On the island of Madagascar, 80% of the population live inland. Away from the coast and urban centres, people have limited access to protein and nutrient-rich foods like fish, leading to undernourishment and malnutrition in rural areas. Innovative aquaculture methods have the potential to provide the rural population with a steady supply of fresh fish and bolster communities with additional revenue streams.
Traditionally, inland fish production rely on intensive or semi-intensive aquaculture methods. The most technically sophisticated extreme version of this is called a Recirculating Aquaculture System (RAS), in which fish are kept indoors in tanks in a closed-circuit system. Here, they are fed with formulated feed, and the water is recirculated after waste is removed and the water purified. An alternative intensive method involves caging fish in nets within open water and feeding them with formulated feed.
Semi-intensive systems take some aspects of intensive fish farming but combine them with more nature-based approaches. One example is pond farming, in which fish are kept in earthen ponds utilizing the natural productivity of the pond, in combination with supplementary feeding to achieve higher productivity.
One alternative aquaculture approach, which could be transformative in Madagascar, is an extensive rice-fish system. Rice-fish systems enable carp and tilapia to be farmed alongside rice production in paddy fields. This provides symbiotic benefits for both species: the rice provides fish with a sheltered habitat and insects to feed on, while the rice is fertilized by the fish waste. There are only limited costs for upgrading the rice fields, and local rice farmers can make additional revenue by farming fish as well as rice. However, just 20% of suitable paddy fields are currently utilised for rice-fish farming, despite its considerable benefits.
To tackle this, the Projet d’Aquaculture Durable à Madagascar (PADM) focused on the promotion of rice-fish and pond culture in the highlands and the east coast of Madagascar. Financed by the Federal Ministry for Economic Cooperation and Development (BMZ) and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, the project benefitted 15,815 fish farms, as well as local communities who benefit from livelihood opportunities across the value chain, the availability of fresh fish, and improved nutrition.
We developed a Sustainable Asset Valuation (SAVi) assessment, in collaboration with our partners GIZ GmbH and the Shamba Centre for Food & Climate, to assess the performance of four aquaculture systems. To do this, we modelled the economic, social and environmental costs and benefits of extensive rice-fish farming, semi-intensive fish farming, intensive net cage fish farming, and intensive fish farming in tanks over a 25-year lifecycle, from 2025 to 2050. Using quantitative modelling informed by qualitative methods such as system mapping, we captured the complex interactions among variables such as water and nutrient dynamics, fish and rice production to analyze both the sustainability and profitability of the different approaches.
Overall, we found that extensive rice-fish farming demonstrates high environmental performance with minimal water usage, efficient nutrient utilization, and a reduction in green house gas (GHG) emissions of -0.81 kg-CO2e/kg rice. Indeed, introducing fish into a rice paddy reduces methane emissions by increasing soil oxygenation, thereby limiting the conditions favourable to methane-producing bacteria. It also contributes to biodiversity, supporting diverse aquatic and terrestrial species, fostering ecological balance, habitat diversity, and conservation efforts. In contrast, intensive systems, such as net cage and tank farming, exhibit higher environmental impacts, including green house gas (GHG) emissions ranging from 2.79 to 6 kg-CO2e/kg fish, significant water demands up to 34,091 litres/kg fish for net cage systems, and up to 14 times greater water pollution due to nutrient export.
For rural communities, extensive rice-fish farming operates at a modest scale compared to the other systems, producing both fish and rice products. This integrated approach enhances nutritional diversity and food security while also fostering rural employment and economic stability. Moreover, extensive rice-fish farming systems offer recreational benefits, serving as communal spaces for social interaction, leisure, community gatherings, and educational experiences, enhancing their social value. In comparison, intensive farming systems based on external feeds from agriculture and fisheries ingredients, yields high output by converting the feed’s nutrients into fish, without utilizing primary production within the culture system itself, and without providing additional nutritional benefits.
Image: Olivier Joffre
In terms of economics, extensive rice-fish farming incurs the lowest environmental costs, with no costs for water demand or pollution. In comparison, intensive fish farming in tanks has the highest environmental costs, including USD 0.157 /kg fish for water use and USD 0.03 /kg fish for GHG emissions, reflecting the extensive resource requirements and environmental impact of these systems. Moreover, extensive rice-fish farming incurs the lowest economic cost per kilogram of fish produced (USD 1.34 /kg) whilst being the most labour-intensive system, reflecting significant employment creation in rural communities. On the other hand, intensive systems like fish farming in tanks have higher economic costs (USD 2.34 /kg), offer fewer employment opportunities at farm level and rely heavily on external inputs such as formulated feeds and energy. This comparison highlights a trade-off between employment benefits and cost efficiency in different aquaculture systems.
