development of a business plan for kigembe fish laboratory

Meeting Report

101

DEVELOPMENT OF A BUSINESS PLAN FOR KIGEMBE FISH LABORATORY – RWANDA AND

TRAINING OF STAFF IN BASIC LABORATORY PROCEDURES AND PRACTICES

March 2015, Rwanda - Justus Rutaisire PhD

TABLE OF CONTENTS

TABLE OF CONTENTS .................................................................. PART I. BUSINESS PLAN FOR KIGEMBE FISH LABORATORY ..... 1

THE FISHERIES INDUSTRY IN RWANDA ................................................ 1 BACKGROUND TO THE BUSINESS PLAN ................................................ 3 RESOURCE ENDOWMENTS FOR POTENTIAL GENERATION OF REVENUE BY KIGEMBE FISH LABORATORY ....................................................................... 4

Water Quality Testing ............................................................ 4 Diagnosis of fish diseases (parasites, bacteria, and viruses) ........ 5 Recommendations for fish farmers .......................................... 5 Organizational Analysis .......................................................... 5 Laboratory management structure, the existing policies and regulations ........................................................................... 5

MARKET ANALYSIS ................................................................... 6 SWOT ANALYSIS ...................................................................... 7 FINANCIAL ANALYSIS ............................................................... 8 CASHFLOW STATEMENT ............................................................ 8 INVESTMENT ANALYSIS ........................................................... 13

IMPLEMENTATION PLAN ......................................................... 13

PART II: TRAINING OF KIGEMBE LABORATORY STAFF ........... 13

OVERALL OBJECTIVE .................................................................... 13 TRAINING AT KIGEMBE FISH FARM IN GISAGARA DISTRICT RWANDA ............. 13 THE IMPORTANCE OF HISTORY & RECORDS .......................................... 14

Topic One: Use and handling of laboratory and field equipment .. 14 Topic Two: Laboratory design and setup .................................. 16 Topic Three: Water Quality Analysis ........................................ 16 Topic Four: Fish Health ......................................................... 20

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PART I. BUSINESS PLAN FOR KIGEMBE FISH LABORATORY The Fisheries Industry in Rwanda Fisheries and Aquaculture are an integral part of the livestock subsector that together with crop resources comprise the Agriculture Sector under the Ministry of Agriculture and Animal Resources (MINAGRI). Currently, the fisheries and aquaculture produce about 25,000 tons of fish locally with another 15,000 tons imported from neighbouring countries. The sub-sector provides about 40,000 jobs directly and another 200,000 downstream. The sector supports altogether 1,000,000 livelihoods though it is not a traditional enterprise. Although capture fisheries is still the main source of fish, catches from the lakes are progressively dwindling due to intense fish pressure exerted on the fish stocks. The two areas contribute about 5% to the agricultural GDP. As part of the implementation of the EDPRS and PSTA policies towards attainment of the Rwanda Vision 2020 objectives, MINAGRI developed a Fisheries and Aquaculture Master Plan which clearly outlines the development objectives in the two areas. The Master Plan calls for intensification of production and fish market development. Rwanda has one of the fastest growing economies in Africa and after years of troubles is emerging and able to tackle development challenges largely through increasing the productivity in the agriculture sector. Fisheries has up to the present played only minor role in the country’s development, but this is expected to change in the next 10 years. Fishing activity is largely confined to the lakes of Kivu, Cyohoha and Mugesera and undertaken through co-operatives or associations of fishers. Despite the low levels of production, Rwandans are fish eaters and they import (mainly from Tanzania and Uganda) more than half as much as they produce. The lake fisheries in Rwanda are all artisanal in nature and most fish is consumed fresh. Rwanda has for many years experimented and employed fish culture techniques with varying degrees of success. The Government has developed plans to more than double fish production in Rwanda over the coming 10 years. Strategic Context: Government of Rwanda (GoR) developed a Fisheries and Aquaculture Master Plan as part of the process for actualizing the contribution of the fisheries and aquaculture subsectors to the development aspirations expressed in the EDPRS and PSTA III policy documents for National and Agricultural Sector Development plans in line with Rwanda Vision 2020. Rwanda Vision 2020, EDPRS, PSTA III and the CAADP compact call for transformation of

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agriculture from subsistence into a productive high value, market oriented sector. These policy documents set forth plans for intensification of agricultural production coupled with market orientation and development through farmer re-organization and capacity building, promoting and supporting of commodity chains and agribusinesses development, and strengthening the technical (advisory) and management (institutional) framework of the respective agriculture subsectors at all levels in both public and private sectors. The policies and plans are based on premise of emergence of a vibrant private sector leadership in agriculture production and marketing value chains through deliberate GoR interventions to empower private sector in the management and technical production skills; inputs production and supply industry; and processing, value addition and marketing of agricultural products capacity. One of the pillars identified in Vision 2020 is development of an efficient private sector spearheaded by competitiveness and entrepreneurship while EDPRS II calls for heavy investment in “hard infrastructure” by the GoR to create strong incentives for the Private Sector to increase its investment rate. The Fisheries and Aquaculture Master Plan is premised on the above provisions in realization of the National Fisheries Policy objectives outlined as here below:

(i) Contribute to the food security of the communities; (ii) Contribute to poverty reduction through increased incomes of rural

dwellers; (iii) Contribute to aquatic environmental protection; (iv) Increasing productivity of fishing environments; (v) Intensifying aquaculture production through the use of high yield

aquaculture techniques; (vi) Building national capacities in technical supervision, quality

assurance, extension and research (vii) Reforming the regulatory framework in order to encourage private

investment in fishery and aquaculture; (viii) Improving marketing of fish products.

In order to achieve the above, the master plan identifies the following key thematic areas for public investment, namely:

i) Sustainability and responsible utilization of resources based on public-private sector partnerships;

ii) Developing knowledge based aquaculture and fisheries systems; iii) Creating enabling environment for the private sector to play their role

in increased fish production;

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iv) Creating institutional capacity to manage and develop fisheries resources in Rwanda.

