allowed many small carrageenan processors to enter the business and disrupt the traditional direct and stable relationships between seaweed farmers and a few dominant
carrageenan processors Neish, 2013. Other factors, such as the rapid expansion of carrageenan seaweed cultivation in Indonesia and the fast-growing carrageenan
industry in China, also contributed to the loss of cohesion in the seaweed-carrageenan value chains. With more and more newcomers joining both ends of the value chains,
direct and stable business relationships between farmers and processors have been gradually replaced by a market mechanism dictated by price and mediated through
traders sometimes multiple layers of them. Under this “market governance” structure Neish, 2013, the industry has become more competitive yet volatile. The sudden
and large demand shock from China in 2008 caused severe price fluctuations that destabilized the industry to the extent that some experts called it a “seaweed crisis”
Neish, 2008a, 2013.
Given time, the competitive market mechanism is expected to help the industry gradually regain its order through consolidation andor integration. However, the
process can be facilitated by more proactive actions, such as promoting collective actions of farmers through farmers organizations and providing more reliable and
timely market intelligence to reduce premature harvest, speculation andor other irrational behaviour Neish, 2013.
3. ECONOMIC PERFORMANCE OF CARRAGEENAN SEAWEED FARMING
The economic performance of seaweed farming is determined by its economic costs and benefits. The main economic costs include capital, material inputs and labour. The
economic benefits can be measured by the revenue and cash flow generated by seaweed production. Profit is an indicator of the net benefit, which measures trade-offs between
benefits and costs. A synthesis of the technical and economic performance of 23 cases of Kappaphycus farming examined in the six case studies Table 6 is provided overleaf.
3.1 Investment and capital cost
The physical capital needed for carrageenan seaweed farming usually includes farming systems, vessels, shelters, drying facilities, and miscellaneous equipment or tools.
Farming system A variety of farming systems have been used in carrageenan seaweed farming Neish,
2008b; Hayashi et al., 2010. The most widely used are “off-bottom” and “floating” systems. In both systems, cultivars or propagules are tied to polypropylene lines as
the substrate. Off-bottom systems are usually used in near-shore, shallow waters with the substrate placed near the sea floor. Floating systems are usually used in deeper
waters with the substrate floating near the sea surface.
Off-bottom is the traditional system widely used in carrageenan seaweed farming. A typical off-bottom system hangs cultivation lines between stakes pegged to the ocean
floor. Off-bottom systems located at near-shore farming sites could be constructed and managed by family labour also women. However, an off-bottom system may
face high risks of fish grazing and rope breaking and, hence, need more-intensive plot maintenance Krishnan and Narayanakumar, 2013.
Near-shore areas are limited and subject to the competition of other sectors e.g. tourism and urban development. In the United Republic of Tanzania, suitable farming
sites for off-bottom systems have largely been utilized Msuya, 2013. In India, near- shore water quality has been threatened by industrial and urban effluent Krishnan and
Narayanakumar, 2013.
A floating system uses ropes, floats, weights and other materials e.g. bamboo to build a floating structure to suspend cultivation lines. Floating systems expand seaweed
farming to deeper waters that provide more abundant farming sites.
Social and economic dimensions of carrageenan seaweed farming
24
TABLE 6
Cases of Kappaphycus farming in the six case-study countries
Case No. Country
Notes Farming system
Cultivation line km
Farm area ha
Annual production
tonneyear Source
1 India
Two scenarios of a representative farm
Floating raft 4 cyclesyear 54
1.00 72
Krishnan Narayanakumar 2013, Tables 5, 6 7
2 India
Floating raft 6 cyclesyear 54
1.00 108
3 Indonesia, South Sulawesi
Average of surveyed farms in different regions.
