ANALYSIS OF PRODUCTION AND ECONOMICS OF RAINBOW TROUT FARMING ON TWO CAGE FARMS IN SERBIA AND BOSNIA AND HERZEGOVINA

Abstract

The subject of this paper is the analysis of conditions, production and economic results of Rainbow trout production on two cage farms in Serbia and Bosnia and Herzegovina. An analytical calculation of total costs was used to compare the economic results of trout farming. The aim is to compare the achieved production and economic results of Rainbow trout farming in cage farms in Serbia and Bosnia and Herzegovina, and to analyze the influencing factors. The analysis showed minor differences in the natural conditions, production results, and economic results. Both analyzed farms are characterized by strong fluctuations of water temperature during the year. Such natural conditions affect negatively both the production and the economic results of farming. The analysis showed that the production is economically viable on both farms if the value of production is calculated together with subsidies, ie premiums. Without subsidies, the fish farm in BiH is operating at a loss.

Headnote

ARTICLE INFO

Original Article

Received: 29 October 2021

Accepted: 02 February 2022

UDC 597.552.512:639.311]338. 435(497.11)(497.6)

Keywords:

Rainbow trout, cage farms, economic effects, Serbia, BiH

JEL:Q22, D24

ABSTRACT

The subject of this paper is the analysis of conditions, production and economic results of Rainbow trout production on two cage farms in Serbia and Bosnia and Herzegovina. An analytical calculation of total costs was used to compare the economic results of trout farming. The aim is to compare the achieved production and economic results of Rainbow trout farming in cage farms in Serbia and Bosnia and Herzegovina, and to analyze the influencing factors. The analysis showed minor differences in the natural conditions, production results, and economic results. Both analyzed farms are characterized by strong fluctuations of water temperature during the year. Such natural conditions affect negatively both the production and the economic results of farming. The analysis showed that the production is economically viable on both farms if the value of production is calculated together with subsidies, ie premiums. Without subsidies, the fish farm in BiH is operating at a loss.

© 2022 EA. All rights reserved.

Introduction

On cold-water farms or trout farms in Serbia, Rainbow trout (Oncorhynchus mykiss) is almost exclusively produced as a table species, while brown trout (Salmo trutta), grayling (Thymallus thymallus) and Huchen (Hucho hucho) are occasionally produced for restocking open waters - natural watercourses. Rainbow trout are farmed in Serbia mainly using river and spring water, while farming on lakes is sporadically represented. On trout farms in BiH, as a consumption species most commonly farmed species is rainbow trout (Oncorhynchus mykiss), to a lesser extent brown trout (Salmo trutta) and brook trout (Salvelinus fontinalis). For stocking open waters in BiH, brown trout (Salmo trutta), grayling (Thymallus thymallus), huchen (Hucho hucho) and Neretva soft-mouthed trout (Salmo obtusirostris) are raised. Rainbow trout farming in BiH is mostly done in classic fish farms (concrete race-ways) that are supplied with water from rivers, streams, springs of different capacity (amount of available water), most often from the springing parts of watercourses. Cage farming in water reservoirs (mostly in artificial water reservoirs) has gone through oscillations in the last decade in the number of cage farms, most of which are not registered (Hamzić et al., 2015; Šapić et al, 2019).

Trout farms in Serbia are flow-through by type, and concrete, so-called raceway tanks by type of construction. There are several cage systems (Lake Zaovine, Lake Lisin) but the production on them is small. Based on some estimates (Marković et al., 2009; Radović & Gnjatović, 2021), it is possible to increase the volume of cage farms in Serbia by about 10 times. Bosnia and Herzegovina is characterized by dominant production in classic flow-through trout farms (concrete race-way tanks), trout is sporadically grown in earthen pools. Cage trout farming and the largest production is realized in several cage trout fish farms in water reservoirs on the Neretva (Grabovica and Salakovac), Bilećko Lake and in cages on Žepa.

The sizes of trout farming units can be expressed on the basis of the volume and number of units, as well as according to the production they achieve. According to the amount of annually produced table fish in Serbia, there are fish farms that annually produce less than 100 kg of trout, as well as those whose annual production exceeds 200 tons. Bosnia and Herzegovina is characterized by a large number of rivers, in most cases class I quality, on which a large number of classic, concrete trout farms have been built. Hamzic et al. (2015) present the data that in BiH in 2014 there were about 40 registered trout farms, and according to estimates that number is at least 97, with different annual production. These are mainly smaller fish farms with an annual production of several tons of trout. Large fish farms have a production of over 500 tons per year. According to the completeness of the production process, there are full-system farms that start production with broodstock spawning and semi-systemic farms that start production by purchasing some of the younger trout categories (fry, fingerlings).

