Analysis of the Profitability of Catfish Production in Enugu East L.G.A. of Enugu State, Nigeria
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Asian Journal of Advances in Agricultural Research
10(3): 1-6, 2019; Article no.AJAAR.46869
ISSN: 2456-8864
Analysis of the Profitability of Catfish Production in
Enugu East L.G.A. of Enugu State, Nigeria
C. D. Ochiaka1* and C. E. Obasi1
1
Department of Agricultural Economics and Extension, Enugu State University of Science and
Technology, Enugu, Nigeria.
Authors’ contributions
This work was carried out in collaboration between both authors. Author CDO designed the study,
performed the statistical analysis, wrote the protocol and wrote the first draft of the manuscript.
Author CEO managed the literature searches. Both authors read and approved the final manuscript.
Article Information
DOI: 10.9734/AJAAR/2019/v10i330032
Editor(s):
(1) Dr. Tancredo Souza, Department of Life Sciences, Centre for Functional Ecology, University of Coimbra, Portugal.
Reviewers:
(1) Ali Türker, Mugla Sitki Kocman Universtiy, Turkey.
(2) Ume, Smiles, Ifeanyichukwu, Federal College of Agriculture Ishiagu, Nigeria.
(3) Ranjit Sambhaji Patil, Lokmangal College of Agriculture, India.
Complete Peer review History: http://www.sdiarticle3.com/review-history/46869
Received 15 November 2018
Accepted 28 January 2019
Original Research Article
Published 20 July 2019
ABSTRACT
Objectives of the Study: The study examined the profitability of catfish production in Enugu –East
L.G.A of Enugu state.
Sample Size and Sampling Procedure: A purposive sampling technique was employed in the
selection of 50 respondents used for the study.
Method of Data Collection: Data for the study were collected using structured questionnaires and
interview schedules.
Method of Data Analysis: Descriptive statistics, gross-margin analysis and profitability ratios were
used in analyzing the data.
Results and Discussion: The result of the analysis showed that majority of the fish farmers (70%)
were males and within the age range of 31 - 50 years. The result equally revealed that majority of
the farmers (86%) had at least a National Diploma with about 5 -14 years fish farming experience.
The result further indicated that cost of feed and fingerlings were the major cost component
involved in catfish production. The gross margin analysis and profitability ratios revealed that
catfish production is very profitable in the study area with a net income of about N576, 667 and a
_____________________________________________________________________________________________________
*Corresponding author: Email: damian.ochiaka@esut.edu.ng;Ochiaka and Obasi; AJAAR, 10(3): 1-6, 2019; Article no.AJAAR.46869
BCR of 1.6. The study however revealed that the high cost of farm inputs and poor credit facilities
were the major constraints to catfish production in the area.
Recommendations: It was recommended that more fish feed producers be encouraged into the
business to reduce the high cost of feed.
Keywords: Profitability; catfish; production; gross- margin, costs.
1. INTRODUCTION represents a valuable supplement to diets
otherwise lacking essential vitamins and minerals
The elimination of food insecurity and rural [4]. In Nigeria, the average per capita fish
poverty is a major objective of the Food and consumption may be low, but even in small
Agriculture Organization (FAO) and this topic quantities; fish can have a significant positive
features conspicuously as the first element of the impact on improving the quality of dietary protein
organization’s corporate strategy for the period by complementing the essential amino acids that
2000-2015. FAO has equally initiated several are often present only in low quantities in
programmes like the Special Programme for vegetable based diets [5].
Food Security (SPFS), the Telefood Programme
and special assistance to countries in the context Employment in fisheries has grown substantially
of the technical cooperation programme, all in the last three decades, with an average rate of
aimed at boosting food production and increasing increase of 3.6 percent per year since 1980
the income of the farmer. With the specific focus (FAO 2010) [6]. Many persons are employed in
on poverty alleviation, the challenge is to convert the fish industry as producers, processors or
these development principles into practical and marketers. It is estimated that in 2009, 44.9
reliable strategies for action. Fish farming is cited million people were directly engage, full time or
as one of the means of efficiently increasing food more frequently, part-time in capture fisheries or
production in food deficient countries [1]. in fish farming, at least 12 percent of these were
Although the outlook of fish production is women (ibid).
worrisome given the growing demand for fish and
the declining yield of natural fish stocks due to Studies by Augustesson et al. [7] report possible
over-exploitation, fish farming still holds the anti-cancer effect of n -3 fatty acids found in fish
greatest potential to rapidly boost domestic oil (particularly breast, colon and prostate
animal production. cancer). According to Nair and Connolly [8]
taking fish oil in any form can help regulate
Therefore the study aims to determine the effect cholesterol in the body. The American Heart
of the farmers’ socio- economic characteristics Association recommends the consumption of 1g
on their profit level of fish oil daily, preferably by eating fish, for
patients with coronary heart disease.
