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Ocean & Coastal Management 49 (2006) 546–561
www.elsevier.com/locate/ocecoaman
Trade and export orientation of fisheries in Southeast
Asia: Under-priced export at the expense of domestic
food security and local economies
Leo van Mulekoma,, Anna Axelssonb, Ephraim
Patrick Batungbacalc, Dave Baxterd, Radja Siregare,
Isabel de la Torred, SEAFish for Justice
a
Novib/Oxfam International, Mauritskade 9, 2514 HD The Hague, Netherlands
b
Nijera Kori, 3/3 Block A, Lalmatia, Dhaka 1207, Bangladesh
c
Tambuyog Development Center, 91 V. Luna Road cor. Maningning Street, Sikatuna Village,
Quezon City, Philippines
d
Industrial Shrimp Action Network, 14420 Duryea Lane, Tacoma, WA 98444, USA
e
WALHI, 14 Jalan Tegal Parang Utara, Jakarta Selatan 12790, Indonesia
Available online 25 July 2006
Abstract
Much of Southeast Asia’s economic success is based on the under-priced export of valuable natural
resources. Nowhere is this more evident than in fisheries—an important commodity in Southeast
Asia, with significant export volumes contributing to the foreign exchange earnings of these
countries.
Existing fisheries and aquaculture policy development have lead to increased export earnings over
the last decade, but have also resulted in increased extraction rates and incurred huge costs in terms
of decreased local economic productivity and destruction of natural coastal resources. What is
worrying is that Southeast Asian governments intend to further stimulate the export of fishery
products, in particular shrimp from aquaculture, thereby increasingly threatening both domestic
food security and the economic opportunities of local communities.
This paper argues that: (1) current fisheries management and development policies are not
contributing to domestic food security, are not profitable to the Southeast Asian macro-economy,
and are doing much damage to coastal ecosystems and rural poor communities; (2) development of
shrimp aquaculture has a negative impact and further expansion of the industry should be halted;
Corresponding author. Tel.: +31 70 3421893/3421621.
E-mail address: [email protected] (L. van Mulekom).
0964-5691/$ - see front matter r 2006 Published by Elsevier Ltd.
doi:10.1016/j.ocecoaman.2006.06.001
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(3) the considerable fisheries resources of the region should be used and managed to ensure domestic
food security and economic development of the presently marginalized sectors of the population.
Five recommendations that will help ensure sustainable use of coastal resources and deliver profits
to the countries and communities that depend on these resources are made at the end of the paper.
r 2006 Published by Elsevier Ltd.
1. Introduction
Many economists will claim that the rapid integration into the world economy through
trade and import/export liberalization has been the main impetus for economic growth and
poverty reduction. Citing economic theory dogmas that date as far back as Adam Smith
and David Ricardo, the belief is that liberalized markets are the most efficient, and that if
and when a country sells enough of its produce to other countries it will earn enough
income to take care of the domestic needs of its population [1,2].
However, most economies in Southeast Asia did not start to liberalize until export
growth was well established [3]. ‘‘Exports from behind protective barriers’’ were behind
Southeast Asia’s economic success over the past 20–30 years, not ‘‘free trade’’. In the
1980s, Southeast Asian countries were able to combine high growth with high degrees of
protection [4]. It was only during the 1990s that import tariff walls were broken down and
restrictions on foreign ownership of, or access to, domestic production resources (land,
companies) were relaxed.
1.1. Fisheries and free trade
Globally, fish stocks are seriously being over-fished [5]. Fishery subsidies directed
towards commercial fleets still, however, amount to US$20 billion annually. At the same
time, industrialized countries are demanding more access to developing countries for both
the sale of their subsidized fish, as well as investment in local fishery industries. In other
words, having over-exploited their own fish resources, industrialized countries are now
subsidizing their fleets to extract fish from the coastal waters of developing countries [6].
These subsidies are directly helping to annex a resource that provides a vital source of
protein and income to poor communities in developing countries.
Fisheries are an important commodity in Southeast Asia—for both food security, as well
as export earnings. There are an estimated 12 million registered fishers in the Association
of Southeast Asian Nations (ASEAN) region [7], many of whom depend on part-time
fishing for subsistence livelihoods. The total fisheries production in Southeast Asia is
estimated at 15.1 million MT [7,8]. In 1998, ASEAN exported US$7.6 billion (net US$6
billion) in fishery products [7,8].