Generally speaking, trout production in Serbia is characterized by very large fluctuations in production conditions, the size of farms and the amount of fish produced. In comparison to the surrounding countries, the conditions for trout production can be assessed as acceptable.

The main disadvantage is the lack of sufficient quantities of quality water with stable flows and temperatures during the year. Bosnia and Herzegovina is characterized by high quality mountainous waters suitable for trout farming and increased production, which is evident from the official data on trout production on an annual basis, but due to climate change, significant oscillations of the hydrological regime during the year are evident.

Materials and methods

The data were obtained from Rainbow trout producers based on a structured interview and survey with multi-year averages represented. Data were collected from one Rainbow trout cage farm in Serbia and one in Bosnia and Herzegovina. Data that could not be collected in the described way were calculated and adopted on the basis of average values of other farms. Part of the data from the Republic of Serbia comes from the research of the analysis of the specifics of trout production in mountain lakes (Čanak et al., 2018). The data collected in Serbia derive from the largest cage farm, where about 50 tons of edible Rainbow trout was produced annually, out of a total of about 100 tons of trout produced on cage farms. There are currently a total of 3 cage systems for trout production in Serbia. The total number of cage trout farms in BiH in 2014 was 17 (not all registered), with an annual production of about 155 tons (Hamzić et al., 2015; Rakić et al., 2021). The data collected in BiH come from a cage farm whose annual production is also around 50t, which makes the comparison easier. A special advantage is the fact that in addition to the total production capacities and the breeding capacities themselves are of identical dimensions, each breeding unit has a useful volume of 100 m3.

Based on the collected data, a comparison of production conditions and achieved production results was performed, and thus the observed differences were analyzed. Using the average values of basic production indicators, as well as other technical information on the observed ponds, the calculation of production costs was performed, and thus an analytical calculation of total costs as well. The comparison of economic effects was made at the level of production cost, economic profit, economic efficiency and profitability of production, both for the case without incentives, so too with the incentives. Subsequent analysis included a sensitive analysis of the impact of the wholesale price of table fish, as well as the amount of incentives on the financial result.

Conditions in which production is performed on the examined ponds

According to available data, production at trout ponds in Serbia was performed on areas in operation between 33255 m2 and 81411 m2 during the period 2010-2019 (RSZ, 2020). Out of this area, cage systems occupy about 2,000 m2 in operation per year, on currently 3 active cage farms. Two are located on Lake Zaovine and one on Lake Lisine. The examined pond in Serbia is located on Lake Zaovine.

Lake Zaovine is located in western Serbia, in the municipality of Bajina Basta and at a maximum water level it has an altitude of 892 m. Lake Zaovine is an artificial reservoir of reversible type, which means that water is pumped into it and used to operate the hydropower plant as needed.

"Zaovine" fish production facility is a semi-systemic cage pond and on it the production process begins with the purchase of juveniles of different sizes, but usually of about 10 g. At the Zaovine fishpond, production lasts all year round, and during 2020, experimental carp fattening was carried out for the first time.

On Lake Zaovine, the water is class I quality, and is suitable for breeding salmonid fish species. The exception is the high water temperature during the summer months when the diet is completely or largely disabled. Water temperatures reach such high values that the survival of trout is uncertain. Increased water temperature in the surface layer to a depth of 5 m over 18 °C in the cultivation of Rainbow trout entails a reduction or interruption of feeding, which leads to the absence of growth, as well as to the mass weight loss of fish. This phenomenon is very harmful to the economy of the fishpond, due to the existence of fixed costs that burden the financial result of the business, regardless of fish growth.

An additional specificity of the natural conditions on Lake Zaovine are the low temperatures during the winter. Water temperatures below 4 °C last from January to March and then the fish diet is reduced and the growths are very limited.

The direct consequence of the previously mentioned low and high temperatures in trout fattening are the reduced number of feeding days and the extended breeding period until reaching the consumption size. Indirect consequences refer to more frequent illness of fish during the summer period, difficult manipulation of fish, as well as difficult treatment at low and high temperatures.