Floating raft 10.8
0.99 5.9
Neish 2013, Table 5 4
Indonesia, Bali Off-bottom short-stake
5.3 0.11
6.6 5
Indonesia, Nusa Tenggara Timur Floating raft
3.4 0.50
5.7 6
Indonesia, South Central Sulawesi Off-bottom long-stake
2.7 0.36
3.1 7
Indonesia A representative small-scale
nuclear family farm Floating raft
6 –
6.6 Neish 2013, Tables 7, 8, 9, 10 11
8 Indonesia
A representative large-scale leader farm
Floating raft 30
– 33
9 Mexico
Two scenarios of a hypothetical off-bottom farm
Off-bottom 50 g seed –
1.00 27
Robledo, Gasca-Leyva Fraga 2013, Tables 1, 2 3
10 Mexico
Off-bottom 100 g seed –
1.00 54
11 Mexico
Two scenarios of a hypothetical floating raft farm
Floating raft 50 g seed –
1.00 27
12 Mexico
Floating raft 100 g seed –
1.00 54
13 Philippines, Zamboanga
Six representative farms using different farming systems and
or in different locations Off-bottom FOB
1.8 –
2.143 Hurtado 2013, Tables 4, 5 6
14 Philippines, Tawi-Tawi
Off-bottom FOB 1.62
– 0.9
15 Philippines, Palawan
Floating line HLL 2.7
– 8.57
16 Philippines, Tawi-Tawi
Floating line HLL 1.8
– 2.75
17 Philippines, Zamboanga
Floating raft MRLL –
0.05 2.85
18 Philippines, Zamboanga
Floating line SW –
0.27 8.5
19 United Republic of Tanzania
Two representative farms using different farming
systems Off-bottom
0.3 –
0.662 Msuya 2013, Tables 1, 2, 3, 4 5
20 United Republic of Tanzania
Floating line 0.324
– 0.806
21 Solomon Islands
Three representative farms based on field survey
Off-bottom 4
– 17.4
Kronen 2013, Table 2 22
Solomon Islands Off-bottom
4 –
21.7 23
Solomon Islands Off-bottom
2.4 –
9.2
Floating raft systems are widely used in carrageenan seaweed farming countries such as India Krishnan and Narayanakumar, 2013, Indonesia Neish, 2013, Mexico
Robledo, Gasca-Leyva and Fraga, 2013 and the Philippines Hurtado, 2013. Floating rafts can be used as drying racks; they can be moved to another location to avoid fish
grazing or even removed from the water during bad weather conditions Krishnan and Narayanakumar, 2013. The use of floating raft systems in the United Republic
of Tanzania has been constrained by the low durability of rafts as well as a lack of materials bamboo needed for raft construction Msuya et al., 2007.
Floating lines, such as the hanging long-line HLL system used in the Philippines Hurtado, 2013 and the deep-water floating line system used in the United Republic of
Tanzania Msuya, 2013, are other popular floating systems. In the United Republic of Tanzania, a floating line system was deemed more “forest friendly” than an off-bottom
system because it does not need to use wood stakes Msuya, 2013.
Unlike an off-bottom system, a floating system is more technically demanding to construct andor install and, hence, may entail hired labour. Sophisticated floating
systems such as the multiple raft long line MRLL and spider web SW usually require professionals to install them Hurtado, 2013.
Off-bottom systems are the most common in Indonesia, the Philippines and the United Republic of Tanzania, whereas in India, bamboo raft culture accounts for
almost all of cultivation Krishnan and Narayanakumar, 2013. However, there may be differences within countries. In Indonesia, farmers generally use off-bottom horizontal
“short-stake” systems or small bamboo rafts in Bali; and horizontal long-stake systems in South-central Sulawesi Neish, 2013. In the Philippines, the off-bottom technique
is widespread, but some regions use hanging long-lines while others prefer floating or submerged rafts Hurtado, 2013.
Technical efficiency in utilizing ocean area In Indonesia, the short-stake off-bottom system used in Bali had an average of 48 km
of cultivation line in one hectare of farming area, which was much higher than the long-stake off-bottom system and the floating raft system used in other places of the
country Figure 7, Case 4 vs Cases 3, 5 and 6. The floating raft system used in India also had high efficiency 54 kmha in utilization of ocean area Figure 7, Cases 1
and 2.
