REDUCING POST- HARVEST LOSS OF THE ARTISANAL
DAGAA FISHERY IN LAKE VICTORIA TANZANIA: ’A COST
AND BENEFIT ANALYSIS’ .
LILIAN IBENGWE
(The Ministry of Livestock and Fisheries Development)
SUPERVISOR:
Prof. DAÐI MÁR KRISTÓFERSSON
(University of Iceland)
IIFET 2012 Tanzania Proceedings
Presentation Outline
I. Introduction
II. Methodology
III. Results
IV. Recommendation and Conclusion
IIFET 2012 Tanzania Proceedings
I. Introduction: Background
information
• Tanzania is a coastal
state on the Western
Indian Ocean.
• Richly endowed with
natural water bodies.
• Fisheries play a very
important role.
IIFET 2012 Tanzania Proceedings
I. Introduction: Overview of Lake
Victoria fisheries.
• The Lake Victoria fishery is the most important in
Tanzania in terms of;
quantity of fish landed, value and
provision of employment
• In 2011 the annual catches 341,065 tons. of which
240,255 was from Lake Victoria.
• Annual export from the lake was 88%.
• Dominated by three species:
Nile perch,
Dagaa and
Nile Tilapia
IIFET 2012 Tanzania Proceedings
I. Introduction: Dagaa fishery
(Tanzania).
Total fish landing on Lake Victoria
.
Nile Perch
16%
Dagaa
5%
41%
Tilapia
• Dagaa constitutes 38%
of total fish landings.
• Ranking second in
economic importance
to NP.
Others
38%
• High level of postharvest loss > 50%.
IIFET 2012 Tanzania Proceedings
I. Introduction: Post-harvest loss
Interrelationship of different types
of losses in fisheries.
Market oversupply
Sales increase in length
Reduced price in fresh fish
Quality change in fish
Market loss
Low fish price
Rejection/Dumped
• Post-harvest loss (PHL):
Loss of fish through
various stages of
distribution chain.
• Types of PHL
Physical loss
Quality loss
Market loss
Quality loss
Physical loss
(Akande and Diei-Ouadi 2010)
IIFET 2012 Tanzania Proceedings
I. Introduction: Causes of dagaa postharvest loss.
Dagaa soaked with rain
water
Drying on
ground
IIFET 2012 Tanzania Proceedings
I. Rationale
• There is lack of information on the cost and
benefit of management interventions for
reducing dagaa post-harvest loss .
• A better understanding of basic economics will
be useful for setting appropriate management
strategies.
IIFET 2012 Tanzania Proceedings
What to be done? -Introduction to
Drying racks
•
To set a management strategytechnical innovation of low cost
technology in handling ,processing
&storage.
•
Drying rack advantages(Uganda):Reduce post-harvest loss by half.
Higher quality product
Shorter drying time
A cleaner product is obtained
Drying racks
Drying dagaa
on racks
IIFET 2012 Tanzania Proceedings
II. Drying Racks- Material used to
construct
• Drying racks are made either from:Locally available materials such as:bamboo, tree branches, mosquito
netting, old fishing nets, (at very little cost).
Using expensive /durable materials like:metal wire mesh,
tie wire, and square pipe (angle post).
The use durable drying rack was proposed in
this study.
IIFET 2012 Tanzania Proceedings
II. Methodology
• Enquiry of data through Tanzania
and Uganda Fisheries
department
Rack design, dimension and
material. Descriptions were sent
to Tanzania, to obtain the actual
cost quotation.
Price differences btn product
dried on ground and that dried on
drying racks.
• Drying racks- How to
construct
We need 2 m width, 8
m lengths and 1.6 m
height square steel pipe
(1.5” diameter).
The pipes welded to
make the structural
framework. The top is
then covered with wire
mesh.
IIFET 2012 Tanzania Proceedings
III. Methodology
• Cost And Benefit
Analysis.
It is straight
forward, organised and
analytical method.
Cost
Compares benefit and cost in
evaluating the net profitability of
a project of social nature, with
time differences taken into
account.
IIFET 2012 Tanzania Proceedings
Benefit
III. Cost And Benefit Analysis
• Analysis was categorised as:
1) Assessment of all possible dagaa post-harvest losses
- PHFLA standards in dagaa fishery (Mgawe-FAO 2008)
Fresh wt.(tons) Dry wt. (tons) Equivalent Loss (Million Tshs.)
REASONS FOR LOSS
Estimated dagaa landing
100
197,200
35%
% Loss
0.9%
1,775
621
1,242
Animal predation
2%
3,944
1,380
2,761
Types of loss
i).Physical loss
Physical damage during fishing
Discarded after prolonged rain
4%
3,155
1,104
2,209
Theft
0.1%
197
35
70
Sinking sacks during transportation
0.7%
1,380
520
1,040
Presence of by-catch
2.5%
4,930
1,750
3,500
Quality degradation through rain
11%
22,400
7,840
14,112
Change in colour before being sold
30%
59,160
21,000
10,500
Fragments/ drying grass
8%
15,776
5,600
10,080
ii).Quality loss
TOTAL PHYSICAL AND QUALITY LOSS
45,514
59.2%
iii).Market practices
Unfair marketing practice
Loss due to insect infestation
Loss in terms of levy evasion
7,700
Not quantified
Not quantified
IIFET 2012 Tanzania Proceedings
15,400
III. Cost And Benefit Analysis
2) Assessment of the cost of reducing the losses
Equation …1
3) Assessment of the anticipated benefits
associated with using drying racks.
