Abstract:
This paper reviews the profitability of fresh water ornamental fish, out growing in Kalutara District. Data were collected using structured questionnaire from 45 out growers in 2012. The analysis was conducted by calculating operational cost, revenue, gross profit, financial profit and rate of return on the investment (ROI). In terms of unit investment cost and variable cost, cement tanks are costly compared to mud ponds. In addition, revenue and gross profit per surface feet2 of a mud pond show better off situation. Moreover, economic indicators such as rate of ROI and payback period (PBP) were more favourable for mud ponds. Though economic indicators for cement tanks were far below compared to that of mud ponds, which were above average compared to the returns in the financial market prevailed. Hence, growing out in a cement tank is more suitable for small scale growers while mud ponds method is suitable for medium and large scale entrepreneurs. As the initial investment cost for mud ponds is higher despite of its superiority in all the economic indicators, the new entrants to mud pond grow outs may be limited. To overcome such entry barriers, soft bank loan facilities shall be facilitated to out growers, who are willing to start mud ponds grow out. Moreover, high variable cost is the prime factor which affects the long term sustainability of the industry in which feeding cost incurs about 44 %. Therefore, innovations in local feed alternatives are vital for the increased economic viability of the industry.
