Journal of USAID/Bangladesh, GATE project (2006)

1. A PRO-POOR ANALYSIS OF THE
SHRIMP SECTOR IN BANGLADESH
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Course No. Econ 5205 Course Title: Economics of Industry
Presented by-
Farhana Afroj- MSS 171546
Md. Bayazid- MSS 171559
Economics Discipline, Khulna University
Authors: GATE publication
Journal of USAID/Bangladesh, GATE project (2006)

2. TERMINOLOGIES
Bagda it is a type of shrimp which is basically cultivated in the salt
water prone area. It also called salt water shrimp. It has high market
share
• Galda fresh water shrimp, larger in size, command high market
price.
(The countries that follow the development pattern of the leading
country.)
• FOB a situation where the seller is requested to deliver and load the
goods on board a ship or airplane specified in the contact of sale. No
insurance cost for the seller.
• Fry baby shrimp or prone.
• Fingerlings slightly larger size than fry.
• Spot market a market in which goods and services are traded for
immediate delivery.

3. TERMINOLOGIES (CONTINUED)
• Brood mother parents shrimp which is basically the main sources
of fry.
• Traditional production requires few inputs and low production.
Fry are caught in pond and grown from March to June.
• Modified traditional production uses more inputs, increased
technology, use of electric pumps to bring in salt water, mixing
cultivation (shrimp, other fish, rice crop) in the farm.
• Semi-intensive production requires greater inputs and investment
such as regulated water temperature, supplementary feed, and
better infrastructure. Though this method of production considers
significant higher production and profit, it also associated with
higher environmental cost.

4. TERMINOLOGIES (CONTINUED)
• Shrimp value chain the shrimp sector in Bangladesh is a buyer-
driven chain where producers have little ability to influence the
price at which they sell their product. They are frequently locked
into contracts that limit the price they receive.
• Fry catcher Fry collectors sift through the surf for post larvae. 40
percent of all fry catchers are men, 30 percent women, and another
30 percent girls and boys. Lacking land and assets, they are the
most vulnerable workers along the chain
• Fry faria, aratdar and commission agent Fry faria buy fry from
catchers or hatcheries throughout the year. They sell the fry to an
aratdar. Fry aratdar typically buy fry from the fry faria and sell fry
to the commission agent. Often faria and aratdar are indebted to
intermediaries higher up the chain and are committed to sell fry
exclusively to that lender. These contracts are sanctioned through
strict social codes and occasionally enforced by violence.

5. TERMINOLOGIES (CONTINUED)
Nursery nurseries are where the fry are adapted to the farm
environment. The majority of the fry goes directly to the farm.
Fry pass through nurseries before being delivered to the farms.
Farming shrimp are using primarily traditional and some modified
practices on the farmed bases.
Shrimp Faria they purchase shrimp from the farmers and sell them
on to other intermediaries. They may offer conditional loans to
farmers and buy shrimp from the farmers at a price that they
determine.
Shrimp aratdar buy shrimp from the farmer or faria, sell to the
commission agents who aggregate the shrimp, and then sell to the
processors and exporters.
Commission agents are typically medium to large size
entrepreneurs.

6. TERMINOLOGIES (CONTINUED)
• processor/Exporter There are 130 processing plants in
Bangladesh. Of these, 65 are in operation. Most plants clean,
preserve, and package shrimp. A number of plants are also
beginning to cook or semi-cook the shrimp to increase the value
added of the product.
.

7. 7
Pro-poor policy can be defined as those policies that aim to
improve the asses and capabilities of poor people. They include
policy interventions that directly target poor people or focus on
poverty reduction in general.
Open credit market it is a credit market in where the credit
givers provide the loan to the good customers without security.
Environmental cost is the cost connected with the actual or
potential deterioration of natural assets due to economic activities
TERMINOLOGIES (CONTINUED)

8. TERMINOLOGIES (CONTINUED)
• Focus group discussion is a good way to gather together people
from similar backgrounds or experiences to discuss a specific
topic of interest.
• Horizontal integration is the process of a company increasing
production of goods or services at the same part of the supply
chain. A company may do this via internal expansion, acquisition
or merger. The process can lead to monopoly if a company
captures the vast majority of the market for that product or service.
• Fish aquaculture is a farming process implies some form of
intervention in the rearing process to enhance production, such as
regular stocking, feeding, protection from predators.
• Deveining shrimp means to remove a shrimp shell and the vein
that runs aling the shrimp’s back first, it toward the tail the tool
removes the shell and the vein in one motion.