Productivity of a farming system Figure 8 illustrates the productivity of farming systems in terms of dried seaweed
production per unit of cultivation line. The evidence indicates that: • The productivity of an off-bottom system varied widely from the low end for the
fixed-off-bottom FOB system in the Philippines Cases 14 and 13 as well as the short-stake and long-stake systems in Indonesia Cases 6 and 4 to the high end
for the off-bottom systems in Solomon Islands Cases 22, 21 and 23. Even for the same country, the productivity of the FOB system in Zamboanga, the Philippines
Case 13 was twice as high as that in Tawi-Tawi Case 14.
• From a global perspective, the floating raft systems locate at the lower end of the productivity spectrum in Figure 8. However, the raft system in Nusa Tenggara
Timur NTT, Indonesia Case 5 had a higher productivity in terms of tonnes per kilometre than the other systems used in Indonesia.
• The floating line systems Cases 15, 20 and 16 locate at the higher end of the productivity spectrum in Figure 8. The productivity of the HLL system used in
Tawi-Tawi, the Philippines Case 16 was almost three times as high as that of the FOB system in the same area.
Figure 9 illustrates the productivity of farming systems in terms of dried seaweed production per unit of farm area. The evidence indicates that:
26
• The productivity of an off-bottom system varies from the 9 tonnesha for the long-stake system used in South Central Sulawesi, Indonesia Case 6 to 60 tonne
ha for the short-stake system used in Bali Case 4. • The productivity of a raft system varies widely from 6 tonneha for the raft system
used in South Sulawesi, Indonesia Case 3 to 108 tonneha for that used in India Cases 1 and 2.
In summary, the evidence does not indicate distinct patterns in the productivity of different farming systems, neither in terms of production per unit of cultivation line
Figure 8 nor in terms of production per unit of farming area Figure 9. This should not be surprising because a direct comparison of the productivity of two farming
systems may reflect mostly the differences in their farm locations e.g. temperature, weather condition, and water quality that affect the growth rate of seaweed and the
number of growing cycles as two primary factors determining the productivity. Evidence from the literature summarized in Hayashi et al., 2010 indicates that the
growth rate of Kappaphycus varies widely across different farming systems andor the same system used at different locations ranging from 0.2 to 10.86 percent per day.
Investment for building a farming system Off-bottom is generally deemed the least-capital-intensive farming system. Evidence
provided by the case studies confirms this perception. As indicated in Figure 10, the FOB
FIGURE 7
Technical efficiency in utilizing ocean area: evidence from India and Indonesia
Notes: “km” measures the total length of the cultivation lines of a farming system; “ha” gauges the farm area. Source: Calculated, based on cases listed in Table 6.
Floating raft Off-bottom
1 2. India [raft, 1 ha, 54 km] 4. Indonesia, Bali [short-stake, 0.11 ha, 5.3 km]
3. Indonesia, South Sulawesi [raft, 0.99 ha, 10.8 km] 6. Indonesia, South Central Sulawesi [long-stake, 0.36 ha, 2.7 km]
5. Indonesia, Nusa Tenggara Timur [raft, 0.5 ha, 3.4 km]
Length of cultivation line per unit of farming area kmha 6.8
7.5 10.9
48.2 54.0
FIGURE 8
Productivity of different farming systems in terms of the length of cultivation line
Notes: “km” measures the total length of the cultivation lines of a farming system; “ha” gauges the farm area. Source: Calculated, based on cases listed in Table 6.
