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Economic Analysis of an Aquaponic System for the Integrated Production of Rainbow Trout and Plants

P.R. Adler1, J.K. Harper2, E.M. Wade3, F. Takeda1, and S.T. Summerfelt3
Volume 1, June 2000

ABSTRACT

Conventional treatment alternatives for phosphorus in wastewater, whether they employ chemical precipitation, physical removal, or land application technologies, represent a significant additional cost to the owner of an aquaculture operation. Plant-based removal of nutrients has the potential to generate additional revenues, which can offset treatment costs. The objective of this analysis was to describe the economic relationship between a 22,680 kg per year recirculating rainbow trout (Oncorhynchus mykiss Walbaum) production system and a hydroponic treatment unit, growing "Ostinata" lettuce (Latuca sativa L.) and sweet basil (Ocimum basilicum L.), capable of reducing phosphorus concentration levels in the fish farm effluent to less than 0.1 mg/L. The integration of the fish and plant production system (aquaponics) produces economic cost savings over either system alone. Shared cost savings come from spreading out operating costs (e.g., management, water, nutrients, and overhead charges) and capital costs (e.g., backup generator, used truck, and office equipment) over two systems. The investment analysis demonstrates the profitability of this combined system over its 20-year expected life. Net present values are positive for a wide range of discount rates. Internal rate of return analysis shows that for a total investment of $244,720 this system can potentially provide a return of 12.5%. The hydroponic system drives the potential profitability of the combined system with 67% of annual returns derived from plant production.

1USDA-ARS, 45 Wiltshire Road, Kearneysville, WV 25430

2Department of Agricultural Economics and Rural Sociology, The Pennsylvania State University, 214-A Armsby Building, University Park, PA 16802

3The Conservation Fund's Freshwater Institute, P.O. Box 1746, Shepherdstown, WV 25443

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