9. TERMINOLOGIES (CONTINUED)
• De-heading shrimp means cutting the head of the shrimp and
than manufacture.
• Horticulture means the art or practice of garden cultivation and
management.
• Duncan index is a measure of occupational segregation based
on gender that measures whether there is a larger than expected
presence of one gender over another in a given occupation or
labor force by identifying the percentage of employed women or
men who would have to change occupations for the occupational
distribution of men and women to be equal.
Eutrophication the process by which a body of water becomes
enriched in dissolved nutrients that stimulate the growth of
aquatic plant life usually resulting in the depletion of dissolved
oxygen.

10. TERMINILOGIES

11. INTRODUCTION
• In Bangladesh, shrimp production with export has been
increased rapidly over last two decades.
• With the increase of production area more than tripled, the
production of shrimp and prawn has been increased more than
14th times.
• In 2004 the foreign earning through export of shrimp was $360
million which is 4.9% of export. With this, it has created
employment opportunities over 6 lack people directly.
• Despite this, because of the production and processing
backwardness, it can't able to dominate the world market.
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12. OBJECTIVES OF THE STUDY
1. Provide a detailed summary of the shrimp sector value
chain in Bangladesh
2. Identify where women and men are located in the value
chain and explore any gender differences in returns,
wages, and profits
3. Develop policy and programmatic recommendations to
maximize opportunities for vulnerable groups—in
particular the resource poor, landless, women, and
minorities
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13. APPROACHES AND METHODOLOGY
Employs gender value chain analysis, pro-poor livelihood
approach to shrimp sector, social and environmental impact
throughout shrimp value chain.
• Data: Primary data
• Data collection method: Focus group discussion and key
important interviews with structured questionnaire
• Time period: September 2005 to November 2005
• Study area: Khulna, Chittagong and Cox's Bazar
• A total of 188 individuals were interviewed representing each
node in the value chain.
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14. VALUE CHAIN ANALYSIS
• Value chain analysis focuses on the institutional arrangements
like producers, Processor, marketers, distributors and consumers.
In this paper gendered value chain analysis has been used to find
out the different positions and contributions of men and women
across the value chain
Pro-poor livelihood approach:
Pro-poor approach find out how growth in the sector can benefit the
poor ensuring that rent and returns are better distributed across
the value chain. Livelihood analysis is concerned about the
earning and employment.
So, A pro-poor livelihoods approach considers the entirety of
production and earnings for the poor and assesses how shrimp
and prawn fit into a household’s strategy for income and
employment.
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15. OVERVIEW OF SHRIMP SECTOR
• Bangladesh is blessed with suitable environment to harvest fish
in numerous rivers.
• This contributes $360 million a year by domestic and export
earning.
• Export oriented shrimp culture has undergone rapid horizontal
expansion and rapid expansion occurs in the mid 1980s.
• Because of the global demand of shrimp, it has received credit
support in 1985 from world bank for increasing production,
construct embankments and boundaries to eliminate salt water
seepage.
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16. Impediments:
• Environmental cost has been increased.
• With the contamination of shrimp from banned antibiotics
through feed supply and grow out system, shrimp export had
been banned in 1997.
• Despite the investment in processing, it failed to ensure the
quality shrimp.
• Another problem is low yield of shrimp because of the primitive
cultivation process.
OVERVIEW OF SHRIMP SECTOR
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17. SHRIMPAND PRAWN PRODUCTION PROCESSES
There are 2 main verities of shrimp-
1)Galda- fresh water shrimp 2) Bagda- salt water shrimp
36 spices of these shrimp are harvested in Bangladesh.
Dominated shrimp production region: Chittagong-Cox’s Bazar and
Khulna-Shatkira-Bagerat
Shrimp Production methods:
There are 3 shrimp production process-
1) Traditional Extensive Production Process
2) Modified traditional Production Process
3) Semi-intensive Production Process
Most of the farmers use traditional cultivation technique. 17

