WWW.WAS.ORG • WORLD AQUACULTURE • MARCH 2023 37 As the sector grows, so too will the solutions to these challenges. Improved sales price, consumer knowledge and acceptance of aquaponic products will be critical to enterprise profit in the future. Notes D. Allen Pattillo, Ph.D. is a Faculty Extension Specialist in Aquaculture at the University of Maryland-College Park. He has been working with aquaponics since 2009 and aquaculture since 2003. The research contained in this article reflects the findings of an international aquaponics industry survey that was conducted for his Ph.D. dissertation work at Auburn University from 2018-2021. Janelle V. Hager is a Research and Extension Associate focused on aquaponics at Kentucky State University. She works directly with fish farmers and aquaponic growers in Kentucky, conducts several workshops annually, is currently on the board of the Aquaponics Association, and has over 15 years of experience in the field. (CONTINUED ON PAGE 38) reported that they successfully secured loans, contrasting with no loan usage by survey participants in Europe (Villarroel et al. 2016). This suggests increased willingness among financial institutions to support this new technology (Pattillo et al. 2022b). Viable Business Models. As the industry matures and more success stories make their way into mainstream media, the likelihood of receiving a building or operational loan increases. Success is attractive to lenders because it lowers their perceived risk of recouping the investment. Profitability is critical for business success, but growers should also consider the opportunity cost and return on their investment. Internal rates of return (IRR) for aquaponic operations range from 7 to 27 percent (Engle 2015). A smart business person would compare the IRR of aquaponics to other business and investment options. Consider also if the aquaponic business model will yield a livable wage for its employees, including the owner-operator. Solutions Startup Capital. Loan opportunities must be made available to advance the industry. Government-backed loans would reduce the risk to private lenders, allowing farmers to get the financing they need (Brewer 2019, Greenfeld et al. 2020). One such opportunity is the USDA beginning farmer and rancher loan program (USDA FSA 2021) but this program has very specific qualifications for farmers. Viable Business Models. High infrastructure costs make selecting crops that maximize returns critical. Some low-tech options may provide economic sustainability for aquaponic farms. Fern (2014) described one such tilapia-cucumber aquaponic facility with a breakeven cost of $1.16/lb for tilapia and $0.25/lb for cucumbers, which should promote profit in retail markets. High turnover crops also promote profit. Leafy greens like lettuce and herbs grow quickly, have a relatively high market value, and take up a small growing area (Bailey and Ferrarezi 2017). Aquaponic farms in the midwestern US were able to profit when basil prices were at least $10/kg, and profits grew in proportion to farm size (Quagrainie et al. 2017). Diversified farm income can also help growers achieve profitability. Supplemental income from surplus electricity sales from gas generators that co-produced heat, CO2 and electricity pushed one German farm into profitability (Baganz et al. 2020). Other income-generating activities like training and educational opportunities, growing microgreens, material and supply sales and other co-products were common in this study (Pattillo et al. 2022b). Conclusion Successful farmers consider key economic considerations like overall investment, annual operating cost, market competition, realistic market prices and projected revenue (Engle 2015). Only 31 percent of commercial aquaponics producers claimed to be profitable, and the amount invested did not necessarily correlate with profit (Love et al. 2015). Profitable farmers 1) chose aquaponics as their primary income source, 2) were located in warmer regions, 3) had greater gross sales revenue, 4) had greater aquaponics knowledge levels, and 5) sold non-food products (e.g., materials, supplies, consulting services, workshops and agritourism). The combination of determination, forethought, effort, wisdom and ingenuity can make all the difference between success and failure.
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