Much of Southeast Asia’s economic success is based on the under-priced export of
valuable natural resources. Commodities are sold without including the real costs of
production. And while protective walls are tumbling and exposing domestic communities
to the rigors of harsh (and uneven) global competition, these communities have
increasingly less resources available to build their domestic economy.
Unfortunately, biological estimates clearly indicate that natural fishery resources are depleted
to a fraction of former standing stocks [9]. Thus, the likelihood that fisheries production will
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remain important for national economies in the future is remote, and it seems unlikely that a
fishery industry can continue to keep up with a growing domestic demand for fish. An
estimated 65 million people in Southeast Asia remain undernourished [10].
1.2. Objective
Using official statistics, research findings, and documentation from various nongovernment organizations working in the region, the paper attempts to prove the following
points:
1. policy development over the last decade has led to increased extraction rates and
increased export earnings;
2. the apparent advantages in earnings from these examples are directly associated with
huge costs incurred in decreased local economic productivity and destroyed coastal
natural resources; and
3. the economic use of coastal resources has actually resulted in financial losses, and that
these losses are carried primarily by the exporting countries and their local
communities.
It argues for the: (a) responsible use and management of the considerable fisheries
resources of the Southeast Asian region to ensure domestic food security and the economic
development of the presently marginalized sectors of the population; (b) temporary halt to
export-oriented economic policies; and (c) re-institution (where possible) and retention
(in all cases) of the protection barriers that shield domestic economies from unequal
competition on a global free trade market.
2. Fisheries management and trade: loss of fish and loss of food security in the region
2.1. Sell fish to buy fish?
Data on import and export of fishery products in the region (including aquaculture and
inland fishery) are summarized in Table 1 and complemented with cursory and incomplete
data on losses incurred as a result of coastal habitat conversions and insufficient fisheries
management. The attempt to outline gains and losses in fish volumes for the regional
market in the table shows that the region, despite an actual fisheries trade deficit in volume,
can still make fisheries trade work for food security objectives by simply using some of the
earnings from export to buy a larger quantity of (cheaper) import. It also indicates that the
availability of fish for domestic markets may also be affected by insufficient fisheries
management, which may still be compensated for if most of the export earnings are used to
feed Southeast Asian populations.
The ‘‘best case’’ scenario assumes a minimum of loss due to management problems (e.g.
all illegally caught fish still ends up on intra-regional markets) and assumes that all export
earnings are used to import fishery products. The ‘‘worst case’’ scenario provides a
warning signal, and shows how much loss in fish (and thus food and economic value) may
be incurred when there is insufficient fisheries management and all net gains from trade are
used for purposes other than feeding domestic populations. Potentially, this loss could
reach 6.4 million MT (or 40% of current ASEAN fishery production)!
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Table 1
A cursory estimate of gains and losses to availability of fish on domestic markets incurred in Southeast Asian
fisheries and aquaculturea
Factor
Value (US$ billion)
Production (million
metric ton)
Fisheries production
Ex-vessel value
Import
Export
Net profit
Food fish balance in trade (weight)
Possible converted gain from tradeb
Direct losses in fish because of mangrove and
coastal habitat conversions in South China Sea
Illegal Fishing (IUU)c
In Indonesia alone
Access agreementsc
11
0.73
1.8
7.8
6
15.1
Loss in fish for domestic used
Value of that loss ex-vesseld
1.5
2.5
1.1 (negative)
0–5 (positive)
2 (negative)
1.5 (negative)
1.4–3.9 (negative)
Min. 1.8 (negative)
+1.9 to
+1.4 to
6.4
4.7
a
Data are for 1998, taken from FAO Fishstat 2000, FAO Country Profiles 2000. The estimate on mangrove
conversion is taken from program documents of UNEP on the South China Sea [48], and calculated by using the
direct impact on fish biomass [43]. IUU fishery in the region is estimated at 10% of production [8], but the
Indonesian government estimates that for Indonesia alone 1.4–4.0 billion US$ is lost in IUU fishery [18,19]).
