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Value Chain Analysis of Shrimp of Dacope Upazila in Bangladesh

GMA Hossain
Department of Agribusiness and Marketing, Bangladesh Agricultural University, Mymensingh 2202

MI Hossain
Department of Agribusiness and Marketing, Bangladesh Agricultural University, Mymensingh 2202

Abstract/ Executive Summary:

Shrimp farming of Bangladesh is one of the most important contributors for its economic development and rural employment generation. The study examined the value chain actors, functions, governance and value chain mapping; estimated value addition in terms of cost and margin in Chalna, Tildanga and Bajua villages of Dacope upazila under Khulna District. Twenty five farmers and 55 traders were interviewed for collecting primary data. Descriptive analysis was performed for reaching the objectives.The study found that farmer, faria, bepari, aratdar, depot owner, commission agent/supplier, processing plant and retailer were value chain actors for shrimp. It was observed that value chain governance was dominated by external parties (legislative governance) and national bodies dominate judicial government. It was identified that processing plants add highest value at Tk. 228 per kg. On the basis of share of profit and cost it was revealed that processing plant was the dominant actor in the chain. Highest value addition, marketing cost and net value addition was Tk. 22800 per quintal, Tk. 13988 per quintal and Tk. 8901 per quintal incurred by processing plant respectively. Percentage of total cost and percentage of total profit was highest for processing plant at 62.85% and 43.71% respectively. The policy implication is that it is necessary to establish storage facility and government monitoring of shrimp markets for the improvement of the present situation.

Keywords: Value chain, Aquaculture; Shrimp

Location: Chalna, Tildanga and Bajua villages of Dacope Upazilla in Khulna District.

Start Date: 00-09-2016

End Date: 00-10-2016

Program Area: Animal Health and Management

Commodity: Shrimp

Objectives:

This study, therefore, aims to identify the actors and functions of the value chain players of shrimp with governance. It aims to generate some economic data on the value addition in terms of cost and margin in successive stages of shrimp value chain through different value chain actors which will help in formulating future policies and regulations for the shrimp industry.

Methodology:

The study was conducted in Chalna, Tildanga and Bajua villages of Dacope Upazilla in Khulna District. These villages were selected for their high potentiality of shrimp growing farmer’s availability and shrimp related trader’s/middlemen’s availability. Simple random sample technique was used for selecting the shrimp farmers. Twenty five shrimp farmers and 55 shrimp traders were interviewed through well developed interview schedule during the months of September and October of the year 2016. Out of 55 actors 15 faria, 8 bepari, 5 deport owner, 7 aratdar, 18 retailer and 2 processing plant were selected for interview. Descriptive statistics such as sum and average as a substantial part of data analysis were employed to analyze the data. Value chain actors and their functions and mapping were also investigated by using descriptive statistics. The role of national and international institutions was examined as a governance indicator by following Kaplinsky and Morris (2001) value chain analytical framework where three realms of rulemaking and monitoring which refers to legislative, judicial, and executive governance is examined for better understanding of the governance. These three realms can be exercised by parties internal or external to the chain. The extent of chain power can be related in complicated ways in relation to the relative size of the firms in the chain (Kaplinsky and Morris, 2001). The larger the farm the larger the influence are. From this analytical framework the used indicators are: share of chain sales, share of chain value added, share of chain profits, relative rate of profit, share of chain buying power, control over a key technology and distinctive competence and holder of chain “market identity” (e.g. brand name). Value addition at producer’s level was estimated by following the equation of VA=PP×QF-(TVC+TFC) where PP is indicated price of produce, QF is indicated quantity of produce, TVC is indicated total variable cost and TFC is showed total fixed cost. Traders’ level value addition is calculated by using the formula of TVA= Selling price – Purchase Price. Net value addition = Gross value addition- minus marketing cost.

Source of Information: Progressive Agriculture 30 (1): 65-74, 2019

Article Link (Online Journal): DOI: https://doi.org/10.3329/pa.v30i1.42210

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Shrimp farming and business can provide income stability, opportunities to generate income more than before and improve food security situation to the farmers in the coastal areas in Bangladesh. Shrimp is a priority export product of Bangladesh with a high international demand. As supply of raw materials for the shrimp processing plants are very low; shrimp farming and business of shrimp can be very profitable for the people of coastal area. This paper is concerned with the analysis of shrimp value chain focusing on actors and their function, value chain mapping and governance and estimation of the cost and margin in relation to the value addition of the shrimp value chain actors in the specific study area of Bangladesh. It was observed that shrimp was moved to consumer (domestic or overseas market) from farmer through different intermediaries or value chain actors like farmers, faria, bepari, aratdar, depot owner, commission agents, processing plants and retailers. From different functions transportation system is below the standard in the study area. In developing a value chain map it has been identified that retailers added Tk. 51.67 per kg in the value chain which was the second highest and Tk. 228 per kg was added by processing plants as it is the highest added value in the market chain. In understanding the governance of shrimp value chain the study revealed that external party plays dominant in legislative governance part while national bodies playing the judicial governance dominantly. Highest gross value addition was incurred by the processing plant (Tk. 22800 per quintal) while they also received the highest selling price (Tk. 101800 per quintal) and paid the highest purchase price (Tk. 79000 per quintal). It may take in consideration that shrimp farming is seasonal in nature. In Bangladesh shrimp farmers are often forced to sell their shrimp during the catching season. If retail and other wholesale price fall due to some unexpected or natural phenomenon, farmers will have to sell their shrimp at the low price. This signifies the importance of better storage facilities and improve infrastructure in rural markets. Policies that encourage farmers to form collective arrangement for marketing will be helpful. Therefore, monitoring market actors for secure shrimp quality according to the needs of the foreign buyers need to be stronger.

Knowledge Management: Journal