Small-scale, Home-use and Recreation Aquaculture
By Dan Burden, content specialist, AgMRC, Iowa State University, firstname.lastname@example.org.
Prepared August 2009.
There are very different business models with vastly different levels of preparation between a large-scale commercial-scale aquaculture venture and a small-scale “hobbyist” venture. Both necessitate sound business planning, but the former requires extensive feasibility and business planning, while the latter can be more of an exploratory “try-by-doing” activity. Success in both require some level of record keeping to know “what works” and what does not, and what are the true financial and time-investment realities of the project.
Small-scale aquaculture includes small-scale shrimp or tilapia production for pond-side sales, bass and bluegill production for pond stocking, ornamental fish for hobbyists and fee-fishing enterprises. The opportunities usually range from personal recreational use that includes a few friends to “help subsidize” the activity to small-scale local sales. The endeavors frequently involve the landowner in utilizing an existing or newly constructed small pond or tank system as a small-profit-center activity, not large-scale commercial fish production.
This is an avenue by which small farmers or individuals interested in aquaculture can explore the business without a great deal of financial exposure, yet can explore their interests, markets and expansion opportunities. A recent University of Kentucky article stated that with some of the production-oriented activities, it is not uncommon for the producer to sell a few hundred pounds of fish or freshwater shrimp at retail prices through niche markets, realizing a 10- to 20-percent return on the initial investment.
For this type of venture to be profitable, it is necessary to keep a few things in mind. First, it is a very small-scale and limited business venture. It is important to commit to it as a business venture and think of it as such, and not an extension of your hobby. Secondly, it needs to be “low-input farming,” with prudent management to keep costs down but still to produce the highest quality product or experience for the customer or client. Several excellent state and regional extension aquaculture programs have publications to assist entrepreneurs interested in exploring small-scale aquaculture. One has been produced by Iowa State University, and two others are listed toward the end of this article.
Even with a small project, one should consider some sort of risk management plan. With any limited-scale project, it is important to remember that you will probably not have the “redundancy” or backup tanks, ponds or raceways, and resource-management-systems that a commercial producer normally would have to guard against catastrophic loss. Depending on the size of your project and input costs, you may or may not have or want to have a contracted insurance option to cover your operation. If your project centers around a single-production system, you may want to carefully look at it with a critical eye and attempt to define the weaknesses in your system and cost-effective ways in which to mitigate risk (back-up pumps or oxygenation systems, liability insurance and warning signs if there is public access). If there are other producers in your area with whom you can partner, consider “sharing risk” through back-up plans where cooperators share equipment or can resupply your venture.
Top producers constantly evaluate their production systems to improve product quality and production efficiency. This too should be applied to your marketing strategy. Even if you do not have a clear-cut marketing plan, you should consider developing one. The complexity and direction of the plan will depend on how your sales are structured and the sales volume. Even the hobbyist raising fish in a basement can develop a communications plan for reaching out to regular clients about upcoming batches of particular species and when they will become available. If you are doing very-limited pond-fee fishing, consider a field day activity with catered food, a prize competition, sponsorships or an educational demonstration to turn your activity into an event. There are many good publications to assist entrepreneurs interested in exploring small-scale aquaculture. These include A Guide to Marketing for Small-Scale Aquaculture from the Department of Agricultural Economics and Purdue Aquaculture Program in association with the Illinois-Indiana Sea Grant Program and Small-Scale Marketing of Aquaculture Products, a 2009 revision of the widely distributed Southern Regional Aquaculture Center (SRAC) Publication No. 350 from the Southern Regional Aquaculture Center, Texas A&M University.