Access agreement data are scarce, but evidence indicates is at a minimum 1.8 MT [16]. It is not known how much
of IUU and access agreement fishery catches are leaving the region or are still taken to markets within the region.
b
Range calculated assuming no fish is bought from gains in trade, to all gains of trade are used to buy fish for
domestic markets; 6 billion US$ trade profit at 1.20 US$/kg average import price.
c
It is known that IUU fishery and catches under access agreements have impacts on domestic landing, but it is
difficult to be accurate on actual volumes involved. Some of the catches of these fisheries will leave the region, but
some will still be landed and traded within.
d
Range calculated at ‘‘best case’’ scenario (when IUU and access agreements keep catches within Southeast
Asia) and assuming all earnings from export are converted to buying fish for the domestic markets, and at ‘‘worst
case’’ scenario (when all IUU and access agreements fishery catches leaves Southeast Asia) and assuming none of
the earnings from export are used for buying fish for the domestic market. Neither one of these scenarios is likely,
but the analysis illustrates the potential impact trade and export have on the availability of fishery products on
domestic markets.
Although both the ‘‘best’’ and ‘‘worst case’’ scenarios are unlikely, this analysis is
valuable as an attempt to link fisheries management issues and export-oriented policies
with domestic food security and the availability of fishery products on the local markets. If
Southeast Asian countries wish to manage the fishery for food security purposes, this can
only be done if the export earnings are used to buy food (fish) for domestic populations.
However, such a ‘‘sell fish to buy fish’’ policy is not immediately evident, since exports of
fisheries products from Southeast Asia exceed imports [7].
In Fig. 1, two different trade balance graphs are presented: that of an ‘‘exporter’’, and
that of an ‘‘importer’’ of food and fish. Agricultural trade balances are shown in Fig. 1 for
Indonesia (the ‘‘exporter’’) and the Philippines (the ‘‘importer’’). Indonesia is selling
substantially more agricultural and fisheries products than it buys. The country appears to
be earning money, but at the same time domestic market prices rise [11], people are getting
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700
600
8000
500
400
6000
300
4000
200
2000
100
0
0
Fishery trade balance (1000MT)
Agric. trade balance (Million US$)
10000
-100
-2000
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Philippines (million US$)
Indonesia (MT)
-200
Indonesia (million US$)
Philippines (MT)
Fig. 1. Agricultural trade balance (food value), and net fishery volume import/export of the Philippines and
Indonesia. Notes: Data on agricultural trade from www.adb.org/documents/books/key-indicators; data on fishery
import and export from www.fao.org/fi/statist/fishoft/fishplus.asp.
hungry, and the Food and Agriculture Organization of the United Nations (FAO) has
made calls for food aid to the country. The Philippines represents a totally different
situation. The country is a net importer of fishery products. Moreover, the Philippine
agricultural trade balance (for all agriculture products) shows that it imports large volumes
of all kind of food products.
2.2. Losses in domestic food security
During the years when the Philippines switched from being a ‘‘seller’’ to being a ‘‘buyer’’
of food, domestic self sufficiency in fisheries products declined steadily from 100% in 1993
to 71% in 1997 [12]. To compensate for this, one would expect the import of fisheries
products to increase. However, the net import of fishery products by the Philippines has
remained relatively constant at a modest level of 50–100,000 MT (Fig. 1). Apart from the
question about whether the country should be happy with this ‘‘food bill’’, and
notwithstanding the fact that the country is buying fish, it appears that import quantities
are not related to the locally growing demand for fish.
It is speculated that much of the foreign exchange earned from the export of food is not
devoted to purchasing low cost nutritive foods for the needy, but is diverted to the
purchase of luxury foods and other products in demand by local elites [13]. The existence
of huge shopping malls and luxury supermarkets in the big cities of the Philippines, and the
increasingly short supply of fish in domestic markets in Cambodia1 [14], suggests that this
might be right and that the current fisheries-related trade and export policies in Southeast
Asia do not work to alleviate food security problems.
1
Cambodia exports approximately 80% of its fishery products.
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2.3. Losses in access to fishery resources
There is more evidence to back up the above conclusion, and there are grounds to
speculate that the situation may actually become worse as the demand in the region for fish
will only grow [7].
The conversion of productive coastal lands (only ‘‘valued’’ in terms of losses in fish
biomass in Table 1) and the intrusion of foreign fishing vessels have led to livelihood and
income losses of poor segments of the population. The lack of enforcement of existing
fisheries policies is also imposing large costs on countries [15,16]. Between 1998 and 2001,
an estimated 200,000 small-scale fishers in the Philippines lost their livelihoods due to
massive conversion of fishing grounds to make land available for foreign investments and
export processing zones [17]. In Indonesia, there are losses of possibly as much as US$4
billion (catch-value) per year [18,19] within its Exclusive Economic Zone, and local fishers
have complained that they can no longer access their fishing grounds [20,21] due to illegal
fishing—most of which is done by foreign fishing vessels. Cambodian officials have also
acknowledged that they can only guess what other fleets are taking from the country’s
fishing waters [14].
