harry ako and pingsun leung depts. of molecular biosciences and bioengineering and natural resource...
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PRELIMINARY ECONOMICS OF AQUAPONICS
Harry Ako and PingSun LeungDepts. of Molecular Biosciences and
Bioengineering and Natural Resource and Environmental Management
College of Tropical Agriculture and Human Resources
University of Hawaii at Manoa
• We generated a simple economic model that was fun to play with and I came to some interesting projections.
• We gathered information from farmers which was very interesting to me.• I therefore told Clyde, why don’t we have a workshop? A little out of
hand.
Why?
We thought that aquaponics might be good for island ecosystems because it is 6 times more productive per unit area of land, uses on 2% of the water as traditional agriculture and releases no effluent into the environment . It is non-polluting.
We just got back from Samoa. E-mail [email protected] for how to
manual.
Research(introduction, not report)
We worked on a very simple system. Plywood sheet with walls, tub for fish, air pump, bucket. Shown.
Both the Ako approach and the Fox/Tamaru approach are highly technical
What we did: Economics determined by materials cost to build an 8 plywood system and cost of operations
This report is based on real numbers and very modest extrapolation. Recorded the price of the wood, every brick, PVC pipe etc. Labor not accounted for.
Capital Costs (extrapolations from 8 plywood system; start with one plywood backyard system)
Items Life 1 plywood
Lettuce traya 10 $130
Shade structure 10 $60
Fish tank 10 $80
Air pump 5 $80
Laborb $0?
Total $350
aincludes wood, screws, plastic, polystyrene sheetsbbuild yourself; this is not as good an assumption when the system is large.
• Cost of each component of each item.• Lifetime of each item.• Costs 3.5 X higher for pre-made systems or another kind of system
Capital CostItems Lif
e1 plywood
12 plywood= racewaya
5 raceways
Lettuce tray 10 $130 $1,560 $7,800
Shade structure
10 $60 $720 $3,600
Fish tankb 10 $80 $600 $2,600
Air pumpc 5 $80 $220 $1,100
Water pump 5 $310 $1,550
Refrigerators (2)d
10 $1,100
Delivery vane 10 $20,000
Total $350 $3,410 $35,110
Annualized cost
$43 $332 $6,260a4 feet wide, 100 feet long; see figureb use larger tankscuse blower for larger operationdvs $8000, chosen for energy conservation reasons ($90/yr vs $4300/yr)edoes a farm this size need a van?•Build yourself
Annualized costs are costs/lifetime in years
Annual variable costs (extrapolated from one tray)
1 plywood
12 plywood=raceway
5 raceways
Fingerlingsa $15 $180 $900
Feed $27 $324 $1,620
Electricityb $66 $788 $3,942
Water $0.56 $6.69 $34
Suppliesc $20 $239 $1,200
Interest $35 $341 $1,815
Labord owner owner owner
Lease rent $74 $434
Total variable costs
$148 $1,774 $9,045
amost of us grow our own; costs are nursery costsbat $0.30/kwh; cOasis cubes mostly; dfor the 1 plywood or backyard system, approx. 2 hr/wk; for the 1 raceway 5-10 hr/wk; 5 raceway, approx 20 hr/wk
Production (based on our data; lb/yr; pieces/wk)
1 plywood
12 plywood =raceway
5 raceway
Lettucea
211 (7.4 )
2,534 (89)
12,672 (443)
tilapiab 43 (0.83)
515 (10) 2,574 (50)
http://img.alibaba.com/photo/11697156/Tilapia_Fillet_Light_Skinned_CO_Treated.jpg
Farmers can be more or less productiveThese values predict sizes of niche markets that can be serviced.a from mediocre season like Spring; 250 g/headbmarket size= l 1b
The thoughts on planning
Choose the production volume you would like to do.
This in most cases determines the markets you can compete in and the prices you can get.
A common error is to produce without thinking about the market.
Suppose you want to have a One plywood/tray system (backyard)
1 plywood
12 plywood =raceway
5 raceway
Lettucea
211 (7.4 )
2,534 (89) 12,672 (443)
tilapiab 43 (0.83)
515 (10) 2,574 (50)• Our production numbers say 7.4 heads of lettuce or other vegetable per week. Maybe 1 fish/wk. Is this enough for a family?