High water temperatures during the summer make technological operations of grading, transfer to other cages and implementation of medicinal baths more difficult, due to additional stress for fish that are already in suboptimal living conditions. Delivery of table fish is difficult in summer due to mandatory hypothermia below 4 °C. During winter, on the other hand, the catch itself is very difficult due to the freezing of water on all surfaces that are in contact with the air, while the manipulation of fish in order to grade it is completely excluded due to damage to the skin of fish from low temperatures.

Snowfall during the period December-March on Lake Zaovine makes work difficult, primarily due to the impossibility of transporting workers and delivering fish. The existence of ice cover is occasional on Lake Zaovine, it does not happen every year.

Wild animals (otters, herons) which can cause very significant damage to production present the risk in production. Otters are especially dangerous because, in addition to the direct damage to the fish they eat, they can cause much bigger problems if they damage (bite) the cage nets when entering them. The presence of a guard dog on the cage system cannot solve the problem of otter intrusion.

A special trait of trout farming in lakes is the risk of more frequent fish diseases with parasitic diseases, if cyprinid fish species are also present in the lake. With elevated water temperatures, this problem has become even more important, both due to the faster flow of parasitic diseases, and due to the difficult implementation of antiparasitic baths. Only short-term, current so-called "flush" baths are possible on cage systems, the implementation of which requires extensive experience.

Production on classic trout farms in Bosnia and Herzegovina during 2019 was performed on an area of 104,202 m2 and in cages with a total volume of 87,050 m3 (Statistics Agency of BiH, 2020). Cage trout farming in BiH is represented on several water reservoirs, with the largest volume of production in water reservoirs formed on the Neretva River (altitude of Mostar reservoir 78 m, Salakovac 123 m, Grabovica 159 m and Jablanica 270 m), Lake Bileća 400 m), the confluence of two rivers in Lake Drina (altitude 250 m). These water reservoirs have quality water for fish farming.

From Table 1 it can be seen that the conditions in which the production takes place on the analyzed farms are very similar. There is a difference in water temperature, with the water temperature at the cage farm in Serbia reaching 25 °C, while at the pond in BiH it does not exceed 22 °C. The number of days with high temperatures from 20 °C to 25 °C on the fishpond in Serbia is 15-30 per year. In the cultivation of Rainbow trout, these temperatures are extremely unfavorable and directly affect the increased losses during breeding. Also, these extreme temperatures for trout farming affect a smaller number of feeding days, a longer breeding period and a poorer feed conversion ratio at the fish farm in Serbia compared to BiH. Desirable water temperatures for Rainbow trout farming during the growing season are from 7 °C to 18 °C, and are optimal from 14 °C to 16 °C (Savić et al., 2009; Woynarovich et al., 2011).

Studies indicate that an increase in water temperature from 19 °C to 25 °C leads to a decrease in the amount of feed consumed, as well as a decrease in growth, with the largest decrease at 25 °C (Myrick, Cech, 2000), which approaches lethal temperatures for Rainbow trout (25 °C - 26 °C)., according to some authors (Cherry et al., 1977; Hokanson et al., 1977). Also, the same conclusions were reached by Jiang et al. (2021), that increasing the temperature from 17 °C to 21 °C reduces the amount of feed consumed and the specific growth rate (SGR), and that elevated temperatures lead to weakened immunity, digestion and growth of Rainbow trout. Also, some recent research suggests that Rainbow trout have a limited ability to mitigate the negative effects of rising ambient temperatures (Coughlin et al., 2020).

Rainbow trout farming capacities are similar in the analyzed farms, where the unit capacities (one cage) are identical and amount to 5 m·5 m·5 m with a useful volume of about 100 m3. The mass densities of fish in the final phase of fattening are up to 20 kg/m3 at the farm in Serbia, and up to 30 kg/m3 at the farm in BiH. Excessive stocking densities can cause a number of negative consequences for farmed fish and production results, such as lower growth rate, higher conversion rate, bad fin condition, more frequent diseases, etc. The stocking densities at both observed farms are generally below the upper recommended limits for cage farms, based on several studies (Ellis et al., 2002), and below the generally recommended (rull of tumb) stocking density for Rainbow trout of 40 kg/m3 in the final phase (Mäkinen and Ruohonen, 1990).