2.4. Liberalization despite ‘‘external costs’’
Current trends to liberalize the fisheries economy by reducing tariffs for imports (e.g. in
the Philippines, where many fisheries tariffs were reduced from 70–80% to 5%) and to
create legal openings for more foreign investments in the fishery industry (e.g. the
Aquaculture and Fisheries Modernization Act (AFMA) in the Philippines [22] and the
Law on Foreign Investment in Indonesia [20]) will stimulate foreign investments and trade.
It will also stimulate the conversion of coastal habitats, the displacement of fishers, and the
export of ‘‘high value’’ fishery products. Thus, there are reasons to believe that
liberalization will only reduce food security and the national economy, unless so-called
‘‘external costs’’ are included in economic cost-benefit analyses.
3. Shrimp aquaculture development in Southeast Asia: a ‘‘boom-bust’’ economy with huge
costs
ASEAN governments appear to have turned to aquaculture as a way out of the apparent
dilemma between losses in fishery resources and the need for food security. They regularly
express high interest in the development of aquaculture as an industry for both domestic
food needs, as well as foreign exchange earnings [23]. Shrimps are a particularly high value
commodity with huge demand in rich markets and they currently account for 1% of the
global trade in fishery products by weight, but about 20% of world fishery exports by
value [8].
Trends over the last few decades show that what governments aim to achieve by
engaging in aquaculture is not happening. The domestically available supply of
aquaculture products has decreased, and the earnings appear to go mainly to a privileged
few at the expense of the less fortunate. Ultimately, the shrimp producing countries are
losing more then they gain from shrimp aquaculture.
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3.1. Main trends in shrimp aquaculture development
Apparent early successes in shrimp aquaculture development have encouraged national
policy makers and international agencies to invest in the industry [24]. The Asian
Development Bank (ADB) and the World Bank have supported shrimp aquaculture
development projects in Bangladesh, China, Indonesia, Malaysia, the Philippines and
Thailand. Japan, the United States and the European Union (EU), have also added to
bilateral development support packages.
Before the 1970s, small-scale aquaculture farmers produced shrimp for the domestic
market [24]. However, since the 1980s, shrimp aquaculture has been increasingly promoted
by governments as a major source of foreign currency earnings. Shrimp farms expanded
rapidly in Indonesia, Philippines and Thailand. In the Philippines alone, development
assistance given to shrimp aquaculture was close to US$2 billion during this period [25].
Despite the failures experienced in Ecuador and Taiwan in the late 1980s, the focus on
shrimp aquaculture development has continued in Southeast Asia. In fact, the Philippines
even established a law quite recently which literally calls for ‘‘aggressive promotion in all
[Philippine] regions’’ of export-oriented aquaculture (the AFMA; [22,26]), even though the
country has faced 10 years of declining production in shrimp aquaculture [25,26].
During the 1990s, the development of shrimp aquaculture became increasingly driven by
public-private investments aimed particularly at generating earnings from export of the
commodity. In Thailand, corporations invested over US$300 million in shrimp farming
between 1986 and 1991, while the government invested US$84 million [13]. In Vietnam, the
government embarked on a ‘‘blue revolution’’ program, hoping to earn US$2 billion in
revenues from seafood exports in the 2000–2005 period. Shrimp farming operations, seen
as a cornerstone for this ambitious target, produced 158,755 tons in 2001 and now cover
448,800 ha. Investments have been driven by government subsidies based on loans from
various international financing institutions (reaching over US$4000/ha), as well as tax
incentives for traders and foreign investors [27].
Indonesia has actively promoted shrimp aquaculture development since 1984. First
through ADB and World Bank supported contract-farming enterprises, with little direct
foreign investment, and later (since 1998) with an ambitious program aimed at increasing
shrimp production to 670,000 tons by 2003. In financing this development, the program
has relied mostly on private (domestic and foreign) investments [11,28]. The program was
not deterred by virus attacks that virtually wiped out 90% of the shrimp farms in Java and
Sulawesi in the early 1990s [11]. Currently, Southeast Asian shrimp exports stand at 424.8
million MT and US$4.2 billion (Table 2).
