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Journal of Agricultural Economics and Rural Development

JAERD

Vol. 2(3), pp. 050-053, October, 2015. www.premierpublishers.org, ISSN: 2167-0477

Research Article

An economic study of small-scale tilapia fish farming in


Mymensingh district of Bangladesh
N.I. Toma1, M. Mohiuddin2*, M.S. Alam3, M.M. Suravi4
1

Lecturer, Department of Agricultural Economics, EXIM Bank Agricultural University, Bangladesh.


Senior Scientific Officer, BARI, RARS, Jamalpur, Bangladesh.
3
Upazila Agriculture officer, Mirsharai, Chittagong, Bangladesh.
4
Former MS Student, Department of Agricultural Economics, BAU, Mymensingh, Bangladesh.
2*

The study was designed to estimate the costs, returns and resource use efficiency of tilapia fish
farming in some selected areas of Mymensingh district. Both tabular and statistical techniques
were used to achieve the objectives set for the study. The study revealed that the tilapia fish
production is profitable business. Per hectare yield of tilapia fish were 19432 kg, 23234 kg,
27993 kg, for which money value was Tk. 2407846, 2950242, 3517805 for marginal, small and
medium farmers, respectively. Benefit cost ratio was the highest for medium farmers (1.33)
followed by marginal and small farmers (1.27). It was observed that the coefficient of human
labour, feed and irrigation charge had significant effect on economic returns. Resource use
efficiency analysis revealed that farmers are not efficient in using resources in tilapia fish
production. Human labour cost, feed cost and fish protection chemicals cost were underused
and therefore increase the use of these resources can maximize profit in tilapia fish production.
Multiple ownership of pond, high price of feed, high disease infestation and lack of scientific
knowledge and management were found the major problems for tilapia fish.
Key word: Cost, returns, resource use efficiency, tilapia fish, Bangladesh

INTRODUCTION
Fisheries is the second most valuable productive and
dynamic sectors in Bangladesh which plays a significant
role providing food, nutrition, incomes, livelihoods,
employment and foreign exchange earnings in the
economy of Bangladesh (Dey et al. 2010; Jahan et al.
2010; Belton et al. 2011, DOF, 2011). Moreover, fish
accounts for 4.43% to national GDP and 23.37% to the
agricultural GDP and 2.73% to foreign exchange
earnings (DOF, 2012). About 1.25 million peoples are
directly involved in fisheries sector and over 12 million
additional rural people indirectly earn their livelihoods
from fisheries related activities (DOF, 2012). The present
per capita annual fish consumption in Bangladesh stands
at about 17.52 kg/year against a recommended minimum

requirement of 20.44 kg/year; hence there is still need to


improve fish consumption in the country (AIS, 2011).
Bangladesh has hundreds and thousands of seasonal
water bodies in the form of ponds, ditches, shallow road
side canals, barrow pits and it is without no doubt, that
these water bodies have tremendous potential for
aquaculture.

*Corresponding Authors: M. Mohiuddin, Regional


Agricultural Research Station (RARS), Bangladesh
Agricultural Research Institute (BARI), Jamalpur,
Bangladesh. Email:mbashar24@yahoo.com, Phone:
008801717213507

An economic study of small-scale tilapia fish farming in Mymensingh district of Bangladesh

Toma et al.

050

These are especially suitable for the culture of sh


species with short life cycle, fast growth rate and require
low input support. In such cases, tilapia can be a
promising fish for aquaculture in suitable seasonal water
bodies. Recently, the low market price had severely
damaged the farming of the exotic riverine cat sh in the
country. Therefore a large number of commercial cat
sh producers have found tilapia as an alternative
species to culture
in their farms to maximize the
production.
Fish provides 60% of national animal protein
consumption. To fulfill the deficit of animal protein, there
is crying need to cultivate quick growing fish under
scientific methods and management. Thus tilapia culture
is appropriate one. This fish can be harvested twice in a
year. So, there is an ample scope of pond fish culture.
Recently, in Mymensingh region many farmers have
devoted to tilapia culture in their fish pond because of its
high income gain with low cost of production. Findings
from this study may also help the policy makers,
extension worker and fish producers in making decisions
on future tilapia fish culture. The objectives of this study
was to determine the profitability and identify the factors
responsible for tilapia fish culture in the study area.

