Title: Economic sustainability of small scale Milkfish farming in Tanzania

Final project
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Supervisors: Pall Jensson


This paper assesses the economic sustainability of milkfish farming in Tanzania using a profitability model as the main assessment tool. This tool is for planning, managing and helping with decision making in investment projects. This study examines the case study of the UWASA project in Mtwara Tanzania, and assesses the feasibility of small scale milkfish farming to determine if it can be a business enterprise. Data were collected from primary and secondary sources and assumptions were made based on the author´s experience with milkfish farming. All data and assumptions were analyzed both in a production model and a profitability model. A budget for 1 ha milkfish pond farm was used to assess the profitability of small scale milkfish farming. The planning horizon was 5 years, including 1 year for construction. Net present value, internal rate of return, and payback period were determined. A sensitivity analysis was conducted on equipment cost, pond construction, production, sales price, variable and fixed cost. The findings of the analysis indicate that milkfish farming can be economically sustainable. The results show positive IRR and NPV and a payback period of two years (one year operation) with minimal risk. Small scale milkfish farming is sensitive to sales price and production.

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