|
Aquaculture production, certification and trade: Challenges and opportunities for the small-scale farmer in Asia Michael Phillips1, Rohana Subasinghe2, Jesper Clausen2, Koji Yamamoto1, CV Mohan1,
A. Padiyar2,3 and Simon Funge-Smith2
1. Network of Aquaculture Centres in Asia-Pacifi c (NACA), PO Box 1040, Kasetsart Post Office, Bangkok 10903, THAILAND;
2. Food and Agriculture Organization of the UN, Viale delle Terme di Caracalla, 00153 Rome, ITALY;
3. International Finance Cooperation, World Bank, Washington DC, USA.
Source: Aquaculture Asia Volume XIII No. 1 January-March 2008
Introduction
This article is focused on small-scale farmers in Asia and the challenges and opportunities they face in participating in global market chains for products from aquaculture. The purpose of focusing on small-scale farmers is to raise attention to this large and important part of the aquaculture sector, and the influence of production and market changes on the livelihoods of the many people involved.
Statistics on the small-scale aquaculture sector are poor, but it is important for rural development, employment and poverty reduction. The bulk of aquaculture production in many countries in Asia is from small-scale, family owned and operated operations, perhaps making up to 80% of the farming community in some countries. Small-scale farms may be diffused through a local area district, or highly concentrated around specific resource (e.g. water supply). The sector, whilst innovative and a highly important part of the regions aquaculture production, faces increasing constraints, particularly for export crops such as shrimp.
Aquaculture is under transformation. It is not only growing in response to the huge demand for global seafood products, and stagnation in capture fisheries, but especially for higher value internationally traded export species such as shrimp there is a trend towards a more integrated production-distribution chain with more focus on coordination between the aquaculture farmers, the processors, and the retailers and to some extent to consumers and restaurants. It is no longer enough for the farmer and organizations helping farmers to focus only on increased production, but it is now also important to understand how to link farmers to the production chain, how to produce high quality and safe products, and how to have on-farm management practices that are highly efficient, taking account of the surrounding environment and social issues related to production. A further factor is the trend towards traceability, certification, and improved farm management which are driving costs and responsibilities down the market chain to the farmer.
These global trends require changes in management of both large and small scale-farms to stay competitive. Whereas some larger farms with large product volumes and access to finance usually have the capacity to adapt, and benefit from such trends, there are still many uncertainties related to the influence of such trends on small scale aquaculture producers and their adaptation and participation in modern aquaculture production and market chains.
Certification in aquaculture
Certification is rapidly being introduced to aquaculture, including mandatory and voluntary schemes. There are already a number of voluntary schemes emerging and the number of certification programs and labels for aquaculture products is expanding. Development and implementation of certification schemes is considered as one tool to help towards a more sustainable aquaculture production and at the same time link and inform different stakeholders in the production chain (Anon, 2007).
At the same time, the trends towards certification risk disadvantaging small-scale aquaculture farmers unless positive actions are taken to involve small-scale farmers and develop focused strategies to ensure their participation. Surprisingly, no certification scheme as yet targets the small-scale sector, but there could be significant social and economic benefits if the small-scale sector can be effectively serviced to participate in modern market chains. Some of the constraints the small-scale aquaculture sector faces related to certification include:
- Small volumes of product from individual farms and large numbers.
- Low or no market incentives as yet to become involved in certification.
- Complex marketing channels making traceability difficult.
- Limited access to market, technical and business knowledge and related infrastructure.
- Limited or inequitable access to financial services for investment in changes that may be required for certification.
- Farms may not be formally registered and may not be organized into producers groups.
- Traders-credit relations.
- May not be producing an export product, and therefore producing to least cost to sell within a less wealthy domestic market.
- Commercial/government servicing less oriented towards the small-scale farmer.
- Risk management strategies of larger traders and buyers, requiring large volumes of product, working against small-scale farmers producing small quantities of product.
The above issues need to be addressed. It is a matter of great importance to the industry and to a large number of people who depend on aquaculture as their main livelihood to engage small-scale farmers in the development of certification schemes, to ensure equitable participation. There is a need to better understand the process, standards, their applicability, and the opportunities and challenges for small-scale farmers to benefit from certification systems.
It is unlikely in the near future that many individual small-scale farms can be easily certified, but one way forward may be to promote group certification or certification of clusters of small-scale farmers, that has been used successfully in other agriculture sectors (e.g. organic products, IFOAM, undated). The nature of small-scale farmers is that they only produce small quantities of their product, making it difficult and inconvenient for larger buyers that prefer larger volumes. The need for solutions to allow small-scale farmers to participate in market chains requiring certified aquaculture products is therefore evident.
Example from India
As a part of a technical collaboration between the Marine Products Export and Development Authority (MPEDA) and NACA, on shrimp disease control and coastal management in India, a village demonstration program was conducted from 2002 onwards. The objectives of the program were:
- To reduce the risk of disease outbreaks and improve shrimp farm production
- To organize the farmers under “Self Help Groups” / “Aquaclubs” for sustainable production
- To produce better quality shrimps in socially acceptable, environmentally sound and economically viable manner.