Background to the Business Plan Kigembe Station located in Gisagara and Nyaruguru Districts in Southern Rwanda was established in 1954 mainly as a fish farm with a purpose to provide fish fingerlings and extension services to the small scale farmers at the time. Several ponds of various sizes were excavated and buildings set up for accommodation of staff and storage of inputs and farm tools. The station over the years remained a government fish farm providing services to the earthen-pond based fish farmers. Over the years, there has been need to transform fish farming in Rwanda from predominantly subsistence to a commercial undertaking and position the sub-sector for investment. Already an enabling legal framework has been put in place to attract investors in commercial fish farming. Aquaculture is considered a viable alternative to increasing fish production in Rwanda. The Rwanda’s Master plan on Aquaculture and Fisheries projects a steady increase that should reach at least 130,000 tons per year by 2020 with most of it coming from commercial aquaculture. Whereas several businesses in fish farming have sprung up mainly focusing on cage culture, there are no adequate laboratory services to support the sub sector. It was in this context that Kigembe fish farm was rehabilitated and upgraded by the PIAGELAC project. This effort was recently boosted by The Indian Ocean Commission’s Smart Fish Programme, which provided an assortment of laboratory equipment; an effort that will be complemented by the Government of Rwanda. Commercial fish farming entails rearing fish sometimes in high stocking densities for a profit. Such systems decrease ecological barriers between individual fish and can facilitate transmission of disease causing pathogens and deterioration of water environment, which require services from a competent laboratory to mitigate fish mortalities and maintain a healthy aquatic environment. Whereas Kigembe is being set to provide such requisite services, it faces imminent challenges of sustainability due to inadequate and sometimes irregular support from government and lack of a clear capacity building strategy. Kigembe being a government station requires a clear business plan describing a development trajectory and defining roles that shall be undertaken by the various stakeholders. Aquaculture production in Rwanda is increasing with several investments registered in pond and cage culture production systems. However, there are no

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adequate laboratory services to support the sub-sector. In response to this situation, Smart Fish in assistance to the Government of Rwanda procured assorted equipment and reagents for the Fish Laboratory at Kigembe in Gisagara District. The equipment were delivered at Kigembe but the staff of the centre required hands-on training on how to correctly use and maintain the newly acquired laboratory equipment in good working conditions. There was also need of training in basic laboratory procedures for optimal use and safety. It is anticipated that the laboratory will receive samples from natural water bodies and fish farms and will therefore have to establish procedures for fish samples collection, shipping to the laboratory and communication of results. This is particularly important at this time when parts of Africa are experiencing outbreaks of previously unreported diseases such Epizootic Ulcerative Syndrome (EUS) which causes mass mortalities in wild and farmed fish. The transformations in fish production, disease epidemiology and product development calls for laboratory services along the value chain to ensure sufficient quantities of good quality fish products. The current 5 year Business Plan is intended to achieve this purpose. Resource endowments for potential generation of revenue by Kigembe Fish Laboratory The transformation of the fisheries and aquaculture as contained in the national strategic documents creates opportunities for revenue generation by Kigembe Fish Laboratory (KFL). The Fish Laboratory will function as the Rwanda Agriculture Board leading centre in freshwater fisheries and aquaculture, handling a range of issues. Among them:

(i) Water quality testing; (ii) Diagnosis of fish diseases (parasites, bacteria, and viruses); (iii) Recommendations for fish farmers, while integrating the data and

providing public advisory services; (iv) Advise fish farmers in collaboration with extension staff from the

Ministry of Agricultural and Animal Resources; (v) Work with Rwanda Standards Bureau in supervision of fish and

fisheries products for local consumption and export; (vi) Collaboration with tertiary institutions and Research centres in

fisheries Research for Development. Water Quality Testing The emerging industry in fish production and marketing in Rwanda provides opportunity for Kigembe fish laboratory to position itself as a major player in the industry. Already there are several requests for interested investors to establish

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cages in lakes. As a requirement by RAB and REMA, cage culture establishment in a natural water body has to be preceded by baseline studies in water quality and in some cases benthic environment. The tank fish culture proposed in the master plan will also require water quality analysis. Other production systems such as ponds, pens may also require water quality analyses. Diagnosis of fish diseases (parasites, bacteria, and viruses) Experience has shown that diseases usually emerge with intensive culture of fish where too much fish is usually confined in small holding facilities thus predisposing the fish to disease causing organisms. Some of the diseases are known to cause 100% mortality of the fish especially fry and fingerling leading to financial loss to the business. Laboratory services are therefore vital for the industry to grow. With the newly rehabilitated station at Kigembe, the farmers and government agencies can use the services of the laboratory to diagnose the diseases and pests before the situation turns into an economic loss. This will be a viable source of income for the laboratory. The funds raised from this activity will be used to sustainably maintain and improve the laboratory. Recommendations for fish farmers The laboratory will undertake site suitability studies for ponds construction, cage setting as well as monitoring of fish growth in the culture systems. Results from the testing will provide a basis for recommendation on site suitability and management practices. Through these services the laboratory will charge fees which will support its operations and sustainability. Organizational Analysis

The Kigembe fish laboratory is part of the Kigembe fish farm under the Rwanda Agriculture Board. The farm is under a Head of station who is under the fish and aquaculture program leader at the RAB headquarters in Kigali. RAB is an autonomous body within the Ministry of Agriculture and Animal Resources which among others is responsible for; provision of information to farmers and consumers on agricultural products, techniques and services and prevention of animal diseases and implementation of appropriate strategies meant for ensuring control, prevention, diagnosis and treatment of animal diseases. The laboratory at Kigembe will therefore contribute to the overall mandate of RAB.

