Economic feasibility of fish cage culture in Lake Victoria, Kenya

Abstract

Fish cage culture has rapidly grown throughout Lake Victoria's shores, with Nile tilapia (Oreochromis niloticus) being the primarily cultured species. However, there is inadequate information on its economic viability. The study investigated the economic feasibility of fish cage farming system in Lake Victoria, Kenya, by evaluating the relationship between cost of inputs and revenue from fish sales and analysing the overall profitability of the fish cage culture in the lake. Systematic sampling was employed to select 200 cage farmers for the study. Structured questionnaire was used for data collection. Data was analysed using descriptive statistics, multiple regression analysis, gross margin analysis, net farm income and profitability ratios. The average quantity of fish produced in the production cycle was 11,971.53 kg from which an average of 9020.77 kg was sold at an average selling price of Kenyan Shillings (KSH) 281.36 (USD 2.60) per kg. The multiple regression results revealed that the cost of feeds (coefficient of −0.603) and fish seed (coefficient of −0.387) had a significant influence on returns from fish cage culture business at p < 0.01 and p < 0.05, respectively. The costs of feeds and fish seed were significant components of the total production cost, accounting for 60.25% and 33.50%, respectively. Fish cage production was profitable, with an average gross margin of KSH 1146,727.68 (USD 10,545.59) and net farm income of KSH 1020,518.78 (USD 9384.94) in a production cycle, with a benefit cost ratio of 1.43, an expense structure ratio of 0.06, a gross revenue ratio of 0.70 and a return on investment of 0.43. The study recommends formulation of friendly policies, legislations, operating guidelines and an enabling environment for feed and fish seed producers by policy makers to enhance fish feed and seed production and subsequently reduce prices of feed and seed. Through this, economic viability of fish cage culture will be enhanced.

IESFAC Proceedings 2023

“…It was found that feed expenses form the highest cost component of ₹ 302170 (86.27%) among variable costs. Gawa et al (2021) and Obiero et al (2022) also found the feed cost as the single most important cost component in inland water cages of Jharkhand, India and Kenya respectively. In case of annual fixed cost, permanent human labour formed the highest cost component of ₹ 2 lakhs (51.53%), followed by depreciation ₹ 112560 (29%) and interest on fixed capital ₹ 75600 (19.48%).…”

Socio‐economic impacts of climate change and adaptation actions among smallholder fish farmers in Sub‐Saharan Africa

“…One of the most significant barriers to the expansion of the aquaculture business is the high cost of feeds (Iliya et al., 2023; Obiero, Brian Mboya, et al., 2022). Small‐scale farmers in SSA employ low‐input, low‐output aquaculture to maintain production, relying mostly on naturally occurring ecosystem services and feed (Williams & Rota, 2011).…”