22. Solomon Islands [off-bottom, 4 km] 21. Solomon Islands [off-bottom, 4 km]
23. Solomon Islands [off-bottom, 2.4 km] 15. Philippines, Palawan [HLL, 2.7 km ]
20. United Republic of Tanzania [line, 0.324 km] 19. United Republic of Tanzania [off-bottom, 0.3 km]
2. India [raft, 1 ha, 54 km, 6 cyclesyear] 5. Indonesia, Nusa Tenggara Timur [raft, 0.5 ha, 3.4 km]
16. Philippines, Tawi-Tawi [HLL, 1.8 km ] 1. India [raft, 1 ha, 54 km, 4 cyclesyear]
4. Indonesia, Bali [short-stake, 0.11 ha, 5.3 km] 13. Philippines, Zamboanga [FOB, 1.8 km]
6. Indonesia, South Central Sulawesi [long-stake, 0.36 ha, 2.7 km] 8. Indonesia [raft, 30 km]
7. Indonesia [raft, 6 km] 14. Philippines, Tawi-Tawi [FOB, 1.62 km ]
3. Indonesia, South Sulawesi [raft, 0.99 ha, 10.8 km]
Production of dried seaweed tonnekm of cultivation lineyear
0.55 0.56
1.10 1.10
1.15 1.19
1.25 1.33
1.53 1.68
2.00 2.21
2.49 3.17
3.83 4.35
5.43 Off-bottom
Floating raft Floating line
system in Tawi-Tawi, the Philippines Case 14 cost about one-third as much as the HLL system in the same area Case 16. The same holds for the FOB system in the United
Republic of Tanzania Case 19 as compared with the floating line system Case 20. However, it should be noted that the low investment cost of an off-bottom system
may not necessarily be the result of its economical use of materials but could be thanks to the availability of “free” materials such as wood stakes gathered from nearby
mangroves Kronen, 2013; Msuya, 2013. In the Philippines, a FOB system relying on free wood stakes cost only USD28.4km of cultivation line Case 14, while one relying
on purchased wood stakes cost USD115km Case 13.
Amortized capital cost of a farming system It should also be noted that because of its longer lifespan, the relatively high initial
investment for a farming system does not necessarily result in a high annual amortized capital cost i.e. depreciation. For example, while building the floating line system in
the United Republic of Tanzania Figure 10, Case 20 cost almost three times as much as building the off-bottom system in the country Figure 10, Case 19, the amortized
annual capital costs of the two systems Figure 11, Cases 20 and 19 were almost the same because of the longer lifespan of the floating line system 2.7 years compared
with the off-bottom system 1 year.
In Figure 11, the amortized capital costs of some off-bottom systems Cases 13 and 19 and floating systems Cases 1, 2, 7, 8 and 20 were not very different, in the range
of USD50–60 km. The FOB system in Tawi-Tawi, the Philippines Figure 11, Case 14 and the HLL system in Palawan, the Philippines Figure 11, Case 15 had relatively low
amortized capital costs because of the free materials they used free wood stakes for the former and free floats for the latter.
Economic efficiency of a farming system The economic efficiency i.e. cost-effectiveness of a farming system can be measured
by its amortized capital cost per unit of seaweed production. The indicator measures the trade-offs between the productivity of a farming system Figure 8 and its amortized
capital cost Figure 11. A farming system with a relatively low amortized capital cost per unit of production has a relatively high economic efficiency.
FIGURE 9
Productivity of different farming systems in terms of the size of farming area
Notes: “km” measures the total length of the cultivation lines of a farming system; “ha” gauges the farm area. Source: Calculated, based on cases listed in Table 6.
2. India [raft, 1 ha, 54 km, 6 cyclesyear] 1. India [raft, 1 ha, 54 km, 4 cyclesyear]
4. Indonesia, Bali [Short-stake, 0.11 ha, 5.3 km] 17. Philippines, Zamboanga [MRLL, 0.05 ha]
10. Mexico [off-bottom, 1 ha 100-g seed] 12. Mexico [raft, 1 ha 100-g seed]
18. Philippines, Zamboanga [SW, 0.27 ha] 11. Mexico [raft, 1 ha 50-g seed]
9. Mexico [off-bottom, 1 ha 50-g seed] 5. Indonesia, Nusa Tenggara Timur [raft, 0.5 ha, 3.4 km]
6. Indonesia, South Central Sulawesi [long-stake, 0.36 ha, 2.7 km] 3. Indonesia, South Sulawesi [raft, 0.99 ha, 10.8 km]
Production of dried seaweed tonnehayear
6 9
11 27
27 31
54 54
57 60
72 108
Off-bottom Floating raft
Floating line
28
In Figure 12, the floating line HLL system in Palawan, the Philippines Case 15 is the most economically efficient farming system, costing only USD3.6 for one tonne of
dried seaweed production. The high efficiency of Case 15 was thanks to its relatively high productivity Figure 8 and low amortized capital cost Figure 11.
