IvAift N i A PAiiuL i tFLiLUitR BtVLPMNT tI4BRUtARY 1977 N EL ALVABO R INTERNATIONAL CENTER FOR AQUACULTURE RESEARCH AND DEVELOPMENT SERIES NO 13 PROJECT AID CSD-2780 AGRICULTURAL EXPERIMENT STATION AUBURN UNIVERSITY R. DENNIS ROUSE, DIRECTOR AUBURN, ALABAMA SUMMARY AND CONCLUSIONS I, ish has beto orsriuested hs tie Cm oeomi-tit oif LI Salv adot (;OES ) als a1 solute of' high qiiality fpliteiio to improve tiht diets of loss incomec Sais tttit as. Large qnatitities of inlex- pet ise fish ate ticdced. Lat( gf' eomtmeircial ~ fis luns call cont litite sigoificaiti to the fiitiiie siipjply of fish itn the cities. Iom these fish fat mls to prov idte onte-th irci o[ the achi tioi Ial n eed for fish ill nthbai areas inl 1985, poiidcs totaliig 5S8) h ectairCs w5ill lie ret'iried. Ftooil 'V fishi pontds i eptesti atnt im portanit soorce ofi fisih to liltal a teas. IFisht pt odi ice cil iiimi us 1 iiids cali proxvidci atntua 1 proteiii f or the itiniecliate fatri family ai c cash ill- tome thirougih sales to iiei ghiborin g families. it is estiiiated that approximiately 359 hiectates of famnily po ucs s\\ill he it- q1011edf to mneet tile additional i ee] fot fisit iiilo rual areas iii 1985. A priereqisite to mnceatsed ptodiuctiot toif p)ild-rtliseti fish is gos en met iniiput. \\lie techtoicai tissi stttii priditeti l.\x ageinc ies of the G(OES w ~ill alo\ itssteseltipi iei t of I atp com meircial fatrtts, [amily)O on tdes tlopi~teolt r e(quires a wAeil coorit naitttedi ptoietioi I extetso pro1 )1tgraim dICsi goledt spe- cifictills lilt the siiiall ftlt uter. Agenci ies iof thite GOES ihavse tioine Inuich to in creaise po id fish i j cticit tilo I til iefforts iti tiis areti shotildt be tcotiintieti. Tihotighi progress is siows ll itdciff'icuit to metasuire, the tde- s elolmtnit of fisbeoltute is onie inipol taut meansii fly xh itl tile GOES cani iinprov e the quitifs i life for tnaii\ of te Satlsathtdot poor. CONTENTS I g TOP: Rural market in San Isidro, with temporary stalls in street, has one market day per week. CENTER: Vendor handling small volume of dried fish. BOTTOM: Dried fish in baskets in rural market. Sc, siNs itS ANDi (:i)N( A1. hi , f- I 5(: I) At A i\oc t i- S At s suil f;c~iplttiito Cli at \ f As il To~wt iti 55N( lioill\-------- Sit I L 01' i ION l 1 -A H oi-s X i 'u1 N- -- --- -- ---N (UsfsCIE io Eftbis wsssfra02ieti fMu A is O IN R AS II --------- Large si (oii (il 2o d 77-------- .\iubiui t oh tsutll is (iil 'qill opijor /iii ioll'. Piig' 2) :3 :3 :3 3 3 3 4 4 5 ti M T A R N I IN-RALPH W. PARKMAN and E. W. McCOY** RALPH W. PARKMAN and E. W. McCOY** INTRODUCTION THE WORLD FOOD SITUATION has been recognized as an im- mediate and complex problem. In the most recent food sur- vey conducted by the United Nations, it was estimated that up to 50 percent of the world's people suffer from hunger or malnutrition, or both (12). The majority of these people live in countries commonly referred to as third world or developing nations. These regions are also characterized by rapid population growth and low incomes (26). Thus, a multifaceted approach must be taken to provide a satisfac- tory solution to the food problem. Any successful effort to improve the quality of diets in developing countries requires increases in both food pro- duction and purchasing power of the population. People must be able to buy any additional food that is produced. It is particularly important that increases in income occur among those in greatest need, the poor. To improve conditions for many of the world's poor, popu- lation growth must be slowed. In past years economic de- velopment has resulted in higher incomes, but these advances have been largely offset by population increases. Food pro- duction has barely been able to grow with population, so it could not meet the moderately expanded demand resulting from some improvement in per capita income (26). An increase in the supply of food, particularly foods of higher nutritional quality, is required to improve the quality of life for many of the world's undernourished. In the densely populated developing countries, new