Laboratory management structure, the existing policies and regulations The laboratory should be managed by an in-charge who will report to the Head of station. The laboratory will remain a public facility but charging fees for its services and running an independent account. It would be unsustainable if the laboratory is not given a leeway to run in a quasi-business mode. It would be

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untenable if the funds generated by the laboratory and unutilized at the end of the financial year are sent to the consolidated fund. Fortunately Kigembe already has an account which is more or less independent of the usual government budget cycle effects. There are also other laboratories in MINAGRI such as Rubirizi for Livestock disease diagnosis which runs a similar account while Rwanda Standards Bureau is working toward financial autonomy. Based on these precedents, it is possible for the Kigembe fish laboratory to operate as viable commercial unit. The laboratory will be the reference point for REMA on license and operation of cages in Rwanda water bodies as well as for Rwanda Standards Bureau on evaluation of biological performance of fish feeds. Both REMA and RSB are regulatory bodies which will benefit from the services of the Kigembe fish laboratory MARKET ANALYSIS Currently in the country, there is no such laboratory though many investors are emerging to fill the gap between the supply and demand of the fish. Government and the investors need the facility to save them losses that may occur due to diseases, water quality problems etc. Most of these can be solved or prevented in the laboratory. It is envisaged that most of the investors and government agencies will use the services of laboratory at a fee thus creating revenue to the laboratory. The laboratory is fully equipped with the basic facilities that can be used to analyse any problem that may hinder the successful production of fish. Government and investors are the targeted customers to the laboratory. Government can use the facility to ensure quality of fish imported in the country, establishment of cages on the water bodies etc. while that investors can diagnose fish diseases, water quality etc. There is no other facility of the kind that can be used to solve the emerging challenges faced by the investors. The facility will have well trained personnel that will handle all the problems and provide solutions to the issues raised. This will enable that laboratory to compete now and in the future. Some services of the laboratory can be brought near to the customers. Some of the tests can be carried out at the farms and solutions provided instantly. The services of the facility will be advertised to create awareness. This will enable the public to know and appreciate the existence and its services It is anticipated that the laboratory will be managed as a business entity with the ability to make quick and appropriate decisions without waiting for the long government process of accessing funds and other bureaucracies. This will enable

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the laboratory to operate effectively without any setbacks as seen in some of the government entities. It will provide the laboratory with a sustainable competitive advantage SWOT ANALYSIS Strengths Weakness Compensatory Actions • Laboratory is fully

furnished with the requisite equipment;

• It is the only laboratory of its kind in the whole country to be used by fish producing and processing organization;

• The laboratory has government support;

• No technical personnel; • Inputs e.g. reagents

are not readily available in the country;

• Train personnel; • Establish

relationship with the manufacturers of reagents.

Opportunities Threats Risk management • Local safety risk

issues; • Need to be registered

as regulatory guidelines or market potential; • Attain sole

distributorship from manufacturers of equipment in the country and region.

• All the necessary equipment and reagents are imported in the country.

• Marketing plan and initiative to expand testing to new value chain;

• Make long time agreement with current customers;

• Make cost reduction plan (waste, energy cost, etc.)

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FINANCIAL ANALYSIS Assumptions New Clients (Year 1) 200 Additional New Clients (Year 2) 50 Additional New Clients (Year 3) 60 New Clients for Years 4 & 5 0 Cost of Water Quality Analysis (All parameters) USD 60 Cost of Disease Diagnosis (per disease) USD 18 Cost of Advisory (per contact) USD 50 Interest Rate 24%

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CASHFLOW STATEMENT YEAR ONE Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Income from Operations Water Quality Analysis 600 1,440 2,280 3,120 3,960 5,040 6,120 7,200 8,280 9,360 10,68

0 12,00

0 Disease Diagnosis 180 432 684 936 1,188 1,512 1,836 2,160 2,484 2,808 3,204 3,600

Advisory Services 500 1,200 1,900 2,600 3,300 4,200 5,100 6,000 6,900 7,800 8,900 10,000

TOTAL INFLOWS 1,280 3,072 4,864 6,656 8,448 10,752

13,056

15,360

17,664

19,968

22,784

25,600

OUTFLOWS 1. Fixed Costs Laboratory Equipment 35,00

0

Office Equipment 15,000

Building 10,000

Total Fixed Costs (CAPEX) 60,000

2. Variable Costs Cost of disposables (reagents, chemicals, test kits) for the laboratory

20,000 936 1,482 2,028 2,574 3,276 3,978 4,680 5,382 6,084 6,942 7,800

Salaries & Wages 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 Additional Employment Costs (20%) 400 400 400 400 400 400 400 400 400 400 400 400

Utilities (Gas, Electricity, Water) 78 187 296 406 515 655 796 936 1,076 1,217 1,388 1,560

Advertising 2,400 400 400 400 400 400 400 400 400 400 400 400 Telephone 1,000 200 200 200 200 200 200 200 200 200 200 200 Internet 400 100 100 100 100 100 100 100 100 100 100 100 Travel Funds 350 350 350 350 350 350 350 350 350 350 350 350 Petty Cash 500 100 100 100 100 100 100 100 100 100 100 100 Office Supplies 1,000 100 100 100 100 100 100 100 100 100 100 100 Cleaning Services 400 400 400 400 400 400 400 400 400 400 400 400 Security Services 125 125 125 125 125 125 125 125 125 125 125 125 Professional Fees (Annual) 5,000

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Capacity Building (Training of Staff)

15,000

License 350 350 350 350 350 350 350 350 350 350 350 350 Depreciation 4,200 3,906 3,633 3,378 3,142 2,922 2,717 2,527 2,350 2,186 2,033 1,890 Bank Charges 10 10 10 10 10 10 10 10 10 10 10 10 Service & Maintenance 170 170 170 170 170 170 170 170 170 170 170 170

Total Variable Costs 53,383 9,734 10,11

6 10,51

7 10,93

6 11,55

8 12,19

6 12,84

8 13,51

3 14,19

2 15,06

8 15,95

5 Less Depreciation 49,18

3 5,828 6,483 7,139 7,794 8,636 9,479 10,321

11,163

12,006

13,035

14,065

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YEAR TWO Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Income from Operations Water Quality Analysis 960 2,040 3,120 4,200 5,280 6,600 7,920 9,240 10,45

0 11,88

0 13,44

0 15,00

0 Disease Diagnosis 288 612 936 1,236 1,584 1,980 2,376 2,772 3,168 3,564 4,032 4,500

Advisory Services 800 1,700 2,600 3,500 4,400 5,500 6,600 7,700 8,800 9,900 11,200

12,500

TOTAL INFLOWS 2,048

4,352

6,656

8,936

11,264

14,080

16,896

19,712

22,418

25,344

28,672

32,000


874 1,856 2,839 3,805 4,805 6,006 7,207 8,408 9,533 10,811

12,230

13,650


Utilities (Gas, Electricity, Water) 125 265 406 544 686 858 1,030 1,201 1,362 1,544 1,747 1,950