Most of the floating line systems in Figure 12 Cases 15, 20 and 16 have a relatively high economic efficiency. The SW system in Zamboanga, the Philippines Case 18
is the only exception. Indeed, this expensive farming system Hurtado, 2013 has the highest amortized capital cost per unit of seaweed production USD111.1tonne in
Figure 12.
In Figure 12, most of the off-bottom systems have a relatively high economic efficiency. Case 9 has the lowest efficiency among the off-bottom systems in Figure 12
FIGURE 10
Initial investments for different farming systems
Notes: “km” measures the total length of the cultivation lines of a farming system; “ha” gauges the farm area. Source: Calculated, based on cases listed in Table 6.
1 2. India [raft, 1 ha, 54 km] 20. United Republic of Tanzania [line, 0.324 km]
13. Philippines, Zamboanga [FOB, 1.8 km] 7. Indonesia [raft, 6 km]
8. Indonesia [raft, 30 km] 16. Philippines, Tawi-Tawi [HLL, 1.8 km ]
19. United Republic of Tanzania [off-bottom, 0.3 km] 15. Philippines, Palawan [HLL, 2.7 km ]
14. Philippines, Tawi-Tawi [FOB, 1.62 km ]
Initial investment in farming system USDkm 28.4
51.7 88.3
107.5 107.5
115.0 145.1
192.3 34.1
Off-bottom Floating raft
Floating line
FIGURE 11
Amortized capital costs of different farming systems
Notes: “km” measures the total length of the cultivation lines of a farming system; “years” measures the lifespan of a farming system. Source: Calculated, based on cases listed in Table 6.
1 2. India [raft, 1 ha, 54 km, 3.4 years] 7. Indonesia [raft, 6 km, 2 years]
8. Indonesia [raft, 30 km, 2 years] 20. United Republic of Tanzania [line, 0.324 km, 2.7 years]
13. Philippines, Zamboanga [FOB, 1.8 km, 2.2 years] 19. United Republic of Tanzania [off-bottom, 0.3 km, 1 year]
16. Philippines, Tawi-Tawi [HLL, 1.8 km, 2.3 years ] 15. Philippines, Palawan [HLL, 2.7 km, 3.0 years ]
14. Philippines, Tawi-Tawi [FOB, 1.62 km, 3.1 years ]
Amortized capital cost of farming system USDyearkm
9.2 11.4
38.8 51.6
52.2 53.0
53.7 53.8
56.7 Off-bottom
Floating raft Floating line
FIGURE 12
Economic efficiency of farming systems: evidence from the case studies
Notes: “km” measures the total length of the cultivation lines of a farming system; “ha” gauges the area of a farm site; “ty = tonnesyear” measures the farm’s annual production of dried seaweed; “years” measures the lifespan of a farming system.
Source: Calculated, based on cases listed in Table 6.
because its use of small cuttings 50 g resulted in relatively low productivity Robledo, Gasca-Leyva and Fraga, 2013. Although Case 13 has a relatively low efficiency among
the off-bottom systems, its efficiency is nevertheless higher than the floating raft system Case 17 and the floating line system Case 18 in the same area.
In Figure 12, most of the floating raft systems have a relatively low economic efficiency. Case 2 is an exception. Despite its relatively high amortized capital cost
Figure 11, the floating raft system in India operating six cycles per year Case 2 achieved a relatively high economic efficiency because of its relatively high productivity
Figure 8.
Supposing the price of dried seaweed were USD1 000, then the amortized capital costs of the farming systems in Figure 12 would be between 0.36 and 11.1 percent of
their farm revenues.
