Title: Shrimp Industry in Bangladesh
1Welcome to the PresentationGroup I
- Presented By
- Sk. Faijan Bin Halim (MSS 151510)
- Economics Discipline
- Khulna University
- Khulna
- Special Thanks To
- Nishad Nasrin
- Assistant Professor
- Economics Discipline
- Khulna University
- Khulna
2Group I
- Shrimp Industry Study Problems, Prospects and
Intervention Agenda - A Paper By ATDP Research Team
- September 18, 2005
3Acronyms and Abbreviations
- ATDP Agro-based Industries and Technology
Development - DANIDA Danish International Development Agency
- EC European Commission
- EU European Union
- Govt. Government
- ha Hectare
- mt Metric Ton
- PL Post Larvae
- RD Research and Development
- SPS Sanitary and Phyto-Sanitary
- SSOQ Shrimp Seal of Quality
- USAID U.S. Agency for International Development
- WTO World Trade Organization
4Terminology
- Antibiotics Generally used for the treatment of
a bacterial infection. - Bio-security Bio-security is a set of measures
designed to protect a property from the entry and
spread of pests and diseases. - Brackish Water Normally known as brack water. It
is salt water and fresh water mixed together. It
is saltier than fresh water but not salty as sea
water. - Brood Mother Brood mother is a specific pathogen
free variety of shrimp for commercial aquaculture
today. This ultimately helps the marginal farmers
and increase export. - Greater Noakhali Agriculture Extension Project
(GNAEP) A fisheries management model developed
and tested for fisheries, giving genuine
fisherman access to fishing rights direct from
the government and aiming at a sustainable
utilization of resources. It was first started in
July 1998, with a project duration of 7 years. - Hatchery A place where the hatching of fish is
artificially controlled for commercial purposes.
5Terminology (cont)
- Hazard Analysis Critical Control Point (HACCPP)
It is a systematic preventive approach for food
safety from biological, chemical and physical
hazards that can make the finished product to be
unsafe, and designs measurement to reduce these
risks to a safe level. - Land Grabbing Land grabbing means buying or
leasing of large pieces of land in developing
countries by domestic and transnational
companies, government and individual. - Mortality Rate The number of deaths in a given
area or period, or from a particular cause. - Post Larvae Hatcheries sell two products. One is
nauplii (tiny, newly hatched and first stage
larvae) and post larvae means which have passed
through three larval stage. - Sanitary and Phyto-sanitary (SPS) SPS
measurement enteed into force with the
establishment of WTO in 1995. SPS measurement
sets out the basis rule for food safety, and
animal and plant health standard. It allows
countries to set their own standard.
6Terminology (cont)
- Shrimp Seal of Quality (SSOQ) SSOQ prepares
certification standard pertaining to food safety,
quality assurance, environmental sustainability
and social responsibility in the Bangladesh
shrimp sector. These standards apply to all
operators in the shrimp sector. - Tax Holiday It is a temporary reduction and
elimination of tax. Government usually creates
tax holidays as incentives for business
investment. - Value Chain A value chain is a set of activities
that a firm operating in a specific industry
performs in order to deliver a valuable product
or service for the market. - Wild Fry Wild fry is also known as wild post
larvae. There are abundant supply of naturally
occurring post larvae therefore there is no need
to develop hatchery technology.
7Summary of The Study
- Shrimp is one of the leading export items of
Bangladesh and accounts for roughly 2.5 percent
of global exports and fetches a fair amount of
foreign exchange (250-330) million for last
three years. - It has ample demand in international market and
Bangladesh is blessed with an environment
congenial for shrimp production. - A primary study was undertaken to detect the
problems plaguing the different levels of the
value chain of shrimp in the country. - Motive of the Study
- This study aims to identify obstacles to the
growth of the industry and develop some
intervention strategies that would help eradicate
these obstacles and begin to develop a strategic
model to achieve an export target of 1 billion
by 2010.
