Economic and Technical Viability of Tilapia Culture in Homestead Concrete Tanks in Peri-urban Nigeria

J. A. Afolabi*, P. B. Imoudu * and O. A. Fagbenro** *Department of Agricultural Economics and Extension **Department of Fisheries and Wildlife Federal University of Technology P.M.B. 704 Akure, Nigeria Alfabol@cyberspace.net.ng

ABSTRACT There is a considerable potential for achieving Nigeria=s objective of increasing fish protein production, most especially in urban centres, by farming tilapia in homestead concrete tanks. The economics of this practice, especially the returns on investment, was studied to assess and determine its viability for possible development into large-scale enterprises under the "Poverty Alleviation Programme" for urban dwellers, by the Nigerian government. Two outdoor concrete homestead tanks were designed and constructed to study the economic and technical feasibility of hybrid tilapia culture in peri-urban Lagos, Nigeria. Poultry wastes and oil seed cakes were applied as organic fertilizer and supplementary feed, respectively. Economic viability of the production system was evaluated using Net Present Value (NPV). A sensitivity analysis was conducted on the impact of changes in input prices and productivity on the internal rate of returns (IRR). The IRR signified the yield of the project, which was more than 95%. Compared with bank loan interest rates of between 23% and 25% in Nigeria, the yield is higher by a very wide margin. The benefit/cost ratio of the project was 1.48. All these are quite substantial incentives to support investment in the project. Technically, the system can be easily adopted by urban dwellers and if properly managed, can help alleviate the prevalent problem of low fish intake associated with urban dwellers in Nigeria. INTRODUCTION Two major constraints to the establishment of fish culture enterprises in Nigeria include lack of initial capital input and the acquisition and ownership of land (Afolabi & Fagbenro 1998). Most importantly, the value of rental price of land that satisfies the technical requirements of modern and conventional pond fish culture varies with its quality and alternative uses. It becomes prohibitive and unaffordable especially in urban centres where competing and

conflicting uses with earthen pond fish culture exists. Despite the high rental price of land, its availability in urban centres is limited to commercial, industrial, residential and recreational uses with little or no consideration for agricultural food production (Imoudu 1999). Family-scale (backyard) aquaculture in periurban areas has been recommended in Nigeria (Egwui 1986; Fagbenro 1987; Anyanwu et al. 1989) as an economical method of producing fish where the homestead concrete tank has been developed as an alternative and suitable enclosure for backyard fish culture. The homestead concrete tank is less expensive to establish; little land space at much less costs is required, easy and economical to maintain and is equally as functional and productive as earthen ponds. Sites required for establishing homestead tanks demand no acquisition costs and are not dependent on factors such as natural water source, topography, clay content and alkalinity of soils, therefore costs of land clearing, water diversion, site survey, soil tests and improvement of poor soils are saved. Commencement of construction is possible irrespective of prevalent season as opposed to construction of earthen ponds preferably during the dry season. Construction of homestead concrete tanks does not require mechanization thereby limiting costs to the barest minimum as labour, requirement and time used on land clearing; the stumping, soil profiling, excavation and earth movement in constructing earthen ponds are not required. Total drainage is possible and water level easily controlled without using additional labour during harvesting. All fish harvested are either consumed or sold locally. The enterprise can be expanded or discontinued as desired at little additional costs. Tilapia are the most important fish used in aquaculture in Nigeria because of their hardiness and fast growth (Adesulu 1997). Tilapia culture in tanks is a recent practice, hence there is a dearth of information (in literature) on the design of their culture units, water supply and drainage, stocking density, food and feeding rate, growth and production. This paper discusses the suitability, acceptance, establishment, operation and yields from outdoor homestead concrete tanks as enclosure for tilapia culture in peri-urban Nigeria, based on technical and economic factors. PRODUCTION MATERIALS AND METHODS In Nigeria, homestead concrete tanks are preferably rectangular or square and the minimum suitable dimensions are 6m x 4m x 1.3m and 5m x 5m x 1.3m (L x B x H). Two leak-proof, above ground, homestead concrete tanks (6m x 4m x 1.3m) were designed and constructed at the backyard of a family house in suburban Lagos, and this was used for the study. Lagos is the commercial centre of Nigeria with a population of over 6 million crowded on a land size of 3600 km2. In the recent past, Lagos has witnessed a large influx of human traffic from rural communities as the various rural development government programmes have failed. The materials used for construction were reinforced cast concrete and cement blocks. Drainage outlets were elbow-joint PVC stand-pipes installed at the side of the tank. The tank bottoms were lined with a layer of river sand to a depth of 3 cm, with broken blocks and gravel to serve as biological filter and to maintain a stable pH of 7-8. The tanks were subsequently flooded with municipal (pipe-borne) water to a depth of 1.2 m. Water in the

