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Animal Husbandry and Fisheries Assistant · Chapter 9

Fishing Economics and AP Fisheries Schemes

What to remember

  • Fish farm economics rests on costs (fixed and variable), returns, net profit and the benefit-cost (B:C) ratio; a B:C above 1 means profit.
  • Support for fishers comes through central schemes (such as PMMSY), institutional credit (KCC, NABARD, banks), insurance and state welfare during the fishing ban.
  • Marketing of fish needs a cold chain, cooperatives and short channels because fish spoils fast.

1. Basic cost concepts

TermMeaningExample in fish farming
Fixed costDoes not change with outputPond lease, depreciation, interest on capital, land revenue
Variable (operating) costChanges with outputSeed, feed, manure, labour, fuel, harvest
Total costFixed cost + variable cost
Gross income (returns)Quantity sold × price
Net income (profit)Gross income - total cost
Gross marginGross income - variable cost

Key formulas

  • Total cost = fixed cost + variable cost.
  • Net profit = gross income - total cost.
  • Benefit-cost ratio (B:C) = gross returns ÷ total cost. B:C greater than 1 shows profit; equal to 1 is break-even.
  • Cost of production per kg = total cost ÷ total production (kg).
  • Break-even price = total cost ÷ production (kg).
  • Break-even yield = total cost ÷ selling price per kg.
  • Depreciation (straight line) = (original cost - salvage value) ÷ useful life.
  • Return on investment (ROI) = net profit ÷ total investment × 100.
  • Payback period = initial investment ÷ annual net return.
  • Net present value (NPV) is the discounted value of future net returns less the initial cost.

Worked examples

  • 1. Fixed cost Rs 40,000, variable cost Rs 1,60,000, gross income Rs 2,50,000. Total cost = Rs 2,00,000; net profit = Rs 50,000; B:C = 2,50,000 ÷ 2,00,000 = 1.25.
  • 2. A boat costs Rs 10,00,000, salvage Rs 1,00,000 and life 10 years. Depreciation = (10,00,000 - 1,00,000) ÷ 10 = Rs 90,000 a year.
  • 3. Total cost Rs 3,00,000 with production of 2,500 kg gives a cost of Rs 120 per kg.
  • 4. Investment Rs 5,00,000 with annual net return Rs 1,25,000 gives payback = 4 years.
  • 5. Net profit Rs 50,000 on investment Rs 5,00,000: ROI = 10 %.

2. Economics of capture fishing

  • Costs: boat and gear (fixed), fuel, ice, crew share and repairs (variable).
  • Crew are often paid by a share system: after deducting running costs the catch value is divided between boat owner and crew in agreed shares.
  • Income depends on catch per effort, species mix and market price.
  • Fuel is the biggest operating cost for mechanised boats, so diesel support schemes matter to fishers.
  • Fishing is seasonal. A fishing-ban period without income pushes fishers to seek relief and loans.

3. Economics of aquaculture

  • Capital (fixed) investment: pond digging, water supply, aerators, sheds, pump sets.
  • Working capital: seed, feed, power, labour, medicines.
  • Feed is the largest variable cost in intensive farms. Low FCR cuts the cost.
  • Scale effect: larger farms spread fixed cost over more output.
  • Risk: disease, price falls, flood and cyclone. Insurance and good practices reduce loss.
  • Price spread: difference between the price paid by the consumer and the price received by the producer. Shorter channels lower the spread.

4. Fish marketing

  • Channel: farmer, village merchant or commission agent, wholesaler, retailer, consumer.
  • Fish is perishable, so ice, insulated boxes, refrigerated vans, cold storages and processing plants are essential.
  • Value addition: cleaned fish, fillets, ready-to-cook and ready-to-eat products raise price.
  • Cooperatives bring fishers together, supply inputs, provide credit and market the catch.
  • Export of shrimp and marine products is promoted by MPEDA. Quality standards and traceability decide acceptance abroad.
  • Mobile fish retail outlets and fish markets with hygienic stalls improve access for consumers.