8Problems of the Study
- Inefficient Management
- High Mortality Rates
- Low Quality Shrimp
- Negative Country Image Abroad
- Indiscriminate Catching Brood Mothers
- Lack of Integrated Agriculture Policy
- Inadequate Sanitary and Phyto-Sanitary Measures
- Lack of Standard
- Virtual Competition Among Different Actors
- Lack of Coordination among Donor Agencies
- Lack of Awareness
- Unfair Practice by Agents
- Non-existent RD endeavor
9Intervention Strategies Towards Achieving Target
- The study strongly recommends an integrated model
for both Golda and Bagda projects. - Strategic business units can be cooperative
based, where groups of farmers work together
under a commercial umbrella and disseminate
technical information and training to their
farmer clients - Dialogues and forums should be held regularly
with exporters and importers to raise and address
questionable trade practices and standards. - The government must formulate an integrated
agricultural policy to ensure sustainable
development in this sector. - Instead of working in isolation, the donors
should address these problems collaboratively so
that transfer of learning and experience is
ensured.
10Intervention Strategies Towards Achieving Target
(cont.)
- Donors should also formulate smooth exit
strategies whereby projects are handed over to
the private sector after completion. - Ecological protection and gender equity issues
can be controlled by working with the
aforementioned strategic units to prohibit
certain dangerous practices like land grabbing,
indiscriminate catching, child labor and
participation of women across the value chain,
etc. - Mass awareness can be generated on such issues as
bio-security by again working through the
established industry channels that will benefit
from them. These again are the business units and
association groups. - The SSOQ and DANIDA models can be applied in this
area. The positive aspects of both the models may
be applied in the value chain. - It is found that such intervention can be done
quite possibly if all the stakeholders confront
them jointly in an integrated fashion.
11Shrimp Industry in Bangladesh
- Largest export commodity of the country.
- Bangladesh Produces 2.5 percent of the global
production of shrimp generating more than US 300
million annually. - Main cultured species is the tiger shrimp (bagda
shrimp) a marine shrimp and mainly cultivated in
brackish water. Around 250 million contributed
from Bagda alone. - Next cultured species for export is the fresh
water variety locally called golda. - Shrimp industry provides direct employment to
over 6,00,000 people who in turn support over 3.5
million dependents. - Suffers from lack of vision and strategic
direction.
12Shrimp Sector Contribution
Year Percentage Contribution to Total Export Export to EU (mt) Value (million taka)
2001-2002 4.76 19235 7925.70
2002-2003 5.10 21941 9392.60
2003-2004 5.71 25522 11775.00
2004-2005 5.90 27508 12628.95
2005-2006 4.56 29177 15230.00
2006-2007 4.90 36851 1660.00
Japan, EU and USA are the main importer of
Bangladeshi shrimp
13Shrimp Culture
- Follow traditional method and annual yield is
250-300 kg/ha - Total Shrimp farming area-2,76,000 ha
- Marine Shrimp-195000 ha and Freshwater
Shrimp-86,000 ha - District involved-20, Upazila-52
- Bangladesh captured only 2-3 percent of world
production of shrimp. - Shrimp sector contributes 84 share of total
fishery export in Bangladesh (2012-13). - Country-wise Share
- USA-26, Belgium-21, UK-13, Netherland-5,
Germany-8, Japan-4, Russia-3, Others-20
Culture
Supplier
Boat, Rickshaw
Agent
Boat, Truck
Depot
Commission Agent
Factory
14- Objective of the Study
- The objective of this study is to identify the
industry-embedded problems and then to layout
intervention strategies at each step of the
value-chain to address the same. - Ultimate Goal of the Study
- The ultimate goal of the research is to assess
the possibilities of developing a strategic
business model that can help achieve an export
target worth US1 billion by 2010. - Methodology of the Study
- The methodology entailed both secondary and
primary qualitative study. Secondary research
included both local and international studies
conducted on the subject. Primary study involving
depth interviews of actors across the value
chain. - The findings of the first phase of the study was
validated in a stakeholders workshop focusing on
problems outlined by the members of the value
chain and the intervention strategy developed
based on the outcome of the study
15Interviewed Representative Members of Value Chain
- Brood Agency
- Hatchery/Nursery
- Transport Agency
- Trade Agency
- Depot
- Farm-Shrimp/Nursery
- Processing Industry
- Financial Agency
- Laboratory
- Wholesale Market
- Department of Fisheries
- Facilitating Agency
- Shrimp Technologist
- Association
- Donor Agency
- Scope of the Study
- The scope of the study included the entire value
chain and covered both bagda and galda.
