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PD/A CRSP Aquanews-Summer 2002

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Kenyan Regional Enterprise Budget and Business Plan Development

by Carole Engle, University of Arkansas at Pine Bluff, and Mucai Muchiri, Moi University

here is a great deal of interest in the development of successful aquaculture businesses in the East Africa region. Researchers at the University of Arkansas at Pine Bluff and Moi University, Eldoret, Kenya, are collaborating in the development of enterprise budgets for both tilapia monoculture and tilapia–Clarias spp. polyculture. Budgets will be developed for cash systems based on on-farm inputs and for commercial systems based on purchased feeds and fertilizers. The enterprise budgets developed will be published for distribution with

Moi University—in Eldoret, Kenya—aquaculture facilities.

Photo By: Kevin Fitzsimmons

instructions to farmers on how these can be adapted to their particular situation and farm.

From the enterprise budgets, pro forma financial statements (including annual cost and returns, estimate of total required capital, balance sheets, income statements, and cash flow budgets) will be developed for the production systems and average farm sizes selected. The financial statements will be published with instructions containing a spreadsheet for farmers to enter farm-specific data as needed.

A summary of marketing information will be prepared for each of the production systems/scenarios proposed. Fundamental market information required to present the market plan component will be included. This will include information on prices, product forms, market channels, volume requirements for various market channels, and potential target market segments. Economic planning tools such as these under development in Kenya will assist existing and prospective tilapia farmers to increase the likelihood of developing successful businesses through adequate business planning and monitoring.

The proposed activity will produce enterprise budgets and pro forma financial statements for business plans that can be used as guides for prospective and existing fish farmers. A sound business plan is required by financial institutions before extending credit to any new enterprise. The information developed in this project will not only provide farmers with the appropriate tools to show profitability, but it will also help lending institutions to better assess the viability of aquaculture projects and reduce the rate of failure in loan repayment. Furthermore, this effort will identify the gaps in the existing database on fish farming in Kenya and the region.

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