Profitability analysis of small-scale catfish farming in Kaduna State, Nigeria

This study analysed the profitability of small-scale catfish farming in Kaduna State, Nigeria. Sixty respondents were randomly selected and interviewed using interview schedule to elicit information through multi-stage sampling technique. The data were analysed using frequency, percentages, mean, and ranking while budgetary analysis (gross-margin) was used to determine the profitability of catfish farming. The result shows that majority (70%) used the concrete pond of an average of 200 m 2 . The source of their capital was mainly from personal savings (48.3%). The quantity of fingerlings raised ranges from 500-6000 at 20 fingerlings/m 2 . Majority (55%) of the respondents raised between 3000 and 6000 fish per cycle at 6 to 8 tons/ha -1 year -1 . Quantity of fish raised and consumed had contributed positively to respondents’ household income. However, savings from catfish farming has contributed about 20 to over 75% of the total income of the respondents. The result of profitability reveals that respondents had an average of about ₦774,223.05 and net gross percentage of 73.4% per production cycle. Inadequate capital, scarcity of fingerlings, and inadequate extension services were the major problems facing catfish farmers. The study recommended that catfish farmers should be encouraged to form and manage functional cooperatives as a way to pool their resources for individual development within the fish farming industry. Also, the government should subsidize the prices of input used in fish farming.


INTRODUCTION
Fish constitutes about 41% of the total animal protein intake by the average Nigerian hence there is great demand for fish in the country. Nigeria requires about 2.66 million metric tons of fish annually to satisfy the dietary requirement of its citizens (150 Million). Regrettably, the total aggregate domestic fish supply from all sources (capture and culture fisheries) is less than 0.7 million metric tons per annum. Nigeria has to *Corresponding author. E-mail: issafola@gmail.com. Tel: +2348033339312. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 4.0 International License import about 0.7 million metric tons of fish valued at about $500 million annually to augment the shortfall. This massive importation of frozen fish in the country has ranked Nigeria the largest importer of frozen fish in Africa (FMARD, 2011). It is projected that the per capita consumption of fish would be 13.5 kg from 2010 to 2015, while projected demand for fish would have increase from 1,430,000 tons in 2000 to 2,175,000 tons in 2015, with supply gap deficit of 1,444,752 tons (FMARD, 2011).
Statistics indicate that Nigeria is the largest African aquaculture producer, with production output of over 15,489 tonnes per annum, which constitutes about 4% of the nation's agricultural GDP (Federal Office of Statistics, 1999). However, FAO estimated that Nigeria imports about 560,000 tonnes of fish estimated at about $400 million annually while annual domestic fish supply in Nigeria stands at about 400,000 tonnes. This makes Nigeria one of the largest importers of fish in the developing world (FMARD, 2011). To solve the country's high demand for fish, Nigerians must turn to their underutilized in-land water for improved fish production and aquaculture. However, catfish farming expansion has been a slow process as private sector fish farmers have faced major constraints including lack of good fingerlings and quality feed (Akolisa and Okonji, 2005) and Kaduna State is not in any way insulated from these constraints.
As in most parts of Africa, the most commonly cultured species of fish in Nigeria include catfish (Clarias gariepinus), the imported tilapia and carp (Oreochromis niloticus and Cyprinus spp.). Many fish farmers focus on catfish, as they can have a high market value of two to three times that of tilapia (Emokaro et al., 2010). According to Amiengheme (2005), the importance of fish in human nutrition cannot be overemphasized as food fish has a nutrient profile superior to all terrestrial meats (beef, pork and chicken, etc) being an excellent source of high quality animal protein and highly digestible energy.
Nigeria has a land area of 923,768 km 2 with a continental shelf area of 47,934 km 2 and a length of coast line of 853 km. It also has a vast network of inland waters like rivers, flood plains, natural and man-made lakes and reservoirs (Shimang, 2005). The inland water mass was estimated to be about 12.5 million hectares of inland waters capable of producing 512,000 metric tons of fish annually (Ita,1993;Shimang, 2005). Kaduna State has a fair share of the vast fisheries resources. These include rivers, dams, and ponds where many fishing activities take place. Domestic fish production of about 500,000 metric tones is supplied by artisan fisher-folk (85%), despite over fishing in many water bodies across the country (Adekoya and Miller, 2010).
Despite these considerably high potentials, local fish production has failed to meet the country's domestic demand (FAO, 1999). The fish industry remains the most virgin investment in Nigeria compared with the importation of frozen fish in the domestic market (Taiwo, 2011). Lack of access to microcredit, insufficient investment and lack of information were identified among the key constraints in the aquaculture industry in Nigeria (FMARD, 2011).
A sure means of substantially solving the demandsupply gap is by embarking on widespread homestead/small scale catfish production. However, the sources of this effort must be anchored on analysis of profitability of catfish production. Therefore, this study was designed to determine the resources, costs and returns, and other factors affecting catfish production in Kaduna State.
The analysis of the catfish farming will: give an insight on how fishfarmers source their working capital and expenditure, indicate the level of fish production, indicate the contribution of catfish business to the household income of the fishfarmer, and ascertain the cost of and returns of the small-scale catfish farming. The broad objective of this study is to assess the profitability of catfish farming in Kaduna State. The specific objectives are to: i. Determine the profitability of small-scale catfish farming in the study area; ii. Describe the contribution of small-scale catfish farming to household savings and income; and iii. Describe the problem militating against small-scale catfish farming in Kaduna State.
The high demand for fish which cannot be met by local production and import has pushed the market price of catfish beyond the reach of ordinary Nigerians, coupled with the taste for fresh fish consumption. As such, catfish consumption in Nigeria remains the delicacy of the wealthy. Engaging in catfish farming in Nigeria is a gold mine that can guarantee 100% return on investment with 90 days payback period (Emokaro et al., 2010;Business World, 2011). There are two marked seasons in the State, the dry windy season and the rainy (wet) seasons. The wet season is usually from April through October with great variations as one moves northward. On the average, the State enjoys a rainy season of about five months. There is heavy rainfall in the southern parts of the State like Kafanchan and northern parts like in Zaria with an average rainfall of about 1016 mm/per annum.
This study focused on catfish farmers in Kaduna State. Four Local Government Areas (LGAs) were purposively selected for the study based on their high involvement in catfish farming. These LGAs are Kaduna North, Kaduna South, Sabon-Gari and Chikun. A simple random sampling technique was used to select 60 catfish farmers from the list of catfish farmers obtained from Kaduna State Agricultural Development Project (KADP). A reconaisance survey was also carried out to verify the list of farmers so obtained. The 10% proportionate selected sample included twenty (20) catfish farmers from Kaduna south, 15 from Chikun, 15 from Kaduna north and 10 from Sabon-Gari. A total of sixty (60) fishfarmers were used for this study. Primary data was collected using structured interview schedule. Secondary data was obtained from published articles, journals, textbooks and the internet. Personal observation was also utilized in data collection. Frequency, mean, percentages and standard deviation was used to achieve objectives ii and iii while Gross margin (GM) analysis was used to determine the profitability of small scale catfish farmers.