Geographical coverage was Coxs Bazaar,
Chittagong, Noakhali, Dhaka, Bagerhat, and Khulna.
16Sector Map of Bangladesh Shrimp Industry
17Additional Problems of Shrimp Industry (General)
- Lack of integrated agricultural policy
- Wild fry collection
- Land grabbing
- Lack of standard at all level of value chain
- Hatcheries operating under capacity
- High demand but inadequate supply due to high
mortality rates and farms are unable to supply to
the processors despite of high international
demand - Change in price due to inconsistency in supply
chain - Farmers sometimes inject illegal material to
shrimp for necessary weight requirement - Lack of proper monitoring mechanism
- Government provided extension workers perform
very poorly.
Post Larvae of Shrimp
18Additional Problems of Shrimp Industry (Brood
Parent Collectors)
- According to experts indiscriminate catching of
brood mothers may extinct from our country within
two to three years - In Bangladesh male and female shrimps are
harvested together. There is no mechanism for
harvesting brood mothers separately - Inadequate policy measures regarding the time of
catching, technology and human resource - Lack of local expertise in the time of fry
collection from the sea - People involved in this business have no
knowledge regarding wild life - Lack of monitoring compliance affect the value
chain as well
Brood Parents
19Additional Problems of Shrimp Industry (Agents
and Hatchery)
- Agents are mostly traders and most of them
entered into business by force. Traders force the
farmers to buy PL in stocks. - Quality and price control mechanisms are
compromised due to inadequate supply. - Inadequate control and monitoring by law
enforcing agencies is also a troubling issue.
- This portion complies too many players and all of
them are engaged in marginal operation. - Most investors are motivated to turn black money
white. Production and sales figures are often
exaggerated to override the low. - Inadequate bio-security measures such as
drainage, bacterial and viral control and use of
medication lead to low quality of product.
20Hatchery/Nursery (cont)
- In case of golda bio security related problems EU
imposed a ban on Bangladeshi shrimp import due to
failure to comply with EU regulation. - Lack of trained human resources. Majority 70 are
from outside country and of which 50 are from
Indian nationals. Illegal application of
technology and medication represents a potential
threat to bio-security. - Unethical business practice arises due to the
direct result of govt. programmes directed in
favor of the hatcheries. - Cost of RD activities at the hatchery level is
highly uneconomical.
21Additional Problems of Shrimp Industry (Agent-PL,
Transport Agency)
- Lack of working capital and availability of
special interest rate is the main constraint - High mortality rate during transshipment from
hatchery to farm especially in case of bagda - These agents control both farm and hatchery. They
purchase on credit from the hatchery owner and
receive commission from farm - In case of golda, a large number of PL imported
from India which contains nitrofurine (a
prohibited substance)
- Poor infrastructure makes hindrance incase of
transporting bagda from Coxs bazar to Khulna. - Lack of landing facility from air transport in
Khulna, it increase time and transportation cost.
Policy for licensing air transport is inadequate. - Due to time heavy time consumption some
hatcheries try to transport PL by road but the
situation is still unimproved. - Temperature and oxygen controlled vans for road
transport are still at the experimental stage.