agricultural lands are not available at a reasonable cost. Thus, increases in food production must be achieved through improvements in yields (26). Streeter (23) cited examples of how the use of modern cultivation practices and improved varieties of traditional crops and the introduction of nontraditional crops have in- creased the productivity of agricultural lands in developing countries. One example from the Streeter report was from the Re- public of El Salvador, a country which has much in common with many of the developing regions of the world. One of the important problems facing this country is the need for increased food production. BASIC DATA ABOUT EL SALVADOR Geography and Climate El Salvador is a Central American republic bordered by Guatemala to the west, Honduras on the north and east, and the Pacific Ocean on the south. It is the smallest coun- * This study was derived from Parkman, R. W., "An Overview of Fish Marketing in El Salvador", unpublished M.S. thesis, Au- burn University, June 1976, and is submitted as a contributing part of USAID contract AID/CSD-2780. ** Former Graduate Research Assistant and Associate Professor, respectively, Department of Fisheries and Allied Aquacultures and Department of Agricultural Economics and Rural Sociology. try in Central America, having an area of approximately 21,000 square kilometers (roughly the size of Massachusetts). There are 321 kilometers of coastline (7). Greatest land dis- tances are 256 kilometers east to west and 96 kilometers north to south, Figure 1. Mountain ranges divide the country into three geographi- cal regions running east to west: (1) a narrow coastal plain, (2) a populous central plateau where the three largest cities are located, and (3) a mountainous northern region. The climate is tropical and temperature varies with alti- tude. There are two distinct seasons, a rainy season from May to October and a dry season for the duration of the year (7). Population El Salvador is the most densely populated country in Cen- tral America - 182 persons per square kilometer. Its total population in 1973 was estimated at 3,814,000 (5). Guate- mala, the second most densely populated Central American country, had 51 persons per square kilometer in the same year (25). The population is increasing at the rate of 3.5 peroent per year,... a rate that would double population in 20 to 21 years (4). Income Average per capita income in El Salvador was $324 in 1972 (6). This income was poorly distributed, however, with 80 percent of the population receiving only 37 percent of the income and the remaining 20 percent getting 63 per- cent of the total (24). This represents annual per capita incomes of approximately $150 and $1,020 for the two re- spective strata. Income in rural areas was estimated at one-third of the national average (17). Nonfarm families and families own- ing farms of less than 1 hectare comprised 20 and 40 per- cent of the rural population, respectively, and received only 7.6 and 19.6 percent of the income in 1970. In contrast, 0.3 percent of the rural families received 22.2 percent of the in- come, Table 1 (5). Nutrition A nutrition survey in El Salvador conducted in 1963 found that 75 percent of the children suffered from malnutrition. This was considered to be a contributing cause in more than 50 percent of the deaths of children below the age of 5 years. A 1965 survey in 30 rural communities concluded that consumption of animal protein, which was only 26 percent of recommended levels, was one of the most serious nutri- tional problems of the rural population. The traditional diet of rural Salvadorans consists of tor- tillas, beans, and coffee supplemented with rice and cheese. This diet has 900 calories less than the minimum recom- mended by the General Direction of Public Health in El Salvador and is notably lacking in animal protein (17). Ani- mal protein is desirable and in many cases necessary for a nutritionally adequate diet. FISH AS A SOURCE OF PROTEIN Fish compare favorably in price with other sources of animal protein in El Salvador. In the markets of