5. Credit, insurance and institutions

ItemRole
NABARDRefinance and development of rural credit
Kisan Credit Card (KCC) for fisheriesWorking capital for fish farmers and fishers
Commercial and cooperative banksTerm and working loans
Fish Farmers Development Agency (FFDA)District-level agency promoting freshwater aquaculture
Brackishwater Fish Farmers Development Agency (BFDA)Same role for brackishwater
National Fisheries Development Board (NFDB), HyderabadCentral body for fisheries development
Marine Products Export Development Authority (MPEDA)Export promotion
Coastal Aquaculture Authority (CAA)Regulates coastal aquaculture
ICAR-Central Institute of Brackishwater Aquaculture, ChennaiBrackishwater research
Central Institute of Freshwater Aquaculture, BhubaneswarFreshwater research
Central Marine Fisheries Research Institute, KochiMarine research
Central Institute of Fisheries Technology, KochiFish processing and craft research
Fishery Survey of IndiaSurvey of marine resources
  • Fishers can take accident insurance under national and state schemes. Group accident insurance covers fishers on death or disability.
  • Fishery cooperative societies have a three-tier structure in many states: primary society, district or central society, state federation.

6. National schemes

  • Blue Revolution: the earlier central programme (also called Neeli Kranti) to raise fish production and fisher income.
  • Pradhan Mantri Matsya Sampada Yojana (PMMSY): a national scheme started in 2020 that supports fish production, infrastructure (harbours, cold chain, markets), fisher welfare, insurance and fisheries technology. It helps in beneficiary-oriented and infrastructure-oriented projects.
  • Fisheries and Aquaculture Infrastructure Development Fund (FIDF): concessional finance to build fisheries infrastructure.
  • Department of Fisheries under the Ministry of Fisheries, Animal Husbandry and Dairying at the Centre.
  • Kisan Credit Card extended to fish farmers and fishers.

7. Andhra Pradesh schemes and institutions

Scheme names change often. Study these as qualitative themes and always verify the latest official release.

  • Fishing-ban relief: the state gives financial assistance to marine fishers during the seasonal fishing ban (earlier YSR Matsyakara Bharosa; since 2025 the Matsyakarula Sevalo scheme, Rs 20,000 per family).
  • Diesel subsidy: support for diesel used by mechanised and motorised boats.
  • Fish landing centres and harbours at coastal locations, with Visakhapatnam, Kakinada and Machilipatnam as long-established harbours.
  • Aquaculture seed law: the state has a law to control quality of aquaculture seed.
  • Aqua labs and testing facilities: to test seed, feed and water; they support farmers.
  • Fisher welfare: housing, insurance, education support and group accident cover for registered fishers.
  • Cooperative societies: fishermen cooperative societies and a state federation.
  • Fisheries education and research: the College of Fishery Science at Muthukur within the state's veterinary university; also ICAR institutes on the coast.
  • Wetlands: Kolleru lake (a Ramsar site) and Pulicat lagoon are important to inland and lagoon fishers. Over-conversion of lake area to ponds has harmed the lake, and the state has taken action to restore it.
  • Marketing: state-supported fish outlets and mobile retail units.

8. Entrepreneurship in fish farming

  • Choose the species by local demand, water source and market.
  • Prepare a project report with capital cost, working capital, production plan, revenue and loan repayment.
  • Maintain a farm record book: stocking, feed, mortality, expenses and sales.
  • Join a farmers' group or a Farmers Producer Organisation (FPO) for bulk buying and selling.
  • Follow better management practices and traceability norms to reach export markets.
  • Insure the crop where cover is available.

9. Risk, records and sustainability

  • Risk sources: disease outbreaks, poor seed, price fall, power cost, cyclone and flood, and loan burden.
  • Risk control: use certified seed, keep farm records, spread stocking dates, join a group, and insure where possible.
  • Sensitivity check: a farmer should test the profit if feed price rises or the selling price falls. For example, if the price falls from Rs 150 to Rs 120 per kg while cost per kg is Rs 120, profit becomes zero.
  • Sustainability: avoid banned drugs, treat effluent, protect mangroves and do not convert wetlands without approval.
  • Traceability and record books are needed for export certification.