Advertising 400 400 400 400 400 400 400 400 400 400 400 400 Telephone 100 200 200 200 200 200 200 200 200 200 200 200 Internet 400 100 100 100 100 100 100 100 100 100 100 100 Travel Funds 350 350 350 350 350 350 350 350 350 350 350 350 Petty Cash 500 100 100 100 100 100 100 100 100 100 100 100 Office Supplies 100 100 100 100 100 100 100 100 100 100 100 100 Cleaning Services 400 400 400 400 400 400 400 400 400 400 400 400 Security Services 125 125 125 125 125 125 125 125 125 125 125 125 Professional Fees (Annual) 5,000 Licence 350 350 350 350 350 350 350 350 350 350 350 350

Depreciation 1,753 1,635 1,521 1,414 1,315 12,223 1,137 1,058 984 915 851 797

Bank Charges 10 10 10 10 10 10 10 10 10 10 10 10 Service & Maintenance 170 170 170 170 170 170 170 170 170 170 170 170

Total Variable Costs 14,856

10,262

11,271

12,268

13,311

25,592

15,879

17,173

18,383

19,775

21,334

22,902

Less Depreciation 13,1

03 8,62

7 9,75

0 10,854

11,996

13,369

14,742

16,115

17,399

18,860

20,483

22,105

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YEAR THREE Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Income from Operations Water Quality Analysis 1,200 2,640 4,080 5,520 6,920 8,520 10,08

0 11,64

0 13,32

0 15,00

0 16,80

0 18,60

0

Disease Diagnosis 3,708 7,452 11,214

14,976

18,756

22,572

26,316

30,096

33,822

37,548

41,310

45,000

Advisory Services 1,000 2,200 3,400 4,600 5,800 7,100 8,400 9,700 11,100

12,500

14,000

15,500

TOTAL INFLOWS 5,908

12,292

18,694

25,096

31,476

38,192

44,796

51,436

58,242

65,048

72,110

79,100


2,454 5,046 7,647 10,248

12,838

15,546

18,198

20,868

23,571

26,274

29,055

31,800


Utilities (Gas, Electricity, Water) 491 1,009 1,529 2,050 2,568 3,109 3,640 4,174 4,714 5,255 5,811 6,360

Advertising 400 400 400 400 400 400 400 400 400 400 400 400 Telephone 100 200 200 200 200 200 200 200 200 200 200 200 Internet 400 100 100 100 100 100 100 100 100 100 100 100 Travel Funds 350 350 350 350 350 350 350 350 350 350 350 350 Petty Cash 500 100 100 100 100 100 100 100 100 100 100 100 Office Supplies 100 100 100 100 100 100 100 100 100 100 100 100 Cleaning Services 400 400 400 400 400 400 400 400 400 400 400 400 Security Services 125 125 125 125 125 125 125 125 125 125 125 125 Professional Fees (Annual) 5,000 License 350 350 350 350 350 350 350 350 350 350 350 350 Depreciation 4,200 3,906 3,633 3,378 3,142 2,922 2,717 2,527 2,350 2,186 2,033 1,890 Bank Charges 10 10 10 10 10 10 10 10 10 10 10 10 Service & Maintenance 170 170 170 170 170 170 170 170 170 170 170 170


17,666

20,514

23,381

26,253

29,282

32,260

35,274

38,340

41,420

44,604

47,755

TOTAL OUTFLOWS 16,250

13,760

16,881

20,003

23,111

26,360

29,543

32,747

35,990

39,234

42,571

45,865

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YEAR FOUR Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Income from Operations Water Quality Analysis 1,200 2,640 4,080 5,520 6,920 8,520 10,08

0 11,64

0 13,32

0 15,00

0 16,80

0 18,60

0


14,976

18,756

22,572

26,316

30,096

33,822

37,548

41,310

45,000


12,500

14,000

15,500

TOTAL INFLOWS 5,908

12,292

18,694

25,096

31,476

38,192

44,796

51,436

58,242

65,048

72,110

79,100

OUTFLOWS 1. Fixed Costs Laboratory Equipment

15,000

Office Equipment Motor Vehicle

35,000

Total CAPEX 50,00

0 Total Fixed Costs

50,000


2,454 5,046 7,647 10,248

12,838

15,546

18,198

20,868

23,571

26,274

29,055

31,800

Salaries & Wages 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 Additional Employment Costs (20%) 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100


Advertising 400 400 400 400 400 400 400 400 400 400 400 400 Telephone 100 200 200 200 200 200 200 200 200 200 200 200 Internet 400 100 100 100 100 100 100 100 100 100 100 100 Travel Funds 350 350 350 350 350 350 350 350 350 350 350 350

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Petty Cash 200 200 200 200 200 200 200 200 200 200 200 200 Office Supplies 100 100 100 100 100 100 100 100 100 100 100 100 Cleaning Services 600 600 600 600 600 600 600 600 600 600 600 600 Security Services 150 150 150 150 150 150 150 150 150 150 150 150 Professional Fees (Annual) 5,000 Licence 350 350 350 350 350 350 350 350 350 350 350 350 Depreciation 736 684 637 592 551 512 2,926 2,721 2,531 2,354 2,189 2,036 Bank Charges 10 10 10 10 10 10 10 10 10 10 10 10 Service & Maintenance 200 200 200 200 200 200 200 200 200 200 200 200


15,999

19,073

22,150

25,217

28,427

34,024

37,023

40,076

43,143

46,315

49,456


05 15,315

18,436

21,558

24,666

27,915

31,098

34,302

37,545

40,789

44,126

47,420

YEAR FIVE Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Income from Operations Water Quality Analysis 1,200 2,640 4,080 5,520 6,920 8,520 10,08

0 11,64

0 13,32

0 15,00

0 16,80

0 18,60

0


14,976

18,756

22,572

26,316

30,096

33,822

37,548

41,310

45,000


12,500

14,000

15,500

TOTAL INFLOWS 5,908

12,292

18,694

25,096

31,476

38,192

44,796

51,436

58,242

65,048

72,110

79,100


2,454 5,046 7,647 10,248

12,838

15,546

18,198

20,868

23,571

26,274

29,055

31,800

Salaries & Wages 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 5,500 Additional Employment Costs (20%) 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100