22Additional Problems of Shrimp Industry
(Farmer/Nursery)
- Low awareness level resulting high mortality
rate. - Inadequate banking support and financial ability
hinder progress of daily work. - Processors of shrimp mostly get the benefit from
export and pass some of benefit to agent from the
higher price but other members do not absorb much
of the benefit. - Higher production cost due to inefficient
management bodies and high mortality. Higher
price for the product does not always ensures
higher profit due to higher production cost as
like in Bangladesh. - Sale price is completely independent of cost.
- However due to low production cost, survival of
this sector is quite easy than from the other
shrimp producing countries. - Cost of maintaining nurseries is too risky and
expensive.
23Additional Problems of Shrimp Industry (Agent
Shrimp, Processor)
- Huge gap between demand for shrimp by processors
and supply of the same by the farmers . - Processors dictate price based on international
market. - Shrimps are injected with fluid and chemical
substance to increase its weight. - Monitoring of compliance are alarmingly
inadequate.
- Quality of shrimp supplied to the processor is
not of good quality due to adulteration. - Processor engaged in their business during the
tax holiday extension after that they shift their
profession which rises financial default. - Low marketing effort and low prices reduces the
demand in the international market and it also
creates a negative image in the outside market.
24Processor (cont)
- Inadequate technology and knowledge transfer
impact market operation. - Hazard Analysis Critical Control Point (HACCP) is
still inadequate. - It is sometimes difficult to maintain the
international standard of exported shrimp. For
example EU regulation for using nitrofurans is
very low to maintain health standard which is not
highly maintained in our country and it may ban
the export of shrimp to EU. - What We have Learnt ????
- Have a Closer Look on the Marked Portion
- This is a perfect example of inappropriate
grounds for rejection by the developed countries.
International laws can therefore sometimes be
questionable.
25Business Development System
Some General Barriers
- Co-ordination Related Problems
- No coherent coordination and hatchery business is
mainly set up for interest. - Industry needs are not well communicated with
donor activities. - Donor activities also not well communicated among
themselves. - Non-existent government activities.
- Technological Problems
- Non-existent RD activity.
- Donor programmes are not well designed to develop
appropriate technology. - Inappropriate imported technology.
- Human resource development is not long term
sustainable. - Hatcheries seem to be interested in profit
sharing not technology sharing.
26Business Development System (cont)
Some General Barriers
- Feed
- Price of feed is beyond the quality of the poor
farmer. - Most available feed suppliers are substandard,
therefore we often have poor quality of shrimp. - Inefficient monitoring of feed and drug
manufacturing system.
- Financial Problems
- Financial agencies found financial farm non
profitable therefore are reluctant in extending
loan. - Inadequate knowledge of financial operator
regarding the demand and supply status. - Large extent loan is disbursed towards hatcheries
and processors as they seem to be larger in the
actor of the value chain.
27Business Development System (cont)
Some General Barriers
- Bio-Security Problems
- As agents are commercially driven, therefore they
tend to oversell medications such as antibiotics
and hormones just to gain more profit. - Inadequate laboratory facilities result in low
RD advantage. - Due to low level of knowledge regarding bacterial
and fungal infestation lot of exports turn out to
be infected.
Antibiotics of Shrimp
Bacterial disease of shrimp
28Target Achievement
- It is evident that the target rate of US 1
billion target is achievable provided that
certain bottlenecks are removed. - Here the main bottleneck is production level is
unacceptably low. - With the dissemination of technology through the
programmes like SSOQ production in the farmers
level may be increased 4-5 fold making it
possible for the industry to reach its desired
target. - Concentration on increasing management efficiency
ultimately reduce the high mortality rate and
manifold the production level.