Exam traps

  • 1. B:C ratio is gross returns ÷ total cost, not net profit ÷ cost.
  • 2. Gross margin subtracts only variable cost; net profit subtracts total cost.
  • 3. Depreciation uses (cost - salvage) ÷ life; salvage is not added.
  • 4. MPEDA promotes export; CAA regulates coastal aquaculture; NFDB develops fisheries.
  • 5. FFDA is for freshwater; BFDA is for brackishwater.
  • 6. PMMSY is a central scheme; Matsyakarula Sevalo (earlier Matsyakara Bharosa) is a state-level support during the fishing ban.
  • 7. Fixed costs do not change with output in the short run; feed is a variable cost.
  • 8. Kolleru is a freshwater lake with a Ramsar status; Pulicat is a lagoon.

One-liners

  • 1. Net profit = gross income - total cost.
  • 2. B:C ratio above 1 means profit.
  • 3. Break-even price = total cost ÷ production.
  • 4. Depreciation (straight line) = (cost - salvage) ÷ life.
  • 5. Feed is the largest variable cost in intensive farming.
  • 6. FFDA promotes freshwater aquaculture.
  • 7. NFDB is headquartered at Hyderabad.
  • 8. MPEDA is headquartered at Kochi.
  • 9. PMMSY started in 2020.
  • 10. KCC gives working capital to fishers and fish farmers.
  • 11. Fish is perishable, so cold chain is vital.
  • 12. Kolleru lake is a Ramsar wetland.

Practice questions

  1. Straight-line depreciation is

    1. salvage ÷ cost
    2. (cost - salvage value) ÷ life
    3. (cost + salvage value) ÷ life
    4. cost × life
    Answer

    B. (cost - salvage value) ÷ life

    Standard formula.

  2. Statements: 1. Payback period = annual return ÷ investment. 2. Straight-line depreciation uses cost minus salvage. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    B. 2 only

    Payback = investment ÷ annual return.

  3. Kisan Credit Card for fishers provides

    1. exports
    2. working capital credit
    3. free seed only
    4. free boats
    Answer

    B. working capital credit

    KCC gives working capital loans.

  4. Total cost Rs 3,00,000 and production 2,500 kg. Cost per kg is

    1. Rs 75
    2. Rs 150
    3. Rs 12
    4. Rs 120
    Answer

    D. Rs 120

    3,00,000 ÷ 2,500 = 120.

  5. A B:C ratio greater than 1 means

    1. profit
    2. no income
    3. break-even
    4. loss
    Answer

    A. profit

    Returns exceed costs.

  6. Net profit is calculated as

    1. Variable cost divided by output
    2. Total cost minus gross income
    3. Gross income minus total cost
    4. Gross income plus fixed cost
    Answer

    C. Gross income minus total cost

    Net profit = gross income - total cost.

  7. For the same farm (cost Rs 2,00,000, income Rs 2,50,000), the B:C ratio is

    1. 0.25
    2. 2.0
    3. 1.25
    4. 0.8
    Answer

    C. 1.25

    2,50,000 ÷ 2,00,000 = 1.25.

  8. Which central scheme started in 2020 supports fish production and infrastructure?

    1. PMAY
    2. PM-KISAN
    3. PMJDY
    4. PMMSY
    Answer

    D. PMMSY

    Pradhan Mantri Matsya Sampada Yojana.

  9. Statements: 1. FFDA is for freshwater aquaculture. 2. BFDA is for brackishwater aquaculture. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    C. Both 1 and 2

    Both statements are correct.

  10. The Central Institute of Brackishwater Aquaculture is located at

    1. Chennai
    2. Kochi
    3. Hyderabad
    4. Bhubaneswar
    Answer

    A. Chennai

    CIBA is at Chennai.

  11. Fixed cost is Rs 40,000, variable cost Rs 1,60,000 and gross income Rs 2,50,000. Net profit is

    1. Rs 50,000
    2. Rs 90,000
    3. Rs 2,00,000
    4. Rs 40,000
    Answer

    A. Rs 50,000

    Total cost = 2,00,000; profit = 2,50,000 - 2,00,000 = 50,000.

