Economic evaluation of fish descaling machine

Introduction

Indian fisheries are one of the important sectors in terms of its contribution to the national economy. It is providing food, nutrition, socio-economic development and livelihood to the large population of the country. In addition, country earns valuable foreign exchange by exporting fish and fish value added products (Anon., 2021a) [1] . The preliminary processing of fish consists of different steps such as evisceration, beheading, scaling, cutting of fins and belly flaps, slicing of whole fish into small parts or steaks and other operations based on the consumption like filleting, skinning, grinding of skinned fillets etc. These pre-processed products are sold or further processed to obtain value added products (Bykowski and Dutkiewicz, 1996) [2] . Among the post harvest processing operations of fish, fish descaling is one of the important operation. Scaling is the process of removal of scales on the fish skin. Many fresh water fish needs descaling and the fish vendors remove the scales manually using hand tools. They use different kinds of brushes or knives to remove the scales. The freshwater fishes prevalent in the Indian fish markets such as rohu, catla, mrigal, silver carp and grass carp have prominent scales and their manual descaling is very difficult (Bykowski and Dutkiewicz, 1996) [2] . Manual descaling process may sometimes cause bruising of fingers and palms of the fish workers leading to infections. All the process is done in an unhygienic way (Gaikwad et al., 2017) [4] . Another drawback in manual fish scaling is difficulty in separating various fractions of the waste generated which has good commercial value in industries like animal feed, pharmaceuticals etc. Fish processing waste has potential to extract proteins, oils, bio active peptides, enzymes (Ghaly et al., 2013) [5] . During the market survey, it was found that the reasons for non adoption of descaling machinery were the lack of locally made machines that suit their species or needs and relatively higher cost of equipment. Considering the above facts and the research gap, there is a need to develop and popularize an inexpensive, efficient and safe fish descaling machine indigenously suitable for small fish vendors, fish farmers, restaurants, hotels and hostels. The new machine development is focused to operate in a semi continuous manner to make the descaling operation easy, convenient, reduce the drudgery, and collect the scales neatly to be disposed off safely by keeping working area tidy and hygienic or utilized for preparing value added products.

Materials and Methods

The fish De-scaling machine was developed with an objective to remove the scales of the fish, reduce human drudgery, avoid contamination and maintain hygiene for human consumption. The description of the developed descaling machine and economic evaluation of the machine is as follows.

Assembly of the fish descaling machine

The main assembly and fabrication was carried out in the workshop of the College of Agricultural Engineering, Kandi, Sangareddy. The individual components were fabricated as per the designed specifications. Standard components like chain, bearings, sprockets, motors, VFDs were procured from the market. Supporting frame was fabricated as per the specifications and was placed on a hard and even surface. The designed components were fabricated or procured from the market and kept ready for assembly of the machine. The assembled fish descaling machine is depicted in Fig. 1 and the specifications of the developed machine are given in Table .1. The developed machine was evaluated for the economics of operation. The methodology used for estimation of cost is depicted as follows:

Economics of the developed fish descaling machine

The economics of the developed fish descaling machine were studied by calculating the cost of fabricating machine, cost of operation, payback period, benefit-cost ratio and net present worth.

Cost of fish de-scaling machine

The cost of the developed machine was calculated by considering the actual quantity of the raw material used in the fabrication of the designed machine including transportation and labour charges.

Cost of operation

The cost of operation of the developed fish de-scaling machine was calculated by straight line method described by Ojha and Micheal (2009) [6] . The following assumptions were made before calculating the cost of operation. The expected returns for the machine were estimated based on the descaling charges of ₹ 20 per kg weight of raw material. In the fixed cost, annual depreciation, annual interest on investment and taxes were computed by using the following equations.

Payback period

Payback period is the amount of time taken to recover the cost of an investment. Payback period of the developed fish descaler in terms of number of years was computed by using the following equation (Reddy et al., 2004) [7] .

Where, P-Payback period, years I-Investment, ₹ E-Annual net return, ₹

Benefit cost ratio

Benefit cost ratio was estimated by using the equation suggested by Reddy et al. (2004) [7] .

The discounted cost and discounted return were calculated by using the following equations. Assuming, an increase in annual operational cost of the machine as 2% due to the probable hike in the repair and maintenance cost.

Where, B t -Returns for year t, ₹ C t -Cost of production for year t, ₹ t -Economical life, years r -Discount rate, fraction

Net present worth

Net present worth or Net Present Value (NPW) is the present worth of cash flow stream of the operation. It was calculated by using the following formula (Reddy et al., 2004) [7] .

Where, P-Net cash flow, ₹ i -Discount rate, fraction t -Time period, years C -Investment, ₹

Results and Discussion

The fish descaling machine was fabricated and evaluated for different speeds of descaling and conveying rollers. The economics of the machine for optimized parameters was evaluated on different metrics like cost of operation, payback period, net returns, Benefit-cost ratio, net present worth as follows.

