Optimal aquafarm structure and size : a case study of shrimp mariculture

Abstract

Aquaculture is a relatively new industry particularly in the Pacific region. As with any new industry, not much research has been done on the optimal farm size, structure, minimum operation scale and operating strategies. For this paper, farm size refers to the land area used to culture sea animals, farm structure refers to the production phases carried out in a farm, minimum operation scale refers to the number of tanks or ponds necessary for economic profit and operating strategy refers to the make-or-buy decision on the intermediate products and stocking-harvesting scheduling. Almost all aquacultured animals go through four stages of growth in a life cycle after being hatched: nauplii, postlarval, juvenile and adult. The corresponding operation phases are maturation, hatchery, nursery and growout. An aquafarm may operate any combination of operation phases if markets exist for all stage animals. If no markets exist for intermediate-stage animals, an aquafarm whose target is to produce adult animals would have to operate all operation phases. This study attempts to determine optimal aquafarm size, structure and operating strategy using a nonlinear programming technique. The theoretical nonlinear programming models are developed by incorporating all operation phases under two assumed market conditions: (1) markets for all stage animals exist, this production system is referred to as the open system; (2) only markets for adult animals exist, and this production system is referred to as the closed system. To analyze the economies of size on shrimp production in Hawaii, hypothesized shrimp farms based on Hawaii's production experience are designed. Optimal farm size, structure and operating strategies are derived. Results indicate that, for Hawaii, hatchery operation is the most profitable operation, followed by maturation, nursery and growout in descending order based on profitability, for the open system. On-farm production of broodstocks from productive female spawners is economically preferable. Under the closed system, small farms are not economically feasible. Medium size farms in the closed system should adopt a biweekly stocking schedule while large farms should stock growout ponds weekly. With different assumptions on output prices, the minimum operation scales for each of the four production phases are also derived.