3.2. There are a few who profit
There is a large demand for Southeast Asian shrimps on the global market. Japan, the
United States, and EU for instance, all import huge quantities of the commodity. In fact,
the Japanese development assistance to aquaculture (bilaterally and through the ADB)
appears to have been used to promote the flow of products to Japan, either as direct
imports or by negotiating investment agreements (mostly directed at shrimp processing
and trading, rather than farm pond operation) [13,29].
The motives behind the development support of European countries and the United
States are a bit more obscure. In Vietnam, however, a clear relationship exists between
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Table 2
Some key data on shrimp aquaculture and food security in Southeast Asia and Bangladesh
Year 2000
Prawn/
shrimp
aquaculture
production
( 1000 MT)
Total
shrimp/
prawn export
( 1000 MT)
Total
shrimp/
prawn export
(million
US$)
Thailand
Philippines
Indonesia
Vietnam
Malaysia
(1998)
Cambodia
Bangladesh
230
36.7
143.7
158.8
9.8
248.7
12.1
127
27.2
9.8
2,750
144.7
862.9
319
76
0.5
63.1
0.5
63.1
42
350
Total
(ASEAN)
579
424.8
4,152.6
Shrimp pond
area (ha)
Mangrove
area lost due
to shrimp
pond
development
Food shortage
in country, 1998
(% population)
80,000
14,3197
610,000
446,000
11,100
16,800
160,400
394,000
120,000
1,250
21%
21%
6%
22%
1%
1,272
141,000
6,500
33%
60%
1,290,297
692,450
13%
References: Thailand and Vietnam: [36]; Food shortage data: [10]; Total ASEAN (except mangroves): [10];
Indonesia: [11]; Philippines: [12]; Bangladesh: [38]; Cambodia: [14].
bilateral trade negotiations between the country and the United States on the one hand,
and the assistance provided by the World Bank for shrimp aquaculture on the other [27],
thereby establishing a clear export-oriented motive behind the development of the
industry.
The private sector is apparently ‘‘hitching a ride’’ on this situation. A case in point may
be the Charoen Pokphand (CP Group), a multinational that, in cooperation with
Mitsubishi, made shrimp a truly global commodity. The CP Group now has three major
shrimp aquaculture companies with businesses in China, India, Indonesia, Thailand and
Vietnam. CP Feed Mills is the largest shrimp feed company in the region,2 while the CP
Aquaculture and CP Intertrade branches ensure that the CP Group is involved in the full
cycle of production—‘‘from inputs to overseas marketing’’ [13]. CP controls approximately
18% of Thai shrimp exports, and 60% of the Thai shrimp feed market [30]. CP is also 31%
co-owner of the single largest shrimp aquaculture company in Indonesia, the PT Central
Pertiwi Bratasena (PT CPB [31,32]). PT CPB is one of three companies that, together,
control 90% of the production and export of shrimps. All three of these companies are
involved in so-called ‘‘Nucleus-Estate Smallholder Schemes’’ or NESS (Fig. 2), a form of
contract farming in which the company (Nucleus) does not actually own farm ponds, but
provides credit to small scale farmers for the purchase, development and operation of
ponds, while dictating the sourcing of inputs3 as well as the buying prices. In this way,
large companies can access public land (‘‘for development’’), use government credit
schemes (‘‘to assist small-scale farmers’’), and control the shrimp production process
(via conditions posed in credit-schemes) without having to take the investment risks and
establishing ponds themselves [24]. Ironically, much of the credit-funds involved originate
from development loans of international financing institutions, and are administered as
2
3
Feed accounts for approximately 50–60% of the total inputs in shrimp farming.
PTCPB is also a feed provider.
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State Land
Company make
pond
Community
Land
Company
sells the
pond in
credit
installment
Farmer has
to pay his
credit
installment
with his
harvest to
the
company
Credit Bank
Fig. 2. Model of credit settlement of the NESS relationship in big scale shrimp farming in Indonesia. Note: Figure
courtesy of R. Siregar.
being distributed to small-scale farmers. On paper, subsidiaries of the companies are
merely seen as intermediary credit providers. In short, the number of players4 in the
regional shrimp export market is quite small; most of the products are sent abroad, and
much of the profit benefits only a few.