Cost of operation

The evaluation of the machine was carried out for optimizing the operational speeds. During the evaluation of the machine, the capacity of the machine was taken as 50 kg per hour. The cost of operation included were fixed costs and operational costs of ₹ 35,788 and ₹ 6,32,450, respectively with the life of descaling machine assumed as 5 years. The total cost of operation per annum was ₹ 6,68,238. Considering 300 working days and 8 working hours per day, the cost of operation was found to be ₹ 5.57 kg -1 . The cost of descaling the fish was found to be ₹ 278 per hour. Considering ₹ 20 charged per kg for fish descaling operation, the expected returns per day was found to be ₹ 3,000 resulting in an annual income of ₹ 9,00,000 for 300 days. The net profit that might be earned for fish descaling operation using the machine was found to be ₹ 2,31,763. Delfiya et al. (2019) [3] reported that manual fish scaling requires ₹ 15 and operating cost of a drum type descaler they developed was calculated as ₹ 4.76 and ₹ 9.52 per kg in case of Tilapia and Pearl spot, respectively and stated that ₹ 5.5 could be saved by using the machine in case of Pearl spot. The cost of operation of ₹ 5.57 kg -1 determined in the present study was in close agreement with the cost of operation estimated by the earlier investigator. The details of the Cost of manufacturing the machine and operational costs, Annual cost of operation of the fish descaling machine and Calculation of economics of fish de-scaler operation are given in Table 2, 3 & 4 respectively.

Payback period

Payback period was calculated on the basis of investment made to the net returns. It was the ratio of investment made on the machine to net annual returns made from the descaling operation. It was found to be 0.9 years or 324 days.

Net returns

Net returns of the developed descaling machine was obtained by deducting the value of estimated cost from estimated returns and was found to be ₹ 4,68,313 for a period of 5 years with an average net returns per year as ₹ 93,663.

Benefit-cost ratio

The benefit-cost ratio (B-C), calculated based on the discounted returns and discounted costs was found to be 1.36:1. The discount rate for the descaler was assumed as (%) 12 13

Increase in operational cost of the descaler due to change in maintenance and repairs (%) 2

Net Present Worth (NPW)

It was the difference between the present value of cash inflows and the present value of cash outflows over a period of time. The Net Present Worth was found to be ₹ 1104734 for a period of 5 years. Manual descaling operation was laborious, unhygienic and requires the skill to handle the tool to remove the fish scales. It was observed that on an average in manual operation, one person takes about 2 minutes for descaling a fish of size 500 g (Gaikwad et al., 2017) [4] , i.e. around 15-20 kg per hour.

With a capacity of about 66.4 kg h -1 , the fish descaling machine developed in the present study, could descale a similar fish in about 1 minute. Therefore, the developed machine would be beneficial for the fisher folks, unemployed rural youth and small entrepreneurs. Adoption of the machinery would greatly improve the utilization of fish by-products like fish scales effectively by cleanly collecting them. Improvement in hygiene in fish processing and surroundings were envisaged as one of the foremost advantage of using the machine. All these advantages might result in increased value addition to the fish and new customers for the fish meat and additional income to the vendor. The details of the calculation of economics of the machine for 5 years is given in Table 5.

Conclusions

The cost of the machine was found to be ₹ 2,04,500. The total cost of operation per annum was ₹ 6,68,238. Considering 300 working days and 8 working hours per day, the cost of operation was found to be ₹ 5.57 kg -1 and ₹ 278 h -1 . Considering ₹ 20 kg -1 charged for descaling operation, the net profit that might be earned for descaling fish using the machine was found to be ₹ 2,31,763 per annum.

Payback period calculated was 324 days with net returns per year as ₹ 93,663. The benefit cost ratio obtained was 1.36:1.

References

1. Bykowski P, Dutkiewicz D. Preliminary processing of freshwater fish, freshwater fish processing and equipment in small plants. FAO Fisheries Circular No. 905 FIIU/C905. Rome: Sea Fisheries Institute, Fisheries and Aquaculture Department, FAO; 1996;3(1):3-13. Available from: www.fao.org/3/w0495e/w0495E03.htm
2. Delfiya DSA, Murali S, Alfiya PV, Zynudheen AA, Gokulan CR, Samuel MP. Optimization of processing conditions of hand operated descaling machine for various fish. Fishery Technology. 2019;56(1):221-226.
3. Gaikwad N, Ahmed T, Govind BY, Singh A. Design, development and performance evaluation of fish descaling machine. Fishery Technology. 2017;54(2):273-278.
4. Ghaly AE, Ramakrishnan VV, Brooks MS, Budge SM, Dave D. Fish processing wastes as a potential source of proteins, amino acids and oils: A critical review. Journal of Microbial and Biochemical Technology. 2013;5(4):107-129.
5. Ojha TP, Michael AM. Principles of agricultural engineering. New Delhi: Reliance Industries Pvt. Ltd.; 2009;1:467-476.
6. Reddy SS, Ram PR, Sastry TVN, Devi BI. Agricultural economics. New Delhi: Oxford and IBH Publishing Co. Pvt. Ltd.; 2004. Available from: https://www.amazon.in/Agricultural-Economics-SubbaReddy/dp/B007I0KCV2