Economic results of production

Based on the previously presented data from Table 1, as well as other normative data, an analytical calculation of the total costs of trout production for defined production conditions can be compiled. Two farms in Serbia and Bosnia and Herzegovina with an annual production of cca. 50 tons were selected for the calculation of economic results. Natural conditions for production and applied production technology are key factors that have a decisive influence on the achieved production and economic results. When defining organizational and economic models, data of special importance for economic results are: size of the tank, time of breeding, average weight of stocked fish, losses during breeding, choice of feed for fattening, number of employees, way of selling table fish, etc. Some of the variable factors can change, so it is necessary to monitor their impact on the economic effects of production (length of farming, size of the tank). It is important to know whether it is possible to produce and sell edible fish until the appearance of snow and strong cold spells, as well as what size of young fish to stock in order to achieve that. In the case of larger quantities of fish produced, this is certainly more difficult to achieve due to the possibility of sale. The length of cultivation conditions the engagement of workers, which causes significant production costs.

The defined conditions and production technology for which the calculations were made are:

- water temperatures vary throughout the year (1 °C - 25 °C),

- breeding begins with the purchase of fingerlings with an average weight of 10 g and ends with the sale of table fish with an average weight of 250-350 g,

- the number of feeding days per year at water temperatures from 7 °C to 18 °C is 270-300.

The value of production is the value of table fish sold. The quantity of consuming Rainbow trout in both models M1 - Serbia and M2 - BiH is 50 t. The selling price of Rainbow trout in Serbia varies during the year, with the wholesale price mostly depending on the current supply and price of Rainbow trout from imports (Turkey, Albania), as well as the price of surrounding markets (Serbia, BiH, Montenegro, Croatia). In the past 10 years, the wholesale price of trout in Serbia fco the buyer has varied between 2.8 €/kg and 3.3 €/kg (excluding VAT), with the current price being around 3.13 €/kg. In BiH, the average price is 2.97 €/kg. The planned productions, as well as the average realized ones, amount to 50 tons per year, which due to different sales prices between Serbia and BiH leads to a higher value of production in Serbia. In addition to the value of table fish, the total value of production includes incentives. In Serbia, the right to incentives is exercised for produced and invoiced fish in the amount of 10 RSD/kg, or 0.085 €/kg ("Official Gazette of RS", No. 61/2013 and No. 44/2014). In BiH, the amount of subsidies for freshwater fish varies depending on the entity, and in the case of the analyzed pond is 1.2 KM/kg, which is equivalent to 0.5114 €/kg (Official Gazette of the Federation of BiH, No. 14/2020). It is easy to see that the incentives per unit mass of table fish produced are more than 6 times higher in BiH than in Serbia.

The price for fingerlings in the size of 10 g with transport is around 10 €/kg (excluding VAT) in Serbia, while in BiH it is significantly cheaper and costs 7.7 €/kg. Mortality losses during cultivation to consumption size according to the collected data are about 20% for model M1 (Serbia) and 7% for model M2 (BiH). This results in significantly higher costs for stocking fingerlings in Serbia (€ 25,000) compared to the fish farm in Bosnia (€ 16,559.1), in order to achieve the planned production of table fish of 50 t per year.

Feed Conversion Ratio (FCR) is the amount of feed consumed per kilogram of fish growth. At the analyzed farms, the FCR at the level of the entire production cycle ranges between 1.1 and 1.3 kg/kg. For the price in the calculation from table 2, the average price for medium energy feed (18-20 MJ/kg; digestable energy/kg feed) with transport, without VAT, was taken. The price of food in Serbia is lower, but due to the higher FCR as a consequence of poorer natural conditions for farming, the cost of feed at both observed farms is approximate. From an economic point of view, the most favorable feeding strategy does not have to be the one with the lowest FCR, nor the one with the cheapest feed (Vaško et al., 2011).

During the breeding of Rainbow trout, on average, each generation of fish is treated several times for bacterial (yersiniosis, furunculosis, flavobacteriosis) infections (Jeremić and Radosavljević, 2011; Radosavljević et al., 2013). The costs of medical treatment are calculated for the case of treatment of the entire fish biomass twice, at average weights of 15 and 50 g, which most often happens in practice at a fish farm in Serbia. According to the collected data, the costs of treatment at the observed cage trout farm in Bosnia and Herzegovina amount to 1,278.2 € / year.

Chemicals are used for the purpose of disinfecting farming cages, tools, equipment and accessories, but also for treating the fish. The most commonly used chemicals are hydrated lime, benzalkonium chloride, formalin, hydrogen peroxide, acetic acid (Burka et al., 1997), as well as chlorine and live lime for tank and dead fish sanitation.