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Advertising 400 400 400 400 400 400 400 400 400 400 400 400 Telephone 100 200 200 200 200 200 200 200 200 200 200 200 Internet 400 100 100 100 100 100 100 100 100 100 100 100 Travel Funds 350 350 350 350 350 350 350 350 350 350 350 350 Petty Cash 200 200 200 200 200 200 200 200 200 200 200 200 Office Supplies 100 100 100 100 100 100 100 100 100 100 100 100 Cleaning Services 600 600 600 600 600 600 600 600 600 600 600 600 Security Services 150 150 150 150 150 150 150 150 150 150 150 150 Professional Fees (Annual) 5,000 License 350 350 350 350 350 350 350 350 350 350 350 350 Depreciation 1,893 1,761 1,637 1,523 1,416 1,317 1,225 1,139 1,059 985 916 852 Bank Charges 10 10 10 10 10 10 10 10 10 10 10 10 Service & Maintenance 200 200 200 200 200 200 200 200 200 200 200 200


17,076

20,073

23,081

26,082

29,232

32,323

35,441

38,604

41,774

45,042

48,272


05 15,315

18,436

21,558

24,666

27,915

31,098

34,302

37,545

40,789

44,126

47,420

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INVESTMENT ANALYSIS INVESTMENT 1 2 3 4 5

Revenues 149,50

4 192,37

8 502,39

0 502,39

0 502,39

0 Total Capital Expenditure (CAPEX)

60,000

50,000

Costs 155,13

2 177,40

2 342,31

4 360,57

4 360,57

4 Interest 0 0 0 0 0

Net Cash Effect -

65,628 14,976

160,076

91,816 141,81

6 Interest Rate 24%

Discount Factor 1 0.806 0.65 0.524 0.423

Discounted Cash Flows -

65,628 12,077

104,108

48,156 59,984

Returns on Investment (ROI) IRR (through 2018) 103% Net Present Value (USD) through 2018 158,697 Payback period 5.6 Years ROI 23% Summary of Business Plan TOTAL INVESTMENT (UGX) 265,132 Payback Period 5.6 Years

Year Cash flow Cumulative 1 -65,628 -65,628 2 14,976 -50,653 3 160,076 109,423 4 91,816 201,239 5 141,816 343,055

All the key measures/indices for measuring the business investment worthiness (NPV and IRR) indicate a highly positive implying that if the laboratory at the Kigembe Fish Farm Station is operated as a business it is

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more than likely to be profitable. The high positive NPV value (USD 158,697) indicates that the laboratory will create value or profit when the planned investments are undertaken. It also indicates that the laboratory can be managed and operated profitably with other factors assumed to remain as when the business was assessed. Since the IRR (103%) is higher than the 24% interest rate, the conclusion would be that the investment in this laboratory would be a profitable investment. It is however recommended that RAB continues being responsible for the overhead costs including salaries and major maintenance works for office and laboratory facilities, while the laboratory revenues provide for logistics and actual laboratory work including collecting and analyzing samples. With a ROI of 23% may not be absolute but is a good indication that the laboratory will be able to create monetary returns or value if managed and operated in manner envisaged in the Business Plan. For a public investment, a payback period of 5.6 years is indeed very good and shows that laboratory if operated as a business can be viable and with time can be able to sustain itself without relying on government subventions.

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IMPLEMENTATION PLAN

Activity Targets Period (Years) Responsible Entity

1 2 3 4 5

Construction of requisite buildings and procurement of consumables, chemicals and reagents

Equip the laboratory with all the requisite facilities in the first year of its operation. These should enable it to conduct the demanded analyses.

RAB, MINAGRI, technical

personnel, laboratory

management Creating Awareness – The laboratory will focus on maintaining a strong identity with the existing and potential customers and its focus in marketing will be to increase customer awareness in the fisheries sector working closely with the main players in the industry e.g. RAB, MINAGRI, Rwanda Standards Bureau (RSB) farmers’ cooperatives etc. These will play a significant goal of marketing the services offered at the laboratory by the word of mouth.

The laboratory recognized by authorities as the reference for fisheries and aquaculture in Rwanda within 2 years

Laboratory

Management, RAB, RSB

Training of requisite technical personnel – Knowledgeable and skilled technical personnel directly influences the quality of the analytical process. The technical level includes sample handling, method of analysis, personnel, equipment, consumables and chemicals and quality control procedures etc.

Six staff trained in Laboratory principles and instrumentology, sample preparation, water quality analysis, disease diagnosis and management by end of the first year

RAB, Laboratory,

Establishment of an organizational structure One (1) laboratory Laboratory

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– The laboratory as a business unit of RAB will have to find a niche within the organization that will allow it operate and make profit. This indirectly influences the quality of the analytical process. The decisions made will greatly determine the success of the laboratory.

manager and one Quality Assurance (QA) manager appointed. The manager will be responsible for the whole laboratory and the implementation of the plan. The QA manager will ensure quality assurance and have an independent position. There will also be one senior technician for proximate analyses and one senior technician for specialized analyses. These will be assisted by junior staff in the departments as shall be elaborated by RAB.

Management, RAB, MINAGRI

Water Quality Analysis – This will mainly assist farmers, government agencies involved in water based management etc. to assess the effect of fish and feed on water quality, provide information on the establishment of farms and their effects on the ecosystem etc.

Capacity to analyses water samples as prescribed by REMA established within 2 year and continues to grow

Technical Personnel,

REMA

Disease Diagnosis – The laboratory will technically collect fish sample for the diagnosis of pest and diseases, chemicals in food fish etc. and provide feedback.

Human and infrastructure capacity for diagnosis of; bacteria, fungi and parasites fully

Technical Personnel,

RAB

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established by the end of 2nd year

Advisory Services – The laboratory will provide tailor made services to particular customers at a fee. The laboratory will collect sample from the customers, analyze them and give feedback to the farmers.

