Pd/a Crsp Eighteenth Annual Technical Report

The first phase of this study was to conduct an analysis of the economic trade-offs associated with PD/A CRSP-developed technologies in Thailand using secondary data. This paper outlines conditions under which a small-scale tilapia producer in Thailand chooses among four PD/A CRSP–developed technologies: low-intensity inorganic fertilization (inorganic technology); organic fertilization with collected chicken manure (organic technology); organic fertilization in layer-fish integrated ponds (integrated technology); and high-input green water (HIGW) technology using intensive inorganic fertilization treatments. A mixed-integer programming (MIP) model of annual operations of a small-scale Thai tilapia farm was developed and used to attribute technologies to the production ponds based on maximization of net income. Eleven scenarios were developed that were based on the advantages of each of the four technologies. Results of this first-phase analysis will provide important insights into the key relationships to be explored in the survey data collection phase. The following progress report presents the results of the analysis conducted in Phase I and a draft of the survey instrument to be used in data collection in the second phase. (A draft of this survey may be obtained from the PD/A CRSP—Eds.) EIGHTEENTH ANNUAL TECHNICAL REPORT 120 available in Shrestha et al. (1997). Table 1 provides a summary of annual fish yield, inputs used, and cost associated with the four technologies. Prices are 1990 annual input and output prices in Thai Baht (1 Baht = US$0.04) from Engle and Skladany (1992). Table 1 shows that tilapia polyculture with the inorganic technology has the lowest yields, followed by tilapia monoculture with HIGW technology. However, the HIGW technology requires much lower fish stocking density when compared with the remaining technologies. Table 1 also shows that the integrated technology provides farmers with three sources of income: fish, eggs, and hens. The costs and benefits of having egg-laying hens in the integrated technology were calculated from Engle and Skladany’s (1992) report. The above data were used to develop a mixed-integer mathematical programming model (MIP) of annual operations of a Thai fish farm, assuming a producer has access to the above four technologies and also has the option of taking ponds out of production. The objective was to maximize net annual returns subject to the following constraints: 1) A pond balance constraint, which ensures that the total number of ponds stocked with fish (or out of production) is equal to the number of ponds in the farm; 2) Fingerling balance constraints, which account for the total number of fingerlings of each fish species stocked in all ponds; 3) Urea and TSP balance constraints, which account for the total use of inorganic fertilizers in all ponds; and 4) Financial constraints. The financial constraints can be subdivided into loan balance constraints and a loan repayment constraint. The loan balance constraints evaluate the total amount of operating loans and investment loans that a producer must have in order to finance variable input purchases and new capital (e.g., chicken coops over ponds as are used in the integrated technology approach). The loan repayment constraint ensures that the total annual revenue is sufficient to pay back the operating loan (with interest), make annual payments on the investment loan, and cover the annual capital depreciation. We assume that net returns are calculated as returns above fixed costs, and the only capital payments included in the MIP model are associated with construction of chicken coops on ponds using the integrated technology. Engle and Skladany’s (1992) report indicated that a 1-ha pond using the integrated technology has approximately 1,100 hens housed in three bamboo coops (3 m × 18 m × 1.5 m) that cost 21,000 Baht (5-yr service life). Other capital expenditures associated with layer-fish integrated ponds are: 1) Coop roofs (3-yr service life), which require 4,500 Baht; 2) Plastic netting (1-yr service life), which requires 120 Baht; and 3) 45 feed trays (3-yr service life), 45 water trays (3-yr service life), 105 baskets (2-yr service life), and electric wiring and bulbs (10-yr service life), all of which require an additional 6,125 Baht investment. The total capital investment in chicken coops accumulates to 31,745 Baht per 1-ha pond. Output Units Inorganic Organic Integrated HIGW Quantity Price (Baht unit) Quantity Price (Baht unit) Quantity Price (Baht unit) Quantity Price (Baht unit) YIELD Total Fish Yield k g 4,646 12 6,034 12 6,034 12 5,049 12 Hens head 1,100 40 Eggs head 277,200 1.45 VARIABLE INPUTS Fingerlings Tilapia head 90,520 0.10 90,520 0.1 90,520 0.1 25,000 0.1 Mrigal head 129,310 0.05 129,310 0.05 129,310 0.05 Puntius head 12,930 0.05 12,930 0.05 12,930 0.05 Silver Carp head 8,620 0.15 8,620 0.15 8,620 0.15 Common Carp head 17,241 0.15 17,241 0.15 17,241 0.15 Lime k g 43 6 43 6 43 6 1,250 6 Urea k g 43 7 1,593 7 TSP k g 143 12 910 12 Collected Manure k g 9,600 0.25 Chicken Feed k g Cost: 213,175 Baht (1,100 hens) Chicken Vaccines vial 10 100 Electricity for Chickens months 12 100 Diesel l 43 12 43 12 43 12 43 12 Rent for Plastic Net d 6 100 6 100 6 100 6 100 Table 1. Annual yield received and variable inputs applied in a 1-ha pond with respect to four alternative tilapia production technologies: ponds using low-intensity inorganic fertilizers (inorganic); ponds using collected (or purchased) chicken manure (organic); ponds integrated with layers (integrated); and high-input green water ponds (HIGW). All prices are in 1990 Thai Baht (1 Baht = US$0.04). Source: Engle and Skladany (1992) and Shrestha et al. (1997). a These are expected values. b Chicken feed for the first year consisted of: 1) 1.09 kg chicken-1 of commercial feed I (7.16 Baht kg-1) for the first six weeks; 2) 0.82 kg chicken-1 of commercial feed II (10.16 Baht kg-1), 0.41 kg chicken-1 of corn grain (3.5 Baht kg-1), and 1.36 kg chicken-1 of fine rice bran (4.3 Baht kg-1) for the next six weeks; and 3) 7.64 kg chicken-1 of commercial feed III (10.16 Baht kg-1), 15.27 kg chicken-1 of medium rice bran (2.4 Baht kg-1), 5.09 kg chicken-1 of fine rice bran (4.3 Baht kg-1), 8.91 kg chicken-1 of broken rice (3.5 Baht kg-1), and 0.26 kg chicken-1 of minerals (12 Baht kg-1) for the remaining 40 weeks. MARKETING AND ECONOMIC ANALYSIS RESEARCH 121 The objective function is expressed as the difference of total annual payments (i.e., the sum of variable costs, annual interest payment on the operating loan, and the annual payment on the investment loan) from the total annual revenue. Variable inputs (outlined in Table 1) include fingerlings, chicken manure, urea, TSP, lime, diesel, electricity, chicken feed, and chicken vaccines. Annual revenue per pond is calculated for each technology by using the output quantity and price data contained in Table 1. Since ponds devoted to the integrated technology include hens that produce eggs for two years, a terminal condition is included in the objective function, which accounts for the current value of future returns over variable costs of selling eggs and hens during the following year. The MIP model was developed for a farm with two 1-ha ponds. Such farm sizes are not atypical of small-scale Thai aquaculture; Shrestha et al. (1997) reported an average farm size of 3.4 ha among the farms participating in trials of the HIGW technology. Decision variables for the MIP model include the number of ponds (integer variables) that are devoted to one of the four possible technologies or are taken out of production. Other decision variables include the total quantity of fingerlings, urea, and TSP purchased during the year, and the amount of operating and investment loans taken by the producer. We also assumed a fixed annual interest rate of 12% (Engle and Skladany, 1992).