  12. Investment Rs 5,00,000 with annual net return Rs 1,25,000. Payback period is

    1. 8 years
    2. 4 years
    3. 5 years
    4. 2 years
    Answer

    B. 4 years

    5,00,000 ÷ 1,25,000 = 4.

  13. Break-even price per kg is

    1. fixed cost divided by price
    2. gross income divided by cost
    3. production divided by total cost
    4. total cost divided by production
    Answer

    D. total cost divided by production

    It is the price at which profit is zero.

  14. Which is a finance fund for fisheries infrastructure?

    1. Fisheries and Aquaculture Infrastructure Development Fund
    2. Pradhan Mantri Jan Dhan
    3. Stand-Up fund only
    4. Mudra
    Answer

    A. Fisheries and Aquaculture Infrastructure Development Fund

    FIDF gives concessional finance.

  15. The largest operating cost in intensive fish farming is usually

    1. seed
    2. labour
    3. medicines
    4. feed
    Answer

    D. feed

    Feed forms the major share.

  16. Variable cost Rs 1,00,000 and gross income Rs 1,60,000. Gross margin is

    1. Rs 1,00,000
    2. Rs 60,000
    3. Rs 2,60,000
    4. Rs 1,60,000
    Answer

    B. Rs 60,000

    1,60,000 - 1,00,000 = 60,000.

  17. Statements: 1. Gross margin subtracts total cost. 2. Net profit subtracts total cost. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    B. 2 only

    Gross margin subtracts variable cost only.

  18. Which fisheries institute is located at Bhubaneswar?

    1. MPEDA
    2. Central Marine Fisheries Research Institute
    3. Central Institute of Freshwater Aquaculture
    4. Central Institute of Fisheries Technology
    Answer

    C. Central Institute of Freshwater Aquaculture

    CIFA is at Bhubaneswar.

  19. Share system in fishing means

    1. fixed wage only
    2. crew pay rent
    3. all catch goes to the owner
    4. catch value is divided between owner and crew in agreed shares
    Answer

    D. catch value is divided between owner and crew in agreed shares

    After running costs, the proceeds are shared.

  20. Total cost Rs 2,40,000 and a selling price of Rs 120 per kg. Break-even yield is

    1. 20,000 kg
    2. 2,880 kg
    3. 2,000 kg
    4. 200 kg
    Answer

    C. 2,000 kg

    2,40,000 ÷ 120 = 2,000 kg.

  21. Statements: 1. NFDB is at Hyderabad. 2. MPEDA is at Hyderabad. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    A. 1 only

    MPEDA is at Kochi.

  22. The Fishery Survey of India works on

    1. surveying marine fishery resources
    2. issuing KCC
    3. running hatcheries only
    4. exporting shrimp
    Answer

    A. surveying marine fishery resources

    FSI surveys marine resources.

  23. MPEDA is headquartered at

    1. Mumbai
    2. Chennai
    3. Kochi
    4. Hyderabad
    Answer

    C. Kochi

    MPEDA has its head office at Kochi.

  24. Statements: 1. B:C ratio = gross returns ÷ total cost. 2. B:C below 1 means profit. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    A. 1 only

    B:C below 1 shows a loss.

  25. Which institute at Kochi works on fish processing and craft?

    1. Central Institute of Freshwater Aquaculture
    2. Central Institute of Fisheries Technology
    3. National Fisheries Development Board
    4. Central Institute of Brackishwater Aquaculture
    Answer

    B. Central Institute of Fisheries Technology

    CIFT is at Kochi.

  26. Fish marketing needs a cold chain because fish is

    1. bony
    2. cheap
    3. heavy
    4. perishable
    Answer

    D. perishable

    Fish spoils quickly without ice or cold storage.

  27. Which is a state-level support for marine fishers during the fishing ban in Andhra Pradesh?

    1. PMMSY
    2. FIDF
    3. Matsyakara Bharosa
    4. CAA
    Answer

    C. Matsyakara Bharosa

    The state gives assistance during the ban period; check the latest official release.

  28. Which Andhra Pradesh wetland is a Ramsar site known for fishing?

    1. Nagarjuna Sagar
    2. Pulicat only
    3. Hussain Sagar
    4. Kolleru lake
    Answer

    D. Kolleru lake

    Kolleru lake is a Ramsar site.