tanks was replaced (completely drained and refilled) at the end of every month to maintain good water conditions for tilapia growth. Due to small size and shallowness of concrete homestead tanks, the carrying capacity is low and therefore monosex (hybridised) tilapia fingerlings (< 50 g) were stocked at 6 fish/m 2 into the concrete tanks, and were cultured for 120 days (one cycle of production). Hybrid tilapia was selected because of its hardiness, adaptability to overcrowding and low dissolved oxygen demand (Haylor 1989) and availability from government fish seed multiplication centres at moderate costs. Poultry wastes (30-40% manure, the rest waste feed), applied at 900 kg/ha/wk by spreading over water surface served as organic fertilizer as well as indirect fish feed. Soybean cake was used as supplementary feed and fed once daily at 5% of the total fish body weight by broadcasting at selected feeding spots within the tanks. Complete harvesting was carried out after both tanks were drained after each production cycle lasting 120 days. Water temperature and pH in the concrete tanks were monitored before 8:00 am bi-weekly throughout the culture period. RESULTS AND DISCUSSION Data on tilapia growth, survival and yield, and water quality obtained in this study are presented in Table 1. Water pH and temperature were within optimum ranges for tilapia growth (Balarin & Hatton 1979). Post-stocking mortality was low and ranged from 9% to 12.5%. No further mortality was recorded up to the end of each cycle. Siddiqui & Adam (1985) reported similar mortality values (6%-10.4% for Nile tilapia, Oreochromis niloticus) in tanks, while Balarin & Haller (1982) obtained much lower mortality (2.5%) during the growing phase of 25-50g to 250g Nile tilapia. The values of mean daily growth obtained in this study (Table 1) were lower than values of 1.71-1.81 g/fish/day reported by Siddiqui et al. (1989). Hybrid tilapia used in this study are fast growing and with their omnivorous feeding habit, attained market size of > 180g after each production cycle lasting 120 days. The feed conversion ratio (FCR) varied from 2.81-2.98 for the three production cycles when soybean cake was used as supplementary feed. Allison et al. (1976) reported FCR of 0.921.56 for Blue tilapia (O. aureus) fed 25% protein-rich pelleted feed in concrete tanks. The African catfish, Clarias gariepinus, (or any other indigenous predatory fish) can be introduced to control over-population of tanks by tilapias, and to avoid predation on the initial tilapia stock, tilapias with mean weight of 50g should be stocked at 10 tilapias:1 catfish (Fagbenro & Salami 1996). Table 1. Production cycles of tilapia fed with soybean cake in homestead concrete tanks.
Produc 1 tion cycles 48 288 252 49.7 185.9 2 48 288 262 47.3 182.5 3 48 288 260 48.2 181.6

Tank surface area of two tanks/household (m2) Number of tilapia (fish/2 tanks) - at stocking - at harvest Mean tilapia weight (g) - initial - final

Survival (%) Mean daily growth (g/fish/day) Feed conversion ratio Total harvest weight (kg/tank) - adult tilapia - juvenile tilapia Water quality in tanks - pH range - average temperature (o C)