San Salva- dor, fish cost less per pound than pork, beef, or poultry. Though consumers purchase food rather than protein, it is important that planners of food production programs con- sider the nutritional value of agricultural products per unit of consumer cost. As shown by data in the table, fish were less expensive per unit of edible protein than other meats, eggs, or milk. Fish has recently been recognized by the Government of El Salvador as a potential source of animal protein that can be used to improve the diets of lower income Salva- dorans. In 1969, USAID and USPC were requested by the GOES to assist the Fisheries Service, General Direction of Natural and Renewable Resources, in a study of the pro- duction of fish in inland waters, including the natural lakes, rivers, and artificial ponds of the country (14). STATUS OF POND CULTURE Jensen et al. (14) evaluated the status of fishculture in El Salvador and identified several factors which were limiting its development. They reported that approximately 500 fish ponds with a total area of 53.5 hectares had been constructed, but only 12 percent of the pond area was being managed for fish production. Many pond owners were unaware of the technical assistance and fingerling distribution services provided by the Fisheries Service. Many were dissatisfied with the small size of fish produced, low production, and marketing problems caused by the sporadic supply of fish. PRICES OF COMMONLY SOLD SOURCES OF ANIMAL PROTEIN AND COST PER KILOGRAM OF EDIBLE PROTEIN, SAN SALVADOR, JANUARY 1974 Product Price/unit' Protein/unit ' Cost per kg of protein Colones 3 Grams Colones Fish' Snook ------------- 2.13/kg 132 16.15 Shark ----------------- 1.43/kg 132 10.82 Beef 5 Loin ------------------ 5.28/kg 180 29.22 Round ------------ . 5.06/kg 180 28.01 Pork 5 Loin--------------- 3.30/kg 163 20.24 Ham 2.86/kg 163 17.56 Poultry 4 2 .86 / k g 14 1 2 0.2 8 Eggs ------ 1.40/doz. 72 19.43 Milk --------------- 0.44/qt. 34 12.94 'Prices of all products except fish were reported in Direcci6n General de Economia y Planificaci6n Agropecuaria, Precios co- munes de los principales productos pecuarios en la plaza de San Salvador, 15 de Enero de 1974, (San Salvador: 1974), 1 p.; fish prices were determined from visits to the La Compafiia market. 2 Protein content elaborated with data from United States De- partment of Agriculture, Food, The Yearbook of Agriculture, 1959, U.S. Govt. Print. Off., Washington, D.C., 1960, pp. 244-248. 3 2.5 colones -- $1.00. SFish-39 percent refuse (Spanish mackerel), chicken-32 per- cent refuse, from United States Department of Agriculture, Com- position of Foods, Handbook No. 8, U.S. Govt. Print. Off., Wash- ington, D.C., pp. 32, 113. 5 Beef and pork sold boneless. Recent investigations conducted at the National Fish- culture Station, Santa Cruz Porrillo, identified solutions to many of the problems previously associated with pond cul- ture in El Salvador. Recommendations concerning species, stocking rates, fertilization, and harvesting methods have been revised (1,22). The revised culture system utilizes Tilapia aurea as the primary species. This species grew faster and reproduced less than the previously used Tilapia mossambica (3) The guapote tigre, Cichlasoma managuense, was stocked in combination with the tilapia to produce larger fish. This piscivorous species controlled excess tilapia recruitment, thus preventing overcrowding and stunting (11,22). The addition of organic or inorganic fertilizers increased production in ponds (22). A supplemental feed containing coffee pulp, a locally available agricultural by-product, has been used in certain instances. Fertilization and supplemental feeding result in higher fish production than that obtained with fertilization only (2,21). Beginning partial harvesting of fish at weekly, bi-weekly, or monthly intervals 4 months after stocking would permit pond owners to correlate supply with need (10,22). An economic analysis of the inland fisheries of El Salvador (15) included budgets for four alternative fish production systems. All were economically