The aquaculture sector in Bangladesh has undergone rapid transformation, growing from 2000 to 2012 at 220% while inland and marine capture grew only 62% and 70% respectively. This is driven by strong domestic demand as fish consumption doubled from 2002 to 2012. Aquaculture has been particularly important, with the development of clusters, structural changes in the value chain including input suppliers and processors, technological changes, and product differentiation. While this transformation has increased food and nutrition security, challenges remain around input and electricity costs.

1. Rapid Transformation
of the Aquaculture
Value Chain in
Bangladesh
Ricardo Hernandez, Ben Belton,
Thomas Reardon, Shahid Rashid,
Kaikaus Ahmed, Xiaobo Zhang and
Akhter Ahmed
Workshop on
Evidence-Based Policy Options
For Food And Nutrition Security
in Bangladesh
1 October 2014, Dhaka

2. Trends in Bangladesh Fish Economy
Fish important to food security (availability):
2/3 of Bangladesh’s animal source food consumption
is from fish, 1/3 from meat
Perception : fish sector is underdeveloped, slow
growing, traditional
Reality: very rapid growth and transformation in
all segments of the fish value chain

3. Fish consumption growing fast:
1.8 MMT in 2002  3.6 MMT in 2012, 100% in 10 years!
Aquaculture important in fish/shrimp production.
From 2000 to 2012:
Inland capture  62%
Marine capture  70%
Aquaculture  220%!!
Export Market  135%
Local Market  100%

4. The importance of fish for food and
nutrition security in Bangladesh
Percentage of Bangladeshi households consuming nutrient rich foods on 0-2, 3-6, 7-
10, or 11-14 days during the preceding 2 weeks
(Toufique & Belton, 2014)

5. Aquaculture is important to food security
(access via incomes & employment)
Both farm and off-farm employment
The attention of the sector demonstrates
“export” bias
Aquaculture has been the answer of the hidden
miracle of the domestic market

6. The Rapid Growth of Aquaculture and
the Local Market
2,500
2,000
1,500
1,000
500
Source: Statistical Yearbook of Bangladesh,
Fisheries Statistical Yearbook of Bangladesh
12%
10%
8%
6%
4%
2%
0%
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Percentage
Volume (thousands MT)
Capture Marine Culture Export Exports (Q/Share) Exports (V/Share)

7. VC Transformation: Formation of Clusters
• Cluster formation in particular geographic
areas is an important part of sector
development
• Several types of clusters:
- New fish areas
- Early fish and shrimp areas

8. VC Transformation: Structural Change
• Rapid development of the off-farm components
- Upstream: hatcheries and feed milling
- Midstream & downstream: transport, wholesaling,
retailing and processing
• The upstream and midstream VC development
kept pace with the rapid growth in fish
production
• Smallholders can specialize in pond operation,
enjoy cost savings via economies of scale, scope,
and agglomeration

9. • Farmers have additional sources of funding for
operations, investment, and tech change.
- Output tied credit market
- Feed, fingerlings and fry sales on credit
• Concentration & increase of enterprise scale in all
segments of the VC
- Large proliferation of hatcheries
- extensive leasing-in land, converting paddy land to pond
• The VC has “lengthened” geographically
- Distance from farmer to consumer
- Distance from input supplier to farmer and feed mill
- Input acquisition stretches internationally, including FDI

10. VC Transformation: Product Cycle
• Series of stages driven by: competition, tech change,
market expansion, and product introduction.
- (1) local niche (2) commodity stage (3) product
differentiation (4) commodity stage (5) new niche or
differentiated product
• In Bangladesh we discern 3 stages:
- In the 80s, shift from fishing to pond farming using native
carp species
- In the 1990s, exotic Pangas (catfish), and widespread
hatchery production of monosex Tilapia in early 2000s
- In late 2000s, introduction of native fish species, such as
Koi (climbing perch), magur, shing, chitol, pabda. Once
common, now scarce in the wild

11. Fish consumption by species and income
in 2006-07
Quantity of fish consumed in preceding 3 days by income
group and species (2006/7). (Belton et al 2014)

12. Fish consumption by species and income
in 2011-12
50
40
30
20
10
0
Pangas Silver
Carp
Tilapia Rui Puti Taki Mrigel Dry Fish Koi Shrimp Hilsa
Quantity in g
Quantity consumed per capita in the last 7 days. Source:
IFPRI BIHS survey 2011
Q1
Q2
Q3
Q4
Q5

13. VC Transformation: Rapid Technology Change
• Upstream-farm segment TC:
- Fishing/capture  pond production
- Backyard ponds  commercial ponds
- Intermediate stage intensification
- No feed  artisanal feed  commercial (sinking to
floating)
- Hired labor, use of vitamins, antibiotics, lime
- Pond productivity rose between 3-25 times higher than
backyard

14. • Upstream-input supply TC:
- Feed mills: from 7-8 in 1999 to 100 in 2012 (10% large scale)
- Hand mixing  feed mills  differentiation of feed types 
extrusion
- Hatcheries: wild fry or PL for stocking  hatcheries & nurseries
- Diffusion  scale increase  concentration
- Hatcheries’ “change agents” are varied: Government, NGOs,
returning workers, large farmers
• Midstream/downstream TC:
- Wholesale sector rapidly expanding – rural fish wholesale markets
- Expansion of fish seed wholesalers, feed dealers
- Ag input stores now have “fish input lines”.

15. CONCLUSIONS
• The fish VC in Bangladesh is transforming very
rapidly, in all segments. Home grown-home
experienced market revolution.
• Transformation relied heavily on private sector
(formal and informal)
• Government paved the way between explosion
of rural supply and the booming urban demand
• The main problems remain cost of fuel, cost and
access to electricity, cost of feed, and quality of
inputs.