Start a Shrimp Farming Business
India with over 8100 Km of coastline, vast streches of estuaries/ backwaters , lagoons provide enormous opportunities for brackish water shrimp farming . Commercial shrimp farming is almost two decades old in India .During the early nineties due to proven technology in post larvae production and farming of two varieties of shrimps viz white shrimp ( Penaeus indicus ) and tiger shrimp (Penaeus monodon ) large scale growth of shrimp farms and hatcheries was witnessed during a short span of five years. However, in December 1996 the Supreme Court had to step in to protect the environment and to control the indiscriminate growth of shrimp farms. To overcome the various problems and also to have sustainable growth guidelines have been issued by the government to ensure that coastal aquaculture is regulated,planned,developed and managed with adequate checks, controls and within the framework and guidelines provided by Coastal Aquaculture Authority, Chennai .
It is commonly said that after Green and White Revolution in India, it is time for Blue Revolution to exploit the huge potential in fisheries sector. Shrimps are called the "Pinkish Gold" of the sea because of its universal appeal, unique taste, high unit value realisation and increasing demand in the world market.
2. Scope for brackish water shrimp farming
The over exploitation of shrimp from coastal waters and the ever increasing demand for shrimp and shrimp products in the world market has resulted in the wide gap between the demand and supply in the International market. This has necessitated the need for exploring newer avenues for increasing shrimp production. The estimated brackish water area suitable for undertaking shrimp cultivation in India is around 11.91 lakh ha. spread over 10 states and union territories viz. West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Pondicherry, Kerala, Karnataka, Goa, Maharashtra and Gujarat. Of this only around 1.356 lakh ha are under shrimp farming now and hence lot of scope exists for entrepreneurs to venture into this field of activity. The following table gives the state-wise potential area available for shrimp.
3. Location of the project
The first and foremost requirement for entering into the venture is the acquisition of suitable land. The details of land surveyed and identified suitable for shrimp farming in coastal districts are available with the Department of Fisheries of the concerned State Governments and with the Regional offices of the MPEDA functioning in the coastal states of India. A suitable site is one that can support optimum conditions for the growth of shrimps at targetted production level. Most of the lands available along the coastline are owned by the State Governments. In such cases, the entrepreneur has to get it on long term lease from the revenue authorities of the State Government. If it is a private land, one has to preferably purchase on outright basis. While selecting the site for the project, the entrepreneur should ensure the following :
i) Area should be accessible preferably by a road even during the monsoon season.
ii) Mangrove area with large tree stumps should be avoided.
iii) Site should have good pollution free water supply of both freshwater and brackish water. Water quality parameters required for maximum feed efficiency and maximum growth of Penaeus monodon are given below :
iv) The areas should be flood free
v)A location with a natural slope, for proper drainage should be selected.
vi) Social problems due to competing use of water resources and drainage of waste water should be properly taken care of.
vii) Availability of necessary infrastructure namely electricity, ice factory, cold storage, communication facilities etc., are necessary for successful management.
4. Borrowers' profile
Complete details of the entrepreneurs, partnership firm, registered company should be given. Qualification and experience of the promoters, net worth of the borrowers, financial ability , other activities undertaken by them etc., have to be furnished.
5. Technical feasibility of the project
As the project envisaged new technologies, the borrowers may take the help of a competent outside agency to prepare the technical feasibility report on the project. However, to serve as a guidelines to the entrepreneurs in this regard the broad technical parameters are given in Annexure-I. The first and foremost requirement of the project is to get a license from Coastal Aquaculture Authority,Chennai as per the existing norms and guidelines.
6. Physical and financial outlay
Details of the physical and financial outlays involved for setting up of 5 ha. brackish water shrimp farm are furnished in Annexure No.II. It can be seen therefrom that the total cost including working capital expenses for raising the first crop for a 5 ha. Shrimp farm works out to Rs. 28.936 lakh. While submitting the project to the banks for sanction of loan entrepreneurs are expected to submit detailed plan and estimates for all the civil works to be undertaken as also invoices of various items to be purchased from the suppliers.
7. Margin money and bank loan
The entrepreneur has to bring in 15% of the project cost out of his own resources and the balance of 85% will be provided by banks as loan.
8. Rate of refinance
NABARD refinance is available for projects for setting up of shrimp farms provided the same is technically feasible and financially viable. NABARD provides refinance to eligible banks as per refinance policy.
9. Financial viability
For undertaking shrimp culture within CRZ and outside CRZ the following assumptions have been made
The financial analysis for extensive system of shrimp farming has been shown inAnnexure No. III. Results of the analysis are as under:
i. NPW at 15% DF - Rs.16.063 lakh.
ii. BCR at 15% DF - 1.25
iii. IRR is more than 50 %
Because of huge gap between supply and demand of shrimps in local as well as international market, there may not be any problem in marketing the same. Shrimp can either be sold directly by the farmers in the market or sold to exporters for processing. Shrimp can be exported in frozen form with head on , head less, battered and breaded, or IQF products or any other form with value addition depending on the requirement of the buyer. The shrimp has to be packed as per requirements of importing countries and therefore this should be decided after a detailed market survey. Hygienic packaging, display and appearance of the packet are key factors to attract consumers of importing countries.
11. Rate of interest
As per existing RBI guidelines interest rate to be charged to the ultimate borrower for loan exceeding Rs.2 lakh will be as decided by the lending Bank. NABARD's interest rate for refinance would be as per refinance policy prevailing at the
12. Repayment period
As can be seen from Annexure No.IV the borrower will be able to repay the bank loan in 7 years with a moratorium of one year on repayment of principal.
Security from the ultimate beneficiaries has to be obtained as per the lending norms of financing banks which have to be in conformity with the guidelines of RBI.
Estimated physical and financial outlay involved for setting up of a shrimp farm (5 ha) Rs. lakh
1) Detailed plan and estimates are to be furnished alongwith the project.
2) Fuel & electricity charges have comedown because generators are not used regularly
3) Invoices for purchase of various items to be enclosed.
4) Generators( Generators are not purchased and are hired whenever required - hire charges are very meagre viz., 400-500 per day- not taken into account )
5) At the field level it was observed that lining of feeder canals were not done
6) Facility of drinking water storage and supply net work was not provided.
Statement showing Financial Analysis for Shrimp Culture in 5 ha. Farm (Rs. lakhs)
STATEMENT SHOWING REPAYMENT OF PRINCIPAL AND PAYMENT OF INTEREST (ILLUSTRATIVE)
Repayment period 7 years with one year grace
Total Outlay = Rs.28.936 lakh
Margin (15%) = Rs.4.340 lakh
Bank Loan = Rs.24.596 lakh
Rate of interest 12% pa (Rs. lakh)