18. SHRIMP PRODUCTION METHODS
Traditional Modified Traditional Semi-Intensive
Average Pond Size 4.5 hectares 2.5 hectares 3.0 hectares
Stocking Density
Post Larvae/m2
3.5-7.5 2.0 5.0
Water
Management
Mostly tidal Mostly tidal with some
pumping and aeration
Pumping and
aeration
Fry Sources Wild Wild and hatchery Wild and hatchery
Feeding1 Natural feeding with
occasional fertilization
Fertilization with
supplementary feed
Fertilization with
supplementary feed
Survival rates (%) 15-30 45-70 80+
Production
kg/ha/yr
100-250 600 2000
Cost (BDT/Ha/yr) 30,000-60,500 93,000 320,000
Cost (BDT/Kg)2 300-173 155 160
Returns
(BDT/Ha/yr)3
5,000-57,500 117,000 380,000
Table 1: Typology of Shrimp Production in Bangladesh
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19. PRAWN PRODUCTION METHODS
• Prawn is mostly produced in the southwestern region in Bangladesh
mostly in Noakhali and Patuakhali .
• There are two culture systems:
Women are mostly engaged in these prawn production.
ponds using poly-
culture with carp
In paddy fields (ghers)
Farm size small Comparatively large
Farmers involved small large
Land preparation February to April February to April
System Integrated Not integrated
Harvested June November and December
Post larvae collection From the wild or
hatchery
From the wild or hatchery
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20. THE SHRIMPAND PRAWN VALUE CHAIN AND
GENDER ISSUES
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21. TERMS AND CONDITIONS OF LABOR
The fry catchers are the more vulnerable workers with least power in the
value chain. 40% workers are women and girl and left are men and boys.
They are adversely affected by-
• Ban enacted in 2000
• Lack of efficient and open credit market
• Dependence upon particular buyer
So the net earning is very low.
Health concerns: Suffering from Skin infections, fungal infections,
lesions, rashes, and cuts are frequent. Women fry collectors may suffer
particular types of vaginal and fungal infections as a result of their
activities.
Environmental concerns:
• Potential loss of other biodiversity
• Wastage is significant 21

