Assessing the Economic Viability of Offshore Aquaculture in Korea: An Evaluation Based on Rock Bream, Oplegnathus fasciatus, Production
2007
Lipton, Douglas W. | Kim, Do H.
Interest is growing in offshore aquaculture as a means of overcoming environmental concerns that plague nearshore and coastal aquaculture production. The challenge of dealing in the offshore environment adds expenses that are not present in other aquaculture production systems. We collected financial and production performance data from a commercial-scale offshore aquaculture production system for rock bream off the coast of Korea. Financial performance of the system was evaluated using Aquasim, a stochastic financial simulator. To compare performance, we focused on the 10-yr internal rate of return (IRR) and net present value based on different assumptions regarding fish survival rates and market prices. The baseline model that used the observed survival and market prices had a high probability of financial success and an IRR of 18%. Financial performance became a lot riskier when we assumed that survival rates followed a triangular distribution with a 25% minimum survival that increased 5% per yr, even when the mean survival rate was as high as 97%. Rock bream aquaculture could be successful under that survival scenario if prices are high for the first 5 yr and then start declining in consequence of the industry expanding. In that case, the IRR is around 14%, but with greater variability than the baseline. If prices fall from the initial baseline level in the early yr of production, then the operation has little chance of surviving.
Show more [+] Less [-]AGROVOC Keywords
Bibliographic information
This bibliographic record has been provided by National Agricultural Library