Black Soldier Fly Larvae-based Fish Feed Production: Financial Feasibility and Acceptability Analysis
CHAPTER ONE
Objectives of the Study
The major objective of the study is to determine the financial viability of BSFL meal and BSFL-based feed production and the acceptance of the BSFL-based fish feed by fish farmers.
The specific objectives are as follows:
- To determine the level of profitability of BSFL meal and BSFL-based fish feed production,
- To determine the perception of farmers toward the use of BSFL in fish feed,
- To determine the mean amount farmers are willing to pay for BSFL-based feed and the factors influencing the amount they are willing to pay
CHAPTER TWO
LITERATURE REVIEW
Introduction
This chapter presents a review of existing literature relevant to the study. The review covers the state of aquaculture in Ghana, current fish feed produced and the various ingredients of fish feed. It is followed by a review of BSF and the technique for its production and harvest
into valuable feedstuff. The impact of BSFL production on the socioeconomic, health and environment is also reviewed. The review further looks at empirical results on the financial feasibility of BSFL production and empirical results on the perception and knowledge of
consumers towards the use of insects in feed. Finally, the various analysis; feasibility, perception, WTP and partial budget analysis are reviewed.
State of Aquaculture in Ghana
Overview
Aquaculture contribution to GDP in Ghana has not been separated from total fisheries;however, total fisheries contributes 1.1% towards total GDP (GSS, 2015). As at 2016, aquaculture contributed 11.3% towards total fisheries production (MoFAD, 2016). The main type of fish cultured is tilapia and catfish with the majority of culture fish either in ponds orin cages (Rurangwa et al., 2015). Cage farmers contribute more than 80% towards total production (Rurangwa et al., 2015). The commercial operators do not make their own feed but rather buy feed from fish feed companies. In recent years, as seen in Figure 2.1, aquaculture production has increased steadily. The sector is constrained by subsistence farming, lack of inputs and high cost of commercial feed production.
CHAPTER THREE
METHODOLOGY
Introduction
This chapter describes the various methods that were used to achieve the objectives of this study. It begins with the conceptual and theoretical framework underlying the study. The chapter further explains the various methods that were used to achieve the objectives of the study, the method of data collection, and provides a brief description of the study area.
Conceptual Framework
For every investment the main objective is profitability. The questions that the entrepreneur asks when introducing a novel product to the market is; if a product is manufactured will there be demand for it and at what price? If there is, will it be profitable to produce taking into account revenue and costs of inputs needed for production? This study as shown in Figure 3.1 seeks to review a complete business model for analysis to serve as a road map for entrepreneurs wanting to manufacture BSFL meal and BSFL feed. It looks at the production of BSFL meal and BSFL based fish feed as the main output, and the various factors that drive the production of these products.
CHAPTER FOUR
RESULTS AND DISCUSSIONS
Introduction
This chapter deals with the presentation and discussion of results obtained from the study. First, the socio-economic characteristics of respondents are described and discussed. Then the results from the financial feasibility analysis, perception of farmers towards the use of BSFL in fish feed, the MWTP and the factors influencing the decision. Finally, results from the savings farmers will make from switching from conventional feed to BSFL feed is discussed.
CHAPTER FIVE
SUMMARY, CONCLULSION AND RECOMMENDATIONS
Introduction
This chapter summarises the study and concludes on the various objectives set for the study. Based on these conclusions, recommendations are made to facilitate the production of BSFL meal and BSFL-based fish feed on an industrial scale
Summary
The research sought to ascertain the feasibility of BSFL meal and BSFL-based feed production and to identify farmer’s acceptance of the product. The study revealed that the BSFL meal production is feasible at 10% below the Selling price of conventional fishmeal at
NPV of GHS5,735,340.00 an IRR of 32% and a BCR of 2.4. The production of BSFL-based fish feed was also feasible at MWTP amount with NPV of GHS8,130,254.76, an IRR of 30% and a BCR of 1.95. However the production of BSFL meal and BSFL-based fish feed is
capital intensive with an initial start-up cost (Fixed asset and operational cost) of GHS4,230,193.00 and GHS6,489,280.00 respectively.
In ascertaining the perception and willingness to pay of farmers, 150 farmers were sampled from Asuogyaman and lower Manya krobo districts. Majority of the farmers were men and had some form of education. Under the perception analysis, the farmers overall mean score
was 2.8 and 1.4 for benefit and risk statements respectively. When compared to the midpoint scale, the mean score for risk was significantly lower (t=-6.576, p<0.003) and for benefit score significantly higher (t=19.163, p<0.000) than the midpoint scale. Comparison of the
overall mean benefit score with the overall mean score for risk showed that the score for benefit is significantly higher than that for risk (t=13.137, p<0.000).
Conclusions
Based on the discussed results the following conclusions arise: The production of BSFL meal and BSFL-based fish feed is financially feasible giving 1000 metric tonnes production level and a discount rate of 31%. The amount of capital outlay needed to begin operations is high. There is a high degree of acceptance of the BSFL-based fish feed amongst fish farmers; they have favourable perception towards the use of BSFL in fish feed and are willing to pay for it. They do not perceive the use of BSFL in fish feed to be harmful in terms of socioeconomic, health and environmental factors. The perceived benefit of the use of BSFL in fish feed is significantly higher than the perceived risk of the use of BSFL in fish feed.
Recommendations
The use of BSFL to produce fish feed is a technique that will solve socio economic, health and sanitation issues. However, the initial cost of investment is quite high. The following are suggested:
- Entrepreneurs should form cooperatives and partnerships to produce the BSFL-fish due to the high initial investment required
- Scientist-Entrepreneurs fora should be organised to share the results on the viability of BSFL production in order to encourage investments.
- Potential BSFL meal manufacturers should be prepared to charge a price below that of the existing fishmeal to feed manufacturers. BSFL-based fish feed manufacturers should recognise the MWTP amount of farmers. This should be done in order to penetrate the market and to convince fish farmers to adopt the new product.
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