87.5 1.14 2.81 23.42 2.18 7-8 27.0

91.0 1.13 2.92 23.91 2.10 7-8 26.5

90.3 1.11 2.98 23.61 2.15 7-8 28.0

Source: Derived from primary data (1999) BASIC ASSUMPTIONS FOR COMPUTING COSTS AND RETURNS - Two homestead concrete tanks were used for the study. - The projected amount of sales is not more than 90% of the production for the period. - Fish mortality and loss of fish were put at 10% of stock. - Market-size of adult tilapia was estimated to be 180 g. - Output was estimated based on three crops of tilapia per year. - Sales of table-size tilapia was estimated at 100/kg (US$ 1/kg) which is very conservative. - Approximate weight of fish is obtained by average weight x total number of fish produced. - Cost of fingerlings was calculated at current market prices. - Poultry waste was obtained free, only transportation cost was computed. - Increase in cost of soybean cake (feed) will take care of inflation and price changes. - Personnel cost was not included, as household labour was readily available at no cost. - Depreciation was carried out through the straight-line method. - Salvage value was taken to be zero. - Expected life span of homestead concrete tank was taken to be ten years. - Cost of capital (interest rates) in Nigeria is 23-25% on loans granted by commercial banks. The investment costs of constructing the homestead concrete tank are presented in Table 2 and the projected five-year operational expenses are presented in Table 3. The five-year projected revenue is presented in Table 4, the cash flow is presented in Table 5, the calculation of Benefit/Cost Ratio (BCR) is presented in Table 6, and the calculation of Internal Rate of Return (IRR) is presented in Table 7. Table 2: Investment costs in the construction of homestead concrete tank. Item Materials - site clearing and excavation - cement bags (50 kg bag) - 225 mm (9 inch) concrete blocks - 3.8 m3 of sand (1 truck load) - 3.8 m3 of gravel (1 truck load) - 3 m of PVC pipe (100 mm diameter) Unit cost () 3000 490 35 1500 3000 150 Quantit y 2 60 550 2 2 2 Total value () 6,000 29,400 19,250 3,000 6,000 300

- wooden plugs - wooden planks - 1 kg of 4-inch nails Labour/Personnel - bricklayers (2 bricklayers for 4 days) - unskilled labourers (2 labourers for 4 days)

25 125 25/kg 500/day 350/day

2 2 2 8 8

50 250 50 4,000 2,800

TOTAL 71,100 100 = US$ 1 Source: Computed from primary data (1999) Depreciation of homestead concrete tanks = Cost - Salvage value = 71100 = 7,110 Expected useful life 10 Table 3: Projected five-year operational expenses. Item
Production expenses - tilapia fingerlings - poultry wastes - agricultural lime - soybean cake

Unit cost ()
1.50 30/kg

Quantit y
290 20 kg

Total cost ()
435 600

1305 150 600 500 2555 7110 9665

1371 150 450 500 2471 7110 9581

1440 180 300 600 2520 7110 9630

1512 200 300 650 2662 7110 9772

1588 250 300 750 2888 7110 9998

Total production cost (A) Depreciation (B) Total operational expenses 1 100 = US$(A + B) Table 4: Five-year projected revenue. Year 1 2 3 4 5 Item of sale Quantity sold 783 792 801 810 819 Approximate weight (kg) 141.00 143.00 144.00 146.00 147.42

Average price () 100 100 100 100 100

Total annual revenue () 14100 14300 14400 14600 14742

Adult tilapia Adult tilapia Adult tilapia Adult tilapia Adult tilapia 100 = US$ 1

Table 5: Cash flow projection for five years. Year 1 2 3 4 5 Cost () 9665 9581 9630 9772 9998 Revenue () 14100 14300 14400 14600 14742 Incremental benefit () 4435 4719 4770 4828 4744 Discount factor (25%) 0.800 0.640 0.512 0.410 0.328 Net Present Value at 25% () 3548 3020 2442 1979 1556 12545 100 = US$ 1 Net Present Value (NPV) = 12545 ie. positive

Table 6: Calculation of Benefit/cost ratio (BCR). Year 1 2 3 4 5 Cost () 9665 9581 9630 9772 9998 Revenue () 14100 14300 14400 14600 14742 Discount factor (25%) 0.800 0.640 0.512 0.410 0.328 Discounted cost () 7732 6132 4931 4007 3279 26081 100 = US$ 1 BCR = 38626 26081 = 1.48 Discounted revenue () 11280 9152 7373 5986 4835 38626

The result of the benefit/cost ratio is greater than 1, which indicates that the project is profitable and hence accepted. Table 7: Calculation of Internal rate of Return (IRR). Year Incremental benefit () 4435 4719 4770 4828 4744 Discounted factor (85%) 0.541 0.292 0.158 0.085 0.046 Net Present Value at 85% () 2349 1378 754 410 218 5159 100 = US$ 1 Discounted factor (95%) 0.513 0.263 0.135 0.069 0.035 Net Present Value at 95% () 2275 1241 644 333 166 4659