Vessel Vessels boats or canoes are needed for seeding, crop management, harvesting,
and transport of cargos cultivars, harvested fresh seaweeds, dried seaweed, etc.. Non-motorized vessels are usually used in small-scale operations and they are
convenient for tasks that do not require transporting heavy cargos e.g. routine crop management. Motorized vessels are needed for large operations and special tasks such
as transporting harvested fresh seaweeds especially for large harvests andor long- distance transportation.
An off-bottom farm located in shallow waters may only allow the use of non- motorized boats Hurtado, 2013, which tends to make the transport of large crops
inconvenient and costly. A floating device was developed in the United Republic of Tanzania to help farmers transport harvested fresh seaweeds to drying sites Msuya,
2013.
Depending on the size, materials and cost of labour used in boat construction, the costs of non-motorized boats used in carrageenan seaweed farming vary Table 7. The
evidence from the Indonesia and Philippines cases indicates that motorized vessels tend to be more expensive than non-motorized vessels Table 7.
Many smallholder farmers own at least non-motorized vessels e.g. dug-out canoes to facilitate routine crop management. Farmers with large operations may own
18. Philippines, Zamboanga [SW, 0.27 ha, 8.5 ty, 2.8 yrs] 11. Mexico [raft, 1 ha 50-g seed, 27 ty, 5 yrs]
17. Philippines, Zamboanga [MRLL, 0.05 ha, 2.85 ty, 2.8 yrs] 9. Mexico [off-bottom, 1 ha 50-g seed, 27 ty, 5 yrs]
7. Indonesia [raft, 6 km, 6.6 ty, 2 yrs] 8. Indonesia [raft, 30 km, 33 ty 2 yrs]
13. Philippines, Zamboanga [FOB, 1.8 km, 2.143 ty 2.2 yrs] 1. India [raft, 1 ha, 54 km, 4 cyclesyear, 72 ty, 3.4 yrs]
12. Mexico [raft, 1 ha 100-g seed, 54 ty, 5 yrs] 10. Mexico [off-bottom, 1 ha 100-g seed, 54 ty, 5 yrs]
2. India [raft, 1 ha, 54 km, 6 cyclesyear, 108 ty 3.4 yrs] 16. Philippines, Tawi-Tawi [HLL, 1.8 km , 2.75 ty, 2.3 yrs]
19. United Republic of Tanzania [off-bottom, 0.3 km, 0.662 ty 1 yrs] 20. United Republic of Tanzania [line, 0.324 km, 0.806 ty, 2.7 yrs]
14. Philippines, Tawi-Tawi [FOB, 1.62 km , 0.9 ty, 3.1 yrs] 15. Philippines, Palawan [HLL, 2.7 km , 8.57 ty, 3 yrs]
Amortized capital cost per unit of dried seaweed production USDtonne
16.7 3.6
21.3 23.4
25.5 28.4
28.4 41.1
42.6 43.9
48.9 48.9
71.6 56.9
82.3 111.1
Off-bottom Floating raft
Floating line
30
motorized boats that tend to be used also for activities other than seaweed farming Hurtado, 2013; Neish, 2013.
In Solomon Islands, owning a motorized boat was usually uneconomical for smallholder farmers. Although some of them may be able to borrow motorized boats
for use during harvest seasons, establishment of community-owned motorized boat transport was requested by seaweed farmers in the country to help them deliver
dried seaweeds to selling points Kronen, 2013. In the United Republic of Tanzania, 58 members of a cooperative contributed an average of USD5.9 TZS7 414 each to
build a community-owned vessel Msuya, 2013.
Evidence provided by the cases in Table 6 reveals no clear patterns on the economic efficiency of vessels used in different farming systems andor different countries
Figure 13. • The two cases in the United Republic of Tanzania Cases 20 and 19 had the
highest economic efficiency in vessels because of their low investment USD6 in the community-owned vessels.
• Given the same investment, the economic efficiency of vessels would be higher for a larger production scale e.g. Case 9 vs 10; Case 11 vs 12; Case 15 vs 16; and
Case 17 vs 18. It should be noted that as vessels may be used for activities other than seaweed
farming, the amortized capital cost for vessels in Figure 13 may be overestimated. On the other hand, besides amortized capital cost, the cost of vessels may be reflected
FIGURE 13
Economic efficiency of vessels: evidence from the case studies
Notes: “USD” measures the farm’s investment in vessels. “ty = tonnesyear” measures the farm’s annual production of dried seaweed; “years” measures the lifespan of vessels.
