Preparation of Enterprise budget for Integrated fish farming

Preparation of Enterprise budget for Integrated fish farming Enterprise budget for integrated fish farming o Budget is a statement of income and expenditure Enterprise means an economic activity undertaken to earn profit. Enterprise budget reflects real or anticipated income and expenditure of an economic activity.

Enterprise budget for integrated fish farming(Rs/ha/yr) A CAPITAL COST i) Pond digging cost 70, 000 ii) Cost of 100 ducks @ Rs 100/bird 10, 000 iii)Other. - 20, 000 -----1, 000 -------

B VARIABLE COST i) Lime ii) Manure iii) Fertiliser iv) Fish fingerlings v) Feed vi) Labour vii) Medicines viii) Other incidental charges -- 5, 000 12, 000 17, 000 10, 000 20, 000 10, 000 5, 000 11, 000 ------90, 000 ------

C FIXED COST i) Depreciation ii) a) on capital cost @ 15% b) On variable cost @ 10% iii) Repairs & Maintenance iv) Taxes v) Insurance Premium - 5, 000 15, 000 9, 000 6, 000 0 4, 000 ------34, 000 ------

D Total Cost (B+C) 1, 24, 000 E Total Income (i) 3000 kg fish @ Rs 60/kg (ii) 7000 eggs @ Rs 3/eggs (iii) Culled birds @ 80/bird for 90 birds 1, 80, 000 21, 000 7, 200 ------2, 08, 200 -------

F Net Income (profit, E-D) (Rs. 2, 08, 200 - 1, 24, 000) F Cost – benefit ratio a) On Total cost basis b) On Total Variable Cost basis 84, 000 1. 68 2. 31

§ However, we may have several options and frequently it may not be all that simple to find out that best “option” by working on manual methods. § However, using the linear programming technique, these problems could be solved in a computer in few minutes.

The Linear Programming problem § It is very important that we write down the linear programming problem clearly and correctly. Otherwise, the results obtained may not be meaningful. § We need to specify the decision variables, the objective function and the constraints for the linear programming problem irrespective of whether it involves maximization or minimisation

§ Let us take carp farming as an example. The important inputs used in carp culture are : pond area (optional), manure, urea, super phosphate, fingerlings stocked, groundnut oilcake, rice bran and labour. § These variables are therefore the decision variables. Then, we should write down the objective function which spells the contribution of each of these inputs for a particular levels of output.

§ In the case of fish culture, the objective function may mean total yield of carps farmed and harvested or total income obtained. In case the yield is to be maximized, then all the physical inputs should be included as decision variables. § On the other hand, if income maximization is attempted then information on prices, consumer preferences and demand, supply of substitution products and their prices etc. would need to be incorporated.

§ The constraints with reference to the various decision variables, pond area, water availability, capital etc. should be specified. § With these, a linear problem could be formulated for obtaining an optimal solution. It should be noted that clear and precise formulation of the problem is important as otherwise meaningful inferences could not be drawn from the results so obtained.

Applications of the L. P. techniques § Several applications of the linear programming technique in the case of fisheries are possible. In aquaculture, for example, suppose we need to formulate a feed of a certain protein content using about 30 ingredients in varying ratios. § Further, if the desired feed of specific protein content need to be a least cost one, then, this could be done using linear programming technique

§ In fish processing, several ingredients could be used in varying proportions in more than one processing method to manufacture a product at the minimum cost possible. § One may wish to know the optimum fish production plan in carp culture or marine fishing. All these problems could easily be solved using the linear programming technique.