years. Two full positions and two seasonal employees are required per year. The
latter are employed only in times of the heaviest workload in the 6 months from
spring to autumn. Labour costs total 479,952 € in a four-year period. Costs of
maintenance and repairs, estimated as 10% of the yearly depreciation, are
302,254 €. Miscellaneous variable costs are estimated to be 5% of depreciation,
total 151,127 € in four years. Interest on operating capital sums to 88,853 € in four
years. Total variable costs were 1,358,186 €.
11.6.3.2 Enterprise Budget Analysis
Costs and receipts of two case-scenarios were calculated for consumption mussels.
Scenario 1: Production of consumption mussels with Investment into a new vessel.
This is the base scenario assuming a four million € investment into a new vessel for
farming of mussels for consumption. A general overhaul of the motor is necessary
after 10 years and is calculated with 385,000 €. Net returns for an average four year
period sum to 4,594,996 €. Scenario 2: Production of consumption mussels using
free capacities of existing mussel farmers. For this scenario, retrofitting costs for the
vessel are about 750,000 €. No land-based facility is included. This leads to net
returns of approximately 6,022,000 € in four years, which is 1.3 times higher than
in the base scenario.
11.6.3.3 Productivity Measures
Break-even yield and break-even price were calculated to estimate the minimum
level of biomass production and the minimum price per kg mussel to enable the
enterprise to cover cost. Assuming a biomass of 10 kg meter
−1 (consumer mussels)
the break-even price is 0.52 € when a new vessel and land facility is taken into
calculation. Using existing equipment, a break-even price of 0.37 € results. In the
case of seed mussels the break-even price varies between 0.34 and 0.49 €.
Break-even yield for the consumer mussel scenarios lies between 3.67 kg and
5.17 kg per meter longline, respectively, assuming a mussel price of 1 € kg
−1 . In
the seed mussel scenario the break-even yields range from 3.42 to 4.92 kg. Actual
prices and yields observed at field experiments are higher than the break-even
values. This indicates the profitability of both practices, while the consumer mussel
production is clearly more above those criterions for economic viability.
11.6.3.4 Investment Appraisal
Assuming the operating life expectancy of a new vessel to be 20 years, we calculate
the NPV of cash flows over 20 years with a discount rate of 7% in the basic model.
This rate is chosen according to Liu and Sumaila (2007), who argue that the most
frequently used discount rate by Nature Resources Canada is within a range of
334
B.H. Buck et al.
latter are employed only in times of the heaviest workload in the 6 months from
spring to autumn. Labour costs total 479,952 € in a four-year period. Costs of
maintenance and repairs, estimated as 10% of the yearly depreciation, are
302,254 €. Miscellaneous variable costs are estimated to be 5% of depreciation,
total 151,127 € in four years. Interest on operating capital sums to 88,853 € in four
years. Total variable costs were 1,358,186 €.
11.6.3.2 Enterprise Budget Analysis
Costs and receipts of two case-scenarios were calculated for consumption mussels.
Scenario 1: Production of consumption mussels with Investment into a new vessel.
This is the base scenario assuming a four million € investment into a new vessel for
farming of mussels for consumption. A general overhaul of the motor is necessary
after 10 years and is calculated with 385,000 €. Net returns for an average four year
period sum to 4,594,996 €. Scenario 2: Production of consumption mussels using
free capacities of existing mussel farmers. For this scenario, retrofitting costs for the
vessel are about 750,000 €. No land-based facility is included. This leads to net
returns of approximately 6,022,000 € in four years, which is 1.3 times higher than
in the base scenario.
11.6.3.3 Productivity Measures
Break-even yield and break-even price were calculated to estimate the minimum
level of biomass production and the minimum price per kg mussel to enable the
enterprise to cover cost. Assuming a biomass of 10 kg meter
−1 (consumer mussels)
the break-even price is 0.52 € when a new vessel and land facility is taken into
calculation. Using existing equipment, a break-even price of 0.37 € results. In the
case of seed mussels the break-even price varies between 0.34 and 0.49 €.
Break-even yield for the consumer mussel scenarios lies between 3.67 kg and
5.17 kg per meter longline, respectively, assuming a mussel price of 1 € kg
−1 . In
the seed mussel scenario the break-even yields range from 3.42 to 4.92 kg. Actual
prices and yields observed at field experiments are higher than the break-even
values. This indicates the profitability of both practices, while the consumer mussel
production is clearly more above those criterions for economic viability.
11.6.3.4 Investment Appraisal
Assuming the operating life expectancy of a new vessel to be 20 years, we calculate
the NPV of cash flows over 20 years with a discount rate of 7% in the basic model.
This rate is chosen according to Liu and Sumaila (2007), who argue that the most
frequently used discount rate by Nature Resources Canada is within a range of
334
B.H. Buck et al.