2. REVIEW OF LITERATURE
Fish farming is the principal form of aquaculture. 3. MATERIALS AND METHODS
Fish farming involves raising fish commercially in
tanks or enclosures usually for food. Economic The study was conducted in Enugu-East L.G.A of
studies have demonstrated that fish farming in Enugu State which has its headquarters in Nkwo
Nigeria can be a good source of income. Several Nike. The study area has an area of about 383
2
works [2] show that fish farming provides cash to km and a population of 279, 089 [9]. It has a
2
a family in addition to supplementing the diet of population density of 728.69 inhabitants per km .
the farmer. Fish can be an important cash crop The area is made up of several communities.
even for farmers with limited resources.
According to Jamu and Ayinla [3] the high Ten communities where fish farming activities
domestic demand for fish, the stagnation of are prevalent were purposively selected for the
inland capture fisheries and changing macro- study. These communities include Alulu, Edem,
economic environment in most Sub-Saharan Emene, Ibeagwa, Amoji, Obinagu, Iji, Akpoga,
Africa implies that investment in aquaculture can Nokpa and Ngwuomu. Five catfish farmers were
be profitable in Nigeria. randomly selected from each community. Thus a
total of fifty catfish farmers were selected for the
Fish is highly nutritious, rich in micronutrients, study. Data for the study were collected from
minerals, essential fatty acids and proteins, and both primary and secondary sources. Data
2Ochiaka and Obasi; AJAAR, 10(3): 1-6, 2019; Article no.AJAAR.46869
collected were analyzed using both descriptive HND or B.Sc. while only 4% had no formal
and inferential statistics. education. This finding confirms the works of
Olagunju et al. [12] and Nwibo [13] who
Budgetary technique of analysis was used to ascertained that majority of fish farmers were
determine gross margin which was them used to educated. This high level of literacy will have
analyze the profitability level. Profitability ratios of positive effect on the utilization of inputs and
catfish farmers were then calculated in order to incentives for fish farming and processing. Also,
determine economic performance of catfish education is a facilitating factor for the utilization
production. of technologies. Most of the respondents (44%)
had 5 - 9 years of fish farming experience while
The gross margin analysis is stated as: 16% had about 1 – 4 years experience. This
indicates that most of the fish farmers were
GM = TR – TVC (1) experienced. Majority of the respondents had a
household size of 6-10 while 4% had over 15
TR = P x Q (2) persons in their household. Most of the farmers
2
(40%) had a total pond size of between 26m –
TC = TVC + TFC (3) 2
50m . Only 10% of the respondents have a total
2
pond size of over 100m . Majority of the fish
NI (profit) = GM – TFC (4) farmers (42%) are teachers or lecturers. This is
followed by civil servants who represent 36% of
where the respondents. Only 10% of the respondents
are full-time fish farmers.
GM = Gross margin
TR = Total Revenue
3.2 Costs and Returns to Fish Farmers
TVC = Total Variable Cost
TFC = Total Fixed Cost
TC = Total Cost The result of the analysis of the costs and returns
NI = Net Income accrued to an average fish farmer in the study
P = Price per kg of catfish area in 2017 are displayed on Table 2. According
Q = Quantity of catfish sold to the result, an average fish farmer invested
about N923, 333 in catfish production. These
Profitability ratios: include the operating cost, labour cost and fixed
cost. The cost of land constituted the greatest
NI share of the fixed cost representing about
Rate of Return on Investment (RRI) = x 100
TC 95.81% of the fixed cost and 54.15% of the total
(5) cost. This means that cost of land acquisition is
NI the major important single cost item associated
Profitability Index (PI) = (6) with catfish production. The cost of feed (N200,
TR
000) was next in amount accounting for 21.70%
TVC of the total cost. This is followed by cost of labour
Operating Ratio (OR) = (7) (N90, 000) accounting for 9.75% of the total cost.
TR
The cost of fingerling (N60, 000) is next and
accounted for 6.5% of the total cost. The
3. RESULTS AND DISCUSSION variable cost items constituted 42.49% of the
total cost while the fixed cost accounted for
3.1 Socio-economic Characteristics 56.51% of the total cost. From the table, total
revenue of N1, 5000.000 was realized by the
Table 1 shows that most of the fish farmers catfish famer at the end of sales during a
(54%) in Enugu-East L.G.A. fall within the age production cycle. A production cycle is normally 6
range of 41 -50 years. This means that most months.
catfish farmers in the area are still in their active
age group. Majority of the farmers (70%) were The gross margin (GM) was N1, 098,500 while a
males, thus justifying Bamigboye et al. [10] and net income (NI) of N576, 667 was realized. The
Ogunleye et al. [11] who stated that more men benefit cost ratio was 1.62. This indicates that for
than women are involved in fish farming. Also, every N1.00 invested in catfish production, a
majority of the respondents (74%) were married. profit of N0.62 was realized. This means that
The table also shows that 96% of the catfish production is profitable in the study area.
respondents can read and write. About 54% had The result obtained compared favourably with
3Ochiaka and Obasi; AJAAR, 10(3): 1-6, 2019; Article no.AJAAR.46869
the findings of Awoyemi [14] and Olawunmi et al. profitability index (PI) was 0.38 thus indicating
[15] that catfish farming is a very profitable that for every naira earned, about N0.38 returned
business. to the farmer as net income. The rate of return on
investment (RRI) was 62.45% which indicates
3.3 Profitability Ratios that the farmer earned N0.62 on every naira
spent on catfish production. The operating ratio
The profitability ratios of catfish production are (OR) is 0.27. Operating ratio that is less than one
presented in Table 3. According to the table, the indicates a good and profitable business.