29Intervention Strategy
- Strategies that were previously uncovered in the
primary study illustrated below - Agricultural Policy
- Ministry of agriculture and land should initiate
an integrated policy to enhance land productivity
while considering different sub-sectors like
shrimp, jute, horticulture etc. - Fisheries department should prepare different
policies for bagda and golda as requirement for
these two species are completely different. - As 70 of the foreign exchequer from shrimp is
contributed by bagda, therefore emphasis should
be placed there. - Hatcheries, farmers and processors should be
considered as single unit rather than competitors
while formulating any policies. - Policy assessment and updating should be done on
annual basis based on foreign technician and
international market scenario.
30Intervention Strategy (cont)
- 2. Policy on Brood and Hatcheries
- Brood parents catching for bagda and golda
should be strongly monitored during some specific
seasons whereas experts suggest that it should be
banned in some specific areas specially in
Sundarbans and Satkhira to enable a consistent
flow of brood mothers. - Brood mothers collecting method should be changed
in our country observing from others developed
countries. Training facilities will be helpful in
this case. - A 100 ban should be imposed on collecting PL for
Bagda which makes industries non-existent.
However such ban should not be imposed before
making any alternative livelihood for the
individuals whose main occupation rely on it. - In Coxs Bazar govt. initiate tax holiday for
bagda hatcheries, similar steps should be taken
for golda. - Restrictions should be imposed on using net and
individuals without trade license should not be
allowed in this trade. - Private sector operation and support from the
donor should be introduces.
31Intervention Strategy (cont)
- 3. Policy on Bio-Security
- A free market mechanism across the value chain
with biologically safe food force the farmers to
adopt bio-security measures. - Rather than depending on foreign technicians
local manpower should be trained on testing
measurement. - Certification program like SSOQ plays a major
role for creating value addition in the form of
better quality and enhance image. SSOQ has
laboratory in Coxs bazar which test the post
larvae and then send it to the farmers. - Bio-security policy should include viral,
bacterial and fungal diseases. Policies must be
adopted in the use of harmful chemical
substances. - Traceability is important which helps farmer to
receive training on record keeping and
certification procedure. It should be adopted at
each and every stage of the value chain including
importer. This proactive measurement helps to
achieve larger export also.
32Intervention Strategy (cont)
- 4. Financial Policy
- Restriction on number of hatcheries to control
financial corruption which may eradicate
unethical practices rampant in this sector. - Government should undertake investigation before
granting any hatcheries/processors to operate. - Tax holiday should be directed towards the farmer
in the form of low interest rate to ensure that
traders do not take all the advantage. - Incentives can be more effective that helps
farmer to meet certain bio-security measures. - 5. International Policy
- In the last few years consumers are more
conscious about whether imported shrimp is
produced maintaining international codes for food
safety, produced in an environment friendly way.
Therefore, international standard should be
ensured.
33International Policy (cont)
- Concerted effort on a global scale is necessary
to assist LDCs in order to build capacity
necessary to guarantee compliance. - The SPS (Sanitary and Phyto-sanitary) provisions
should be formulated in a transparent and
accountable manner. - If standards are to be harmonized, these should
be take into consideration of regional condition.
For example, though EU ban import shrimp but
exporters are able to divert some a part of
consignment to USA and Japan. - Adequate preparatory measures should be ensured
for exporting countries (SPS measure) prior to
imposition of any penalty. - Adequate financial and technical assistance
should be provided to the LDCs to facilitate
conformity with SPS requirement. - Certification procedure should be clearly
addressed to avoid any conflicting interpretation
with respect to standard.
34Intervention Strategy (cont)
- 6. Policy of Donor Agency
- Donor agencies should develop a joint country
strategy to ensure smooth and effective
functioning. - Ensure greater transfer of knowledge which
increases the effectiveness of the project by
learning from other mistakes and implementing
other success stories. - Donor agencies should develop a plan based on
long term exist strategy rather and transfer of
ownership should follow a smooth and efficient
process. - Instead of acting only a financing source only
donor agencies can also function as a broker and
aid govt. to formulate an integrated agricultural
policy. - Emphasis should focus on the private sector as
from 1986 to 1996 govt. established only a few
hatcheries whereas private sectors established
total of 55 hatcheries with less fund. - Donors can aid in country image promotion and
export diversification.
