Challenges in the Era of Globalization - iaabd

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Proceedings of the 12th Annual Conference © 2011 IAABD Abstract Profitability Analysis of Small Scale Aquaculture Enterprises in Central Uganda. Theodora S. Hyuha, thyuha@yahoo.com Department of Agribusiness and Natural Resources, Faculty of Agricultural Sciences, Makerere, University, P.O. Box 7062, Kampala Uganda. James O. Bukenya Alabama A&M University, Normal Alabama, USA Julius Twinamasiko Department of Agribusiness and Natural Resources, Faculty of Agricultural Sciences, Makerere, University, Kampala Uganda Joseph Molnar Auburn University, Auburn Alabama, USA. Fish farming in the three countries surrounding Lake Victoria (Kenya, Tanzania and Uganda) has received increased attention following reports of dwindling fish stock in Lake Victoria. Over time, Lake Victoria’s fish production has been plummeting as overfishing, the use of illegal and harmful fishing methods and soaring demand have overstretched the lake’s supply capacity. In an effort to manage this renewable but exhaustible resource, international development agencies and advanced research institutes are promoting aquaculture within the context of integrated agriculture and have begun addressing socio-cultural and economic factors that have been impeding aquaculture development in the region. This study investigated the profitability and socioeconomics of aquaculture in central Uganda. The paper draws on data collected through a random selection of 200 small scale fish farmers in the three major fish farming districts of Mpigi, Mukono and Wakiso during 2009/2010 production season. The analysis was carried out using descriptive statistics, enterprise budgeting and linear regression model. Although the results show small scale aquaculture to be a profitable enterprise in the region, the estimated profit margins are relatively small. Harvested fish size, farming experience, fish price and volume of fish harvested are the most influential factors in explaining profitability in the region. The major factors hindering aquaculture development in the region include predators, unavailability of credit facilities, expensive feeds, and shortage and poor quality of fingerlings. Introduction Fishery is one of Uganda’s most important renewable resources and of fundamental importance to the population and economy. The fish sector makes a vital contribution to the food and nutritional security of over 30 million people in the country and it provides income for approximately 4 million households engaged in fish production, processing and trade (OECD, 2007). Fish currently ranks as Uganda’s highest non-traditional agricultural export earner and the considerable export revenues it generates plays an important role in advancing the development vision of increasing country’s overall foreign exchange earning capability. The fish industry contributes about 3 percent to the country’s gross domestic product and generates over US$85 million in foreign exchange earnings (Bagumire, 2009; OECD, 2007). Uganda’s fisheries sector is comprised of both capture and culture (aquaculture) fisheries with the former contributing most of total production. The capture fishery is basically artisanal while aquaculture is primarily produced by farmers who practice fish farming as one of the many other farming activities 222
Challenges in the Era of Globalization Edited by Emmanuel Obuah (FAO 1996). Since the inputs used are virtually the same as in their farming activities, small-scale fish farming is properly seen in the context of agricultural production (Gabriel et al., 2007). Over the last five years however, fish farming has received increased attention following reports of dwindling fish stock in Lake Victoria, Uganda’s main source of capture fisheries 3 , due to the use of illegal and harmful fishing methods and soaring demand Ogutu–Ohwayo et al., 1990; Bahiigwa, Mugambe and Blackie, 2003). Already, half of the native fish from Lake Victoria are extinct, and the traditional lifestyles of lake-shore communities that make a living from its troubled waters have been disrupted and are crumbling (Ogutu– Ohwayo, 2000). In an effort to manage this renewable but exhaustible fishery resource, international development agencies such as Food and Agriculture Organization (FAO), United States Agency for International Development (USAID), United Nations Industrial Development Organization (UNIDO)] and advanced research institutes (such as Auburn University, Alabama, Makerere University) are promoting aquaculture within the context of integrated agriculture and have begun addressing sociocultural and economic factors that have been impeding aquaculture development in Uganda. This complimentary study investigated the profitability and socioeconomics of aquaculture in central Uganda. The rest of the paper is organized into six additional sections. The next Section presents the materials and method followed by the profitability analysis in Section three, Section four examines the factors that influence aquaculture profitability while the factors that hinder aquaculture development are presented in Section five. The last section presents the study conclusions and recommendations. Theoretical Framework Following Sadoulet and De Janvry, (1995), a farmer is assumed to choose a combination of variable inputs and outputs that maximize profit subject to the existing technology constraint. Given the underlying production function and assuming the technology to be homogeneous across the farms, the profit function is ………………………………………………………………… (1) where p is a vector of prices of output q is quantity produced and w is a vector of variable inputs. ……………………………………………………………………… (2) Where is profit and other variables remain as defined before. According to Sadoulet and De Janvry, (1995), the function can be normalized and used to estimate a single commodity such as fish. The normalized function is Materials and Methods …………………………………………………………………………………… (3) The data for this study are drawn from a field survey conducted in June-July 2010 on 2000 fish farms in the three major fish farming districts in central Uganda: Mukono, Mpigi and Wakiso districts. The investigated region is also the target area of an aquaculture development program, USAID-AquaFish Outreach Project, which started in 2009 as a follow-up on a previous project (FISH project) in 3 Though Uganda is rich in aquatic resources, with 18% of its 241,038 sq km total area covered by lakes, rivers and swamps, this potential has been eroded due to over fishing (Jagger and Pender, 2001) at the time when the demand for fish is increasing both internally and internationally. 223
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Table of Contents Challenges in the
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Local Steering Committee Jacob Musi
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Abstract Challenges in the Era of G
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Table 3 Determinants of Competitive
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Abstract Challenges of Oil Revenue
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Abstract The Changing Requirements
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The Model, Data and Variable Defini
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Figure 1.1: Spread of directorships
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Theoretical Framework Challenges in
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Single 18.1 Masters and above 35.3
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Source: Field survey, 2010 Table 3:
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Abstract Exploring Organisational R
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Table 1: A Summary of Operating Ban
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Discussion and Conclusion Challenge
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Abstract What does Globalization me
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Banks in Ghana Challenges in the Er
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References: Challenges in the Era o
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Relationship Commitment Total 1264.
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Conclusion Dissatisfied 6 3.4 3.6 7
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