2.1. Simulator Development
The bioeconomic simulator developed consists of three calculation centers: the shoal of tilapia that simulates one year of production in finishing fish farming (fattening), the zootechnical indices of tilapia, and cost and revenue control centers. The interaction of these three provides economic values such as Revenue, Cost, and Profit, as well as financial indicators such as net present value (NPV), internal rate of return (IRR), and benefit/cost ratio, among others (Gaspar et al., 2018). The bioeconomic model performs the calculations from the construction of the productive scenarios following the following illustrated sequence (Fig. 1):
To develop the bioeconomic model, electronic spreadsheets were used in the Microsoft Excel 2016 software system. The methodology used for the development of the bioeconomic model followed the method described by Brumatti et al., (2011). Some of the worksheets that make up the bioeconomic model are described below with a brief narrative of their functions:
•Data: The user inserts the data (inputs), which can be real or simulated (scenarios). The information gets uploaded from other worksheets, which are linked through pre-established formulas.
•Shoal Structure: The structure of the shoal, categorized according to the number of individuals, evolved in the course of a year, according to their previously established zootechnical indices. The simulator is able to establish the final number of animals that will be slaughtered per cycle and annually considering the following calculation:
•Finished animals MonoN(cycle) = area x density (unit/m²) x survival (%)
•Finished animals MonoC (cycle) = Number of cages x cage size (m³) x density (unit/m³) x survival (%)
In Multiphase Systems, the following calculations were considered to determine the final number of fish produced per cycle:
•Finished animals MultiN (cycle) = area (Phase 1) x density (Phase 1) (units/m²) x survival (Phase 1) (%) + area (Phase 2) x density (Phase 2) (units/m²) x survival (Phase 2) (%) + area (Phase 3) x density (Phase 3) (units/m²) x survival (Phase 3) (%)
•Finished animals MultiC (cycle) = Number of cages (Phase 1) x cage size (m³) (Phase 1) x density (units/m³) (Phase 1) x survival (Phase 1) (%) + Number of cages (Phase 2) x cage size (m³) (Phase 2) x density (unit/m³) (Phase 2) x survival (Phase 2) (%) + Number of cages (Phase 3) x cage size (m³) (Phase 3) x density (unit /m³) (Phase 3) x survival (Phase 3) (%)
To carry out the calculations using cages, the installation of small-volume cages (size 2.0m x 2.0m x 1.50m) was considered, with the number of cages per hectare of water mirror obtained through the ratio of water dilution of 1:10, that is, for each 1m² of water mirror of the cage, 10 m² of water mirror of the reservoir is considered (Furnaleto et al. 2006).
After identifying all the sources of income and expenses of the productive system, the next step is to obtain the results through mathematical-financial calculations described and adapted from Costa et al. (2018) and which will be presented in the Statement of Economic Results:
•Revenue (US$) = Total volume produced (kg) × sales price (US$/kg)
To obtain the total volume produced, the final weight of all fish finished during the production cycles within a period of one year was considered. Since it is a finishing fish farm, the only source of revenue considered was the finished tilapia. For the sale value, we considered what is commercially paid for a kilogram of tilapia in a local market (US$1.24) for fillet yield of 28%.
•Effective operating cost (EOC) (US$) = Σ (settlement + nutritional + sanitary + labor + maintenance + consulting and administration)
Each cost is calculated separately by the simulator, including:
Settlement: Amount that will be spent on the purchase of animals (fingerlings or juveniles) to carry out the settlement of nurseries or cages:
•Settlement (US$) = number of animals (thousand) × purchase price (US$/thousand)
Nutritional: Total amount spent on the purchase of feed, considering the quantities used in each growth phase.
•Nutritional (US$) = total feed used (kg) × purchase value (US$/kg)
Sanitary: Corresponds to the amounts spent for water quality control (quality kit), corrections (cathe, fertilization), and vaccines (when used). They are calculated by summing all items related to animal health.
Labor refers to permanent labor, considering the salary expressed in minimum wage (US$252.66; reference year 2019), plus social charges, which together are 62% of the monthly salary of each employee.
•Labor (US$) = ((number of minimum wages per month × minimum wage value + (salary value × percentage of social charges)) × 12) × number of employees
Maintenance: The sum of about one percentage (5%) of the amount invested in machinery, equipment, and improvements and a percentage (2%) of insurance on these investments.
Consulting and Administration: This is added to values related to daily veterinarian and zootechnist (when necessary) services and expenses for telephone, mail, energy, and genetic improvement (if it occurs).
•Gross profit (US$) = Σ revenue - Σ effective operating cost
•Total Operating Cost (US$) = Σ effective operating cost + depreciation + amortization
•Total Operating Income (US$) = Σ revenue - total operating cost
•Total Cost (US$) = Total operating cost + taxes
•Net Income (US$) = Σ revenue –total cost
•Net Margin (%) = (net income ÷ revenue) × 100
Some economic indicators were also calculated:
•Total Cost/ha (US$/ha): (Total cost × 10,000m)/total area (m²)
The same was done for revenue/ha and net income/ha. The total cost/kg produced was calculated considering the sum of all costs, which were divided by the total production (kg) during the year. Subsequently, following the same formula, revenue/kg produced, and net income/kg produced were calculated.
To represent the technical indicators obtained during a production cycle, the cost of the feed/kg produced (US$/kg), labor cost/kg (US$/kg), average productivity (kg/m²/cycle and year), and productivity (kg/ha/cycle) were calculated.
For the financial evaluation, formulas were used according to the methodology cited by Gitman (2010) and Gaspar et al., (2018), considering the annual inflows and outflows measured in cash flow for 10 years:
•Net Present Value (NPV): Sum of the present values of the estimated flows of an application (inputs and outputs), calculated from a given rate and period, subtracting the amount invested.
NPV = Σ current value of cash receipts - net investment
If NPV ≥ 0, the investment is accepted.
•Internal Rate of Return (IRR): The hypothetical discount rate, which makes the NPV of an investment alternative null, that is, equalizes the current value of the input cash with the net investment.
For this, we compare the IRR obtained with the opportunity cost of capital in an alternative use, given by the attractiveness rate; in this case the rate was 8% per year.
If IRR ≥ the cost of capital, the investment is accepted.
•Profitability Index (PI): The reason for the sum of the current entry values and the value of the initial investment, thus measuring the return on each real investment.
PI = Σ current cash value ÷ net investment
If PI ≥ 1, the investment is accepted.
•Cost-benefit ratio (CBR): Quotient of the current value of projected revenues(R) and the current projected cost value (C), including investments (I), required to develop the project.
CBR = Σ R ÷ (Σ C + Σ I)
If CBR ≥ 1, the investment is accepted.
•Payback: Time required for return on a given investment
Payback = Net investment ÷ average annual cash entries
After performing all calculations, the results were presented through the Statement of Economic Results (SER) and a table with risk indicators, thus facilitating the interpretation and comparison of the results obtained.
2.2. Simulated Scenarios
For the test of the functionality of the bioeconomic simulator several steps were necessary. All of them were described below, as well as the formation of the scenarios.
The study was developed under the productive conditions of tilapia found in Brazil, more specifically, in the central region of the country, where the climate is tropical, which favors the production of tilapia throughout the year. The data used in the bioeconomic fattening simulator contained information on the characteristics of economic interests that were considered, from fillet weight to fishing and fillet yield. These data have been standardized based on the conditions of intensive production systems that generally work with genetically enhanced animals.
One property was described (Table 1), and in it four different production scenarios were simulated with the following combinations: Multiphase x Nursery (MultiN), Multiphase x Cage (MultiC), Monophase x Nursery (MonoN), and Monophase x Cage (MonoC). In each scenario, the zootechnical and productive indicators used were defined, considering the average of these indicators found in the different regions of the country, so that they would be representative. The physical structure necessary for the process of fattening, such as area, improvements, installations (production infrastructure), and inputs were estimated based on the needs of each of the systems but keeping as little difference as possible.
Table 1
Characterization of the property* and the scenarios for testing the bioeconomic simulator of tilapia termination.
Description
|
MonoC
|
MonoN
|
MultiC
|
MultiN
|
Total Area (m²)
|
10.000
|
10.000
|
10.000
|
10.000
|
Available area (m²)
|
7.840
|
7.840
|
7.840
|
7.840
|
Number of cycles/years
|
2
|
2
|
4
|
4
|
Cycle duration (days)
|
180
|
180
|
180
|
180
|
Number of stocked (unid)
|
94.080
|
47.340
|
89.630
|
32.538
|
Number of finished (unid)
|
89.376
|
44.973
|
72.802
|
26.429
|
Density Phase 1 (unid/m² or m³)
|
80
|
6
|
500
|
25
|
Density Phase 2 (unid/m² or m³)
|
-
|
-
|
350
|
15
|
Density Phase 3 (unid/m² or m³)
|
-
|
-
|
100
|
6
|
Cage size (m³)
|
6
|
-
|
6
|
-
|
Survival Phase 1 (%)
|
95
|
95
|
90
|
90
|
Survival Phase 2 (%)
|
-
|
-
|
95
|
95
|
Survival Phase 3 (%)
|
-
|
-
|
95
|
95
|
Thousand purchases (US$)
|
119.00
|
119.00
|
119.00
|
119.00
|
Sale Price(US$/kg)
|
1.24
|
1.24
|
1.24
|
1.24
|
Starting Weight (g)
|
30
|
30
|
30
|
30
|
Final Weight (g)
|
0.800
|
0.800
|
0.800
|
0.800
|
Fillet Yield (%)
|
28
|
28
|
28
|
28
|
Labor utilization rate (m²)
|
5.000
|
5.000
|
5.000
|
5.000
|
US$ 1.00 = R$ 3.95 (annual average 2019 - Central Bank) *Simulated data
|
The productive conditions were maintained in all scenarios, with high productive and technological levels (use of genetically improved animals and use of aerators), allowing the simulation to determine the economic and financial results for the different models. The labor utilization rate provides a way to calculate what manpower is required in a given area of the property through the simulator, where the average area (m²) that will be in the care of a fixed employee is defined.
The densities used in each production system were based on the system’s support capacity, respecting the existing limits in the system and property, but seeking to work in the economic biomass range (kg/ha) recommended for each system according to SENAR (2018a), in small volume and high density cage - PVAD (less than 18 m³), it is possible to work with fish densities ranging from 80 to 180 kg/m³, because they have a smaller volumetric size the rate of water renewal will be higher, allowing high densities. In production carried out in a nursery, in the frying phase it is possible to work with densities of 25 fish/m². For the re-creation phase, the use of 3 fish/m² is recommended. In the last phase (fattening), density of 1 fish/m² is recommended. In the recreate and fattening phases, densities may be higher (6 to 7 fish/m²) with the use of aerators (from 10 to 20 hp/ha) and with greater water renewal in nurseries (10 to 20%) (SENAR, 2018b).
The MonoC and MonoN systems are composed of a single phase, starting with fingerlings of 30 grams that remain in the cage or nursery until they reach the slaughter weight (0.800grams). The MultiC and MultiN systems consist of three phases: in phase 1, the fingerlings at 30 g remain in the cage until they reach 200 g; in phase 2, the juveniles enter at 200g and remain until they reach 400 g. In phase 3, the fish enter at 400g and leave only when they reach the defined slaughter weight (0.800 g).