Management analysis of catfish farming
The result in Table 2 shows that 70% of the respondents use concrete ponds. The preference for concrete over the earthen by most farmers might not be unconnected with the fact that the earthen ponds are more venerable to predators as well as the high cost of maintaining the earthen ponds.
Personal savings was the major source of capital investment in catfish farming as indicated by 65% of the respondents. Only 8.3% each of the respondents source capital from agricultural banks and commercial banks. This implies that majority of catfish farmers fund their business themselves. This may be because most of the respondents are small scale farmers and their capital investment requires lesser amount of capital, which they can raise themselves. It could also imply that small scale farmers do not have the required collateral to get capital from other sources especially the commercial banks. It may also be due to high interest rate charged by the banks.
Also, Table 1 shows that majority (45%) of the catfish farmers raised within the range of 2500 to 6000 fingerlings at a stocking density of 20 fingerlings/m 2 and a Issa et al. 349 mean pond size of 200 m 2 . The result of the survey shows that 90% of the respondents lose between 1 and 5% of their total stock raised. This indicates that catfish farming is viable since 5% mortality is an acceptable mortality range in fish farming business. About 55% of the respondents produce within the range of 3100 to 5000 while 13.3% of the respondents produced above 5000 kg. This is in line with the stocking quantity of 2,500 ealier indicated. The result shows 41.6% of the catfish farmers sold between 2100 to 5000 kg while only 6.7% sold more than 10000 kg. Over 51% of the respondents consume between 1 and 10% of the fish produced while only about 13% give between 1 and 10% of their fish production per cycle as gift.

Percentage income saved from catfish farming
Majority (40%) of the respondents saves between 15 and 30% of their total income per production cycle as shown in Figure 1.

Percentage contribution of catfish farming to total income
In 2010, catfish farming contributed between 51 and 75% of the total income of majority (60%) of the respondents. A closer look at the result in Figures 2 revealed an increase in the percentage of respondents who had higher percentage of contribution of fish farming to their total income from 2008 to 2010. This might not be unconnected with incresed scale of production over the years indicated.

Price of fish
As indicated in Table 2, majority (66.7%) of the respondents sold catfish (average of 2 kg) for between ₦400 and ₦450. Market forces such as number of buyers determine the price of goods in the market. Hence, price variation was expected in the various locations within the study area due to variation in population density.

Major problems of catfish production
The major problems of catfish production as indicated by the respondents and shown in Table 3 were capital (71%); marketing (60%); and pests and diseases (33.3%). Others include high cost of inputs (25%) and lack of government incentives (20%).

Profitability of catfish farming
The profitability of catfish farming is shown in Table 4.   The results of the gross margin analysis of cat fish production in the study area reveals that respondents spent an average of ₦472437.03 on while the average variable cost which was 59.2% of the average total cost and amounted to ₦279,665 and average fixed cost was 40.8% of the average total cost. Also the average revenue/income generated from cat fish farming indicated ₦1,053,887.3 with an average profit of ₦581,451.02 and gross margin of ₦46,453,383 and average gross margin of ₦774,223.05. This implies that with the capital invested in catfish farming resulted in a high income realized from the business. The result also shows that the higher the invested capital the higher the income realized from the catfish farming. Furthermore, the analysis of the gross margin indicated that catfish farming is profitable and has contributed positively to the total income of the respondents in the area. Ogundari et al. (2006), reported a return to scale of 0.841 in a study of aquaculture in Oyo State, Nigeria indicating that aquaculture posses enough potentials for economic returns. Emokaro et al. (2010) found that the gross revenue of catfish farming in Kogi State covered the total cost 1. 82 times. Also, the findings   (2011) in this study compare favourably with those of Emokaro and Ekunwe (2009) who examined the efficiency of resource-use among catfish farmers in Kaduna, Nigeria and that of Ehirim and Onyeka (2002), who estimated the technical efficiency in Aquaculture in Oyo State and concluded that opportunities exist for increased efficiency (and by implication, profitability) in Aquaculture. The result is however in contrast with the findings of Louise (1977), who found that many fish farms in the UK now operate on marginal profit and those farms which are successful are generally those farms with reduced cost of production due to rigorous standards of husbandry and management, and good market development.

CONCLUSION AND RECOMMENDATIONS
This study concludes that catfish farming is profitable. Based on the findings from this study, the following recommendations were made: