Solon L. Barraclough and Andréa Finger-Stich

Most of the literature on shrimp aquaculture is relatively uncritical concerning its social impacts. One reason for this neglect is because its authors seldom distinguish between the different actors who are involved and affected. This section attempts to identify the principal actors throughout the shrimp production chain from the producer up to the consumer, including official agencies and lending institutions. Section IV will focus on actors who are not included in the industry, but are negatively affected by externalities and by reduced access to natural resources.

Commercial shrimp aquaculture is considered to be an industry because it integrates the whole production chain of which the cultivation stage is only the first link. It also involves many inputs and technologies which are produced by other industries. The industries producing the inputs and aquaculture technologies and those which are processing and marketing the product employ many more workers than does production at the farm level.

Commercial aquaculture combines many elements from fisheries and agriculture. Aquaculture, in contrast to the fishing industry, has no professional identity. As a result it has received little attention by national and international labour organizations. In Ecuador, which has been among the leading exporters of shrimp for over a decade, efforts to organize labour unions by shrimp industry workers have been consistently broken (Snedaker et al., 1986). The International Labour Organization has no data on employment in shrimp aquaculture. Some Asian governmental agency and FAO reports give crude estimates of overall employment in aquaculture. There is almost no information breaking down employment according to the different labour categories at each level of shrimp production. Consequently, we have to make inferences based on fragmentary data taken from somewhat non-comparable Asian country reports.

Shrimp Farmers And Labourers

There is apparently an average of one to three persons working on a full-time basis per hectare of semi-intensive and intensive shrimp pond and up to seven for extensive ponds. Worldwide, shrimp farms covered approximately 962,600 hectares in 1993 and may have employed the full-time equivalent of over one million workers.[10] This farm level employment includes temporary low-paid construction workers and permanent maintenance labourers (handling, pumping, feeding, pond water treatment and harvesting), supervisors, and guards to prevent the theft of shrimp from the grow-out ponds. A few temporary employment opportunities are given to engineers, heavy equipment operators, researchers and consultants. In East Java and Viet Nam employment costs have been estimated to be about 6 per cent of total operating costs in intensive shrimp farming (Chong, 1992) compared with about 30 to 40 per cent in traditional extensive shrimp production (Kongkeo, 1990). With the tendency to develop more semi-intensive and intensive modes of shrimp production, labour as a portion of total costs is being reduced by using more energy and technical inputs. "Aquaculture (shrimp) can hardly be regarded as a mass employer" (Ben-Yami, 1986).

Compared to other production systems taking place in the same coastal areas — mostly rice production — labour requirements for shrimp aquaculture are very low. One study in Indonesia reports that rice production employed an average of 76 workdays per hectare per crop cycle. In the same area, a semi-intensive shrimp farm employed about 26 workdays per hectare (McCoy, cited in Bailey and Skladany, 1991), and an extensive shrimp farm about 45 workdays per hectare per cycle (Hanning, 1988). Extensive shrimp production in West Bengal, on 100 bighas[11], was reported to employ about one third less labour than when the same area was used for rice paddy. In West Bengal, extensive shrimp production, called Jalkar, lasts seven to eight months per year, after which rice paddy cultivation takes over for the remaining months of the year. In this case, labour costs amount to about 7 per cent of the shrimp production total costs (Centre for Communication and Development, undated:25). Workers hired for the eight month period of shrimp production leave their jobs after that period and are hired afresh every year. Average wages in the mid-1980s were about Rs. 180 per month (at 1985 exchange rates, approximately US$ 18). The wages of managers and guards in the mid-1980s were around Rs. 300 (or about US$ 30) a month. Workers lived on the site and often worked at night when the shrimp feed. A West Bengal non-governmental organization says: "the conditions of work and employment are totally dependent on the owners' whims and fancies". Generally about half of the people employed in the Jalkar come from distant villages, especially the guards who are believed to be more reliable if they have no local connections. In the Jalkar system, shrimp production provides twice as much money income to the pond- or Jalkar-owner than would rice production. The benefit to small landowners who are forced to lease their land has been considerably less. In some cases, their rental income has been inferior to what they could gain from rice paddy cultivation, especially if direct consumption benefits are taken into account (Centre for Communication and Development, undated).

These employment and labour figures do not show the employment lost with the development of shrimp farms. Such social costs and environmental "externalities" will be discussed later. It appears from the available literature that for similar areas both traditional aquaculture and agriculture generate more employment than does commercial shrimp farming. In any event, the type of employment generated by shrimp farms is often not available to local people (Snedaker et al., 1986; Centre for Communication and Development, undated). In Bangladesh, the Department of Fisheries estimates that about 75 per cent of the shrimp farmers in the early 1970s were not natives of the coastal areas in Khulna and Satkhira districts (Sultana, 1994:2). In the sample village of Chokoria Sundarban area[12], only 10 out of 300 households obtained leases of shrimp ponds. Leases of 10 acre (4 hectare) shrimp farms in a former mangrove area were beyond the reach of most local farmers (Sultana, 1994:7-9). Many of the shrimp farm owners came from the business or service sector. In the Polder 17/2 area[13], they leased land from local farmers as well as from the government and inundated several hectares beyond the leased land, forcing other land users out of the area and into less secure or more difficult income earning activities (Sultana, 1994: 11).

Extensive shrimp farms produce about one ton of product per growing cycle per ten or more hectares of land. Intensive farms require important investments in other capital besides land (in order to increase stocking densities, water exchange capacities, etc.). Overall production costs (including construction and operating costs) for traditional extensive methods are estimated at US$ 1-3 per kilogram of live shrimp. Land and labour are the principal inputs of extensive shrimp farming. These production costs are commonly undervalued in less developed countries. On the other hand, purchased inputs, costs of energy and technical devices, on which more intensive methods rely, tend to reflect their prices in world markets. Operating costs for semi-intensive and intensive farms range from US$ 3-6 per kilogram of live shrimp (Rosenberry, 1993:23-24).

National and Transnational Investors and Agencies

Shrimp farm owners or operators producing for international markets have to adopt more intensive technologies in order to remain competitive as there are sharp limits to the land and water resources still available for extensive production. This requires access to financial resources and expensive technology. These are provided most of the time by urban entrepreneurs supported by foreign investors and industries. Wealthy investors, such as transnational corporations, tend to be very influential and therefore likely to obtain preferential access to public or private lands, water, credits, markets, tax holidays, subsidies, licences, foreign exchange and technology (FAO/NACA, 1994a:29; Ben-Yami, 1986; Kowalewski, 1987).

The allocation of resources for shrimp farming, and the distribution of benefits, varies greatly from one social context to another. For instance, in the Philippines where the control of land and other resources has traditionally been highly concentrated with a small élite, most shrimp production is in the hands of a few large entrepreneurs and investors. In Thailand, however, land ownership has, on average, been rather widely dispersed. There, small- and medium-sized shrimp farmers who were previously cultivators and fishermen could frequently move into shrimp farming and in this way improve their incomes substantially. In the 1980s, large feed and other input manufacturers, processors and marketing companies became increasingly important. They have played a crucial role in intensifying Thailand's shrimp production and thereby increasing their own profits. These large enterprises are often joint ventures with transnational investors based in Japan, Taiwan Province of China, Europe or North America who also provide additional economic and technical backup.

In most cases the large enterprises do not attempt to own the shrimp production units. In Thailand in 1990 they owned only some 10 per cent of the total number of shrimp farms and produced less than 20 per cent of the total output. A few large corporations, however, had oligopolistic control over the feed production sector, with only nine enterprises sharing 80 per cent of the market at the beginning of the 1990s. By promoting co-operatives and societies in which the shrimp farm owner or farmer was only one member, these large enterprises could closely control production practices (prescribing exactly the type and quantity of inputs to use and having exclusive control over the output) (Weigel, 1993:399).[14] In this way they could reap profits while passing on many of the risks to small "independent" producers. Shrimp farmers' profits tend to fluctuate greatly from one crop cycle or year to another. Processors and trading enterprises have more stable incomes, as they tend to have important shares of the market among the 50 countries which cultivate shrimp. The trend is to encourage intensive shrimp farms developed on the farmers' own units but with substantial financial and technical backing (Platteau, 1989).

