The downside of shrimp farming and trade in Southeast Asia

Farmed shrimp has been a leading export of Southeast Asia since the late 1980s. Thailand is the top exporter of farmed shrimp in the world, producing around 240,000 metric tons per year. Indonesia and Vietnam have gone up in shrimp production since the late 1990s, each now producing more than 100,000 MT per year.2 In 2003, the total volume of shrimp exports from Southeast Asian countries reached 424,800 metric tons valued at $ 4.2 billion,3 with most of the exports going to the United States, Japan and European Union. 

But intensive shrimp farming is being seriously undermined by its own massive socio-environmental costs borne by coastal communities, which are also called "market externalities" because they are not taken into account in the cost of shrimp production. Indeed, questions have been raised not only on the sustainability of intensive shrimp production, but also whether or not its $ 4.2 billion yearly profits are even worth the socio-environmental costs.

These questions should not be ignored, but placed at the forefront of issues to be tackled by governments, especially now that the World Trade Organization is pushing for the free trade of virtually all commodities, including shrimp and other fishery products. There is reason to fear that free trade would only worsen the socio-environmental costs of intensive shrimp production.  

Mangrove loss and valuation

One of the costs is large-scale conversion of mangrove ecosystems that used to give a host of natural goods and services to coastal communities in the region.  Mangroves are a source of wild fish for food, firewood and charcoal and protection from storms, tsunamis and land erosion.  Large-scale cutting of mangroves has resulted in the loss of these goods and services. 

The loss of mangroves in Southeast Asia in the last three to four decades is staggering, and conversion to shrimp farms is a leading cause of this loss. In Thailand, a total of 203,765 hectares representing 55 percent of total mangrove area were lost, of which at least 32 percent were due to conversion to shrimp farms. 4

In Vietnam, there were more than 200,000 hectares of mangroves in the Mekong Delta before 1975. Today, only 60,000 hectares remain due to mangrove conversions to shrimp farms.5  In the Philippines, only 117,000 hectares remain out of 500,000 hectares of mangroves in the 1920s. Mangrove conversion to fishponds for milkfish and shrimp, which began in the 1960s and continued up to the 1990s, was one of the leading causes of mangrove decline.6

All in all, the total loss of mangrove areas in Southeast Asia directly attributable to shrimp farming is estimated at 692,450 hectares.7

There have been recent efforts by resource economists to valuate the loss of mangrove ecosystems, which also take into account so-called "ecological footprints" - i.e. the effects of declining fish production and the loss of other goods and services by mangrove areas on the coastal communities themselves. One of these put the loss at US$ 10,000 per year/hectare in Thailand and US$ 8,000-11,000 per year/hectare in the Philippines. Another valuation done in Palawan in 2003 estimated the loss at US$ 5,000-41,000 per year/hectare.8

Using the last valuation as point of reference, the total regional mangrove loss of 692,450 hectares would be worth US$ 5.5 billion-7.6 billion, which means that the total profits of US$ 4.5 billion are not even enough to cover the costs of mangrove destruction alone.9

This estimated total value of loss would accumulate year after year forever-- unless the mangroves lost are restored to their former status. This is a task next to impossible because it entails a lot of political will, huge sums of money and several decades of management before any recovery of mangrove areas can even happen. 

Nearly irreversible as it is, the destruction of mangroves is all the more deplorable if we consider the fact that a hectare of intensive shrimp farm is profitable for just three to five years, after which it is abandoned and new areas are developed for shrimp farming.

Other socio-environmental costs

Besides the loss of mangroves, there are other socio-environmental costs of intensive shrimp farming whose impacts are no less severe.

One is increased salinity of drinking water as a result of seepage of saltwater from shrimp farms into underground aquifers. This has been reported in the Philippines, particularly in the town of Dilasag, Aurora, where the shallow wells of a village turned out increasingly salty water and the residents had to go to the town proper to fetch their drinking water, for which they had to spend more than US$ 1 weekly in transportation.10

In Thailand, where shrimp farms have moved inland alongside rice paddies, the salinity of freshwater has affected rice productivity in the 1990s across large areas in central and southern Thailand.  This is because besides saltwater seepage, inland shrimp farms require large quantities of freshwater mixed with saltwater and thus competed with rice paddies for freshwater coming from irrigation canals. There were reports of aquifers drying up, along with subsiding land levels as a result of the loss of underground water.11

Still another effect is on the health of people in communities living near shrimp farms. In Indonesia and other countries in the region, there have been concerns about the improper disposal of sludge and effluent containing carcinogenic antibiotics, metabolic wastes and organic matter into adjacent water ecosystems, where they cause water pollution that kill many wild-fish species.12

A recent study of the health impacts of intensive shrimp farming in Bohol Island in the Philippines has linked the relatively high incidence of diarrhea, intestinal parasites and skin diseases in local children to the effluent released into the river where local people fish and bathe.13

Perhaps most damaging, economically speaking, is the worsening dislocation and marginalization of local small-scale producers as a result of the privatization of previously common land resources. 

