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the raft farmer could earn about USD4.3 per day, amounting to USD1 150 per year for 270 days of production.
Although monoline culture appears to be more profitable than raft culture, the operational difficulties may be greater there is a higher threat of grazing by fish; ropes
could break, leading to crop loss; and plot maintenance is labour-intensive. The above analysis is based on the assumption of 400 kgcycle for monoline culture.
If the yield is only 350 kgcycle, then the net profit will be only INR210, similar to the raft culture.
The non-monetary advantages of raft culture make it a preferred system choice in Ramanathapuram District. Therefore, this study concentrates on the socio-economics
of the raft culture system.
Profitability and viability of raft culture Consider the 3-year operation of a 1-ha seaweed farm with 900 rafts with the following
specifications: • Each raft contains 60 m lines for growing. With 900 rafts, the farm has 54 km of
lines for growing. • After three years of operation, a new set of investments needs to be made.
• One production cycle lasts 45 days. There are 4 production cycles in the first year and 6 cycles in the second and third years.
• In a production cycle, each raft is planted with 60 kg of seed material and produces 20 kg of dried seaweed after part of the harvest is set aside as seed materials for
the next cycle.
Item no. Item
A 3 m × 3 m raft 60 m lines for growing
1
Monoline 60 m lines for growing
1 Production
2 - Initial seed materials kg
60 60
3 - Fresh seaweed per 45-day cycle kg
280 400
4 - Fresh seaweed reserved as seeds kg
60 100
5 - Dried seaweed product kg
20 28
6 Price of dried seaweed INRkg
16 16
7 - Price of dried seaweed USDtonne
331 331
8 Revenue INRcycle
320 448
9 Cost INRcycle
114 158
10 - Operational expense including depreciation
106 158
11 Farming system
95 38
12 Initial seeding
4.2 –
13 Tools
6.7 –
14 Operation
– 70
15 Cost of harvesting
– 50
16 - Financial expenses
8.2 –
17 Interest
6.8 –
18 Insurance
1.4 –
19 Net profit INRcycle
206 290
20 Net profit USDcycle
4.3 6.0
1
Data for the raft system adapted from Seaweed Culture, Golden Jubilee Village Self Employment Opportunities, Government of Tamil Nadu 2008-09.
Notes: USD1 = INR48.405 2009. 8 = 5 × 6. 9 = 10 + 16. 12 Including only the cost of seed transportation. 19 = 8 – 9. Numbers may not add up due to rounding.
TABLE 4
Financial analysis of raft culture vs monoline culture in India
TABLE 6
Annual revenue, cost and net profit of a 1-ha seaweed farm with 900 rafts
Item no. Item
Unit 1st year
4 cycles per year 2nd and 3rd years
6 cycles per year 1
Annual dried seaweed production per cycle: 20 kgraft
tonnesha 72
108
2 Price of dried seaweed
USDtonne 331
331
3 Annual revenue
USDha 23 799
35 699
4 Annual costs
USDha 14 339
19 471
5 Fixed cost
USDha 4 076
4 076 6
- Depreciation USDha
3 066 3 066
7 - Interest on investment 7
USDha 864
864 8
- Insurance 1.2 USDha
147 147
9 Operating cost
USDha 10 263
15 395 10
- Braider twining charges USDha
2 231 3 347
11 - Transportation
USDha 1 934
2 901 12
- Raft maintenance USDha
5 875 8 813
13 - Miscellaneous
USDha 223
335 14
Annual net profit USDha
9 460 16 228
15 Annual net profit per kilometre of line
USDkm 175
301 16
Profit margin 40
45
17 Break-even price
USDtonne 199
180
Notes: USD1 = INR48.405 2009. 3 = 1 × 2. 4 = 5 + 9. 5 = 6 + 7 + 8. 9 = 10 + 11 + 12 + 13. 14 = 3 – 4. 15 = 1454. 16 = 143100. 17 = 41. Numbers may not add up due to rounding.
The initial investment requirements for the seaweed farm are summarized in Table 5. The annual revenue, cost and net profit of the farm are summarized in Table 6. The
results indicate that: • The farm is profitable with USD9 460ha USD175km of line for the first year
4 cycles and USD16 228ha USD301km of line for the second and third years 6 cycles per year.
• The profit margins are 40 percent for the first year 4 cycles and 45 percent for the second and third years 6 cycles per year.
• The break-even prices USD199tonne for the first year and USD180tonne for the second and third years are much lower than the actual price USD331tonne.
The cash flow situation of the three-year operation is summarized in Table 7. The results indicate that:
• The farm’s net cash inflow is USD190 for the first year and USD19 293 for each of the second and third years.
• The positive cash inflow in the first year implies that the farm can recover its investment within the first year. Specifically, the pay-back period for the operation
is about 0.98 year. • The internal rate of return IRR of the 3-year operation is 110 percent.
Item no. Item
Unit Annual amount
1 Initial investment
USDha 12 336
2 - Seedlings 54 tonnes
USDha 1 952
3 - Farming system 900 rafts
USDha 10 383
4 Initial investment per kilometre of lines
USDkm 228
TABLE 5
Initial investment for a 1-ha seaweed farm with 900 rafts 54 km of growing lines
Notes: USD1 = INR48.405 2009. 1 = 2 + 3. 4 = 154. Numbers may not add up due to rounding.
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Summary In sum, the above analyses provide strong evidence of the economic and financial
profitability and viability of seaweed farming in Tamil Nadu. The estimated high rate of return on investment is consistent with the findings of Padilla and Lampe 1989,
who calculated an IRR of 78 percent for seaweed farming in the Philippines; Shang 1976, who estimated an IRR of 56 percent for Gracilaria cultivation; and Firdausy
and Tisdell 1991, who reported an IRR of 123 percent in Bali. Seaweed farming has thus emerged as one of the most profitable livelihood options for coastal fishing
communities in various locations of the Asian continent.
3.3 Social performance