3.3. Serious doubts about benefits to domestic food security and employment
Aquaculture should, in theory, increase both employment and the supply for domestic
food consumption. However, because most shrimps are exported, aquaculture makes little
contribution to local food security [11,33] and governments are aware of this. The Director
General of Fisheries of Indonesia who attended a symposium in RO Korea in 1998 said,
while introducing Protekan to his ASEAN colleagues, ‘‘To address the issue of food
security, the government launched a crash program for boosting the export of fisheries
commodities’’. The ‘‘fish for fish’’ policy has been discussed above with the conclusion that
fisheries and aquaculture earnings are not used to buy food for domestic populations.
Shrimp aquaculture itself already expends more food than it produces—for every ton of
shrimp, at least 1.5–2.6 tons feed are needed [11].
The supply of shrimps for the domestic market appears secondary to export driven
motives. Again, some examples from Indonesia and the Philippines may demonstrate this.
During the Asian crisis of 1997 and 1998, domestic shrimp prices in Indonesia soared
600%, clearly keeping in line with the devaluation of the Rupia [11]. From 1993 to 1997,
domestic shrimp consumption in the Philippines went down from 1.37 to 0.67 kg/capita
[25], while prices rose 24% and 20% during 2000 and 2001, respectively [26]. In sharp
contrast, during the last decade shrimp has steadily become cheaper in Europe and the
United States.
A commonly-used argument to ‘‘defend’’ shrimp aquaculture development is that it
generates employment for the poor. However, this employment generation is limited to
1–5 persons/ha (from very extensive to very intensive aquaculture). Cursory estimates
indicate that subsistence employment in 1 ha of mangrove or coastal wetland can range
4
This paragraph is merely intended to illustrate that only a few make profits from the shrimp aquaculture
industry. The names of particular companies are mentioned to provide evidence for that, and nothing more is
intended by the authors.
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between 10 and 40 persons [34,35]—much higher than that generated by the same area of a
shrimp farm. Moreover, outsiders are usually employed by shrimp farm operations
[17,34–36]. Loss of access to coastal habitats as a result of this so-called ‘‘profitable
industry’’ is estimated to contribute substantially to the unemployment of millions of
individuals.
3.4. There are many who lose
Aquaculture development comes at a huge cost to local populations, and it is usually the
marginalized that pay the price. Documented effects of shrimp aquaculture development
include a serious loss of production potential in surrounding rice fields in Bangladesh
[37,38] and in Thailand and Vietnam [34–36,39]—up to 50% in a whole province [33].
Costs include displacements of people [17,34–36], as well as huge environmental and socioeconomic opportunity losses. Soaring land prices directly attributed to shrimp aquaculture
development [40] obviously benefited landowners, but made landownership unattainable
to the poor.
Table 3 provides clear insights into the existing livelihood opportunities affected
negatively by shrimp aquaculture development—i.e. losses in economic opportunities for
subsistence and semi-subsistence communities in Bangladesh. Less detailed reports from
rice growing areas in Thailand [33], coral reefs in Indonesia [11], and coastal areas in the
Philippines [17,41,42] provide evidence that this is also happening all over Southeast Asia,
in areas much larger than the shrimp farms themselves.
There is also the ‘‘hard cash’’ argument, derived from the science of ecological
economics, which helps to estimate the real (‘‘external’’) costs derived from the mangrove
conversion that often results from aquaculture development. Recent estimates of losses in
economic value incurred by the conversion of mangroves include US$10,000/year/ha
(Thailand [43]), and US$8–11,000/year/ha (Philippines, Table 4, [44]). These estimates
include so-called ‘‘ecological footprint effects’’ of declined fish production and other
ecosystem services over a larger area than the mangrove habitat itself. If these values are
extrapolated to the total estimated loss of mangroves in Southeast Asia, the full amount is
mind-boggling and certainly much larger than the direct cash gains from shrimp exports.
Combining the estimated loss of mangroves of 692,450 ha (Table 2) with these data
indicate that US$4.2 billion has been earned from shrimp aquaculture at the cost
(in mangrove destruction alone) of US$5.5–7.6 billion, thereby resulting in a negative
balance of US$0.8–3.4 billion/year for the region.
Feasibility studies on shrimp aquaculture development from international financing
institutions and public investors are, albeit haltingly, beginning to include some external
costs in their cost-benefit estimates. Granted, there are wide discrepancies in the use of
data—a recent program of the United Nations Environment Programme [48], for example,
estimates the total loss of mangrove area in the region at 70% (including China); while a
recent advisory report to the World Bank on the issue used 1995 data pegging mangrove
losses due to shrimp aquaculture at 402,199 ha [49] for 12 Asian countries (or slightly over
5% of historical mangrove areas). Even with this last figure, however, the external costs of
shrimp aquaculture from mangrove losses alone would still exceed the financial profits.
