,000
Fertilizers
DAP
kg
50
130
6,500
CAN
kg
50
270
13,500
Lime
kg
20
1,300
26,000
Labour
Pond repairs and harvesting
KShs/day
2000
150
300,000
Interest on operation loan
KShs
12%
500,000
60,000
Total Variable Costs (TVC)
KShs
1,596,000
Net returns above TVC
KShs
1,704,000
Fixed Costs (FC)
KShs
Depreciation
Ponds
KShs
40,000
Equipment
KShs
10,000
Machinery
KShs
30,000
Buildings
KShs
10,000
Water supply
KShs
20,000
Interest on capital investment
KShs
30,000
Total Fixed Costs (TFC)
KShs
140,000
TOTAL COSTS
KShs
1,736,000
Net returns above TC
KShs
1,564,000
Net returns/Ha
KShs/ha
3,128,000
Break Even Price
Above TVC
KShs/kg
106.4
Above TC
KShs/kg
115.7
Break Even Yield
Above TVC
kg/ha/year
12,768
Above TC
kg/ha/year
13,888
Cash flow budget
One useful tool for planning the use of money in an aquaculture enterprise is a cash flow budget. A cash flow budget is an estimate of all cash receipts and all cash expenditures during a certain time period. Estimates are made monthly, bimonthly, quarterly or annually. Estimates can include non-farm income and expenditures as well as farm items. Cash flow budgeting looks only at money movement, not at profitability. Non-cash revenue or non-cash expenses, for example depreciation, are not considered.A cash flow budget is a useful management tool because it:
Makes you to think through your production and marketing plans for the year.
Tests farming plans: will it be possible to produce enough income to meet all cash needs?
Projects need for operating credit and ability to repay borrowed funds.
Projects when to borrow money and when to repay.
Helps
in control of finances. By comparing the budget to actual cash flow,
one can spot developing problems due to an unexpected drop in income or
unplanned expenses, and opportunities to save or invest funds if net
cash flow is higher than expected.
Helps communicate farming plans and credit needs to lenders.
Items to be included in a cash flow budget include:
Receipts from sales
Operating cash expenses
Living expenses
Other expenses e.g. Personal withdrawals
Debt interests and payments
Capital sales
Capital purchases
Income tax payments
Each type of revenue is charged during the specific period when it is occurred.Cash flows differ depending on the purpose for which the analysis is being developed. You could have:
Monthly cash flow budgets – for detailed financial planning
Quarterly budgets – to develop estimates of cash needs over a several year period
Annual budgets – used in investment analysis to determine cash flow over the life of the investment
Components (items) of a cash flow budget
Beginning cash balance (BCB) – this is the amount of cash at hand at beginning of the production period.
Receipts – cash revenue generated by sales of the crop or capital assets.
Note: cash revenue items (receipts) + BCB are summed up to obtain Total cash inflow for the time period
Operating cash expenses –
expenses related directly to the quantity of fish produced. e.g.
fingerlings, feeds, field labour, security personnel, repairs etc.
Also expenses associated with the purchase of capital assets or breeding stock are included.
Living expenses – this Includes what the owner of the enterprise spends on the self which can be referred to as nonfarm investments
Other expenses – not related to actual production
Scheduled debt payments – includes principal and interest payments for each separate loan.
Note: All expenses are summed to obtain total cash outflow.
Cash available – this is the difference between Total cash inflow and total cash outflow
New borrowing – if the cash available is negative,
this means that there is insufficient cash generated during the period
to meet all cash obligations and additional borrowing is needed for that
time period.
Cash balance – obtained by adding cash available to new borrowing. It becomes the beginning cash balance at the start of next time period. This must always be positive
Debt outstanding –
an accounting of the debt outstanding for each loan is kept at the
bottom of the cash flow budget. Therefore, principal payments in a time
can be subtracted out of the balance owed.
Table 2: An annual Cash Flow budget for a hypothetical fully operational tilapia /catfish farm
When planning for commercial aquaculture, the following aspects of production must be considered very critically: i. Species to be produced ii. Production site iii. Production technology
I. Species to be produced
The choice of what to produce will be guided by: a) Market preference b) Ecological requirements of the species c) Production technology of the species d) Resources available to produce
The species to be produced must not only be marketable but also suited for the climate and be produced cost effectively. Different species require different climatic conditions to perform optimally. For example:
Nile tilapia and African catfish require warm water of more than
25degC to achieve high growth potential. Growth of these fish is quite
slow at elevations greater than 1600 meters because the water
temperatures are very low. For best performance, average water
temperatures of about 28degC are best. In Kenya, such regions are to be
found in low land areas. In areas where temperatures are lower, a larger
pond surface area can compensate for that. High sunlight intensity is
also preferred for tilapia culture under semi-intensive production.