feasible, but profits increased with greater inputs of fertilization and feeding. An increase in the production of pond-raised fish can occur only through promotion and extension of improved fishculture methods to interested farmers and pond owners. The Fisheries Service has been active in this area. A Manual of Fishculture has been published and made available to pond owners and interested farmers. This man- ual contains sections on pond construction, biology of cul- ture species, and all aspects of pond management, from the preparation of ponds for stocking to harvesting and market- ing (22). Extension workers have supervised the renovation and management of 60 percent of the total pond area of the country and have assisted farmers who wish to construct new ponds (9). A 5-year program with plans for the con- struction of 100 communal ponds managed by rural com- munities for their own benefit was begun in 1973. This will provide fish for the immediate communities and serve as demonstration ponds for surrounding areas (8). FISH MARKETING In addition to emphasis on the production of fish, the GOES also has recognized the importance of marketing for the development of fishculture. The following is a brief sum- mary of important results of a survey of fish marketing re- cently conducted in El Salvador (18). Most fish consumed in El Salvador came from marine fish- eries, both industrial and artisanal. Freshwater artisanal fish- eries also contributed substantially to the total supply. The production from fish ponds was insignificant in 1973. Except in fishing communities, the majority of fish consumed in El Salvador was marketed through established channels of distribution. Major cities served as centers of fish distri- bution for surrounding areas. In the large cities, substantial quantities of all types of fish were sold. Less expensive fish comprised a greater part of sales in the small cities. Limited amounts of less expen- sive fish were sold in rural markets. Both supply and in- come appeared to influence the consumption of fish. Within rural areas, both fresh and total fish consumption Tilapia mossombica, left, Tulopia aureo, right. \\xits greater iii the cciitral zonie thaii iii othiei zones. Tlis Wxas attributed to the proximity of tossns iii the ceiitral zone to major ceeiters of fish distribuitioii lo-catenl iin the large cities. Coiisueis paid1 pirem~iumi prices for all species of the fam ily' Cichl idae: tihe guapotes, ni (jal ras. aind( til apias. (:011 sumiels pireferred freshsx atei fishi over most inal ile species. _\lanyi sources of inlanid fish xx ere oear major markets, so~ freshsvater fish normally reached markets iii excellent coii ditionm. F-reshwxater fisi (of the family Ciclilidae soldi for a pirice sim il ar to thfat paid for thle prem iumn iri-i iie species, ap- proxiiiately c 2 . 2 0) per kilogiram. Othei freshwxater sfpecies xx ere sold for appiroximuately c I .32 per kilogram, similar to the price of less expeilsixe marine species. Dried fish xxere the least expemisive oif all fish types. selling for appiroximately e 1.1(1 per kilogram. The projected demandc for fisli iii urlbai areas iii 1985 xx as 7,887 metric toils, an increase (If 4,354 mnetric toiis ov~er tile 197.3 urban supply . Tile 198.5 ndeinid iii rural areas xx\as fpro(jectedi to lie 1,9.56 inetrin toils, all ilerease of 1.077 metiric- toins over 197:3 rural supplsy PROJECTED NEEDS lII viesw ill tfte p1ojected derman d for- fishl, productionmi i- creases usi all comtrillotig fishieries are i-eijoired. The actual trend~ iii supply iiidicates thlat this is i ot olccuirriing. Total donmestic fproduictioin of fish hias remainled relatively stab~le at apiproximately .5,50t0 metric toils (18). Lro satisfs" thle pro- jeered demaiid for fisll midn axvoid iticreases iii impor ts, do- illestie pr oductioin of fish must he doiibled by 1985. lMuch iof tile increase iii piroduction m iust cioisist (of less expelisis e fish to heiiefit lo\s illeOmie conisumners5. Pirojected demandc for fisll iefeirs 01115 to quantities wxhichi xxil Ifle actiiafsill ni l tllrougli thle mnarketillg system. A sig- Ilificailt part (If El Saixador's total dlomiestic fproduoctioni is cilistiiienl by fislii g comimumiities. 