35Intervention Strategy (cont)
- 7. Operational Strategy General
- A shrimp association should be formed taking one
representative from each value chain group. There
exist two hatcheries and one processor
association but they work in isolation with each
other but they should work under an umbrella
organization. - There are few agents who have control over
farmers and hatchery supply. However they need to
be enlisted to collect information from them and
disseminated it to monitor of farm activities. - SSOQ model could be used in ensuring increase in
production. - National target on exports as well as performance
target should be directed towards the value chain
to ensure efficient integration. - Bagda and Golda are two different generic brand
therefore, their promotional strategies also need
to be different. - In developing an operational strategy, grass root
problems should be solved in the organization
level.
36Intervention Strategy (cont)
- 8. Operational Strategy Golda
- For Golda project regional integration model may
be helpful where all the value chain actor
performed regionally and whey it matured then
attempt to form a limited company. - GNAEP model is very much effective and have a
goal of transition from project phase to private
sector phase. - Regional association may be considered fro
financial support. - All movement of good from hatcheries to processor
recorded properly since a single entity is in
operation. - Golda can also be cultivated in a poly-culture
system with Carp to boost production.
37Intervention Strategy (cont)
- 9. Operational Strategy Bagda
- For the hatcheries to be stationed across the
country, they have to consider the production of
bagda as they are located near coastal belts and
the strategies need to be different due to
geological proximity. - Hatcheries can jointly run the PL and use
technology using road as a means of transport.
Code number for hatcheries, certification system
improved efficiency in transport, distribution
and traceability. - Farmers should be helped to form a group.
Bargaining power of famers should be boosted for
equitable distribution of benefit. Farmers of a
specific geo-graphical region should be tagged
for easy accessibility, supervision and
traceability. - Govt. agencies should monitor bio-security
measures and provide financial support to the
farmer to develop export oriented industry. - Cooperatives have to be allowed freedom.
38Intervention Strategy (cont)
- Support can be sought from the govt. and the
donor agencies to enhance country image. - Strategies should also be generic for bagda and
golda. - Strategies should be directed towards brand which
increase industry competition within the country. - Maintain data banks of products.
- Maintain liaison with the market and transmit
information down the chain.
- RD facilities can be mobilized through linkage
with the various universities of the country. - Research activities can be initiated by the
regional integrated units or join effort by the
hatcheries of bagda. - Strong linkage with the SSOQ is needed at the
initial stage. - Internship program of the students in various
universities can be developed at all level of
value chain to ensure human resource development.
39Intervention Strategy (cont)
- 12. Operational Strategy Donor
- Donor should continue with SSOQ model to ensure
smooth transition and placement of technology
transfer. - Donor should develop a plan on milestone basis
rather than time bound basis in the areas of
technology, standardized operation and marketing
strategies. - An integrated model should be developed by taking
representative of the private bodies for smooth
transition from the very beginning of the
project. - A typical NGO driven model should be avoided
since it lacks transition and partnership with
public sector need also to be avoided because
this may lead to ownership issue.
40Conclusion
- Integration of activities both in terms of value
chain and region may help to achieve US 1
billion theoretically described in the above
discussion. - Working with existing PL supply agents who
control a significant number of farmers and also
ensure quick dissemination of information and
provide technical training. - Presence of donor in the absence of government
guidance is very much essential for a planned
time period as a facilitators only. - Private sector participation is essential and
project should be handed over only after the
sustainable profitability has been ascertained. - Fisheries department and donor should outline
policy framework according to the need of the
buyer and ask the govt. for implementation. - If all of the strategies are met only then
Bangladesh can increase its market share and
become one of the leader in the global shrimp
market.
41- Thank You All
- From
- Any Questions????