1 2 3 4 5

IRR = Lower discount + Difference between x NPV at lower discount factor rate the two discount rates Absolute difference* between the two NPV *where absolute difference is the sum of the values ignoring the signs attached to them. Since the NPV at 95% discount rate is still positive ( 4659), it means that the IRR is greater than 95%. This is an indication that the business will generate greater returns than the market rate (i.e. 25%), thus supporting the viability of the project. CONCLUSION The study has revealed that tilapia can be successfully cultivated in peri-urban homestead concrete tanks. The practice can be both economically and technically viable, as revealed by the results of the NPU, IRR and BCR calculations on the project. The study has also demonstrated that the culture of hybrid tilapia in outdoor concrete tanks is possible without affecting growth and water quality. There is considerable potential for achieving Nigeria=s objectives in increasing fish protein production most especially in the urban centres by farming fish in family-based homestead concrete tanks. This practice will greatly enhance the current low per-capita fish protein intake, and when widely accepted and extensively practised will probably reduce the existing deficit between fish supply and demand in Nigeria. The practice of rearing fish under small-scale intensive system in homestead tanks is still new which is probably responsible for its little recognition. There is need to introduce and encourage the practice nation-wide and it should be backed with adequate extension service and publicity with the aim of creating awareness. ACKNOWLEDGEMENTS Travel Grant to the third author was provided by CTA (Technical Center for Agricultural and Rural Cooperation), Wageningen, The Netherlands. REFERENCES Adesulu, E.A. (1997) Currents status of tilapia in Nigerian aquaculture. pp.577-583, in K. Fitzsimmons (ed.). Fourth International Symposium on Tilapia in Aquaculture (ISTA IV). American Tilapia Association, Orlando, Florida, USA. Afolabi, J.A. & Fagbenro, O.A. (1998) Credit financing of coastal artisanal aquaculture in Nigeria. pp.12-14, in A.Eide & T. Vassdal (eds.) Proceedings of the Ninth Conference of the International Institute of Fisheries, Economics and Trade. International Institute of Fisheries, Economics and Trade, Tromso, Norway. Allison, R., Smitherman, R.O. & Cabrero, J. (1976) Effects of high density culture and form of feed on reproduction and yield of Tilapia aurea. pp. 168-170, in T.V.R. Pillay & W.A. Dill (eds.) Advances in Aquaculture. Fishing News (Books) Ltd., Farnham, Surrey. Anyanwu, P., Ezenwa, P. & Uzukwu P. (1989) fish culture in homestead tanks in Nigeria: practices, problems and prospects. Aquabyte 2(3): 8-10.

Balarin, J.D. and Haller, R.D. (1982). The intensive culture of tilapia in tanks, raceways and cages. pp. 265-356, in J.F. Muir & R.J. Roberts (eds.) Recent Advances in Aquaculture. Croom Helm Ltd., London. Balarin, J.D. and Hatton, J.P. (1979). Tilapias: a guide to their biology and culture in Africa. University of Stirling, Scotland. 174pp. Egwui, P.C. (1986) Yield of the African catfish, Clarias gariepinus from a low input homestead concrete pond. Aquaculture 55: 87-91. Fagbenro, O.A. (1987) Fish farming in concrete-block tanks in Nigeria- a new fishery business. Paper presented at the Second Annual Conference of the Nigerian Society for Applied Fisheries and Hydrobiology, Lagos, Nigeria; October 11-14, 1987. Fagbenro, O.A. & Salami, A.A. (1996) Studies on the control of tilapia recruitment using tilapia-predator polyculture systems in southwest Nigeria.p.542, in R.S.V. Pullin, J. Lazard, M. Legendre, J.B. Amon Kothias & D. Pauly (eds.) Third International Symposium on Tilapia in Aquaculture (ISTA III). ICLARM Conference Proceedings 41, Manila, Philippines. Haylor, G.S. (1989) The case for the African catfish, Clarias gariepinus Burchell 1822, Clariidae: a comparison of the relative merits of tilapiine fishes, especially Oreochromis niloticus (L.) and C. gariepinus Burchell, for African aquaculture. Aquaculture and Fisheries Management 20: 279-285. Imoudu, P.B. (1999) Sustainable agriculture and poverty alleviation: reality or illusion. 17th Inaugural Lecture delivered at the Federal University of Technology, Akure, Nigeria on October 12, 1999. 45pp. Siddiqui, A.Q & Adam, A.B. (1985) Studies on comparative growth of Sarotherodon niloticus and Sarotherodon aureus in outdoor concrete tanks using drainage water. Proceedings of the Saudi Biological Society 8: 333-343. Siddiqui, A.Q., Howlander, M.S. & Adam, A.B. (1989) Culture of Nile tilapia, Oreochromis niloticus (L.), at three stocking densities in outdoor concrete tanks using drainage water. Aquaculture and Fisheries Management 20: 49-57.