1ii 1970), for example. approxilllatelx 2t0 perceint of tile total fresh fish supfply wxas coiistied iii fishimng centers afom i the coast (24). Tile present dleiiand projectioni does not imicude fish coilsumptioii by the fisliiig sector oif El Salvador, despite its importailee iii plani- iiiilg iieeded prodiictioin iincreases. El Salv ador's population xas :37.9 perceilt urbami ill 197(0, buit it is CStililateti to reich 5(0 pe-Cemit iii-a lbii\ 1985 (20). As moire people move into uirb~an centers, the demanid for f'ood will increase iii these areas. Urbaniizatioii requires a more efficient system of distibu- tioni for fish as wxeli as other agricultural commodities. Be- cause the production areas, channels of dlistrilbution, and centers of consuimption are mnoire restr icted for fish, urhan- ization creates, additioi al p~roblemns for distribution of fish to rural areas. 1hi 197:3, the mnajor ity of tile fishi supply to puhlic markets caine from i nlie fisheries. Chaunei ls of distibu ltioni have ileel established to imove the supply of fish from lanlding sites to mnajor consumption centers. As the population in urban centers incr1eases, the dlemandl for fish wxill ii ciease alld( less fi xli wxill be avail able for the rural popul ation . F'ishl ieach iu g ii al inar kets usually passed thirough dlis- tribiutioii ceinters in the cities. ille supply situatioii for ruoral areas, in adequoate ini 197:3, xxoul 1(1 ot im prov e as urban iza- tioni in creasedi. ( oiltii tied s hor tages iin ruoral aireas is inidicatedi by projectionl data shoss ilg that 1980) (demnd for fish in the cities wsill sillpass5 total 197:3 domestic, pi oductioii of fish. III views of the re1-cnt stabilitN of domuestic proaduction lexvels, the iugh coilsuimpt ioi of fish in active fi sh ing aireas, anid the increased demand~ foi fish iin urban ceiitei s, it is estimatedi that the (Ieficieilcy iii s uppix' of fish in ril areas wxill ap- piroximate the (leillaid ini 1985 ( 1,956 metric toins) . fin effect, deinaiid iii the cities wxill uitilize tile eiitiire supplN. Thie si tuiat ioin ill ui il areas Ibecome is ex eui less faxvoral e wxIhei h iicoin e le~s lxaire coilsi dci e( To attract fish o 11 t of urhai ce uters, pirices imuist i lecessaliiI. be i greater in rur al aireas thaii iii the cities. This \x mld prosve ani adlditioiial lbt rden to iiurial inih afnta ut s, the populiiation sector reportedl to hav e the loss est ix iige ioncomes. MEANS OF INCREASING SUPPLY A sulbstLiltial increcasc in the deiiaiid har fishi iii El Sals adoi is proeted for thle near fttire. The (domestic supplx' has lot iiicreased si gilifi cai iti iii i ecent s eai s. These treind~s Iindi cate that effoirts to iincrease fish prioductioi inii all sectors he iindertakeii. Not oiiiv is there a n eedl for more fish, hut large quaiitities of ii expel isis e fish are iieeded to betiefit loss iincoine coi isulners. .\ eai s of ii creas iig the piroduict io of i mirin e fi sheriies fhave been suggested (12,24). Similar dev elopmeiit programs nlulx' he establlishedl to iiierease the fharv ext froom iiatiiral iii- land xwaters. Fishing pressure iii iiatiiral fish stocks is heavy. Miid thle possibility of iiicreasiiig piroduictioii of these fisheiries is extireiely limited. Fisictilture is ain meai s of ii creasil g f ut tire fish isiipplies iii El Salv adoir. Certain quaintities may b~e piroduced in) cages Miid pen s located iii stitable niatuiral xxaters. Tro a large e xtent. howsever, incireased piroduictionl from inland wxateis inulst coine thirouI igh the culiftu re of fish ini flo ad. Existiiig fisictilture oipeiratioins in~ El Salxvador cal b e di- xvided iiito twxo major types, large commeircial and small family operatiolis. and 1)oth call make importailt coiitrihutioiis to thle future stupply of fish. H1arvests fi om these operatioiis alre dlestiinedl for~ txo dI~ist in ct (olsiiiei giroupfs. Large Commercial Ponds Liarge commercial pon ds aire located onii edium to large scale farms (10 liectares or larger) operated by activ e cornm mercial fpirodutcers. These operations are oi ieiited to fish sales in) the cities aiidl represenlt pon d areas gireater thai i0t.5 hectare each. Poiid owsneris utilize productioii techniques xwhich permuit thle lharvs t of a lar1ge fish (0. 