Recognition of the laboratory as the competent reference point by the public and private sector by the 3rd year

Technical Personnel

Procurement of goods and services – This includes the replacement of replenished chemicals and consumables and the procurement of the services of professionals for to build the capacity of the facility

Acquisition of initial stock with the 1st year and building capacity to continuously acquire equipment and consumables

Laboratory Management

Accreditation of the laboratory – This involves proper implementation of Quality Management System according to an internationally recognized standard. The first step in the process of implementing a QMS is to understand its principles and the correct interpretation of the standard. This knowledge is necessary as the standards only describe which aspects should be covered in the quality system, not how. Understanding the principles enables the laboratory to translate the requirements of the standard into procedures and rules.

Accreditation by RSB within 3 years and internationally by the 5th year.

Laboratory

management, RSB

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PART II: TRAINING OF KIGEMBE LABORATORY STAFF The following outlines the activities of the assignment: Overall Objective The overall objective of the assignment was to equip staff with basic knowledge in operation and maintenance of a fish laboratory through the following activities:

(i) Theoretical exposition to staff on basic laboratory procedures including equipment, storage, handling, general hygiene, instrumentation, safety rules and others;

(ii) Hands-on practical training on use of the newly acquired equipment and those that are already at the station.

(iii) Exposition to the following: • Collection of benthos with bottom grab and preservation; • Collection of water samples for analysis of the various

water quality parameters; • Collection of zoo and phytoplankton; • Measurement of water depth; • Measurement of pond water turbidity; • Collection of fish samples for parasites and pathogens and

for fixation for microscopic examination; • Basic light microscopy procedures, correct use and

maintenance of light microscopes. • Preparation and examination of wet samples and smears

from fish • Handling of samples including labelling, indexing, and

communication of results. • Selected sample analyses • Codes of practice in a laboratory • Safety of persons and property in a laboratory

Training at Kigembe fish farm in Gisagara District Rwanda Trainees identified by RAB and facilitated by SMARTFISH attended the training course. Although preparation for the training started on 19.01.2015 the training that included some theoretical background and hands-on

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practical training started on 21.01.2015 and ended on 28.01.2015. The training was preceded by asking the trainees to state their expectations from the training which were captured and used to modify the lesson as to meet the trainees’ expectations. During the training, the participants were taken through a series of theoretical presentations followed by a practicum. The subjects tackled during this training session are summarized as; laboratory design and set up, Laboratory safety and guidelines, a preamble on aquaculture, water quality, how to test water quality for aquaculture, this was followed by techniques in diagnosis of fish for fish health. We reviewed the importance of records in fish health management, and finally the use, handling and maintenance of laboratory and field equipment. The Importance of History & Records Participants were introduced to the importance of keeping records and history of fish farm activities and events. Questions seeking general information about the behavioral, physical changes of the fish, routine procedures, culture systems etc. were discussed highlighting the significance of information in fish disease diagnosis and fish health management. Topic One: Use and handling of laboratory and field equipment The trainees were introduced to the recently acquired laboratory and field equipement which included, microscopes, digital water quality meters and kits, depth finds echo locators, eikmans mud grubers, plankton nets of mesh size ranging from 35 to 100 microns, automatic feeders, water current flow meters and many others (Plate 1 below). Participants were taken through rigorous hands on training in use, care and maintenance of most equipment stocked at Kigembe Fish Laboratory.

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Topic Two: Laboratory design and setup Participants were introduced to various components of a laboratory which included; laboratory building plan and layouts, instruments, benches, apparatus, flooring, consumables, fume hoods, chemicals, drainage, water, gas, and electrical among others. The trainees were introduced to laboratory ethics and code of conduct. It was brought to the attention of the trainees that in order to facilitate easy up take of this information, signs and labels plays a significant role. We reviewed together different signs and labels used in laboratories to minimize occupation hazards in any laboratory setup. Different signs ranging from biohazard through, high voltage, and eye wash units, radioactive substances, corrosive chemicals including those toxic to both human and environment and many others. Power Point presentation on this topic is herewith attached

Topic Three: Water Quality Analysis The importance of water quality in natural water bodies and fish farming was emphasized since it is the medium in which fish live, grow and reproduce. The optimum fish production is totally dependent on the physical, chemical and biological qualities of water to most of the extent. Hence, successful pond management requires understanding of water quality. Water quality is determined by various physico-chemical and biological factors, as they may directly or indirectly affect its quality and consequently its suitability for the distribution and production of fish and other aquatic animals. Water quality is determined by variables like temperature, transparency, turbidity, water colour, carbon dioxide, pH, alkalinity, hardness, unionized ammonia, nitrite, nitrate, primary productivity, Biological Oxygen Demand, plankton population. All living organisms have /tolerable limits of water quality parameters in which they perform optimally. A sharp drop or an increase within these limits has adverse effects on their body functions. So, good water quality is very essential for survival and growth of fish especially in intensive culture systems such as the one proposed by the GoR. Poor water quality can cause massive fish kills and is often a major factor contributing to fish disease and parasite infections. Water quality does not remain constant. It can change dramatically over time so it has to be regularly monitored. It is advisable to have a water quality test kit, know how to use it, and be able to interpret the results. Water quality should be monitored routinely to identify problems before fish kills occur. In addition,

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any time fish appear stressed or fish mortalities are observed, water quality should be evaluated immediately for temperature, dissolved oxygen, total ammonia, pH, and nitrite. Other tests may be appropriate depending on results of the water analysis. The trainees were an overview of various water quality parameters critical to the survival, growth and reproduction of fish in captivity. Water quality parameters that are often tested are:

a) Dissolved oxygen; b) Water temperature; c) pH d) Total Ammonia Nitrogen e) Nitrite/Nitrate

In addition factors influencing water quality in a pond were highlighted. These included; photosynthesis, respiration, water temperature, fertilization, feeds and feeding, aeration and water exchange. Mitigation measures were presented and discussed with the group. Practical’s on water quality analysis and monitoring, use of different equipment and kits in water quality analysis were carried out. First by demonstrating to the group and later every member of the group was given a chance to operate these equipment.

