The global market is hungry for farmed shrimp. Over the last two decades, worldwide production has more than tripled and is predicted to continue to grow at a rate of six percent a year. With this boom, the farmed shrimp production market — in particular, across South Asia — has come under new pressures and increased scrutiny. As public consciousness about food supply chains grows, the environmental and social issues that have historically darkened the farmed-shrimp industry, such as destruction of coastal habitats, water pollution, and violations of workers’ rights, have become intertwined with the economic health of farmers and producers.
In an effort to make shrimp farming more sustainable, and economically secure, The Boston Consulting Group, with support from the Gordon and Betty Moore Foundation, has analyzed the practices and supply chains in four major shrimp-producing countries: Thailand, Vietnam, Indonesia and India.
In their analysis, the Boston Consulting Group identified the present and near-future challenges facing the farmed-shrimp industry in order to provide shrimp producers and traders with actionable steps toward financial security, increased productivity, and sustainable processes. Over the course of nearly 12 months, the team at the Boston Consulting Group engaged with corporations industry experts across these four countries and set to work collecting statistics, governmental reports, and anecdotal evidence from local farmers, exporters and consultants. What they gathered differed from country to country. The bottom line that underscored each report, however, remained more or less the same: producers need to cultivate systems that reduce the risks of disease, anticipate trade requirements of traceability and accountability, and build the sustainable practices needed in the face of an unpredictable climate.
Thailand, once a market that led exports to the US, has halved in size since 2012.
The Boston Consulting Group found that the principal factors for this decline was a perfect storm of due export bans, unfavorable trade policies and disease, including widespread die-offs resulting from early mortality syndrome as well as increased trade restrictions from the EU and the US. However, the report notes that recoveries can still be made if Thai producers focus their efforts on farming fully traceable shrimp. "Although traceability will eventually become the new norm and prices will come down accordingly,” the report said, “Thailand has the ability to demonstrate a more radical form of transparency at a national level that would differentiate it from other shrimp-producing nations and shine a light t5,.klon the risks buyers take when they purchase shrimp with unknown origins from other countries."
Vietnam’s shrimp farmers have also struggled with disease outbreaks and trade regulations. In fact, the country is still struggling to lift their EU yellow card, an official warning issued by the EU resulting from their commitment to fight against illegal, unreported, and unregulated fishing. In particular, high levels of antibiotics in Vietnamese shrimp have led the US, the EU, and Japan to refuse imports from Vietnam at ever increasing rates. In order to remain in the game, the Boston Consulting Group reports, both Thailand and Vietnam will need to increase their sustainability processes, to comply with traceability requirements, and boost productivity.
India and Indonesia are in quite the opposite position as Vietnam and Thailand. Both countries’ farmed-shrimp markets have greatly benefited from the losses incurred by other South Asian producers, and they have become, respectively, the world's second- and third-largest shrimp producers. The potential problems identified by the consulting group for these fast-growing markets, however, are rooted in this growth. Project leader Sophie Zielcke explained to Undercurrent News that while India, for instance, hasn’t suffered from the same degree of losses as a result of disease, as with Thailand and Vietnam, producers are soon likely to face increased scrutiny for their farming practices— which were observed to be often carried out on large expanses of land and on unregistered farms, with low biosecurity standards.
"We really see a much slower move towards not necessarily indoor farming but closed systems, biofloc, and water filtration systems that can help mitigate and prepare the country for better standards," explained Zielcke. "But it’s going to take a while given the variety of farmers and the budget required for some of these levers."
By following the guidelines and recommendations laid out by the Boston Consulting Group, India — as well as Indonesia, Thailand, and Vietnam — can identify potential weaknesses in their business models early on and adapt. And in adapting, farmers large and small can run businesses that are sustainable, profitable and agile.
“True change can be achieved only when industry players work together on a large scale. What’s needed is an innovative and collaborative approach focused on achieving long-term, inclusive sustainability.” – Boston Consulting Group
Learn more:
Boston Consulting Group: “Shrimp Farmers Worldwide Must Adopt Sustainable Practices—or Risk Falling Behind.”
Undercurrent News: “Indoor, closed shrimp farms could be set to take over Asia within 5-10 years.”
SeafoodSource: "Profitability in shrimp sector depends on sustainability, says Boston Consulting Group."
Message sent
Thank you for sharing.