Edible Rainbow trout is predominantly delivered freshly caught and chilled to 0-4 °C in appropriate packaging. Transportation costs consist of the costs of packaging, the packaging material, ice, driver's per diem and the cost of the means of transport. External transport can also be hired. The most common amounts of transport costs are between 0.1 €/kg and 0.25 €/kg in Serbia, while 0.17 €/kg was adopted for the calculation. In BiH, data were taken from the records of fish farm where the amount of these costs is € 9,204 per year, or 0.18 €/kg of produced table fish. Service costs include fees for an externally hired technologist, veterinarian, and an accountant.

Risk is the probability that for some unforeseen reason, production will experience complete or partial failure. Risk is calculated as part of the value of production (Bohl et al, 1999; Schaeperclaus und Lukovics, 1998) and classified as variable cost. In this paper, the risk is stated but not calculated, because such cases have not been known on the analyzed farms in the past.

The M1 (SRB) model envisages the permanent engagement of 5 workers, as well as the occasional engagement of additional labor on weekends and during harvesting, which corresponds to the real situation. In the M2 (BiH) model, labor costs were obtained from the survey collectively, without insight into the number of workers.

Water fee is a cost determined at the level of 1.5787 €/m2 of cage area and 0.7289 €/ m2 of used shore according to the Decree on the amount of water fee for 2015 (Official Gazette of RS, 2015), which contributes to the cost of 0.043 €/kg of table fish. In BiH, the costs of using the water resource are calculated differently and they amount to 0.05 BAM/kg of fish sold, which is 1,278.25 € per year for a total of 50 t of table fish produced, or 0.026 € / kg.

Depreciation of facilities is the depreciation of production and ancillary facilities, such as a raft with breeding cages and a container for feedd and utensils. Equipment, such as kibla, fish cassettes, boat, mereds, grader, brushes, etc. are depreciated at significantly higher depreciation rates. Depreciation is calculated using the timelinear depreciation method based on the depreciation rates of the German Ministry of Finance (www.bundesfinanzministerium.de, 2020) for production facilities and used tools and equipment. Starting from the realistic assumption that the prices of materials and labor for making cages in RS and BiH are approximately the same, as well as that similar equipment is needed on ponds of the same capacity, it can be assumed that the corresponding depreciation will be approximately equal per unit capacity.

Property tax is prescribed at the level of 0.4% of the value of the immovable part of the company's property (Law on Property Tax, 2001, 2002, 2004, 2007, 2009, 2010) in the Republic of Serbia. Corporate income tax (Law on Corporate Income Tax, 2001, 2002, 2003, 2004, 2010, 2011, 2012, 2013, 2014) is calculated after the calculation of the financial result in case it is positive in the amount of 10% in the Republic of Serbia. Given that the surveyed cage farm from BiH in the Federation of BiH (legislation is different in the Republika Srpska and the Federation of BiH), profit tax is paid at a rate of 10% on the tax base determined in the tax balance (Law on Profit Tax, 2016).

Observing the cost-effectiveness of production at € 1 of total costs incurred, the Ml model generates € 1.12 in revenue, while the M2 Model generates € 1.09 in revenue, taking into acount the case with incentives. The degree of profit in the total value of production is 11.08% (M1) and 6% (M2). Profitability of capital is 12.46% (M1) and 6.38% (M2), respectively, also looking at incentives.

Sensitivity analysis

The calculation of the total costs (Table 2) of the production of Rainbow trout in cage ponds shows that the financial result is positive in both models, if the current situation with subsidies is taken into account. In the case of the M2 model and assuming no subsidies, the financial result would be negative. For this reason, it is justified and advisable to examine the impact of the reduction in table fish prices, as well as the reduction in the amount of subsidies on the financial result of both models.

Based on official data (SORS, 2021), producer prices of Rainbow trout in the period from 2013 to 2020 ranged from 3.001 €/kg to 3.369 €/kg. Data on retail prices are available for BiH, which in the same period had values from 4.60 €/kg to 4.91 €/kg. The authors decided to examine the impact of changes in producer prices in the range from -25% to + 25% of the selling price of table fish in the sensitivity analysis.

