Demonstrating the Use of Risk Programming for Aquacultural Farm Management

A risk programming method that evaluates production plans based on expected income and risk was demonstrated using representative data from Panama. Results illustrate the usefulness of the program in presenting production choices to decision makers and evaluating those choices under changing conditions. Less experienced or less financially secure farmers may select farm plans that differ quite importantly from those chosen by more experienced or more financially secure farmers. If farm survival is in doubt, more conservative farm plans will generally be adopted. Without consideration of the potential losses, it will often appear that all farmers should pursue the most intensive farm plan within their farming capabilities. However, many farmers will employ less intensive management strategies if the potential for losses associated with more intensive strategies is perceived to be excessive. The model indicated that management strategies were sensitive to changes in shrimp price and feed cost, but less sensitive to the costs of post larvae or energy. Also, shrimp farm managers should give serious consideration to not producing in the dry season due to relatively high risk and low expected returns. Farmers should be most concerned with quality and availability of post larvae, not price. If hatcheries can address these concerns, the higher price of hatchery post larvae will be justified.