11 kilogram o 51 larger), which is competitive in the cities with fish from other sources. The advantages of fish culture, both to the producer and consumer, may appear somewhat optimistic in view of the actual situation in El Salvador. Fishculture has not yet been recognized as an economical alternative to the production of other agricultural crops. Though returns are high, the initial investment required for the construction of commer- cial ponds is high, whether manpower or machinery is utilized. The marketing system is inefficient and margins are elevated, suppressing both supply and demand. Con- sumption is low and demand is highly seasonal. Fish are not considered by consumers as an everyday alternative to other animal products. Nevertheless, an increase in the sup- ply of fish is needed and fish culture can provide this supply. With costs of production as estimated by McCoy (15) and the market prices found in 1973-74, fishculture appears to be a profitable enterprise. The profits will attract increasing numbers of farmers into fish production. As fishculture becomes established as a valid farm enterprise and pond management techniques are refined, greater numbers of farmers will enter production. Based on the supply and projected demand under 1973-74 market conditions, an estimate was made of the number of large commercial fishculture operations needed to supply a part of the projected need for fish in urban areas. Assuming that one-third of the additional need for fish in urban areas in 1985 is provided by pond raised fish, approximately 1,450 metric tons would be required. Commercial operations with pond areas totaling 580 hectares, each with an average pro- duction of 2,500 kilograms per hectare per year, would be required to provide this supply. The total pond area in 1973 was estimated to be 54 hectares, indicating that 546 additional hectares of commercial operations will be needed to meet the future supply of fish to urban centers. An increase in fish production in the large, commercial sector would not have a direct impact on the urban poor, given 1973 conditions. The market study indicated that cichlid species, the type produced commercially, demanded top prices in the cities. Low incomes would prohibit the consumption of these large pond-raised fish by the urban poor. Though freshwater cichlids were more expensive than other fish types in 1973, an increase in production would indirectly benefit low-income consumers. As the supply of pond-raised fish increases, the market price will decrease somewhat. In response to the decrease in price and the preference for cichlid-type fish, it is thought that sales to lower middle and middle class consumers will shift from less-preferred species. The decreased demand for less-pre- ferred species should induce a down-trend in price for these fish. Consumer reaction to price change between fish types would oscillate downward through income groups. The final impact would be increased availability of the cheaper classes of fish to the lowest income group. Small Family Ponds Small family operations could provide an important source of fish supplies in rural areas. In view of the low incomes and poor diets, small family operations represent an impor- tant type of fishculture development in rural areas of El Salvador. Family fishculture operations are normally located on small to medium scale farms (1-50 hectares) of subsistence and commercial farmers. The fish production unit of family opera- tions is less than 0.5 hectare in area. Pond owners utilize management techniques which result in the production of small sized fish (0.11 kilogram or less) at a low cost. Due to the nature of the operation, limited quantities of fish are harvested at frequent intervals, daily in some cases. Fish