Governments have often played an essential role in launching commercial shrimp production. The state has frequently provided cheap credits and facilitated access to land, water and modern inputs as well as to export markets. Traditional common property management systems are seldom suitable for shrimp production geared to export markets. Common property régimes previously accommodated seasonal multicrop aquaculture combined with agriculture for local consumption. The high returns in convertible foreign currency from shrimp aquaculture make it an industry which has been greatly favoured by governments, as well as by national and transnational banks: "The state (is) transforming multiple-use/multiple-user resources historically used by coastal residents to single-use private property owned by local and national élites ..." (Bailey, 1988:32).

A study concentrating on Amphoe Hua Sai and Ranot, two districts of southern Thailand[15], reports that around 3,000 shrimp farmers controlled 20,876 rais (about 3,367 hectares) in ponds. Most of these pond owners (about 93 per cent) were also their operators, but this area seems to be exceptional in this respect. The financial incentives to enter the shrimp business were very high. Thai aquaculturists in the Ranot district, who were previously growing mainly rice, increased their income by as much as ten times (Aquastar Laboratories Ltd., 1994:7-8). Most of their ponds were used intensively. In the districts studied, shrimp farmers were moving in from other areas where they had been producing shrimp for several years (most of them from three to five years) (NACA, 1994b:21-22). Shrimp farming is a full-time activity for most shrimp farmers in this area, as 80 per cent of shrimp farmers reported that shrimp were their only source of income.

For all Thailand, however, it was estimated that 70 per cent of all shrimp producers had other sources of income: 32 per cent as traders, 16 per cent as fishermen, 8 per cent as rice farmers, 7 per cent as labourers and another 7 per cent as government employees (NACA, 1994b:22). It was estimated that only 20 per cent of the shrimp farmers owned their farms, that 77 per cent had access to the land through a collaboration with relatives and friends[16], and that only 3 per cent of the shrimp farms were actually owned by a company.[17] These figures, however, do not show how much pond area each of these groups controls. As shown above, the influence of large corporations in the shrimp industry does not depend on their ownership of the land under production. Large corporations control financial and technical inputs as well as processing and marketing channels. In this way they indirectly controlled in 1991 about 76 per cent of all Thai shrimp farms (ibid.:121, table 37).

Thai aquaculture has thrived in part due to the phenomenal recent growth of the Gulf of Thailand trawl fishery. Thai trawlers fished down the food chain to smaller and smaller fish. In this way their total fish production did not fall substantially, but 70 per cent of their landings were "trash fish" used as animal feed. "The trawl fishery of the Gulf has therefore become a fish meal producer that has enabled the aquaculture industry to develop with relatively low feed costs" (Christy et al., undated:52).

The case of Aquastar, a large Thai corporation active in the shrimp industry, shows how multinational capital is used, with the active support of governments and banks, for vertically integrating the shrimp production chain.[18] Aquastar provides farmers with credit, production inputs, technical know-how and other devices for their entry into shrimp production. An arrangement with the Bank of Thailand and the Bank of Asia allows the farmers to have access to low interest loans for construction and operating costs. The Thai Lands Department looks at the individual land holding of each farmer and "redraws the land boundaries in order to give each farmer clear title to the area of his pond". We will see in the next section that this procedure of "land consolidation" often occurs at the expense of customary local users having less formalized access rights (Fegan, 1994:18).

The World Bank participated actively in the launching of the shrimp industry in Asia. Out of an investment of US$ 1.7 billion in 1992 for Indian agriculture and fisheries, the World Bank allocated US$ 425 million for aquaculture development (Mukherjee, 1994). A substantial part of this sum seems to be destined for intensification and expansion of shrimp ponds. The involvement of the World Bank in shrimp aquaculture, and the development of related hatcheries and other shrimp facilities, illustrates the trend towards internationally organized vertical integration of this industry (O'Neil, 1994:10-11; Sfeir-Younis and Donaldson, 1984). We do not know how much the World Bank has actually invested in shrimp aquaculture in tropical countries, but partial and dispersed information suggest the importance of these credits.[19] In 1985 the Bank planned to invest US$ 200 million in aquaculture projects dispersed in Indonesia, Thailand, the Philippines, Sri Lanka, Malaysia, Bangladesh and China (Scura, 1985, cited in Bailey, 1988:33).

Recently, in India, the World Bank group's IDA has been actively promoting sizeable shrimp farming projects in West Bengal, Orissa and Andra Pradesh. Its loans help finance development of 13 sites covering a total land area of about 6,000 hectares with a net water-spread area of about 3,800 hectares. The land is divided into shrimp farms of 0.5 to one hectare. It is presumed that each pond will be leased to one small farmer family beneficiary, according to the project document. The project is meant to provide employment and income for 5,200 families. Each shrimp farmer would have the possibility of earning about Rs. 30,000 (about US$ 900) per year (Fish Farming International, 1994a:4). Water exchange, technical advice and the management of common facilities (including channels) and services (including technical advice and provision of inputs) would be the responsibility of the Brackish Water Fish Farming Development Agency financed through an annual service charge levied on behalf of each farm unit (FAO/NACA, 1994b:85-87). Overall, the World Bank would invest Rs. 400,000 per hectare (about US$ 12,000).

The donors' justification for their investments in aquaculture has been that it is going to help meet developing countries' food needs. In practice, funds destined for aquaculture have been largely diverted into the production of farmed shrimp which is a luxury export commodity, even though original plans often called for fin-fish production for domestic consumption (Luna, 1984)[20]. Incomes reaching the producing areas are unevenly and unsustainably allocated among different groups of its populations. Support for inland small-scale fin-fish aquaculture, which is less capital intensive, but is more efficient in producing protein to meet the local population's requirements, is often diminished to the extent shrimp farming has been favoured (Bailey and Skladany, 1991:66-73).

Fry Collectors and Hatchery Workers

Shrimp farming has until recently depended primarily on wild shrimp fry (larvae and post-larvae) which ranged second after feed expenses in the production costs of semi- and intensive shrimp farms. In many cases, the collection of fry led to the local depletion of wild shrimp. High technology hatcheries are now being rapidly installed. Actually, considerable employment was created for local people, mostly women and children, in the collection of wild fry from estuarine waters. Local employment and complementary income opportunities will decrease to the extent this activity is displaced by hatcheries, but this is hardly mentioned in the literature. There were about 50,000 part-time fry collectors in West Bengal for about 33,000 hectares in shrimp culture (FAO/NACA, 1994b:58). For 100 shrimp post-larvae, the collector got approximately US$ 1, but what this income means to local people in different areas raises many questions which can only be answered by case studies. There are a number of other unanswered questions as well. How much post-larvae can one gather in how much time? To what extent is shrimp fry collection combined with other tasks? Who is earning and controlling the resulting income?

Between 1993 and 1994, for all Asia, the number of shrimp hatcheries doubled, according to Rosenberry, from 2,759 to 4,208 (Rosenberry, 1993, 1994b). The installation of these hatcheries is often promoted with governmental support. In Bangladesh in 1993, for example, the government owned two of the country's four hatcheries. In order to facilitate the further development of the shrimp industry, the government of Bangladesh has recently decided to sell its hatcheries to the private sector. It also provided US$ 50 million in credit to encourage the installation of new shrimp farms. The government hoped to double export earnings from shrimp in 1994, and again in 1995, to reach US$ 625 million (McElroy, 1993-1994).

Current or future loss of traditional fishery productivity implied by the excessive collection of fry should be weighed, on a case by case basis, against the current employment and revenue opportunities generated through the collection of wild fry. As will be discussed later, such an analysis should also include the risks of reduced biodiversity induced by the over-exploitation of wild fry.[21] Risks of biodiversity loss due to the collection of wild shrimp fry should also be weighed against the risks of escape from hatcheries of shrimp that are disease contaminated or have possibly been rendered dangerous for other species through genetic manipulation (Pullin, 1992). Hatcheries may not be the only alternative to shrimp fry. Prudent management of natural nursery habitats, such as mangroves, could possibly make both traditional fishery production and wild shrimp fry collection for limited shrimp aquaculture compatible.

Manufacturers, Processors and Marketing Agents

Shrimp production involves manufacture of numerous inputs such as shrimp feed, fertilizers, pesticides and veterinary drugs, as well as of technical devices for water treatment and pond operation. The off-farm post-harvest production links also include processors and marketing agents (packaging, transport, export-importers, industries further transforming the product, different levels of wholesalers and retailers, restaurants and supermarkets). There are, however, few data available concerning the social composition, employment conditions and organizational structure of processing and marketing links in the shrimp production chain. A study conducted in Indonesia in 1984 reported that a cold storage factory hired mostly young women who earned no more than US$ 1 per day (Yoshinori, 1987). As was seen above, with the growth and intensification of the shrimp industry, manufacturers, processors and marketing agents are becoming increasingly powerful actors in the production chain. These sectors have grown even faster than the shrimp farming sector itself; for instance, several Asian countries report excessive freezing facilities. These providers of inputs and services in turn push direct producers to expand and intensify their production.

It is difficult to separate those off-farm related industrial and commercial activities which are exclusively related to shrimp aquaculture from those which are related to overall aquaculture production. The feeds, pharmaceuticals, pesticides, technical tools and infrastructure (such as transportation, port and freezing facilities etc.) are similar and largely interchangeable between shrimp and other aquacultural and fishery producers. The technology and inputs are mostly manufactured in the higher income countries of Europe, North America and Asia. Processing involves deheading, skinning, cleaning, sorting, weighing and freezing the shrimp. In most countries it implies low-paid and precarious employment done mostly by women, and often also by children (Sultana, 1994:13).

The numbers of intermediaries vary widely, as do their role and economic power. In Japan, shrimp-specialized primary wholesalers handle 70 per cent of imported shrimp — the remainder being distributed through central wholesale markets. International standards for shrimp exports and imports have already been established, which facilitates marketing (ITC/UNCTAD/GATT, 1991). There are cases where each link of the production chain belongs to a different actor. City based agents or intermediaries may bring the shrimp to the freezing and packaging plants. The same, or another agent, may take them for export. Marketing agents may play an important role in exchanging the information necessary to equate supply and demand, to control quality and to facilitate transfer of technology. A study conducted in Bangladesh found that traders did not collude to exploit producers. There was considerable competition among traders that allowed producers to secure fairly equitable deals (de Campos Guimarăes, 1989). In Japan, however, distributors tend to band together to plan their purchases at stable price and quality (Tradescope, 1992). As we said earlier, the general tendency is towards vertical integration of the production chain, with large seafood companies as providers of inputs, technology and credits increasingly controlling all stages from production to packaging and marketing[22].

High Purchasing-Power Consumers

The United States is now the world's largest shrimp market. It has been estimated that at least 50 per cent of the shrimp imported into the United States comes from aquaculture (Csavas, 1993:45). The United States imports primarily from Ecuador, Thailand, China, Bangladesh and India. In 1992, United States shrimp consumption reached 2.5 pounds (1.1 kilograms) per capita (Rosenberry, 1993:32). Japan accounts for a third of international trade in seafood, and it imports more than 4 million tons of fish products from over 120 countries each year (Kakuta, 1994). The strong yen helped Japanese importers to dominate the market until 1992. The Japanese per capita consumption rate of shrimp reached a record of 3 kilograms per year in 1989. The value of cultured shrimp in Japanese imports of seafood increased from 29 per cent of the total in 1986 to 46 per cent in 1991.[23] Europe[24] is also increasing its overall shrimp imports; from 1993 to 1994 alone they rose by 7 per cent (FAO, 1994:398-399). Besides, there is a growing market among the expanding middle- and upper-classes of the newly industrializing Asian countries.

According to FAO, worldwide shrimp consumption grew by nearly 4 per cent annually between 1970-1988 (Maw Cheng Yang, cited by Rosenberry, 1993:34). As shown in table 1 and the related graph, production of farmed shrimp has been increasing much more rapidly than shrimp captured at sea. In the early 1990s, overall shrimp production was increasing faster than demand, when farmed and captured shrimp production combined grew by an average of 156,000 tons per year from 1990 through 1992.[25] A sudden global production collapse in 1993 induced overall prices to rise by 30 per cent between 1993-1994 (Renard, 1995:47). Thai producers argue that annual consumption growth of between 2 and 3 per cent would be more realistic for the near future and that a production increase in 1994 below 75,000 metric tons might have helped prevent shrimp prices from falling. Fluctuations in shrimp prices make it a risky venture for producers, but attract the interest of speculators.

As a luxury item, shrimp is subject to great fluctuations in demand. Demand could suddenly collapse if consumers became widely convinced that the consumption of shrimp was hazardous to health or that shrimp were produced in a socially and environmentally unsustainable manner.[26] Until recently, cultured shrimp had the reputation of being fresher and safer to consume than captured shrimp. Cultured shrimp, however, are also prone to bacteriological, viral or chemical contamination, leading to health problems that may be publicized and deter consumers (Barg, 1992; Martínez-Espinosa and Barg, 1993). There are some controls by importers; Japanese buyers, for example, have a network of supervisors to ensure that quality requirements are met during production (Rosenberry, 1993:10). The United States Food and Drug Administration samples imported seafood to prevent entry of products that have been adulterated or spoiled or contain poisonous and non-allowed additives (Martin and Flick, 1990:351-364). In addition, the culinary quality of cultivated shrimp seems to deteriorate with artificial feeding. Japanese consumers have recently been reported to prefer captured shrimp which, with modern freezing techniques installed on shrimp trawlers, have superior freshness and quality (Rosenberry, 1993:32).

Large corporations that control the whole production chain claim that they are more capable of controlling health and environmental factors than are small producers. They often attempt to use this argument to provide themselves with a competitive advantage in order to by-pass smaller or less integrated production units (Weigel, 1993). But the volatility of the market induces commercial producers to maximize short-term profits and to neglect investments for making the industry environmentally and socially more sustainable.

Footnotes

10. The development of about 30,000 hectares of shrimp ponds would employ about 30,000 to 40,000 people on a full-time basis for an investment of approximately US$ 100 million (FAO/NACA, 1994b:55).

11. One bigha equals 0.67 hectares.

12. In Cox's Bazar District.

13. In the Dumuria Thana of Khulna District.

14. Some of these large enterprises include Charoen Prokphand, S.T.C. Feedmil Co., Aquastar Co., Unicord Feed Co., Lee Feed Mill Co., Krungthai Feed Mill Co.; large transnational corporations such as Mitsubshi and Cargill are also involved.

15. Provinces of Nakhorn Si Thammarat and Sonkhala.

16. The study does not say who those relatives and friends are and what type of contract binds their support.

17. This illustrates the extremely approximate nature of the data because Weigel, cited in an earlier paragraph, estimated 10 per cent.

18. This enterprise is currently also investing in India and other South-East Asian countries.

19. The World Bank has not released recent information on its credit policy concerning shrimp aquaculture, but an undated technical paper (from the late 1980s) mentions a sum of US$ 180 million investment over five years (Christy, et al., undated).

20. While multicropping of shrimp with milkfish — appreciated as a source of protein in many developing countries — is technically feasible, economic conditions do not encourage it. In 1984, in South Sulawesi (Indonesia), a kilogram of prawn was worth four or five times a kilogram of milkfish (Yosuke, 1987:17).

21. "For every single shrimp prawn in the pond almost a hundred other fish or shrimp are killed" (Csavas, 1988 or 1989:84).

22. In Thailand, the Aquastar corporation is an example. An example in Indonesia is the Indonusa Royal Group, which processes and packages shrimp and other seafood products as well as owning over 100 hectares of shrimp ponds.

23. In 1993, Japanese shrimp imports (frozen, fresh and chilled) reached 301,271 metric tons which is three times the amount of 1984 (FAO, 1994).

24. FAO gives estimates for European imports of cultivated and captured (frozen, fresh and chilled) shrimp for the following countries: Spain, France, Denmark, Italy, United Kingdom, Belgium, Germany, Sweden, the Netherlands, Portugal, Norway, Switzerland, Ireland, Austria and Poland (FAO, 1994).

25. As was seen in the second section of this report, cultured shrimp production fell in 1993, but again grew substantially in 1994.

26. An Ecuadorian environmental group — Accion Ecologica — has already launched a boycott to protest against shrimp aquaculture that has meant the destruction of vast stretches of the country's mangroves (Kohr, 1995).