Fisheries Economics

5.2.5. Enterprise substitution

A fish farmer cultivating local varieties of carps wants to replace it with composite fish culture technology. The per hectare costs of and returns from the two methods are given below. The duration of both the varities is four months. Interest on working capital is 10 %. Suggest whether the fish farmer could adopt the composite fish culture technology to enhance farm profits. Price of fish is Rs 20 per kg.

Local carps farming                                        Composite fish culture

Yield = 665 kg                                                  Yield = 1,850 kg

Working capital = Rs 5,750                           = Rs 16,950

Interest =                                                 =

              = 575                                                     =1,695

Total working capital = 6,325/-                           = 18,645/-

Total income = Rs 20 x 665                                = Rs 20 x 1,850

                      = Rs 13,300                                  = 37,000

Gain                         Rs                                  Losses                   Rs

Added gain           23,700                             added cost            12,320

Reduced cost           -                                   reduced return

                       Net gain = Rs 11,380

By adopting the composite fish culture technology, an additional income of Rs 11,380 could be obtained. Hence, the technology could be recommended and adopted by the fish farmer to increase his income.