produced in family ponds represent an important source of protein for the immediate farm family. Larger family ponds can also provide much needed cash income through sales to neighboring families and to consumers in nearby towns. Fishculture in small family ponds directly benefits those in need. From a production unit of 0.2 hectare, 600 kilo- grams of fish can be produced per year. If 182 kilograms of fish per year were consumed by the immediate family, this would leave 418 kilograms to be sold to neighboring families to provide the pond owner with a net cash income from the enterprise. At a selling price of 01.32 per kilogram, similar to the selling price of less expensive fresh fish in rural areas, 0318 in cash income would be generated. At a selling price of 00.88 per kilogram, lower than the price of dried fish in rural areas, 134 in cash income would be generated (see budget in Appendix). Small family fish ponds can increase food production and income of small farms. Such ponds can be built on marginal lands unsuitable for other crops and be complementary to other farming enterprises. Of even greater importance, they can provide a source of protein for rural consumers and re- duce the dependency of rural areas on the cities for fish supplies. It is estimated that the additional need for fish in rural areas will be 1,077 metric tons in 1985. In view of the possible decrease in supply, the actual needs may approach the projected total demand, 1,956 metric tons. Production of the needed additional 1,077 metric tons of fish can be done in an estimated 359 hectares of family ponds. This pond area is equivalent to approximately 1,800 production units of 0.2 hectare each. RECOMMENDED PRIORITIES FOR FISHCULTURE DEVELOPMENT PROGRAM In view of the cost of fish production and the premium price paid for cichlid-type fish, the supply from large com- mercial operations will increase in future years. As "inno- vators" demonstrate to other farmers the profit from fish- culture, the demand for technical assistance in the construc- tion and management of fish ponds will grow. Though technical assistance to commercial operators should be pro- vided by the GOES, a fishcultural promotion program for this sector is unnecessary. The profitability of fishculture can provide the impetus for large commercial operations to develop independently of government promotion. There are many problems associated with the development of family fish ponds in El Salvador. Small farmers as a group are usually not the most receptive to new agricultural meth- ods. A package of pond management techniques which less- educated farmers can understand and accept must be formu- lated. The number of small operations needed requires a well-coordinated extension program with adequate numbers of well-trained field agents. Low-interest government loans are needed. Fish fingerlings must be readily available to farmers at all times. The establishment of an effective na- tional promotion-extension program for family fishculture is an important way the Fisheries Service can benefit many low-income Salvadorans. APPENDIX. Costs and Returns Analysis for a 0.2-hectare Fish Production Unit Assumptions 1. Tilapia fingerlings are available at the National Fish. - culture Station for a cost of 0 1.50 per hundred. 2. Special low interest loans for fishcuhure are available through the Banco de Fomento Agropecuario; interest rate 6.5 percent per annum; principal repayable in 5 years. 3. Chicken manure is available to the farmer for the cosTL of hauling, 00.075 per kilogram. 4. Family labor is utilized in the operation; labor charged at minimum wage for agriculture, 0l0.33 per hour,. Capital investment items Non-depreciable Construction of dikes' 1 ---------------------- Depreciable Water control system for ponds 2 ------------- S e in e 3 ---- ----- ---- ---- ---- ----- ---- ---- --B u c k e ts ---------------------------- TOTAL DEPRECIABLE ---------------------- TOTAL CAPITAL INVESTMENT ----------------- Annual costs Fixed costs Water control system (20-year life) ---------- Seine (5-year life) -------------------------- Buckets (5-year life)------------- ---------- Interest on average investment @L 6.5% p er annum 4 ....... .. ............ .... .... TOTAL FIXED COSTS-------------- -------- Variable costs F ingerlin gs 5 ---- ------ - --- --------- --------- F er-tilizer --------------------- -- Labor 7 --------- Interest on operating capital Q9 9% per annum 8 .....7----------------------------------- TOTAL VARIABLE COSTS --------------------- Option 1 - at selling price of 1.32 per kg Revenue Cash revenue - 418 kg tilapia sold @ 0 1.32 per kg-------------------- ------- Non-cash revenue - 182 kg tilapia for family consumption --------------------- TOTAL REVENUE --------------------- ------- Returns Return to land: rental value 180 per hectare (0 180 x 0.225 ha)---------------- -------- Return to labor: operating labor ? 9% of construction labor (0~72.27 ?+q05 9 . 4 0) ------- Return to management: total revenue - total fixed and variable costs excluding labor - returns to land and labor (0792.00 - 0237.53 - 040.50 - 0137.67) ------------------------- CASH INCOME 9 : total cash revenue - total fixed and variable costs excluding labor (0552.00 - p237.53)------------ --------- /660.00 235.00 225.00 10.00 470.00 45.00 2.00 15.28 74.03 40.00 115.00 72.27 8.30 0235.77 0l552.00 240.00 0792.00 040.50 131.67 382.30 Option 2 - at selling price of O.88 per kg Revenue Cash revenue - 418 kg tilapia sold Cw 00.88 per kg ------------------- ------- Non-cash revenue- 182 kg tilapia for family consumption -------------------- TOTAL ]REVENUE --------------------------- Retur-ns R etu rn to lan d -- ----- ------------ ----- ------- R eturn to labor---------- ------------- ------- Return -to m anagem ent ---------------------- CASH INCOME 9 (0368.00 - 0237.53) --------- Total cost of po nd construction Clear land: 0.225 ha (0.005 per man-hour) 45 m an-hours t@) <0.33--------------------- Constuction of dikes: 750 M' (0.375 m' per man-hour) 2,000 man-hours @ <033--------- Sod banks: 0.05 ha 16 man-hours @ <0.33------ Drainage system M o n k ------------------------------------ 3 m of 4-in, asbestos cement pipe------------ Water. control structure in stream Rock and mortar diversion dike, 3 x 1 x 0.25 m- T O T A L C O ST -- ------------------------------- 0368.00 160.00 0528.00 040.50 131.67 118.30 0 130.47 < 14.85 660.00 5.28 -- 75.00 60.00 100.00 <-0915.13 2Water control system includes cost of diversion dike and drain- age structures. Seine, 30 x 2 m of 2.5-cm stretch mesh (locally m ade) @ (.7.50 per m ----------------- --------- 0225.00 ' Interest on average investment hased on 6.5% of average cost of capital items, not including construction labor (<235 -+-0225 + (10)/2 'Fingerlings 2,000 tilapia @ <1.50 per hundred <----------------030.00 Transportation cost to Fishculture Station. --------- 10.00 T O T A L -- -------------------- -------------- Fertilization One initial application of 8 kg 20-20-0 (commonly available on the farm) @ <75 per 100 kg ----- Chicken manure, 28 kg per week for 52 weeks- 1,456 kg @ <0.075 ------------------------ T O T A L -- -----7- - --- -- - -- -- --- -- -- -- -- --- -- - - - 'Labor, 219 hours @ <0.33 --------------------- Used in the following activities: Activity <40.00 -- 109.20 <-115.20 -- 72.27 Month 12 3 4 5 6 7 8 9 10- 11 12 S to ck in g -------- ------ 6 -- ---- ---- ---- ---- ---- Fertilization ---------- 6 5 5 5 5 5 5 5 5 5 5 5 Harvesting ----------- ---- ---- 10 10 10 10 10 10 10 10 Miscellaneous --------- 6 6 6 6 6 6 6 6 6 6 6 6 TOTAL -------.------ 1811 11 1121 2121 2121 2121 21 Interest on operating capital, based on 9% of all operating expenses (excepting family labor) incurred before the first harvest at 5 months: Fingerlings -------------- <----------- 140.00 Fertilization -------------------------- 52.20 T OTAL --------------- <------------- 92.20 'After repayment of principal on loan (94.00 per year), the actual cash available to the family would be <294.50 if fish were 0314.47 sold for <1.32 per kg and < 110.50 if fish were sold for <0.88 per kg. 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