Trout require cold, fast
flowing clean water of less than 18degC for growing out and below
10degC for hatchery production. Such conditions in Kenya are to be found
in high altitudes areas.
It is also important to know
whether the species selected for production is adaptable to intended
culture conditions and there is adequate knowledge of the reproductive
biology, nutritional requirements, common diseases and parasites of the
species. Also important is to ascertain that the species proposed for
production is being profitably produced at commercial levels by other
producers. Other issues to consider, which are equally important are:
Is there a reliable supply of good quality juveniles at a reasonable price, for stocking?
Are you capable of establishing your own seeds (juveniles or ova) production capacity?
Is there quality feed for the species and are the prices cost effective?
Do you have a reliable and affordable source for specialized production supplies and equipment?
A good species should have the following characteristics:
Adaptable to culture conditions
Fast growth rate, from egg to market size
Simple and inexpensive dietary requirements
Hardiness and resistance to diseases and parasites
Producer can have full control over the life cycle processes in captivity
Easy market acceptability
Availability of advanced and proven production technology
II. Production site
The proposed site should have the following characteristics:
Be located in a region suitable and allowed for aquaculture production
Have a climate suitable for the species intended for production (preferably indigenous to the area)
Be well drained and protected from floods: when flooded the fish will escape/disappear.
The topography and the soils should be suitable for the construction of the proposed production system
Have adequate and preferably free flowing good quality water supply. This is the life line of aquaculture and is a must.
Water is the key to a good site and not a matter of choice.
Water should be available throughout the year
Water must be free from pollution e.g. pesticides and other detrimental chemicals
Accessible throughout the whole production cycle and have easy access to services and technical assistance
Have adequate space for intended function and possible future expansion
Located on site acceptable under local and environmental management legislation
Have good Infrastructure like:
Roads
to bring supplies to the farm and take the products to the market? When
export markets are targeted, air or water transport must be available.
Air or water transport where export markets are the targeted
Adeqiate (3-phase) power where intensive production systems are proposed
Telephone service may be needed to run the enterprise efficiently
Have good security
III. Production technology
The different
species cultured have each their ecological requirements: feeding and
breeding as well water quality. Aquaculture is done at different
management and intensification levels. On small-holder farms it will
mainly be in earthen ponds but even on a small scale the requirements
and needs of the fish must be met and the production must add to the
economics of the household. The choice of the production level will
depend on:
The species of choice
Availability of the needed technology
Potential prices of fish
Available resources
Available capital
Availability of essential inputs for example feeds, power, skilled labour, professional expertise etc.
Depending on the proposed targets and the resources available, the producer will make a choice for an extensive or an intensive system:
Extensive systems
In these systems little or no input is used in the production. Fish are stocked in cages, still water earthen ponds and other water impoundments (for example reservoirs) and let to fend for themselves. Low costs (recourses and labor), low stocking densities and thus low yields characterize the systems. The main cultured species are Tilapines (e.g. Oreochromis niloticus), Clarias gariepinus and Cyprinus carpio. These are low input-low out put production systems. Majority of the small scale, subsistence fish farmers in rural Kenya fall in this category. Production in these systems ranges between 500 and 1500 Kg/Ha/year. These systems can be organic because they don’t use chemical fertilizers and artificial feed. The fish can be sold on the local market.
Semi-intensive systems
These systems form the bulk of aquaculture production in Kenya. In these systems still water earthen ponds and cages are used as holding units for fish culture. Still water pond culture uses the natural productivity of the water to sustain the species under culture. However to enhance productivity, the ponds are fertilized using both chemical and organic fertilizers at varying proportions to enhance productivity. Exogenous feeding using cereals bran and other locally available feeds is done to supplement pond productivity. Polyculture of Oreochromis niloticus, Clarias gariepinus and Cyprinus carpio is practiced with various combinations of species. Commercial production in these systems ranges between 1 to 3 Kg/m2/year depending on the management levels individual farmers employ. There are Tilapia/Catfish producers in Western Kenya who have achieved productions between 6-10 Kgs/m2/year.
Intensive systems
In
these highly industrialized systems water flows in and out continuously
(flow through). This allows higher stocking densities. The systems
require good supply of good quality water. Less land is required to
produce the same quantity of fish as compared to extensive and
semi-intensive systems. The systems employ mainly raceways, various
types of tanks and floating cages as holding units. In these systems,
more fish are produced per unit area by complementing or substituting
the productivity in the culture units by feeding from outside using
complete feeds (the feeds are specifically manufactured for the species
under culture) and water aeration. Such operations require high initial
capital investment and high operational cost.
They are mainly suited for high value fish. There are very few such operations in Kenya and most of them produce Rainbow trout. Production in these systems range from 10 to 50 kg/m2/year. This depends on the management levels employed by individual producers. This production can go higher with better management and quality feeds.