We advised on how the mini laboratory at Kigembe was equipped for simple but standard methods for analysis of the following parameters that are essential in the management of fish health:

i. Dissolved Oxygen Fish breathe in oxygen for their metabolism. Dissolved oxygen is needed to oxidize potentially toxic metabolic wastes into less toxic forms (e.g. ammonia (NH3) to nitrite (NO2-) and then nitrate (NO3-). Bacteria in ponds that help transform wastes into less toxic products need oxygen for metabolism. Phytoplankton use oxygen at night during respiration. Fish have different oxygen tolerance levels and these were elaborated for fish cultured in Rwanda. Signs exhibited by fish in water with low oxygen levels as well as remedial measures were provided in addition to the tools that the mini laboratory should have for measuring oxygen levels.

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ii. Temperature Fish are cold blooded animals. Their rate of metabolism is directly influenced by water temperature. The rate at which wastes in pond are broken down and chemicals dissolve is faster in warmer waters as temperature is known to affect solubility of solutes. Extreme temperatures can lead to reduced feed intake and growth rates and increase susceptibility to disease while temperature shocks can lead to mass mortality especially in hatcheries. The lower the pond water temperature, the less food the fish will consume and the slower their growth rate will be. The higher the pond water temperature is, the lower the solubility of dissolved oxygen in water. This is important to know for hatcheries and for transport of fry. In the case of Rwanda where most parts of the country lies at high altitude, there was need to elaborate temperature management regimes for the fish species cultured in Rwanda.

iii. pH

It was explained that pH affects the solubility and chemical forms of various compounds, some of which can be toxic. It affects stress levels, causes slow growth, reduced feed intake leading to higher Food Conversation Ratios (FCR). The trainees were shown how to measure pH in aquaculture.

iv. Total Ammonia Nitrogen (TAN) Un-ionized ammonia (UIA)

Nitrite (NO2) Ammonia is a by-product from protein metabolism excreted by fish and bacterial decomposition of organic matter. Examples of such organic matter include wasted feed, faeces, dead plankton, etc. Fish excrete ammonia across their gills. Ammonia is toxic to fish. High levels in water affect ammonia excretion, blood pH, enzyme systems, and cause gill damage. This is because high levels of ammonia in water impair the excretion of ammonia from the fish into the water across its gills. Because of this, the gills become affected; the efficiency with which the fish can extract oxygen from the water through their gills also falls. Ammonia occurs in two forms depending on the acidity of the water. The unionized form of ammonia (NH3) is more dominant when the water is alkaline and the ionized form, ammonium (NH4+) when the water is acidic. In most cases, both forms occur, hence the term Total Ammonia Nitrogen. Total Ammonia Nitrogen (TAN) is the combined measure of its two forms, unionized ammonia (NH3) and ammonium ion (NH4+). The relative

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occurrence of either form in water depends on the acidity of the pond water as well as water temperature. The unionized form of ammonia is the most toxic of the forms of Total Ammonia Nitrogen, to fish. Fish are healthiest when there is no or little ammonia in water. At high TAN, the fish succumb more to attacks by ectoparasites and other parasites. High levels of ammonia in water indicate either a poor phytoplankton bloom or a nutrient over-load within the pond at levels the normal bacteria in the pond cannot assimilate. When there is a nutrient overload, the amount of ammonia becomes too much for the resident population of nitrifying bacteria to handle. In such cases, the oxygen demand in the pond is also much higher than what the pond can replenish by normal means (i.e. through photosynthesis and air movement). Consequently, dissolved oxygen levels in ponds near carrying capacity are always very low (less than 1mg/l) and the fish need to get all of their oxygen by gulping air at the pond surface. The pond also starts smelling foul at this stage because of the progressive accumulation of ammonia and other nitrite not completely oxidized. The ability of the pond to sustain production starts to decline because the water quality is poor. The fish consequently become more stressed, stop eating and then stop growing. Subsequently, the FCR increases, diseases may ensue and mortalities occur. It is at this point, when the water quality of the pond becomes limiting that the pond’s carrying capacity is said to be attained. Ammonia levels greatly affect the carrying capacity of earthen ponds such as those in various parts of Rwanda. Unfortunately, most farmers are not aware of this fact yet it has great economic implications. However in this consultancy, the staff of the mini laboratory was trained on monitoring this parameters with the kits that were procured by Smart fish.

v. Alkalinity and Hardness

These two in combination influence the buffering capacity of the pond water. Hardness is composed mostly of calcium and magnesium, which affect the physiological condition of the fish. Alkalinity also controls the amount and form of carbon-dioxide in water.

vi. Turbidity

Turbidity is a measure of the transparency of water in the pond. The colour of the water gives an indication of what sort of turbidity it is. If it is brown, it is often due to clay and if it is greenish, it is due to plankton. If light cannot penetrate deep into the water column, only superficial phytoplankton can

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survive in the pond. The pond looks as though there is a green scum that might turn reddish at some moments of the day at the surface of the water. This may be an indication of over fertilization or excessive nutrient loading (eutrophication) which affects other parameters and fish health as already explained above. Already the station had a secchi disk that was used to measure turbidity/transparency followed by interpretation of results. In addition to the above, we advised on how to equip the mini lab with capacity to monitor other parameters such as; Carbon Dioxide, Conductivity, total phosphorus, chloride, potassium and others whose roles in fish health we elucidated. Power Point presentation on this topic is herewith attached Topic Four: Fish Health Fish health management can be a challenge and major source of economic loss since fish live in water, which is a complicated environment. Fish are susceptible to infections of virus, bacteria, fungus or invasions of parasites and nutritional deficiencies. Ill health does not only affect fish normal growth and development but can cause mass mortality of fingerlings and adult fish translating into huge economic losses so control of fish disease is one of the most vital steps in commercial fish culture. Whereas fish diseases may not be a major threat in extensive fish farming practices largely practiced in sub-Sahara Africa including Rwanda, characterized by earthen pond farming with very low stocking densities, commercial stocking densities as the ones recommended in the Rwanda fisheries and farming Master Plan necessitate decreased ecological barriers and hence increased rates of transmission that can result into fish diseases and mass mortality if not detected early and controlled. Fish health management is based on the principle of identification of the cause and all-round prophylaxis even during disease free times. Because of aquatic ambience, it is not easy to notice activities of all the fish in a culture unit. It can also be challenging to conduct a correct diagnosis and prevent losses after an infection. This is because the drugs for oral administration can only be effective through ingestion by fish. In other words, if fish fall ill and have lost the feeding ability oral medicine cannot be of much help and yet administration of drugs by injection is not easy in fish while dip treatments are confined to small containers that hold a few fish, it is not practical for large lakes, rivers or reservoirs; therefore, prevention is always

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more important than treatment in the control of fish diseases. In order to have a good prophylaxis regime there must be adequate diagnostic capacity which this consultant kick started for the Kigembe Fish Farm Team.

