ANALYZES THE ECONOMIC VIABILITY OF PROPOSED FARMER-OWNED AND OPERATED AQUACULTURE ENTERPRISES IN NORTHEAST BRAZIL. THE EVALUATION PRESENTS ESTIMATED FIXED AND VARIABLE COSTS AS WELL AS AN ILLUSTRATIVE PROFIT AND LOSS STATEMENT. FIGURES ARE BASED ON THE ASSUMPTION THAT EACH FARMER WOULD BUILD AND OPERATE A SINGLE, 1-HECTARE POND NEAR AN IRRIGATION LATERAL ON LAND THAT WOULD BE PROVIDED ON A LONG-TERM LEASE OR GRANT ARRANGEMENT. POND AND WATER SYSTEM CONSTRUCTION AS WELL AS NETS AND EQUIPMENT WOULD REQUIRE A DIRECT INVESTMENT OF ABOUT CR$ 17,000 PER HECTARE. THE REPORT ESTIMATES A SUBSTANTIAL OPERATING PROFIT OF CR$ 4,912 PER YEAR. IN ADDITION, THE FARMER WOULD ALSO RECEIVE A SMALL CASH INCOME OF CR$ 312 FOR HIS OWN LABOR,AND HE WOULD BENEFIT FROM A CAPITAL GAIN AVERAGING ALMOST CR$ 800 PER YEAR FROM PAYMENT OF PRINCIPAL ON REAL ESTATE DEBT. CASH INCOME AND CAPITAL GAIN WOULD TOTAL ABOUT CR$ 6,000 PER YEAR. THIS REPRESENTS A PROFOUND IMPACT ON THE FARMER'S EARNING CAPACITY. EXCLUDING LABOR INCOME, THE ENTERPRISE WOULD PRODUCE A TOTAL INCOME OF CR$ 5,709 FROM PROFIT AND CAPITAL GAINS. THIS IS AN ANNUAL RATE OF RETURN OF 34% ON A TOTAL INVESTMENT IN PLANT AND EQUIPMENT OF CR$ 16,855. CONSIDERING THAT THIS VENTURE INVOLVES NO MORE (AND PERHAPS LESS) RISK THAN TERRESTRIAL CROP AGRICULTURE, THIS RATE OF RETURN IS EXTREMELY ATTRACTIVE. ALTHOUGH NO COMPARABLE RATES OF RETURN ARE AVAILABLE FOR TERRESTRIAL CROPS,THEY ARE PROBABLY MUCH LOWER. AUBURN UNIVERSITY WILL PERPARE A MORE GENERAL REPORT TO EVALUATE OTHER ASPECTS OF THE BRAZILIAN AQUACULTURE PROJECT.