  29. Statements: 1. Kolleru lake is a Ramsar site. 2. Pulicat is a lagoon. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    C. Both 1 and 2

    Both statements are correct.

  30. Statements: 1. Fish marketing needs a cold chain. 2. Cooperatives can help in credit and marketing. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    C. Both 1 and 2

    Both statements are correct.

  31. Which body is headquartered at Hyderabad?

    1. FSI
    2. National Fisheries Development Board
    3. MPEDA
    4. CMFRI
    Answer

    B. National Fisheries Development Board

    NFDB is at Hyderabad.

  32. Statements: 1. Fixed cost changes directly with output. 2. Feed is a variable cost. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    B. 2 only

    Fixed cost does not change with output.

  33. A boat costs Rs 10,00,000, salvage Rs 1,00,000 and life 10 years. Annual straight-line depreciation is

    1. Rs 90,000
    2. Rs 1,00,000
    3. Rs 9,00,000
    4. Rs 1,10,000
    Answer

    A. Rs 90,000

    (10,00,000 - 1,00,000) ÷ 10 = 90,000.

  34. A farm sells 1,500 kg at Rs 150 per kg. Gross income is

    1. Rs 3,00,000
    2. Rs 22,500
    3. Rs 1,50,000
    4. Rs 2,25,000
    Answer

    D. Rs 2,25,000

    1,500 × 150 = 2,25,000.

  35. Net profit Rs 50,000 on investment Rs 5,00,000. ROI is

    1. 10 %
    2. 5 %
    3. 1 %
    4. 50 %
    Answer

    A. 10 %

    50,000 ÷ 5,00,000 × 100 = 10 %.

  36. Payback period is

    1. profit × years
    2. investment ÷ annual net return
    3. cost × price
    4. annual return ÷ investment
    Answer

    B. investment ÷ annual net return

    It is the time to recover the investment.

  37. FFDA stands for

    1. Fisheries Fund Disbursal Agency
    2. Fish Feed Distribution Authority
    3. Farm Fish Dealers Association
    4. Fish Farmers Development Agency
    Answer

    D. Fish Farmers Development Agency

    FFDA promotes freshwater aquaculture.

  38. Which of these is a variable cost?

    1. Depreciation of a building
    2. Land revenue
    3. Feed
    4. Interest on fixed capital
    Answer

    C. Feed

    Feed changes with the production level.

  39. Price spread is the difference between

    1. consumer price and producer price
    2. fixed and variable cost
    3. cost and profit
    4. export and import price
    Answer

    A. consumer price and producer price

    Short channels reduce price spread.

  40. Which of these is a fixed cost in a fish farm?

    1. Seed
    2. Feed
    3. Fuel for harvest
    4. Pond lease
    Answer

    D. Pond lease

    Lease is paid regardless of output.

  41. Statements: 1. MPEDA regulates coastal aquaculture. 2. CAA regulates coastal aquaculture. Which is correct?

    1. 1 only
    2. 2 only
    3. Both 1 and 2
    4. Neither 1 nor 2
    Answer

    B. 2 only

    MPEDA promotes exports.

  42. BFDA works for

    1. brackishwater aquaculture
    2. fish feed standards
    3. freshwater aquaculture
    4. marine export
    Answer

    A. brackishwater aquaculture

    BFDA is Brackishwater Fish Farmers Development Agency.

  43. Gross margin is

    1. total cost minus variable cost
    2. gross income minus variable cost
    3. gross income minus total cost
    4. net profit plus fixed cost
    Answer

    B. gross income minus variable cost

    Gross margin subtracts variable cost only.

  44. Which is a feature of cooperative fishery societies?

    1. Only conduct surveys
    2. Only issue licences
    3. Supply inputs, credit and marketing
    4. Only train scientists
    Answer

    C. Supply inputs, credit and marketing

    They help fishers collectively.

  45. Total cost is equal to

    1. variable cost only
    2. fixed cost minus variable cost
    3. fixed cost plus variable cost
    4. gross income minus profit only
    Answer

    C. fixed cost plus variable cost

    Total cost combines fixed and variable costs.

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