Looking at incentives in aquaculture, the amounts vary depending on the entities in BiH. In the Republika Srpska, the amount of incentives is at the level of 0.35 BAM/kg of fish (0.179 €/kg), while in the Federation of BiH it varied between 1.16 BAM/kg to 1.25 BAM/kg (0.593-0.639 €/kg). In the Republic of Serbia, incentives for the production of table fish currently (year 2021) amount to 0.085 €/kg, while in 2013 they amounted to 0.062 €/kg. The variation of the amount of incentives was performed in the range from - 100% to + 100% in relation to the currently valid ones. Table 4 shows that at the moment, at the average price of sold fish for sale of 3.13 €/kg and incentives in the amount of 0.085 €/kg, the financial result of the M1 model is 17,809 €. It can also be seen that the production of Rainbow trout would achieve a positive financial result even without government incentives. The question of interest for the M1 model is: how much can the price of table fish decrease without the financial result being negative. This question can be answered if the value of production is equated with the total costs, ie. in case VP = TC. The marginal selling price (Gpc) corresponds precisely to the case when the value of production and total costs are equal, ie when their difference is equal to 0. Thus we get:

a) Gpc = 2.859 €/kg - for a case without incentives

b) Gpc = 2.774 €/kg - for a case with incentives

The selling price of Rainbow trout can fall by 8.66% in the absence of incentives, as well as by 11.38% in the case of incentives without the financial result becoming negative.

Model M2 shows a negative financial result without incentives. With the currently valid incentives, the selling price of table fish can be reduced to 2.76 €/kg or by 7.04% while keeping the financial result positive. Otherwise, at the current average price of 2.97 €/ kg of table fish, incentives can be reduced to 0.21 €/kg or by 40.9% while keeping the financial result positive.

Conclusions

Based on the compiled analytical calculations of total production costs of Rainbow trout in the Republic of Serbia (M1) and Bosnia and Herzegovina (M2), it was shown that the financial result is positive in the M1 model and amounts to 13,555.8 € without incentives and 17,809 € with incentives of0.085 €/kg fish. In the M2 model, the financial result is negative (-15,123 €) without incentives, but is positive with incentives of 0.511 €/kg and amounts to 10,447 €.

The variable costs of both models are very approximate, although they differ significantly in their structure. In the cost structure, variable costs participate with 79.3% in total costs (M1) and 69.3% (M2).

Fixed costs are € 29,604.2 (20.7%) in the M1 model and € 50,182.1 (30.7%) in the M2 model. Such a large difference primarily stems from the much higher costs of permanently employed workers at the fish farm in BiH (€ 42,949) compared to the same in Serbia (€ 22,800). Other fixed costs are proportional in both models and also do not significantly affect the achieved financial result.

The cost price of consuming Rainbow trout is 2.69 €/kg without transportation costs at the fish farm in Serbia, or 3.09 €/kg in BiH. With transportation costs, the cost price is 2.86 €/kg for the M1 model and 3.27 €/kg for the M2. Variable costs in both models participate in the cost price structure of 2.27 €/kg.

Variable costs have a smaller share in the total costs in the case of concrete (raceway) ponds (Čanak et al., 2015), primarily due to the higher amount of depreciation costs. The cost structure also differs depending on the different conditions of production and business in countries around the world (Hasaan et al., 2007).

The costs of permanently hired workers represent the greatest burden and the cause of the negative economic result of the M2 model. In other words, 0.48 € (0.46 €/kg + 0.02 €/kg) is spent on permanently and occasionally hired workers in the M1 model for the production of 1 kg of consuming Rainbow trout, while on the M2 model 0.86 €/kg is needed. Such high labor costs indicate very low labor productivity and most likely too many employees. A possible solution is to reduce the number of full-time employees, and to hire additional labor as needed.

Improving the economic result is possible by increasing the value of production, which is possible if part of the table fish is sold at retail prices. This represents a realistic possibility that small producers do apply in practice, selling table fish on the local market.

Sensitivity analysis showed that with each change of 1% in the selling price of table fish in M1 model there is a change in the financial result of 1,565 €, while with a change of 1% in incentives, there is a change in the financial result of 42.5 €. In the M2 model, a change in the selling price of 1% leads to a change in the financial result of € 1,485, while a change in the incentives of1% leads to a change in the financial result of € 511.4.

Subsequent analysis showed that in the M1 model, the selling price of table fish can decrease to 2,859 €/kg (case without incentives), or to 2,774 €/kg (with incentives), so that the financial result remains positive. In the M2 model, incentives can be reduced by 40.9%, while the financial result would remain positive.

Relative indicators of economic efficiency of Rainbow trout production in cage farms show significantly better results in the case of model M1 than for model M2, as well as absolute indicators.

The main reason for the negative financial effects of the M2 model without incentives are the very high fixed costs of permanent employees. The authors believe that a more detailed analysis of the real needs for such a large engagement of labor on the fish farm in BiH should be done.

Conflict of interests

The authors declare no conflict of interest

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