Or
In
Y
=
lna+b1lnX1+b2lnX2+b3lnX3+b4lnX4+b5lnX5+b6lnX6+b7lnX7+
b8lnX8+U
Where, Y = Gross return (Tk./ha); X 1= Human labour cost
(Tk./ha); X2 = Fingerling cost (Tk./ha); X3=Feed cost
(Tk./ha); X4= Fertilizer cost (Tk./ha); X5 =Lime cost
(Tk./ha); X6 = Insecticide cost (Tk./ha); X7= Water supply
cost (Tk./ha); X8= Electricity cost (Tk./ha); In= Natural
logarithm; a = Intercept: (b1b9) =
Coefficients of respective variables; and U = Error term.
Returns to scale was calculated as the sum of the
regression coefficient of the model. If this sum is 1, then
there are constant returns to scale. If the sum is less than
1, there are decreasing returns to scale. Finally, if the
sum is greater than 1, there are increasing returns to
scale (Gujarati, 1995).
Efficiency of Resource Allocation
In order to test the efficiency, the ratio of marginal value
product (MVP) to the marginal factor cost (MFC) for each
input is computed and tested for its equality 1.
MVPXi
i.e. MFCX = 1
i

MATERIALS AND METHODS


The present study was conducted in three upazilas
namely Muktagacha, Bhaluka and Trishal from the
Mymensingh district which was chosen based on
concentration of successful tilapia fish farmers. So, the
lists of tilapia fish growers from each upazila were
collected and finally a total of 50 farmers were selected
randomly taking 30 from Muktagacha, 11 from Bhaluka
and 9 from Trishal. Data were collected during July to
August 2012 through pre-designed and pre-tested
interview schedules. The collected data were
summarized and analyzed to fulfill the objectives set for
the study. Both tabular and statistical techniques were
used to achieve the major objectives of the study
Tubular technique: Tabular technique of analysis is
generally used to find out the crude association or
difference between two variables. In this study tabular
technique was used to illustrate the whole picture of
analysis.
Statistical technique: Cob-Douglas production function
was used to estimate the effects of various inputs for the
production of tilapia fish in different categories of farming.
To determine the contribution of the most important
variables in the production process, the following
specification
of
the
model
is
applied:
b1
b2
b3
b4
b5
b6
b7
b8 u
Y=aX1 X2 X3 X4 X5 X6 X7 X8 e

The marginal productivity of a particular resource


represents the additional to gross returns in value term
caused by an additional one unit of that resource, while
other inputs are held constant. The most reliable,
perhaps the most useful estimate of MVP is obtained by
taking resources (Xi) as well as gross return (Yi) at their
geometric means (Dhawan and Bansal, 1977). Marginal
factor Cost (MFC) of all the inputs are expressed in terms
of additional taka spends for providing individual inputs.
When the ratio of MVP and MFC is equal to unity
indicates that the resource is efficiently used. When the
ratio of MVP and MFC is more than unity implying the
resource is under utilized. When the ratio of MVP and
MFC is less than unity implying the resource is over used
(Yotopoulos, 1967).
RESULTS AND DISCUSSIONS
Cost and returns of tilapia fish production
Tilapia fish production requires a large number of inputs
like human labour, fingerlings, feed, fertilizer, lime,
Pesticide, watering and electricity. Fixed costs included
land use cost and interest on operating capital of tilapia
fish production. Per hectare cost of producing tilapia fish
in different categories of farmers amounted at Tk.
1901487, 2322295 and 2642796 for marginal, small and
medium farmers, respectively, and on an average it was

An economic study of small-scale tilapia fish farming in Mymensingh district of Bangladesh

J. Agric. Econ. Rural Devel.

051

Table 1. Per hectare cost of producing tilapia fish (Tk./ha/year)

Cost heading

Marginal farmers
Cost (Tk.)
393043
1177620
164497
17798
12653
7648
10150
33500
84578
1901487

Human labour
Feed
Fingerlings
Fertilizer
Lime
Pesticide
Electricity
Land use cost
IOC
Total cost

Small farmers
Cost (Tk.)
384915
1604933
158711
13315
8637
3599
10200
35055
102930
2322295

Medium farmers
Cost (Tk.)
377925
1905622
162814
14781
8869
6335
13093
36900
116457
2642796

All farmers
Cost (Tk.)
385294
1562725
162007
15298
10053
5861
11148
35152
101322
2288859

% of total cost
16.83
68.28
7.08
0.67
0.44
0.26
0.49
1.54
4.43
100.00

Source: Field survey, 2012. Note: IOC= Interest on Operating Capital.

Table 2. Costs and returns from tilapia fish production (Tk./ha/year)

Items
Yield (kg)
Gross returns (GR)
Total variable cost (TVC)

Marginal farmers
19432
2407846
1783409

Small farmers
23234
2950242
2184310

Medium farmers
27993
3517805
2489439

Total fixed cost (TFC)


Total cost

118078
1901487

137985
2322295

153357
2642796

2152386
136473.3
2288859

Gross Margin

624437

765932

1028366

806245

Net Returns

506359
0.27

627947
0.27

875009
0.33

669772
0.29

1.27

1.27

1.33

1.29

Net return over total cost


BCR (Undiscounted)

All farmers
23553
2958631

Source: Field survey, 2012.