Integrated Cost-Benefit Analysis Results
Our analysis reveals that when including externalities in the assessment of these aquaculture projects, extensive systems perform on average 36% better than intensive systems by avoiding negative externalities associated to these systems.
Extensive rice-fish farming, practiced on 100 m2, has the lowest cumulative cost over the 2050 horizon and achieves significant environmental benefits. In contrast, intensive fish farming using net cages and tanks, operating over 1,000 m2 and 10,000 m2 respectively, incurs substantial costs for construction and externalities, highlighting the economic and environmental burdens of intensive systems. The externalities quantified are the following: GHG emissions (feed production, fertilizer production, energy consumption, rice seed production, pond activity), water usage, water pollution (nitrogen export, phosphorus export, organic matter export), land and wild catch requirements to produce feed, and energy requirements to operate.
| Unit | Extensive rice-fish | Semi-intensive | Intensive net cage | Intensive tanks | |
| Scale of farm | m2 | 100 | 700 | 2,000 | 10,000 |
| Direct Costs | |||||
| Cost of construction | USD | 1 | 417 | 29,506 | 4,246,861 |
| Cost of labor | USD | 136 | 510 | 3,208 | 107,274 |
| Cost of feed and fertilizer | USD | 24 | 3,814 | 170,813 | 5,173,619 |
| Cost of energy | USD | – | – | – | 2,325,711 |
| Cost of fingerlings | USD | 11 | 720 | 22,142 | 705,127 |
| Cost of seeds | USD | 2 | – | – | – |
| Cost of water usage | USD | – | 5 | – | 725,201 |
| Externalities | |||||
| Cost of GHG emissions | USD | 0.2 | 49 | 2,024 | 138,749 |
| Cost of water pollution | USD | – | 1,154 | 73,723 | 96,617 |
| TOTAL COSTS | USD | 173 | 6,670 | 301,416 | 13,519,159 |
| Benefits | |||||
| Fish production revenue | USD | 101 | 9,417 | 377,789 | 11,827,738 |
| Rice production revenue | USD | 138 | – | – | – |
| TOTAL BENEFITS | USD | 240 | 9,417 | 377,789 | 11,827,738 |
| Key Performance Indicators | |||||
| Benefit to Cost Ratio | ratio | 1.38 | 1.41 | 1.25 | 0.87 |
Conclusion
In conclusion, the Sustainable Asset Valuation assessment offers a thorough understanding of aquaculture systems in Madagascar, revealing that while intensive systems are financially attractive given the scale of operations, they underperform economically due to high external costs. Extensive systems, characterized by a higher labour-to-capital cost structure, not only support substantial employment and community development but also show strong viability from both societal and financial perspectives. These systems tend to generate positive environmental impacts, contributing to nature-positive outcomes.
Dr. Jens Kahle, an advisor for the Global Program Sustainable Fisheries and Aquaculture program at GIZ, said: “Extensive aquaculture production systems are supposed to be of low productivity, which overlooks that such systems produce fish nearly without externalities. Intensive systems can produce large quantities of fish on a small area, but to do so, they rely largely on externalities (land, water, energy) to maintain water quality and to produce feed. Taking the externalities into account, extensive systems actually have a very high productivity.
“Aquaculture is highly diverse in the level of intensity (stocking density), farm size and production efficiency. Understanding the pros and cons of the different systems shall support decision makers when developing national strategies and national pathways to meet the market demand in the most sustainable manner.”
Key findings
Environmental aspects
- Intensive farming: Higher emissions and resource demands.
- Rice-fish farming: Reduced GHG emissions, minimal water usage, and efficient nutrient utilization. Also protects and enhances biodiversity with the lowest environmental costs.
Economic and social trade-offs
- Intensive farming: Higher costs per kg, fewer jobs, high reliance on external inputs, higher outputs per production unit.
- Rice-fish farming: Lower costs, significant employment, nutritional diversity, and rural stability.
Resilience and viability
- Intensive farming: Higher risks, economic challenges, and lower long-term sustainability.
- Rice-fish farming: Stable benefit-to-cost ratio in both integrated and traditional senses, low investment costs, minimal externalities.