The development of shrimp aquaculture industries then is not in the national interest of
countries in Southeast Asia. The industry is not doing much to alleviate food shortages.
Conversely, it is doing much damage by further marginalizing poor rural communities.
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Table 3
An overview of previous and present livelihood opportunities for communities surrounding shrimp aquaculture
farms in the southwest of Bangladesh
Activity
Previous economic activities in the
shrimp cultivation areas
Present economic activities in the shrimp
cultivation areas
Agriculture
Agricultural work in own land as well as
on the lands of others. Opportunity to
work in ploughing, planting, harvesting,
threshing and other related works
Previously cattle were kept in almost all
households. The families had additional
income from the sale of milk, calves, and
cow dung
Job opportunities have been vastly
reduced due to the conversion of
agricultural lands into shrimp ponds
Cattle
Poultry
There used to be poultry farming in the
region. Women used to earn
supplementary income from the sale of
eggs and chickens
Vegetables in the
Homesteads
Most of the households used to cultivate
vegetables on their homestead lands, and
sell the surplus after meeting household
needs
The fishermen and poor women used to
catch fish in the canals and flood plains,
and sell the surplus after meeting
household requirements
Fishing
Handicraft
A marsh grass known locally as ‘‘meley’’
(CIPERUS) used to grow in the marshy
areas. Women used to weave mats with
flower stems of this grass
Due to two-thirds reduction in rice
production, sufficient straw is not
produced, resulting in fodder shortage.
There is also shortage of grazing land
and fresh water for the cattle
The shrimp cultivators have imposed a
ban on poultry keeping, especially of
ducks, because they eat the shrimps.
Thus the women are deprived of a
former source of income
Due to salinity of the soil, vegetables
cannot be cultivated. There is lack of
nutrition as well as closure of a former
source of income
All the water bodies are now saline. Due
to destruction of scores of varieties of
fish fry during collection of shrimp fry,
fish populations have been drastically
reduced. Many fishermen have lost their
occupation
At present meley is not locally available,
resulting in loss of part time occupation
for women
Note: Adapted from [37].
Table 4
Valuation of mangrove ecosystem in Tagabinet, Palawan, Philippines, 2003
Mangrove area (30–200 10 ha)
Shrimp pond area (10 ha)
Gas and climate regulation
Food and raw materials
Recreation/esthetics
Nutrient regulation/waste treatment
Disturbance regulation
22–996,000
142,000–7.6 million
66,000–3.5 million
1–55.6 million
0.2–14.5 million
0
131,000–295,000
0
0
0
Total value (per ha per year)
5000–41,000
Forever
13,000–30,000
For 3– 5 years
Notes: In US$/year; Valuation methodology based on [45]; Valuation includes the application of ecological
footprint estimates [46,47]; Adapted from [44].
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4. Recommendations
Current fisheries management and fisheries trade and development policies are not
contributing to domestic food security, are not profitable to Southeast Asia’s macroeconomic development, and are inflicting much damage to coastal ecosystems and the poor
communities that depend on them. The development of shrimp aquaculture, in particular,
has negative impact. There is a need for an alternative approach to use and manage the
considerable fisheries resources of the region to ensure domestic food security and to assist
the economically marginalized sectors of society.
Governments in Southeast Asia should seriously consider a temporary halt to exportoriented and liberalization economic policies, and re-institute (where possible) and retain
(in all cases) the protection barriers that shield domestic economies from unequal
competition on a global free trade market. Instruments and safeguards need to be in place
that would guarantee a more equitable and sustainable resource-based economy—i.e. an
economy wherein external costs have become internalized and are paid by users and buyers
of natural resource based products, to those who currently suffer those ‘‘external’’ costs.
It appears foolish to continue with liberalization and export-oriented development
strategies in fisheries and aquaculture without taking full account of domestically-paid
social, environmental and ultimately economic costs involved. It would be economic
common sense to halt all further development of shrimp aquaculture ponds.
The recommendations below may help to ensure that fisheries and aquaculture resources
will become profitable and be ‘‘economized’’ in an equitable manner.
