Cost Returns Analysis And Economic Performance Of Shrimp Farming In The Coastal Districts Of Andhra Pradesh, India

Abstract

This study evaluates the economic performance of shrimp farming across five districts in Andhra Pradesh using Primary Field Survey data of 500 Shrimp farmers. The analysis focuses on major economic indicators, including Benefit-Cost Ratio (BCR), Capital productivity, Cost efficiency, Gross margin, Break-even analysis, and Investment recovery. The total capital cost averaged ₹4,25,366/acre, with the highest in East Godavari (₹4,43,423/acre) and lowest in Prakasam (₹4,10,890/acre), indicating a 7.9% difference. Operational costs ranged from ₹4,27,408/acre (Nellore) to ₹4,37,207/acre (East Godavari), with feed constituting nearly 50% of expenses. Fixed costs ranged widely, from ₹1,64,864/acre (Prakasam) to ₹2,63,912/acre (East Godavari), mainly due to variable lease rents. Yields varied between 2.09±0.4 tons (Nellore) and 2.49±0.46 tons (East Godavari). Gross returns spanned ₹10,02,673±1,96,902/acre (Nellore) to ₹12,03,844±2,26,749/acre (East Godavari), with corresponding net returns following a similar trend. Economic indicators highlighted robust profitability: the overall BCR was 1.70±0.28, indicating ₹1.70 return per rupee invested, with no significant regional variation. Capital productivity and fixed asset utilization ratios were highest in East Godavari (2.70 and 2.84, respectively).Cost efficiency ratios were consistent (0.60–0.62), while variable cost efficiency favoured inland districts. Gross margins ranged from 0.56 to 0.62, with coastal districts displaying higher efficiencies. Break-even yields and prices demonstrated favorable risk-adjusted returns for coastal areas, with actual prices offering 65–69% profit margins. Payback periods were uniform (3.00–3.37 years), confirming the financial viability of Vannamei shrimp farming in Andhra Pradesh.