8/17/2019 Aqua tilpia+ lettuce+basil

1/13

Can you make money from aquaponics?

Economics of Small-scale Commercial Aquaponics i

Kanae Tokunga

Department of Economics and Graduate Ocean Policy Certificate Prog

University of Hawaii at Manoa

with Clyde Tamaru, Harry Ako, and PingSun Leung

World Aquaculture Adelaide 2014

8/17/2019 Aqua tilpia+ lettuce+basil

2/13

Hawaii Market: Background• Population: 1.4 million

• 89% of lettuce is imported

• 370 mt of tilapia imported annually

• Vegetable and melon production sector – 56% of firms yield positive profit

• Aquaculture sector – 58% of firms yield

positive profit

• Preference towards “locally produced”

• Growing interests in aquaponics

8/17/2019 Aqua tilpia+ lettuce+basil

3/13

Aquaponics in Hawaii

• Hawaii is the leader in the field of

aquaponics – 5 commercial farms• For aquaponics to be an viable industry, we

need to evaluate its economic feasibility

• Is aquaponics here to stay or is it just a fad?

We think aquaponics is here to stay

8/17/2019 Aqua tilpia+ lettuce+basil

4/13

Economic Analysis of Commercial Aquaponics

IndividualFarm Analysis

• Survey existing commercial scale aquaponics farms in Hawaii

economic and operational information• Conduct economic analysis for each of the farms

Case Analysis

• Using information provided by the farms, analyze a represen

• Conduct decision reversal analysis and sensitivity analysis to evaluate key factors that affect overall economic outcome

Decision ToolSoftware

• Develop a software for economics analysis of aquaponics

• Excel spreadsheet can be used by existing farms, those who ain starting a farm, policy makers, researchers, etc.

8/17/2019 Aqua tilpia+ lettuce+basil

5/13

Individual Farm Analysis

Modified internal rate of return (MIRR) for 30 years of operatio

Farm A  Farm B 

Location  Waianae, Oahu  Kunia, Oahu  M

Total raceway surface area (m2) 

1,070 

1,142 

Total fish production capacity (m3)  57  23 

Types of vegetables 

Lettuce 

Lettuce 

Lett

Cu

Types of fish 

Tilapia 

Tilapia, Chinese

Catfish 

Ti

8/17/2019 Aqua tilpia+ lettuce+basil

6/13

Case Analysis: System Setup

Lettuce Production 

Number of days in nursery 

14 

days 

Number of days in aquaponics raceways 

31.5 

days 

Weight of a head when harvested 

181 

g 

Harvest and delivery timing 

2 

per w

Tilapia Production 

Number of days in breeding/nursery tank 

105 

days 

Number of days in aquaponics tank  395  days 

Weight of a fish when harvested  567  g 

Harvest timing 

1 

per w

• 4 independent aquaponic systems

• Each system is equipped with 8 vegetable

raceways (35.67 m2

) 

and 1 fish tank (18.93m3)

8/17/2019 Aqua tilpia+ lettuce+basil

7/13

Case Analysis: Baseline Results

MIRR for 30 years of operation 7.36%

Production size Lettuce 

Annual production per unit area or volume  14.25  kg/m2  2

Annual production (kg)  16,248  kg  1

Annual production (heads, fish)  89,549  heads  3

Cost and Revenue Lettuce Tilapia

Initial Investment cost 

$173,616 $43,462

Annual operational cost  $52,406 ($3.23/kg) $13,777 ($7.23/kg)

Annual revenue  $77,012 $21,000

8/17/2019 Aqua tilpia+ lettuce+basil

8/13

Case Analysis: Sensitivity to Output and Input Price

•

Economicsensitive tprices, eslettuce pr

• Economicsensitive t

-0.15

-0.1

-0.05

0

0.05

0.1

0.15

-100% -50% 0% 50% 100%

Lettuce Price Tilapia Price Wage Feed Cost Electricity

8/17/2019 Aqua tilpia+ lettuce+basil

9/13

Case Analysis:Decision Reversal Analysis

•

We use 30-year MIRR with 6% reinvestment rate as a measu• If the MIRR is below 6%, the investment in commercial aqua

not worthwhile

Baseline 

Decision Reversal

MIRR = 6% 

%

Lettuce Price ($/kg) 

4.74 ( = $2.15/lb) 

4.10 (=$1.86/lb) 

Tilapia Price ($/kg)  11.02 (= $5/lb)  5.53 (=$2.51/lb) 

Wage ($/hr)  9.75  12.80 

Feed Cost ($/kg) 

2.03 

4.94 

Feed Conversion Ratio  1.87  4.56 

Electricity ($/kWh)  0.21  0.36 

8/17/2019 Aqua tilpia+ lettuce+basil

10/13

Summary• Small-scale commercial aquaponics is economically feasible

•

Economic outcomes are sensitive to the changes in output p• Organic certification can double the price

• NFT aquaponics to be evaluated with aquaponics decision tsoftware

8/17/2019 Aqua tilpia+ lettuce+basil

11/13

Aquaponics Decision Tool

• As economic analysis a

• Multiple crops

•

Adjusting for seasonal • Scenario analysis

8/17/2019 Aqua tilpia+ lettuce+basil

12/13

Acknowledgement

Funding Support:

Center for Subtropical and Tropical Aquaculture

Cooperating Farms:

8/17/2019 Aqua tilpia+ lettuce+basil

13/13

THANK YO

Kanae Tokuna

kanaet@hawai

University of Hawaii