4.1. Fisheries management: CB-CRM
Community-based Coastal Resources Management (CB-CRM) has developed in the
region as a feasible alternative to many dilemmas facing Southeast Asian governments.
Non-government organizations (NGOs), governments, and development financing
institutions have successfully collaborated to develop this alternative approach to fisheries
and coastal resources management. In essence, CB-CRM entails development of
decentralized management systems wherein fishers and coastal communities (as primary
stakeholders) take active roles as decision makers and implementers of management
[50,51]. Though developmental programs indicate that transaction costs (transaction costs
are measured more in time than in money [52]) towards this approach are high [53,54],
successes that provide both restoration of ecosystems and income/livelihood improvements
for small-scale fisher communities have been reported [55,56].
4.2. Economic instruments: mandatory use of instruments estimating external costs
CB-CRM development alone is not enough. It must be flanked with instruments that
address the single most blatant flaw in economic theory: the ‘‘distortion’’ of the market.
External costs to production are currently ignored—e.g. the Cobb Douglas production
function, often used by economists and project developers in International Financing
Institutions (IFIs), measures only labor and money as inputs, but ignores the value of
natural resources as well as the ‘‘pollution’’ or destruction of such resources as the result of
the economic activity under analysis [57]. As an alternative, the field of ecological
economics has developed to a level of maturity that will allow application in the analysis
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and feasibility study of economic activities involving natural resources. How the
internalization of obvious external costs dramatically changes the picture from apparent
profit to huge loss has already been shown above.
4.3. Policy principles: Code of Conduct, precautionary policy principles, corporate social
responsibility
It also remains necessary to strengthen developing policy principles. The FAO has
developed a Code of Conduct which should guide the more responsible use of fish
resources. Adopted by a majority of countries, it still lacks legal (and therefore binding)
application. With possible consumer preferences in mind, the Marine Stewardship Council
has developed guidelines towards a more responsible tuna fishery. Similar codes of conduct
and policy guidelines have been developed in aquaculture [36]. Thailand and the Global
Alliance for Aquaculture each have one. Recently, NGOs like the Environmental Justice
Foundation also proposed codes that can be used and applied.
On environmental aspects, the different codes are actually quite similar in language—a
sign that all basically do know how to develop aquaculture more sensibly. Care must be
taken, however, to address social impacts and human rights abuses, associated with
fisheries and aquaculture activities, in such codes. The role of the private sector in the
process must also be looked into. Public and social accountability of corporations, and socalled ‘‘chain responsibility’’ have developed beyond mere buzz words into policy
principles that can be applied.
4.4. Good governance: law enforcement and public accountability
Law enforcement and public accountability need strengthening to govern the use and
allocation of public resources. Regardless of the actual form of governance, a country’s
government does have an implicit social contract with its population to take care of a
country’s natural wealth and handle it responsibly. Law enforcement and public
accountability cannot merely be practiced if and when a government has funds or
political interest for it, but should be regarded as the cornerstones of a government’s
mandate—especially if enormous economic resources and potential are at stake.
4.5. Trade related policy reforms and production-cost based negotiations in the global market
place
While the global market place is still a very uneven arena in which basic assumptions
behind free market economic ideologies are significantly flawed, Southeast Asian
governments will do well to consider a more assertive stand towards the liberalization
demands of developed countries and international financing institutions alike [4]. While
developed countries continue subsidizing their own fishery industries and negotiate (in the
World Trade Organisation) and/or ‘‘lend’’ (via international financing institutions) their
way to cheaper access to the resources and markets of developing countries, Southeast
Asia has ample social and economic incentives to protect its domestic fishery and coastal
resource base and put food security issues and domestic equity concerns first.
Obviously, the implementation of these recommendations will have the short-term
impact of making natural resource-based economic commodities (quite significantly) more
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expensive, and in a global competitive market less attractive to buyers. It is nevertheless a
price worth paying. Much of these costs can and should, in export, be deferred to the
foreign buyers of the products. If developed countries want shrimp, they should pay the
full cost and not be allowed to import them at ‘‘bargain’’ prices while ‘‘external’’
production costs are shouldered by those who do not have the money, or do not benefit
from the export earnings. Current overfishing and environmentally destructive practices
worldwide will, only a few years from now, lead to a situation wherein those who are
careful with their natural resource base will be able to demand higher prices. It is more
worthwhile to safeguard and sustainably manage fishery and coastal resources for
domestic use and distribution because at the end of the day, it pays better than exporting
them.
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