In the Philippines, leasehold terms of up to 50 years14 to shrimp farm operators have practically taken away the right of local communities to the coastal resources that they and their forebears had used for generations. What used to be mangrove areas where local fishers gathered shells and crustaceans are now fenced shrimp farms.  In Vietnam, there were violent incidents involving conflicts in land allocation between shrimp farmers and local fishers who lost their access to traditional fishing grounds.15

Small-scale farmers in Thailand, Indonesia and Vietnam who shifted from rice farming to shrimp farming have found out belatedly that shrimp farming is too risky a venture for small producers with limited capital. Production losses have led to farmers defaulting on loans and eventually giving up their land to meet their loan obligations to banks and moneylenders. Displaced and landless fisherfolk and farmers have been forced to move to the cities in search of employment.16

Shrimp farming for whom?

In the 1970s and 1980s, intensive aquaculture development in Asian and Latin American countries received hundreds of millions of dollars in yearly financial aid from the World Bank and Asian Development Bank.17 Intensive aquaculture was hyped as a means to increase global food production and stave off widespread hunger.

Now two decades later, we know better. To begin with, intensive shrimp production was intended to satisfy growing market demand for farmed shrimp in the developed countries. This export-trade orientation has had the effect of raising the prices of shrimp beyond the level that most local people can afford.18 In the Philippines, even the non-export quality prawn costs $7-8 per kilo or about five times than the local mackerel (galunggong).

The net effect has been less shrimp supply to meet the food needs of local populations, especially millions of small-scale fishers and their families across the region. Moreover, the foreign exchange earnings from the export of fishery commodities are not used by Southeast Asian countries to import low-cost nutritive food commodities to compensate for the lesser fish supply in domestic markets, but are instead diverted to purchase luxury food items intended for local elites.19

Besides the food security issue, intensive shrimp farming has brought little benefit, if any, to local communities. Employment of locals in intensive shrimp farms is limited to unskilled, low paying jobs in pond construction, maintenance and harvesting. Technical and managerial positions are usually reserved for outsiders trusted by the shrimp-farm owner. The short lifespan of intensive shrimp farms and the consequent shifting of operations prevent stable employment conditions.20

Alternative to intensive shrimp farming

In the context of growing market demand in developed countries, the shrimp industries in Southeast Asia expanded in the 1980s and 1990s through government policies that promoted export-oriented intensive aquaculture, mainly through fiscal and non-fiscal incentives like tax holidays and tariff exemptions in the import of feeds and equipment.21 The financial support of international financial institutions provided additional motivation for Southeast Asian governments to intensify intensive aquaculture, including shrimp farming.

In essence, the driving force behind export-oriented shrimp farming, which also prompted Vietnam's late entry into the industry in the 1990s, are the relatively big dollar earnings from the growing demand of farmed shrimp in the United States, Japan and the European Union.

But in the pursuit of foreign exchange earnings, any positive correlation of shrimp farming to the well being of people in local communities has been forgotten. In the process of expansion of intensive shrimp farms, environmental policies that could have prevented many of the socio-environmental costs were not enforced effectively.22

In the Philippines, there is an on-going effort to replace the old Peneaus monodon species (black tiger prawn) with the supposedly sturdier Peneaus vannamei (pacific white shrimp) as a means of reviving decreasing production brought about by shrimp diseases. But this is being done without any parallel effort to promote sustainable aquaculture practices; hence the threat that the vannamei species would only continue the socio-environmental costs in the future.

There is thus a need to reorient priorities, and for Southeast Asian governments to see development in terms of more basic indices that focus on human well being like employment, income, food security, social equity and the sustainability of fishery resources. In fact, using these indices as standard, shrimp farming will be judged as having an insignificant-or even negative-contribution to development.  

The dominant role of aquaculture in fisheries development plans should be revised because it has yet to prove that its intensive forms can be sustainable. In fact, intensive shrimp farming with its huge socio-environmental costs should be restricted. There is also a need to reflect the resource rent in the licensing of intensive shrimp farms, and to take into account all market externalities in the cost of shrimp production.

Nevertheless, given declining wild-fish production due to weak fishery management, there may be a need for sustainable, non-intensive aquaculture practices to be enhanced and for national-level frameworks for sustainable aquaculture to be formulated to supplement capture fisheries production.

Finally, there is a need for Southeast Asian governments to prioritize the development needs of the artisanal fisheries sector, which is composed of 20 million-35 million men and women across the region who engage in small-scale fishing, fish processing and fish culture, and whose livelihoods and food security have been harmed by the socio-environmental costs of intensive shrimp farming.

Source: cyberdyaryo.com