Tk. 2288859 for all categories of farmers. Among the


various cost items of tilapia fish production, maximum
cost (Tk. 1562725) was found on feed which was about
68.28 percent of the total cost (Table 1). There was a
wide variation in the cost of tilapia fish cultivation in
different farm category per hectare.

shows that net return per taka investment in tilapia fish


production was 0.28. It means that by spending Tk. 100,
a return at Tk. 28 was obtained. The net return per taka
invested was the highest in medium farmers (0.33)
followed by marginal (0.27) and small farmers (0.27)
respectively.

Gross returns: Table 2 showed that the average yield of


tilapia fish was 23553 kg per hectare and its estimated
value was Tk. 2958631. The medium farmers received
the highest gross return (Tk. 3517805) followed by small
(Tk. 2950242) and marginal farmers (Tk. 2407846),
respectively.

Factors affecting production of tilapia fish

Net returns: The average annual net returns for all


categories of farmers was Tk. 669772 per hectare. The
highest net return was received by the medium farmers
(Tk. 875009) followed by small farmers (Tk. 627947), and
marginal (Tk. 506359), respectively (Table 2).
Net return over total cost: Net return per taka invested
is the ratio between net return and total cost. Table 2

Estimated values of the coefficients and related statistics


of the Cobb-Douglas production function for the sampled
farmers producing tilapia fish are presented in the Table
3. The result showed that most of the co-efficient had
positive sign. However, the co-efficient for human labour
(X ) and water supply cost (X ) were found to be
1

positively significant at 5% level which indicated that 1%


increase in human labour and water supply cost with
other factors remaining constant would increase the
gross return of tilapia fish production by 0.23 percent and
0.129 percent, respectively. The co-efficient for feed cost
(X ) was positively significant at 1% level which indicated
3

An economic study of small-scale tilapia fish farming in Mymensingh district of Bangladesh

Toma et al.

052
Table 3. Estimated values of coefficient and related statistics of Cobb-Douglas
production function model

Factors
constant
Human labour cost (X1)
Fingerlings cost (X12)
Feed cost (X3)
Fertilizer cost (X4)
Lime cost (X5)
Pesticide cost (X6)
Water supply cost (X7)
Electricity cost (X8)
F- Value (N=50)

Co-efficient
1.680
0.23**
0.008
0.56***
-0.059
0.075
0.008
0.129**
0.090
29.750

Standard Error
t-value
1.969
0.862
0.094
2.301
0.110
0.086
0.050
9.987
0.073
-0.819
0.045
1.574
0.031
0.281
0.069
2.077
0.087
1.049
2
R = 0.86 and Returns to scale = 1.041

Source: Field survey, 2012. Note: ***=1% level of significance, **=5% level of significance.

Table 4. Marginal value product of tilapia fish production and resource use efficiency

Variables
Gross return (Y)
Human labour (X1)
Fingerlings (X2)
Feed (X3)
Fertilizer (X4)
Lime (X5)
Pesticide (X6)
Water supply (X7)
Electricity (X8)

Coefficient
0.23
0.008
0.56
-0.059
0.075
0.008
0.129
0.090

GM
429300.78
28799.80
15225.23
179022.21
13215.42
10732.10
4241.07
1589.87
10145.30

MVP
243
0.20
41.29
-0.79
1.759
36.95
27.53
2.80

MFC
241
0.63
40.24
19.75
10.35
17.38
50.98
4.06

Efficiency
1.008
0.32
1.03
-0.04
0.17
2.13
0.54
0.69

Source: Field survey, 2012. Note: GM (Geometric Mean)

that 1% increase in feed cost with other factors remaining


constant would increase the gross return of tilapia fish
production by 0.56 percent.
The fitted Cobb-Douglas production function was found to
be valid as indicated by F-value and R-square. The co2
efficient of multiple determinations, R , was 0.86 which
indicate that the explanatory variables included in the
model explained 86% of the variation in tilapia fish
production. The F-value of the equation was significant at
1% level of probability implying that the variation depends
mainly upon the explanatory variables included in the
model.
Returns to scale: Returns to scale reflect the degree to
which a proportionate change in all inputs caused change
in the output. In the present study the sum of the
coefficient of all inputs for tilapia fish culture was 1.041.
This implies that production behaviour exhibited
increasing returns to scale in the sense that if all the
inputs specified in the production function were increased
by 1 percent, gross return of tilapia fish would increase by
1.041 percent (Table 3).
Efficiency of resource use
The efficiency in resource allocation in respect of tilapia

