Shrimp Farming and the Environment - Library

• Commercial and market conditions, such as availability and cost of production inputs,domestic production and imports, and trends in total demand in the most appropriate markets(including foreign markets);• The risk of disease and the nature of any industry or government strategy to prevent ormanage disease;• The environmental impact;• The social impact;• Similar projects in other regions or countries and their success;• Possible linkages to other critical industries;• The general investment climate;• Industrial policies and other legal/regulatory aspects;• The extent to which the project fits with existing development, natural resource developmentplans, and integrated coastal management plans.Opportunity studies are rather sketchy in nature and rely more on aggregate estimates and readilyavailable information than on detailed analysis. The key limiting factor at this stage is cost: the cost ofproducing an opportunity study is by nature very limited. The purpose of the opportunity study is todetermine whether the idea is worth pursuing and whether it is worthwhile to commit further resources.Prefeasibility studyIf a decision has been reached that it is worth pursuing, the project idea must be elaborated in asomewhat more detailed study. However, the formulation of a full-scale feasibility study is such acostly and time-consuming undertaking that a more limited exercise is usually initiated: that of aprefeasibility study.The prefeasibility study should therefore be viewed as an intermediate stage between a projectopportunity study and a detailed feasibility study. A prefeasibility study presents less detailedinformation and discusses and analyzes project alternatives less intensively, but the two types of studiesshould share the same structure and include the same sections.In a prefeasibility study, the information used will be that which is easily available and reasonablyreliable, whereas in a feasibility study, all relevant data should be documented. The prefeasibility studymore resembles a “desk study” in this regard, while the feasibility study usually necessitates field visitsand empirical observation to document the information.Feasibility studyThe purpose of the feasibility study is to arrive at definite conclusions about all the basic aspects of theproject and to consider alternative conditions under which the project may have to operate. Theconclusions and recommendations resulting from the feasibility study must be supported anddocumented by hard and convincing evidence, in order to minimize any uncertainty.Whereas a prefeasibility study will often be based on the “best known” facts and assumptions, thefeasibility study should be based on confirmed facts, to the extent possible. This means that all inputdata for the study must be documented and proven. (This requirement is restricted to observable anddocumentable facts, of course, such as physical, legal, and economic conditions.)There will nevertheless be some element of uncertainty, even in a feasibility study. One cannot with100% certainty predict for example market conditions in the future or price levels of the products. Buteven these assumptions should be researched and documented to the extent possible, and they shouldbe based on reliable and accepted expert opinions. The uncertainty is reduced as the promoter movesthrough the various stages of a project development, from opportunity study through prefeasibilitystudy to feasibility study.For convenience of presentation, the feasibility study should start with an executive summary outliningthe project data (both actual and assumed) and the conclusions and recommendations. The executivesummary should cover all critical aspects of the project, such as the business environment, thereliability of the assumptions and the documented data, the margin of error (uncertainty and risk) inmarket forecasts, supply trends, technological trends, and project design.68