The program was successful in improving organization of the small-scale sector and reduced risks, with nearly 800 shrimp farmers now participating, across all of India’s shrimp aquaculture producing states. Key elements of success include:
- The development of locally appropriate “Better management practices” (BMPs) formulated with farmers, based on a science-based epidemiological study of shrimp disease risks and the International Principles for Responsible Shrimp Farming (MPEDA/NACA, 2003 and FAO/NACA/UNEP/WB/WWF, 2006)
- Support to formation of farmer clubs (so-called “Aquaclubs”) within villages, and within “clusters” of farmers. Clusters were defined as a group of inter-dependent shrimp ponds, often situated in a specified geographical locality and dependent on the same water source
- One of the most significant outcomes of this project is the reduction in disease prevalence and improved farm profitability as a result of BMP implementation in Aquaclub farms. Successful implementation of BMPs reduced disease prevalence and increased the number of planned (normal) harvests leading to better crop outcomes, improved efficiency in use of key inputs (feed, seed) and profits. Another key to success was the development of farmer clubs, leading to a number of key benefits including:
- Regular information exchange/ sharing of knowledge on Better Management Practices among farmers within the group and increased awareness among farmers.
- Cooperation in buying high quality farm inputs (seed, feed, lime etc.) at competitive price.
- Increased interaction between farmers and input suppliers/farmed product buyers.
- Stronger bargaining power of clubs in the purchase of farm inputs and sale of harvest, in the former case leading to reduced prices for bulk purchase.
- Increased co-operation in sharing common facilities and in area improvements such as deepening of water inlets and unclogging of water supply/drainage canals.
- Collective approach to dealing with common problems including local environment protection especially protection of common water sources.
- Facilitation of farm licensing and formal registration of clubs with government. The formal registration has also recently opened opportunities for group members to access financial support from local Banks.
Although the farmers are not yet formally certified, a farmer club and cluster management system in place provides a basis for moving forward towards voluntary certification.
Ways forward
The small-scale sector is the largest producer and the “mainstay” of Asian aquaculture. It is an innovative sector, but faced with many problems and constraints in the modern trade and market environment. The sector is socially and economically important and cannot be ignored. Fortunately, recent experiences show that there are ways to assist small-scale farmer participation in modern market chains and trade.
One important way is the organization of farmers into producer groups. Examples from India and elsewhere show organized farmers can speak with a louder voice in negotiating prices for inputs such as feed and seed and potentially also have a better platform for more organized marketing and price negotiation when selling the product. A farmer group also allows buyers and extension facilities to have a focal point and hence reach a larger number of farmers with reduced costs. The way forward then is for public and private sector investments to assist the small-scale sector adapt and participate in modern market chains for aquaculture products. The public investments needed include:
- Development of policy that is more favorable to the small-scale sector, and at the very least based on the requirement and realities of the small-scale aquaculture farmer.
- Technical and marketing services more oriented towards small-scale aquaculture producers, as well as the small-scale traders and businesses associated with the sector.
- Facilitating access to financial and insurance services in rural aquaculture farming areas.
- Market access arrangements that support small-scale producers.
- Information services that cater to the needs of rural farmers.
- Encouraging private investment in small-scale aquaculture production and services.
- Social ‘safety nets’ for the most vulnerable producers and traders.
- Orientation of educational and research institutions towards supporting the small scale aquaculture sector.
Trade rules and guidelines, including certification guidelines, also need to consider carefully the needs and realities of the small-scale sector.
There are many opportunities for private investment to support millions of small-scale farmers. Private sector investments are needed in:
- Technical and marketing services for small-scale aquaculture producers.
- Information services.
- Micro-finance and financial services.
- Insurance services.
- Input packaging and delivery for small-scale farmers.
We also consider there is a business case for investment in the small-scale sector. In India, for example, an investment of $80,000 in technical servicing in 2006 led to crop improvements worth $2 million. Given that 70-80% of producers in Asia are small-scale, an investment in servicing the small-scale sector could therefore be a potential profitable one.
“Corporate social responsibility” also has a role to play in private sector involvement in small-scale farmers, particularly the larger retailers and trading businesses that are becoming increasingly powerful. These larger businesses should be encouraged to adopt more CSR initiatives in the aquaculture sector, such as:
- Facilitating market access for small scale aquaculture producers.
- Provision of technical and financial assistance to small-scale producers to comply with market requirements.
- Brand development and marketing favorable to aquaculture products from smaller producers.
Certification and quality assurance schemes are also needed that are relevant and practical for small-scale aquaculture producers. A focus on the advantages from small-scale producers should also be possible both in relation to environmental and social issues related to the production. Development of a small-scale certification scheme oriented towards “Fair trade” as applied to some agriculture products should also be explored.
Whilst many challenges clearly remain, with many questions, it is time to recognize the crucial role of small-scale aquaculture farmers in Asian aquaculture production and trade. The smallscale sector is the largest producer and the “mainstay” of Asian aquaculture. It is an innovative sector, but faced with many problems and constraints in the modern trade and market environment. It needs investment from public and private sector to compete and thrive in the modern aquaculture scene. There are many opportunities for assistance and investment. Ideas and partnership are certainly welcome!
References
Anon (2007) Aquaculture Certification: A Programme for implementing the recommendation of the Committee on Fisheries Sub-Committee on Aquaculture. Concept paper prepared for the FAO/NACA Expert Workshop on Development of Guidelines for Aquaculture Certification-27-31 March 2007. FAO and NACA, Bangkok, Thailand. www.enaca.org/certification .
FAO/NACA/UNEP/WB/WWF.2006. International Principles for Responsible Shrimp Farming.
Network of Aquaculture Centres in Asia-Pacific (NACA). Bangkok, Thailand, 20pp.
IFOAM. Undated. Smallholder Group Certification – Producers. Internal Control Systems for
Group Certification – Training Kit for Producers. International Federation of Organic Agriculture
Movement.
MPEDA/NACA. 2003. Shrimp health management: Extension manual. Marine Products Export
Development Authority (MPEDA), Cochin, India and Network of Aquaculture Centres in Asia-Pacific (NACA). Bangkok, Thailand.
|