• You save by not having to go to the supermarket. Prices, retail, $5.60/lb for lettuce and $9/lb for live
fish.Annual capital cost
$ 43
Annual variable cost
$ 148
Value of lettuce $ 1,183
Value of fish $ 386
Net profit $ 1,378
Thus, based on the model a backyarder could save about $1,400 a year at the
grocery store. Pays for this system in a few months (there are more expensive systems). Or just like the idea of being self-sufficient?
Suppose you want to have a Six plywood or ½ raceway system (farmers’ market)
1 plywood
12 plywood =raceway
5 raceway
Lettucea
211 (7.4 )
2,534 (89) 12,672 (443)
tilapiab 43 (0.83)
515 (10) 2,574 (50)• Our production numbers say 44 heads of lettuce a week. Enough for farmers’ market? Five fish a week.
• Prices, retail, $5.60/lb for lettuce and $9/lb for live fish.• Will have to rent stall, go to farmers’ market, deal with food safety
issues etc.
Annual capital cost
$166
Annual variable cost
$887
Value of lettuce $7,096
Value of fish $2,317
Net profit $8,360
Thus, based on the model a farmers’ market person could earn about $8,000 a year. Decide for yourself whether it is worth it.
(In Pacific Business News)
Now Janet and her husband, Ray, have cultivated a small business — with a big customer following — selling lettuce and other greens at Manoa Marketplace’s open-air market…. The bags range from $2 to $6, depending on the size….
Suppose you want to have a
Small farm (5 raceway system)1 plywood
12 plywood =raceway
5 raceway
Lettucea
211 (7.4 )
2,534 (89) 12,672 (443)
tilapiab 43 (0.83)
515 (10) 2,574 (50)• Our production numbers say 443 heads of lettuce per week. Is this enough for small specialty store? And 50 fish/week.
• Prices they say are $3/lb for lettuce and $6/lb for live fish.• Capital costs for pre-made or other systems are 3-4 times higher
than ours.
Annual capital cost
$2,080
Annual variable cost
$9,045
Value of lettuce $38,016
Value of fish $15,444
Net profit $42,335
Thus, based on the model a small farmer could earn $42,000 a year if all goes well.
Premature conclusion. You can make money but won’t become a millionaire.
A five raceway operation
Suppose you want a large farm
Farm (40 raceway system)1 plywood
12 plywood =raceway
5 raceway
Lettucea
211 (7.4 )
2,534 (89) 12,672 (443)
tilapiab 43 (0.83)
515 (10) 2,574 (50)• Our production numbers say 506 heads of lettuce per day. Is this enough for a discount supermarket? The 400 fish a week would probably overwhelm the live fish market.
• Prices might be $2.25/lb for lettuce and $6/lb for live fish (though
this high price may become unlikely).
Annual capital cost
$50,080
Annual variable cost
$72,357
Value of lettuce $228,096
Value of fish $123,552
Net profit $229,211
Cost of labor would have to come out of profit. We estimate 4-6 workers. The farmer would be profitable if he or she did everything right.
Can you compete at mainland prices?
Farm (40 raceway system)1 plywood
12 plywood =raceway
5 raceway
Lettucea
211 (7.4 )
2,534 (89) 12,672 (443)
tilapiab 43 (0.83)
515 (10) 2,574 (50)• Our production numbers say 506 heads of lettuce per day. Is this enough for a discount supermarket? The 400 fish a week would probably overwhelm the live fish market.
• Prices might be $1.25/lb for lettuce and $6/lb for live fish (though
this high price may become unlikely).
Annual capital cost
$50,080
Annual variable cost
$72,357
Value of lettuce $126,720
Value of fish $123,552
Net profit $127,835
Cost of labor would have to come out of profit. We estimate 4-6 workers. Six workers would make the business unprofitable.
Summary
We developed a preliminary economic model Working with the model was fun It predicted profitability if there is technical
excellence and imaginative niche marketing We can comfortably recommend aquaponics
on these bases. A person can make money but will not become a millionaire
I enjoyed learning a little economics I especially enjoyed learning from the
farmers
Acknowledgements CTSA seed money grant Western Sustainable Agriculture Research and
Education CTSA Pacific Island grant