Table 1. Socio-economic characteristics of respondents
Characteristics Frequency (n = 50) Percentage
Age (years)
18-30 3 6
31-40 10 20
41-50 27 54
>50 10 20
Gender
Male 35 70
Female 15 30
Marital Status
Married 37 74
Single 8 16
widowed 5 10
Educational Level
No formal education 2 4
F.S.L.C. 2 4
S.S.C.E. 3 6
OND/NCE 16 32
HND/B.Sc. 27 54
Fish farming experience (years)
1-4 8 16
5-9 22 44
10-14 12 24
>15 8 16
Household size
1-5 10 20
6-10 33 66
11-15 5 10
>15 2 4
2
Pond size (M )
100 5 10
Main occupation
Full-time fish farmer 5 10
Civil servant 18 36
Teacher/lecturer 21 42
Trader 3 6
Artisan 3 6
Source: Field Survey, 2017
4Ochiaka and Obasi; AJAAR, 10(3): 1-6, 2019; Article no.AJAAR.46869
2
Table 2. Average costs and returns of raising 2000 catfish per 50m
Operating cost Cost (N Percentage of total cost
Fingerling: 2000@N30/fingerling 60,000 6.50
Feed 50 bags @N4000/bag 200,000 21.70
Utilities 10,000 1.08
Medication 6,500 0.70
Transportation 10,000 1.08
Miscellaneous 20,000 2.17
Fertilizer, lime, manure 5,000 0.50
Total 311,500 33.74
Labour cost
Pond construction 30,000 3.25
Salaries/wages 60,000 6.50
Total 90,000 9.75
Fixed cost
Depreciation
Land 500,000 500,000 54.15
Pond 250,000 12,500
Nets, buckets, baskets, knives 10,000 3,333
2.36
Water pump 50,000 5,000
Weighing machine 10,000 1,000
Total 521,833 56.51
Source: Field Survey, 2017
Cost Amount Percentage
Variable cost
Operating cost 311,500 33.74
Labour cost 90,000 9.75
Total Variable Cost 401,500 43.49
Fixed cost
Land 500,000 54.15
Depreciation 21,833 2.36
Total Fixed Cost 521,833 56.51
TC = TVC + TFC Table 3. Profitability ratio analysis of catfish
= 401,500 + 521, 833 production
= 923,333
Ratio Value
Total number of fish harvested and sold = 2,000 RRI = 576, 667 x 100 62.45%
923,333
I kg of catfish sold for N750.00 PI = 576, 667 0.38
1,500,000
:. TR = P.Q OR = 401, 500 0.27
= 750 x 2000 = N1, 500,000.00 1,500,000
GM = TR – TVC = 1500000 – 401,500 = 1,098,500 4. CONCLUSIONS AND RECOMMENDA-
TION
NI (profit) = GM – TFC
Fish farming has the potential to contribute to
= 1,098, 500 – 521, 833 = 576,667.00 sustainable development and poverty reduction
by generating income and employment. Though
BC R = Total Revenue(TR) there are several identified problems faced by
Total Cost (TC) fish farmers such as poor credit facilities, high
cost of farm inputs lack of extension services and
= 1,500,000 high cost of land. In view of the above
923,333 = 1.62 constraints, it was recommended that easy
5Ochiaka and Obasi; AJAAR, 10(3): 1-6, 2019; Article no.AJAAR.46869
access to credit facilities, subsidization of farm 6. FAO. Fishery statistics; 2010.
inputs and regular visit by extension agents 7. Augustsson K, Michaud DS, Rimm EB. A
should be given strong consideration. Finally, prospective study of intake of fish and
government should address the high cost of land Marine fatty acids and prostate cancer.
and fish feed to encourage more fish farmers and Cancer Epidemiol Biomarkers Prev.
fish feed producers into the business. Therefore, 2003;12(1):64-7.
Fish farmers should be encouraged to access 8. Nair GM, Connolly SJ. Should patients with
their credits from microfinance and commercial cardio–Vascular disease take fish oil;
banks at reduced interest rate by the appropriate 2008.
government agency. Available:http://www.cmaj.ca/cgi/content/fu
ll/178/2/18115/03/2017
COMPETING INTERESTS 9. National Population Commission of Nigeria
(NPC). National Population figures, Abuja;
Authors have declared that no competing
2006.
interests exist.
10. Bamigboye EO, Kuponiyi FA, Yusuf OJ.
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© 2019 Ochiaka and Obasi; This is an Open Access article distributed under the terms of the Creative Commons Attribution
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