22. TERMS AND CONDITIONS FOR WORKERS
IN SHRIMP PROCESSING PLANTS
• Violations of the 8 hour workday
• Forced overtime
• Unpaid overtime
• Failure to provide adequate health-care
• Failure to provide child-care and maternal leave
• Failure to observe the right to organize and collectively bargain
• Inadequate hygiene and health and safety measures
• Insufficient bathrooms and toilet facilities
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23. OTHER KEY FUNCTIONS AND SERVICES IN
THE VALUE CHAIN
Transportation: Greatest transportation costs are bared by fry
aratdar, shrimp aratdar, processors, and exporters. Quality of
transportation and management during transportation plays an
important role throughout the value chain.
Feed and feed mills: In past, most of the feed are imported. Now
most farmers use locally produced feed which cause lack of
nutrients food. Used feed- Dried fin fish, Snail meat etc.
Financing processing and hatcheries: GoB has developed an
Entrepreneurs Equity Fund (EEF) targeting agri-based and other
commodity companies. Most of the financing offers from the
GoB are not well distributed. no funds or lines of credit are
available to farmers or other lower level participants in the value
chain.
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24. Standardization and regulation: In the case of exporting shrimp,
the exporter has to fulfill some predefined quality set by importer. If
noncompliance is documented , there is risk of losing contracts. For
this the exporter has to bear greater costs to upgrade the
infrastructure and product quality.
SEGEMENTATION ALONG THE CHAIN: Men and women are
distributed unevenly across all sectors. This segmentation is
measured by Duncan Index. The formula is-
i = (1,2,...N) is the total number of sectors, industries, or occupations
fi and mi are the sectoral employment ratios of men and women to
their respective labor force
The Duncan Index of dissimilarity, ranging from 0 to 100
0=sectors or occupations are not sex-segregated and 100 =men and
women are in entirely different sectors or occupations.
In Bangladesh the index value calculated for 10 sectors in 1990=31
and in 2000=27
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25. RANGE OF SHRIMP PRODUCTS EXPORTED
Product Process Value BDT/Kg
Head on shell with
claws
IQF, Semi-IQF and Block frozen 420
Headless shell on Head removed, neck meat trimmed, IQF raw consumer pack
and raw tray packs
616
Headless shell on
easy peel
Head removed, neck meat trimmed, IQF raw consumer pack
and raw tray packs with garlic and herb bases, butter-flied,
blanched and cooked in BF or IQF process
647
Peeled Peeled, headless, raw and cooked, BF or IQF 650
Pull de-veined (PD),
P&D tail on
Peeled, headless, de-veined, raw and cooked, BF or IQF 708
P&D butter-flied Peeled, headless, de-veined, butter-flied, raw and cooked, BF or
IQF
720
PD skewer, P&D
Butter-flied tail on
skewer
Peeled, pull de-veined, headless, IQF shutter pack raw 750
Cooked Peeled, de-veined, headless and cooked 832
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26. WAGE DISPARITIES BY SEX ALONG THE CHAIN
Men Women Women's wages as a % of Men's
Fry catching
Catching and sorting 89.2 56.7 64.0
Shrimp farming
Pond repair 94.7 78.0 82.4
Seeding fingerlings 61
Casual day labor 60.9 50.0 82.2
Maintenance 73.4 60.0 81.7
Security 77.2
Harvesting labor 80.0
Processing Labor 97.0
Shrimp Processing
Building Repairs and
Maintenance
79.0 65.0 82.3
De-heading 100.0 83.0 83.0
Refrigeration 83.0 65.0 78.3
Cooking/breading 100.0 60.0 60.0
Packing 112.5 80.0 71.1
Administration 290.0 290.0 100.0
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27. COSTS AND RETURNS IN THE VALUE CHAIN
Figure 3. Distribution of Costs and Returns Along the Value Chain ($/Kg)
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28. COSTS AND RETURNS PER ACTIVITY
• The largest margin of earning are of farmers which are $3 per
kg for bagda and almost $4 per kg for golda
• The faria, aratdar and commission agents also earn at higher
amount
• Fry catchers earning is comparatively low.
• The earning of the integrated farmers are comparatively more
than the others.
• Shrimp processing adds significant value to the shrimp by
sorting, de-veining, de-heading, de-shelling, cleaning,
packaging, and freezing for export markets.
• Frozen shrimp has higher demand but it provides low returns
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29. CREDIT AND FINANCING
• In the shrimp value chain, intermediaries obtain the funds from the
buyers or from banking sources and money lenders.
• Most of them borrow money from the buyers with high interest
rate.
• Borrowers most of the times failed to repay the loan which cause
indenture season after season.
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30. COMPLEMENTARY ECONOMIC ACTIVITIES
FRUIT AND HORTICULTURE
• Fruit and Horticulture: With oil-seeds, pulses, and vegetables,
shrimp is cultivated. It helps to increase income.
• Rice: Mixed aman rice and shrimp is also a viable strategy to
ensure food security and diversify income-earning.
• Fish Aquaculture: Various kinks of fishes and shrimp are
cultivated mutually.
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31. ENVIRONMENTAL AND SOCIAL CONCERNS
ALONG THE VALUE CHAIN
The bagda shrimp cultivation causes-
 Increasing salinity and soil degradation
Decline in rice production: Percentage of the population cultivating
rice decreased from 33 to 13 percent as the proportion of farmers
cultivating shrimp rose from 20 to 32 percent
Deforestation and the destruction on homestead vegetation;
Loss of coastal vegetation; and decline of other fish spices
Water logging leading to irreversible changes in wetland ecology
and the loss of micro flora and fauna.
Eutrophication and Water borne disease
Decline in the diversity of agriculture: Cause the loss of poultry and
livestock, changes in social forestry 31

32. CONCLUSIONS
• In shrimp, throughout the chain, poor, small farmers,
intermediaries and exporters are engaged. But the benefits are not
evenly distributed. There are occupational segmentation, wage
inequality, and increased job insecurity for women.
• Indebtedness of fry-catchers and farmers make their returns very
low.
• Significant loss of the fry happens because of the multiple
intermediaries.
• Finally, social and environmental costs hamper growth in the
sector.
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33. RECOMMENDATIONS
1. To increase incomes and assets for those lower down the
value chain;
o Shift to modified traditional practices
o Increased golda production
o Complementary production
o Feed production
o Extensive service
2. To improve the terms of trade and exchange;
o Marketing systems
o Credit and financial services
o Diversity products sold for export
o Link farmers with processing plants
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34. RECOMMENDATIONS
3. Create a favorable policy and legal environment;
o Environmental regulations and guidelines
o Labor rights and benefits
o Land titling and access rights
o Data collection
4. To increase stakeholder dialogue and voice within the chain.
o Institutionalizing change
o Continuous monitoring
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35. THANK YOU
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