Investment and Farm Modeling for Feasibility Assessment and Decision Making in Aquaculture

Engle, Carole R.

doi:10.1002/9780470277867.ch6

Cited by 3 publications

(5 citation statements)

References 37 publications

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“…However, for them to venture into the production of a new species, which is inherently risky, the financial feasibility had to be tested theoretically. Early investors prefer to wait until the body of knowledge of a new species is very robust, to the point of understanding the operational efficiency in order to assure the profit is high enough to remunerate those who finance the project (Engle, 2007). However, in the case of an endemic species with declining wild population but high market demand it would be advisable to take advantage of the current market opportunity and to reduce the present fishing pressure.…”

Section: Discussionmentioning

confidence: 99%

“…In cases like this one, simulation has a central role in constructing theoretical knowledge to make investment decisions, because it allows to explore the possible outcomes of the investment. However, it is important to consider that scientific research on the production of a new species is mostly conducted on a smaller scale and with greater control of production variables, in contrast to a commercial-scale operation (Engle, 2007).…”

Section: Discussionmentioning

confidence: 99%

“…In the case of tegogolo the simulation helped us to decompose the financial risk. Since the simulation was run using information collected from primary sources, we have well represented estimates of uncertainty and first-hand operation data to determine farm-level costs and volume estimations (Engle 2007;Kam and Leung, 2008). Since tegogolo is a new species for aquaculture, and there are limited available experimental data (Engle, 2007), we approached this problem by gathering operation scale information from a similar production system (intensive tilapia production).…”

Section: Discussionmentioning

confidence: 99%

“…This body of knowledge also allows us to design a small-scale intensive production system (SSPS) for P. catemacensis. However, the economic feasibility of cultivating P. p. catemacensis has To bring a new species to production, investment and time are needed (Young and Muir, 1995) and aquaculture ventures are inherently risky (Engle, 2007). To reduce this risk simulation may help to evaluate the viability of a particular production system (Engle and Neira, 2005;Moss and Leung, 2006a;Chen et al, 2017), which is desirable, particularly for those involving new species for aquaculture (Engle, 2007).…”

Section: Introductionmentioning

confidence: 99%

“…However, the economic feasibility of cultivating P. p. catemacensis has To bring a new species to production, investment and time are needed (Young and Muir, 1995) and aquaculture ventures are inherently risky (Engle, 2007). To reduce this risk simulation may help to evaluate the viability of a particular production system (Engle and Neira, 2005;Moss and Leung, 2006a;Chen et al, 2017), which is desirable, particularly for those involving new species for aquaculture (Engle, 2007). Therefore, in this research, we designed a SSPS for P. p. catemacensis, determined its financial viability for a base scenario and used stochastic modeling to predict the impact of uncertain variables on the economic indicators to assess the financial viability.…”

Section: Introductionmentioning

confidence: 99%

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Economic feasibility analysis of small-scale aquaculture of the endemic snailPomacea patula catemacensis(Baker 1922) from southeast Mexico

Mejía-Ramírez

Rocha

Pérez‐Rostro³

2020

Aquat. Living Resour.

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The snail Pomacea patula catemacensis is an endemic mollusk from the southeast Gulf of Mexico, which is commercially exploited and in decline since 2010. This decline is associated with an increasing market demand and illegal capture. We designed a small-scale production system for P. p. catemacensis and determined its financial feasibility for a base scenario. We used information gathered from stakeholders and stochastic modeling to predict the impact of uncertain variables on the economic indicators to assess the financial viability under varying conditions. The small-scale intensive production system, designed to yield 3.9 tons/year of unshelled product, requires an investment of about US $65,000. The production unit was financially assessed using the Modified Internal Return Rate and The Net Present Value of cash flow, considering a 14% discount rate and a 7% reinvestment rate. We obtained a Net Present Value of $67,000 and a Modified Internal Return Rate of 20% for the base scenario, which indicates the viability of the project. A Monte Carlo simulation was run to assess the robustness of the project to variability of three parameters: labor cost, energy cost, and market price; with random and simultaneous variation, resulting in 95% probability of getting a Modified Internal Return Rate larger than the current interest rate (8%) and a low probability (2.8%) to be financially unviable. This production system is worthy of consideration as an option to reduce the fishing pressure on the tegogolo natural populations of the Catemaco Lake while satisfying the market demand.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%