Fisheries Economics

Enterprise budget for shrimp farming

Budget is a simple model commonly used if farm planning. It involves estimation of expenses and income from farm business activities. Budget is a written statement of various costs and income. Enterprise budgets are written plans of action and include estimates of expected results. Budgets are analytical tools for short and intermediate planning. Budgeting helps the farmers to review their goals vis-à-vis resources available and to make important decisions.

The following concepts are used in present study:

SHRIMP FARMING :

Shrimp farming is called extensive farming when stocking density is 1-5 /m². The term modified –extensive planning of farming refers to a situation where the stocking density is from 6-15 /m².

FIXED COST :

Items of cost that do not vary with the level of output – they are estimated on capital items.

VARIABLE COST :

Items of cost that vary with level of output. They are incurred on inputs such as feed, seed, energy, labour etc.

TOTAL COST :

It is the sum of total fixed and variable costs.

TOTAL RETURN :

Refers to the total amount of money that a farm receives from the sale of all produce.

NET PROFIT :

Net profit is returns less total cost.

CURRENT ASSETS :

These assets which are more liquid. They are near cash assets and can be either used up or sold as a normal part of business.

INTERMEDIATE ASSETS :

As the name implies, these assets have intermediate liquidity. They have a useful life greater than one year but lesser than 7-10 years.

FIXED ASSETS :

These are the least liquid of all assets and have a useful life of more than 10 years.

CURRENT LIABILITY :

Current liabilities are those financial obligations, which will become due and payable within a year. This includes an account payable for goods and services received full amount of principal and interest on short-term loans and current portion of principal and interest for intermediate and long term loans and other liabilities which fall within the year.

INTERMEDIATE LIABILITY :

These liabilities represent loans where repayment is extended over atleast 2 years and upto as long as 7-10 years. The balance of intermediate loans is called as intermediate liability. The annual portion is included under current liability.

LONG-TERM LIABILITY :

Loans obtained towards the purchase of real estate (or) buildings (or) mortgage of land and buildings will a repayment period of 10-40 years is termed long-term liabilities. The balance of long term loans is called long-term liability.

NET WORTH :

Net worth is defined as the excess of assets over liabilities. It is the amount of money remaining with the farmers after paying all liabilities.