fish production has been shown in Table 4. The marginal


value product (MVP) to marginal factor cost (MFC) ratios
for human labour cost, feed cost and fish protection
chemicals cost were more than one indicating that still
there is scope to increase the use these inputs thus
increasing the gross returns of tilapia fish production. The
MVP to MFC ratios for fingerling cost, cost of using lime,
electricity cost and irrigation charges were less than one
and positive which indicated that the expenditure on
these resources were more than the optimum (Stage 2)
level. The MVP to MFC ratios for fertilizers cost was less
than one and negative (Stage 3). It indicated that
expenditure on fertilizers was more than the optimum
level which leads to reduction of gross return. Hence,
withdrawal of some units of these resources is profitable
in the short-run. From the above discussion it is clear
that, the inequality of the tilapia fish growers in the study
areas have failed to show their efficiency in using the
resources.
Constraints to higher production of tilapia fish
Although tilapia fish was observed to be a profitable crop,
there exist lots of constraints to its higher production. To
identify constraints, farmers were asked a number of
questions. Thereafter, the constraints were edited and

An economic study of small-scale tilapia fish farming in Mymensingh district of Bangladesh

J. Agric. Econ. Rural Devel.

053

Table 5. Problems of tilapia fish production in the study areas

Problems

Multiple ownership of pond


Lack of operating capital
Labour shortage and high wage rate
Lack of scientific knowledge and methods
High prices of fish feed with adulteration
Disease infestation
Lack of loan facilities

% of respondents
Marginal farmers
%
73
65
60
55
68
70
55

Small farmers
%
68
61
55
62
71
62
55

Medium farmers
%
70
58
60
60
70
62
49

All farmers
%
Rank
70 1
61 3
58 5
59 4
70 1
65 2
49 6

Source: Field survey, 2012.

summarized to arrive at only a few problems. The


constraints were ranked according to the descending
order of frequencies based on the priority of the
problems. The 1st ranked constraint to tilapia fish
production was multiple ownership of pond and high price
of fish feed with adulteration opined by 70% farmers
followed by high disease infestation by 65% of farmers,
while lack of operating capital, lack of scientific
knowledge, low price of fish and labour shortage with

Tilapia fish cultivation is a profitable business for the rural


farmers. Farming of the tilapia fish has a great potential in
Bangladesh and it will be a prime culture species in the
near future for freshwater and brackish water
ecosystems. Tilapia could play greater role towards
reducing poverty through generating more income to the
farmers, increasing employment and supplying animal
nutrition.

in Bangladesh. Studies and Reviews 2011-53. The


WorldFish Center. November 2011.
Dey MM, Alam MF, Bose ML (2010). Demand for
aquaculture
development:
perspectives
from
Bangladesh for improved planning. Reviews in
Aquaculture 2: 16-32.
Dhawan KC, Bansal PK (1977). Rationality of the Use of
Various Factors of Production on Different Sizes of
Farm in the Punjab, Indian J. Agril. Econ., 32(3): 121130.
DOF (2011). Fish Catch Statistics, Department of
Fisheries, Bangladesh Government, Dhaka.
DOF (2012). Fisheries statistical yearbook of Bangladesh
2010-2011. Department of Fisheries, Ministry of
Fisheries and Livestock, Dhaka.
Gujarati DN (1995). Basic Econometrics. Third Edition,
New York, McGraw Hill Kogakusha Ltd.
Jahan KM, Ahmed M, Belton B (2010). The impacts of
aquaculture development on food security: lessons
from Bangladesh. Aquaculture Research 41: 481-495.
Yotopoulos PA (1967). Allocative Efficiency in Economic
Development, Research Monograph Series, 18: 191192, Constantinidis and C. Mihalas, Athens.

ACKNOWLEDGEMENT

Accepted 02 October, 2015

The authors acknowledged the contributions of Dr.


Sanusi Sadiq, Valentin Antohi, Prof. Petroman Ioan,
Dulalchandra Ghosh and Som Pal Baliyan for donating
their time, critical evaluation, constructive comments, and
invaluable assistance toward the improvement of this
very manuscript.

Citation: Toma NI, Mohiuddin M, Alam MS, Suravi MM


(2015). An economic study of small-scale tilapia fish
farming in Mymensingh district of Bangladesh. Journal of
Agricultural Economics and Rural Development, 2(3):
050-053.

rd

th

th

high wage rate were opined as 3 , 4 & 5 ranked


problem is in all the farmers, respectively (Table 5).

CONCLUSION

REFERENCES
AIS (2011). Agricultural information Service, Department
of Agricultural Extension, Khamarbari, Farmgate,
Dhaka.
Belton B, Karim M, Thilsted S, Jahan K, Collis W, Phillips
M (2011). Review of aquaculture and fish consumption

Copyright: 2015. Toma et al. This is an open-access


article distributed under the terms of the Creative
Commons Attribution License, which permits unrestricted
use, distribution, and reproduction in any medium,
provided the original author and source are cited.

An economic study of small-scale tilapia fish farming in Mymensingh district of Bangladesh

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