Impact of the adoption of BMPs on social welfare: A case study of commercial floating feeds for pond culture of tilapia in Ghana

Abstract

Best management practices (BMPs) are the most cost-effective means of mitigating negative impacts of pond aquaculture on the environment. The impacts of BMPs and other innovations on fish farm profits have been studied widely. This study estimates impacts of BMP adoption on social welfare. We employed the economic surplus model to determine net present value (NPV) of adopting the more expensive but less polluting commercial floating fish feed in the pond culture of Nile tilapia (Oreochromis niloticus) in Ghana. We also conducted a sensitivity analysis to determine which variables had the greatest influence on mean NPV. Our results indicate an NPV of US$ 11 million from the adoption of commercial floating feed in pond farming alone in Ghana. The variables with the biggest impacts on NPV were level of change in tilapia yield, and level of change in production costs, with the adoption of the new feed type. We conclude that adoption of yield-enhancing BMPs and innovations in Ghana will result in significant social welfare benefits. We recommend that credit programs and other financial packages be set up by governments or nongovernmental organizations to help farmers meet the increased cost of fish feed and to accelerate diffusion of commercial fish feed in pond farming.

Keywords:

• economic surplus
• Monte Carlo simulation
• net present value
• aquaculture
• social discount rate
• best management practice
• sub-Saharan Africa
• aquafeed

Public Interest Statement

The aquaculture industry has the potential to provide much needed low-cost protein, employment, and other socioeconomic benefits, in addition to reducing the pressure on wild fish stocks. Fish farming is therefore being actively promoted in sub-Saharan Africa. However, most forms of aquaculture result in environmental impacts, such as the pollution of rivers from pond effluents. Environmental best management practices (BMPs) are the most feasible means to reduce the negative impacts of fish farming on the environment due to the relatively dilute nature of fish ponds that defy conventional waste treatment. This study estimates the economic benefits to a developing country (Ghana) from the adoption of an aquaculture BMP that simultaneously solves an environmental impact and economic profitability problem. Our results will inform the local ministries and the international development community to design economic and environmental policies specific to agriculture in general and aquaculture in particular.

Competing interests

The authors declare no competing interests.

Acknowledgments

We would like to thank Drs. Eric Hallerman, Stephen Schoenholtz, and Kurt Stephenson, all of Virginia Tech, for providing input to the project plan. Iris Fynn, Abena Amponsah, Sally Degollo, Michael Sasu, Leonie Siamah, Gloria Appiah-Sefa, Gloria Addae, Alloysius Attah, Derek Owusu, Simeon Odametey, Abigail Tarchie, Ignatius Yawlui, Raphael Ahiakpe, Pascaline Okongo, and Caitlin Worsham, from Virginia Tech in the USA, and the Kwame Nkrumah University of Science and Technology in Ghana, helped with questionnaire administration and data entry. The opinions expressed herein are those of the authors and do not necessarily reflect the views of the US Agency for International Development.

Cover image

Source: Authors.

Additional information

Funding

This research was a component of the AquaFish Innovation Lab, supported by the US Agency for International Development (USAID) [grant number CA/LWA No. EPP-A-00-06-0012-00] and by contributions from participating institutions. The AquaFish Innovation Lab accession number is 1429.

Notes on contributors

Yaw B. Ansah

Yaw B. Ansah received a PhD from the Department of Fish and Wildlife Conservation, and an MSc from the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University (Virginia Tech), USA. His research focus is assessing the impacts of aquaculture BMPs at various levels: farm profitability, social welfare, and environmental sustainability (e.g. pollution reduction) from aquaculture.

Emmanuel A. Frimpong

Emmanuel A. Frimpong is an associate professor at Virginia Tech, USA. He studies fish biology and aquaculture. He is PI of aquaculture development research in sub-Saharan Africa funded by the USAID AquaFish Innovation Lab. He supervised YBA’s dissertation under the project “enhancing profitability of pond aquaculture in Ghana, Kenya, and Tanzania through improved natural resource management and environmental best management practices” out of which the current manuscript was created.