B (t)
Equation …2
4) Evaluation of costs and benefits to determine
net benefit and NPV
T
NPV = ∑
t =0
B (t ) − C (t )
(1 + r )
Equation…3
t
IIFET 2012 Tanzania Proceedings
III. Methodology- Sensitivity
Analysis.
• The cost and benefit analysis is subject to
substantial uncertainty.
• Sensitivity analysis was used to check the
robustness of the calculated Net Present Value
(NPV) for drying racks project.
• Conducted by working out percentage change
from -50% to 50% in NPV.
• Assumptions were set to investigate how changes
in values of implementation cost, investment
cost, Catches and sales price would impact the
NPV.
IIFET 2012 Tanzania Proceedings
IV. Results
1.) Assessment of all possible dagaa post-harvest –xl
sheet
Average
days of
Average
Average catch
catch/day/kg/fisher fishing/month catch/month (tons.)/year/fisher
21
20
420
5
Estimated post- harvest loss for individual
fisher
Processing
Total
Post- harvest loss Fresh wt
method
catch/fisher/year/(kg)
%
(kg)
Drying on ground
5,040
59%
Drying on racks
5,040
30%1,494
2,984
Dry wt.(kg) Eqv.
35%
1 USD is set equivalent to 1480 Tanzanian shillings (2010)
IIFET 2012 Tanzania Proceedings
Loss (USD)
Loss (T.Sh)
1,044
1,139
1,685,720
523
662
980,456
IV. Results
2) Assessment of the cost of reducing the losses
Estimated cost of construction of 1 drying rack
Items
Construction Materials
Year 1
Price (US$)
Year 2-5
Price (T.Sh)
Price (US$) Price (T.Sh)
Pipes
24
35,520
Mesh wire
26
38,480
26
38,480
5
7,400
5
7,400
34
50,320
34
50,320
9
13,320
9
13,320
Sub -Total (Material cost)
98
145,040
74
109,520
Capital cost for rack
17
24,947
13
18,837
Material cost for 1 rack
98
145,040
74
109,520
Capital cost for racks
17
24,947
38
56,512
Total investment cost
115
169,987
112
166,032
Tie wire
Labor
Transport
IIFET 2012 Tanzania Proceedings
IV. Results
3). Assessment of the anticipated benefits associated with using
drying racks
Benefit of using drying racks
Category/catch/loss/benefit
Wt/Kg
Total catch available/fisher/year
Value (USD) Value (T.Sh)
5,040
Physical loss/wt/kg
388
Quality loss wt/kg
2,596
Total loss/wt/kg
2,984
Left for selling in wt/kg
2,056
Earning from Quality loss product
Earning from left wt for selling
Total Earning
Loss occured after using dying racks
Benefit drying on ground
1,344,521
1,224
1,810,795
2,132
Loss occurred when drying on ground
Benefit drying on racks
908
3,155,316
1,139
1,686,264
662
980,456
1,470
2,174,860
993
1,469,052
IIFET 2012 Tanzania Proceedings
IV. Results
4) Evaluation of costs and benefits to determine net benefit and NPV
Cost-Benefit Analysis for Drying racks Project (five years)
ITEMS
COST (T.Sh)
YEAR
1
2
3
4
5
Investment 1 racks
169,987
166,032
166,032
166,032
166,032
Taxes/Revenue
325,113
325,113
325,113
325,113
325,113
Total cost
495,100
491,145
491,145
491,145
491,145
Benefit drying on racks
2,174,860
2,174,860
2,174,860
2,174,860
2,174,860
Net Benefit
1,679,760
1,683,715
1,683,715
1,683,715
1,683,715
BENEFIT( T.Sh)
Present Value
NPV /T.Sh
1,433,243
1,225,782
1,045,889
5,358,742
IIFET 2012 Tanzania Proceedings
892,397
761,431
IV. Results
•
Sensitivity analysis chart on different % changes
of investment cost, price(USD) and quantity of
dagaa (kg).
2,500
2,000
1,500
1,000
Investment cost
500
Quantity of catches
0
-500
Sales price
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
NPV (USD)
• Percentage changes
from -50% to 50% in
NPV.
different scenarios of
assumptions
(investment cost, sales
price and catches).
varying a single
assumption while
holding others constant.
-1,000
-1,500
-2,000
IIFET 2012 Tanzania Proceedings
V. Recommendation and Conclusion
• Drying rack project have positive NPV - worthwhile
to be implemented in Tanzania to reduce dagaa
post-harvest loss.
• The construction cost of proposed dagaa drying
rack may seem high for the fishers,
• But this study revealed that, the cost will be
recovered quickly as losses will be lower and price
will be higher for the good quality products.
• If improvements are demonstrated by producing a
good product, in a shorter time, fishers will adopt
the use of drying racks.
IIFET 2012 Tanzania Proceedings
Acknowledgement….
Japan International Fisheries Research
Society (JIFRS/JICA)
&
United Nations of University-Fisheries
Training Paper (UNU-FTP)
Ahsanteni sana!.
IIFET 2012 Tanzania Proceedings