Seed is considered an essential component for fish farming. Hatcheries play vital role in the production of seeds for propagation to grow-out. The hatchery industry globally is faced with challenges which include stable seed, quality, availability, technology and support services among others. The overall objective of the study is to undertake a comparative analysis of traditional and reformed/modern carp hatcheries in the Jiangsu province of China and examine the challenges facing the industry. Four year data was collected from the two hatcheries and analyzed. Average BCR, Gross Profit Margin and ROI for reformed and modern hatchery were higher than that of the traditional. Poor hatchery management, high production and input cost, limited funds for operations and maintenance among others were some major challenges hindering carp seed production and development. Shift in consumer preferences reduces the demand for carp fish which in a long run affects production of seed. The study concluded that reformed and modern hatchery which is a profit maximizing entity is more profitable and efficient in its operations.