What You Need to Know About Risk Management in Fish Farming
Fish farming is a highly diversified enterprise due to the various species of fish that are available for cultivation. In Nigeria, fish farming is one of the fastest growing subsectors in agri-business, contributing significantly to the nation’s economy through job creation, poverty alleviation, food security, provision of raw materials for animal husbandry and income generation. In 2016 fiscal year, 370,000 metric tons of fish valued at over N175 billion was produced, contributing about 4.5 per cent to the Gross Domestic Product (GDP), with over two million jobs cutting across the various sectors of the economy created.
Just like any economic venture, fish farming is laden with various risks, and there is a need to properly handle these risks in order to avoid economic loss. As a matter of fact, managing risks is a vital part of the fish farming business, as it allows for informed decisions that affect the survival and success of your business. To effectively manage risks, you must be properly knowledgeable on the potential risks and how best to mitigate them.
In fish farming, possible risks encountered can be categorized into Pure risks and Business risks.
Pure risks are those that arise due to unexpected circumstances such as theft, outbreak of diseases, unexpected extreme climatic factors, malicious damage, legal actions against the farm etc. Examples of extreme climatic risks are flooding, drought and deposition of silt. Flooding, for instance, can result in physical destruction of ponds, loss of fish, and the introduction of pathogens or predators through floodwater. Deposit of silt causes turbidity, which harms aquatic life by degrading spawning beds and affecting gill function, as well as reducing light penetration and level of photosynthesis.
On the other hand, business risks are those directly affecting the fish production process, and the commercial business of fish farming. They include production risks such as faulty equipment, late delivery of feed, lack of technical information and expertise, unfavourable government policies, changes in operational costs, in addition to market related risks such as poor quality of fish, and consumer-related risks like change in the taste of consumers, competition from alternative commodities, and health factors.
Irrespective of the nature of the risks your farm is exposed to, each has the potential to impact negatively on your investment. Therefore, it is necessary to ensure standard farming practices that guarantee returns on investment by reducing the likelihood of negative impact on your fish farm.
- Undertake regular inspection on fish farming facilities. It is possible for infrastructure to break down unexpectedly; so it is very important to inspect ponds regularly for damages to prevent the sudden collapse of ponds.
- Monitor water coming into your ponds to make sure that the quality is healthy for the fish and can sustain aquatic life.
- Equipment used within the farm to handle fish must be disinfected regularly to avoid transmission of disease-causing agents. Transfer of nets from pond to pond must be spaced out as much as possible.
- Proper management techniques such as control of stock density and nutrition that minimizes the stress of fish and maintains healthy populations in the ponds should be employed.
- When selecting a pond site, special consideration should be given to topography in order to minimize costly soil removal. The pond site should be located in a flat, well-vegetated drainage basin land, ideally above the flood plain to prevent flooding and washing away of the farm during heavy rains.
- Careful monitoring and observation of fish behaviour for any irregularity (e.g. fish off feed, erratic swimming) will provide sufficient warning that a problem is looming.
- Be sure to insure your fish farm. Knowing that fish farming is a highly profitable but risky business, the best you can do is to minimize the impact that risks have on the financial stability of your business.
Remember that fish farming is a business that involves risks that need to be managed. Whether you are new to fish farming or you are an experienced fish farmer, it is necessary to manage the risks involved in fish farming. An insurance policy protects your farm from the impact of loss that may be sustained in the event of unanticipated disasters. With an insurance policy, you can manage your fish farm without the fear of risks.
Leadway Assurance offers a fish farm insurance policy specially designed to take the worry out of the business of fish farming. The Leadway Fish Farm Insurance Policy insures your fishes against death and also insures the fish pond against any collapse due to fire outbreak, flood, windstorm, accidents, lightning and other factors.
In the event of the death of your fish stock or collapse of the fish pond, the Leadway Fish Farm Insurance Policy provides cover by paying the assessed value of the fish lost and the amount required to restore the fish pond back to its original state.
So, protect your interest before the worst happens. Contact us at Leadway Assurance today. Call our customer care service on (01) 2800 700, 2800 701, +234 812 999 7175 or send an email to Lcs@leadway.com for more details on our fish farm and other insurance policies.