Parasites, bacteria, fungi, virus or nutritional deficiencies can cause fish diseases. In several cases disease conditions are confounded by unsuitable and sometimes deteriorating water environment. Based on this widely acceptable principle and my experiences in dealing with fish disease condition, It was emphasized the need for a plan that will address monitoring and control of fish health taking into consideration the water environment, feeds and their relationships with known etiological agents such as parasites, bacteria, fungi and viruses.

i. Fish health Monitoring The purpose of a fish disease-monitoring program is to obtain information relative to the health status of stocks of fish, and the suitability of conditions under which fish are maintained at a production installation such as pond, cage or tank. A well-designed monitoring program should enhance the efficiency of hatchery operations and minimize the impact of fish diseases by providing the following:

• Information need to plan a fish health program. • A quick response to disease outbreaks (diagnosis, therapy,

prevention). • Reduction of the mortality rate in infected lots of fish by providing

diagnosis and subsequent therapy. • Information as to whether or not a disease problem is attributable

to poor management or is primarily due to the presence of a fish pathogen.

• Incentives for the adoption of measures to control or prevent the introduction of fish disease agents from outside sources, via the transfer of fish or fish eggs or exposure to other contaminated sources.

• Enhanced market opportunities by the provision of stock that is free, or relatively free, of specific fish disease agents. The producer can therefore, supply markets located in geographical areas protected by fish disease regulations.

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In this consultancy, I trained personnel and advised on the equipment required for a fish health programme. I trained staff on collecting samples for fish health, preserving them, labeling them and sending them to a reference laboratory when need arises.

ii. Diagnosis of fish Parasites A common mistake of fish farmers is misdiagnosing disease problems and treating sick fish with the wrong medication or chemical quite often leading to frustration. Selecting the wrong treatment because of misdiagnosis is a waste of time and money and may be more detrimental to the fish than no treatment at all. In this consultancy, I provided simple methods for detection of the common fish parasites.

iii. Live Examination of External Tissue Biopsies. Live examinations may be performed on fish which cannot be sacrificed, such as valuable brood stock, large stock enhancement fish etc. I trained staff on; gross visual examination and microscopic examination of gills, fin, and skin, collection of blood for bacterial cultures from large fish for serological and other diagnostic investigations.

iv. Necropsy My associates and I trained staff on necropsy, which is a post-mortem (after death) examination of an animal. Fish are evaluated during a gross visual examination, and gill, fin, and skin samples are taken for microscopic examination while the fish are still alive. After the fish are euthanized, the brain and posterior kidney of three to four fish are cultured for bacteria. The spleen, liver, and other tissues may also be cultured in large fish. Following bacterial cultures, complete gross and microscopic examinations of the internal organs are performed.

v. Bacterial Culture and identification We trained staff on bacterial cultures normally performed as a part of the necropsy but may be performed separately if warranted. Fresh water fish are routinely cultured on tryptic soy agar with 5% sheep's blood (TSA+B). We advised on the use of other culture media as well as staining for identification of bacterial colonies. We mentioned biochemical tests but noted that as of now they cannot be applied at the mini laboratory until further capacity is acquired.

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vi. Antibiotic Sensitivity

We informed the trainees of use of culture sensitivity tests to determine which antibiotic(s) can be effective in treating the identified bacteria.

i. Histopathology

Histology is the study of cells and tissues on a microscopic level. It allows for a much closer and more detailed evaluation than wet mount biopsies performed during a typical necropsy. In most cases, tissues which have been preserved in a fixative (such as 10% neutral buffered formalin) are embedded in paraffin, sliced into extremely thin sections, mounted onto a slide, deparaffinized, and stained. Different stains are used to target different structures, conditions, and organisms and to discern pathological changes in the tissues. The trainees were made aware of this important technique in diagnosis of fish diseases.

ii. Virology Virology test may be complicated for the mini laboratory at Kigembe as they require electron microscopy, Polymerase Chain Reaction (PCR) or cell culture. However staff were made aware of the viral diagnostic techniques and trained on how to properly collect samples and send them to a competent laboratory. Water Environment Poor environmental conditions and pathogens living in water if not controlled can cause stress leading from minor to severe disease out breaks or even mortalities in cultured fishes. It is therefore of paramount importance for a farm manager to have a well design fish health environmental management plans for the fish farm.

Submission of a Water Sample Fish spend their entire life in water, which means when a fish gets sick, that environment must be tested, no matter how clean one thinks his or her water is. Participants were given the importance of past and recent records of the farms’ water quality parameters such as temperature, pH, ammonia, nitrite, dissolved oxygen). These must be also submitted together with fish samples for analysis. Trainees were given procedures on collecting,

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packaging and shipping of water samples to the laboratory as shown in the attached power point presentation. i. Submission of a Fish Sample

Emphasis was put on the quality of the fish samples shipped to the laboratories. The best fish samples for diagnostic evaluation are the fish that are near death or showing signs of distress. It was stressed that dead fish is rarely accepted for diagnostic tests. However, if the fish are in good condition, that is, their eyes are clear and the gills are red, they may have some value. Decomposed or malodorous fish samples must not be used in diagnosis. Also one must submit a representative number of each species involved (usually three to five fish can do). This ensures an accurate diagnosis of the population as a whole. The trainees were taken through all procedures involved in packaging and shipping of fish to an overseas laboratory. ii. Summary of what should be done in case of disease outbreak

• When a fish becomes sick or dies, it is important to respond correctly to determine why the fish’s health is compromised.

• The fish farm manger should know the system by keeping good records of: water chemistry parameters, water changes, and recent changes or additions of fish.

• Separate water and representative fish samples are usually required by the diagnostic facility.

• How the samples are collected and shipped determines their usefulness in: examining, accuracy, effectiveness of the final assessment and hence arrival at appropriate diagnosis and recommendations.

Documents

development of a business plan for kigembe fish laboratory