Source: Calculated, based on cases listed in Table 6.
TABLE 7
Examples of investment in vessels used in carrageenan seaweed farming
Countries Capital investment in vessels USD per boat
Source Non-motorized
Motorized
Indonesia 150
500 Neish 2013, Table 7
Philippines 120
526 Hurtado 2013, Table 4
United Republic of Tanzania
343
1
– Msuya 2013
1
A boat worth TZS430 000 owned by a 58-member cooperative.
17. Philippines, Zamboanga [MRLL, USD646, 2.85 ty, 5 yrs] 14. Philippines, Tawi-Tawi [FOB, USD120 , 0.9 ty, 5 yrs]
16. Philippines, Tawi-Tawi [HLL, USD526 , 2.75 ty, 5 yrs] 13. Philippines, Zamboanga [FOB, USD120, 2.143 ty, 5 yrs]
18. Philippines, Zamboanga [SW, USD646, 8.5 ty, 5 yrs] 7. Indonesia [raft, USD500, 6.6 ty, 5 yrs]
15. Philippines, Palawan [HLL, USD526 , 8.57 ty, 5 yrs] 9. Mexico [off-bottom, USD1077, 27 ty 5 yrs]
11. Mexico [raft, USD1077, 27 ty, 5 yrs] 8. Indonesia [raft, USD1300, 33 ty, 5 yrs]
10. Mexico [off-bottom, USD1077, 54 ty, 5 yrs] 12. Mexico [raft, USD1077, 54 ty, 5 yrs]
19. United Republic of Tanzania [off-bottom, USD6, 0.662 ty, 9 yrs] 20. United Republic of Tanzania [line, USD6, 0.806 ty, 9 yrs]
Amortized capital cost per unit of dried seaweed productionUSDtonne
0.8 1.0
4.0 4.0
7.9 8.0
8.0 12.3
15.2 17.1
18.7 38.2
44.4 50.9
Off-bottom Floating raft
Floating line
FIGURE 14
Economic efficiency of other physical capital investments: evidence from the case studies
Notes: Other capital investments include shelters, drying apparatus andor miscellaneous equipment and tools. “km” measures the total length of the cultivation lines of a farming system; “ha” gauges the area of a farm site;; “ty =tonnesyear” measures the farm’s annual
production of dried seaweed; “years” measures the average lifespan of other capital investments. Source: Calculated, based on cases listed in Table 6.
elsewhere such as the expense for hiring a boat or the price discount given to traders that shoulder the task of transportation.
Other physical capital investments In addition to the farming system and vessels, other physical capital investments in
carrageenan seaweed farming include shelters for activities such as attaching cultivars to lines Neish, 2013, drying apparatus Neish, 2013; Msuya, 2013, and miscellaneous
equipment and tools e.g. knives, diving masks, mats, ladders, baskets, tarps, sacks, and plastic bags. These items are often used in activities other than seaweed farming
Neish, 2013.
Only a few cases in Table 6 provide information on other capital investments Figure 14. In the Mexico cases, the economic efficiency of other physical capital
investments was increased by the use of larger cultivar cuttings Case 9 vs 10, and Case 11 vs 12. The Indonesia cases do not indicate apparent difference in the economic
efficiency for a small operation Case 7 and a large one Case 8.
Financial capital In India, farmers in a self-help group SHG, especially one in a contract farming
relationship with the processor, may be able to obtain bank loans to finance their initial investments in seaweed farming Krishnan and Narayanakumar, 2013.
In the India cases in Table 6, seaweed farmers paid USD12 Case 1 or USD8 Case 2 of loan interest for one tonne of dried seaweed production, which was 6.0 and
4.4 percent of the total production cost, respectively Krishnan and Narayanakumar, 2013, Table 6.
3.2 Operating expenses