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Shrimp-paddy Conflict in the South-west Coastal Region of Bangladesh

Mohammed Ziaul Haider
Economics Discipline, Khulna University, Khulna, Bangladesh

Rabeya Akter
Corresponding author
Economics Discipline, Khulna University, Khulna, Bangladesh

Abstract/ Executive Summary:

Shrimp cultivation is a comparatively new agricultural practice in the southwest coastal region of Bangladesh. The objective of this study is to analyze the costs and returns of shrimp and paddy cultivation for understanding the behavior of the farmers in the southwest coastal region of Bangladesh. This study compares cost and returns of shrimp and paddy cultivation through collecting primary data from 60 randomly selected farmers from the study area. The derived economic benefit-cost ratio (BCR) of shrimp production is 1.67 and that of paddy production is 1.36 indicating that shrimp production is more profitable than paddy production from economic viewpoint. However, the BCR of shrimp production decreases to 1.04 while the associated external cost of land degradation is added in cost side. The ratio would further decrease to less than one if other indirect cost items such as health cost, loss in livestock, mangrove destruction and biodiversity losses are considered. Such results signal that shrimp production is not a profitable option from a social viewpoint. The study findings also indicate that cost of shrimp production increases and return from shrimp production decreases over the time period. The paddy farmers in the study area moved towards shrimp farming in the 1980s for getting short-run higher benefits. However, the unfavorable changes in cost and production and lower BCR from society's viewpoint explain the recent reverse move of farmers from shrimp cultivation towards paddy production for re-solving shrimp-paddy conflict in the study area. Shrimp expansion led salinity intrusion creates constraints in the move in some cases. An active cooperation of government through enforcing associated rules and regulations might be helpful for the farmers of the southwest coastal region to protect their livelihood and efficiently resolve the shrimp-paddy conflict.

Keywords: Shrimp, Paddy, Benefit-Cost Ratio, Social Cost, South-West Coastal Region of Bangladesh

Location: The farmers in the southwest coastal region of Bangladesh

Start Date:

End Date:

Program Area: Farming System

Commodity: Intercropping, Shrimp, Rice

Objectives:

To analyze the associated costs and returns of shrimp and paddy cultivation for understanding the behavior of the farmers in the southwest coastal region of Bangladesh.

Methodology:

Historically paddy cultivation is the main and traditional occupation of farmers in Bangladesh. Farmers have started shrimp cultivation in addition to paddy in the farming fields since 1980s. Several studies have tried to compare shrimp and paddy sectors on the basis of Benefit-Cost Ratio (BCR). An intensive review of literature reveals that most of the available studies have captured only the direct costs and benefits. However, some other studies have tried to capture some of the indirect costs. Following the methodology of the said literature, this study attempts to address the shrimp-paddy conflict in the southwest coastal region of Bangladesh. This study tries to analyze the trend and logic for conversion of shrimp farm into paddy field. It compares the economic cost and return of shrimp production with those of paddy production. In addition to economic costs and returns, the social and environmental consequences are also considered in this study and an attempt has been made to internalize those social and environmental issues. Finally, the concept of BCR is applied to draw a conclusion. For calculating the economic cost of shrimp production, this study considers four elements: a) cost of land (or lease cost) 1, b) labor cost, c) fry cost and d) feeding cost for shrimp. All these costs are measured in US$. To calculate the return from shrimp production, total shrimp production (in kg) and average market price (US$ per kg) are considered. Similarly, for calculating the economic cost of paddy production, this study considers five elements: a) cost of land (or lease cost), b) labor cost, c) seed cost, d) fertilizer cost and e) insecticide cost for paddy production. All these costs are measured in US$. To calculate the return from paddy production, total paddy production (in kg) and average market price (US$ per kg) are considered. After calculating the economic cost and return of shrimp and paddy production, Net Revenue (NR) and BCR have been calculated. Following the study of [6], the NR and BCR of shrimp and paddy production have been calculated in this study as per equation 1. NR = GR - TC; BCR - GR/TC (1). where, NR=Net Revenue; GR=Gross Revenue; TC=Total Cost; BCR=Benefit-Cost Ratio A positive NR indicates profit, while a negative NR indicates loss. A comparison between the values of NR of shrimp and paddy production helps to understand the trend of conversion between shrimp and paddy production and hence the shrimp-paddy conflict in the study area. Similarly, BCR value also helps to explain the said conversion as well as the conflict between shrimp and paddy production. A BCR value of greater than one indicates profit, while a BCR value of less than one indicates loss. Such NR and BCR values help to reach a logical conclusion regarding the study topic, conflict between shrimp and paddy production. To extend the discussion beyond economic costs and returns associated with shrimp and paddy production, the environmental consequences of shrimp farming has been internalized in the calculation. An intensive literature survey identifies several environmental impacts of shrimp production. A careful consideration of such environmental impacts (i.e. indirect costs) of shrimp farming helps to internalize the adverse effects of shrimp cultivation, which ultimately helps to explain the conflict between shrimp and paddy production. It also helps to justify the new trend in the agricultural sector of the study area. The main objective of this study is to compare shrimp and paddy production to explain the conflict between these two in the study area. It collects farm-level data from randomly selected 60 farmers of Dacope Upazilla under Khulna district of Bangladesh. It follows a stratified random sampling procedure where shrimp and paddy farmers are the two strata. The surveyed sample farmers include 30 shrimp and 30 paddy cultivators. A structured questionnaire is used to collect primary data. Some secondary information is also used to address the study objectives.

Source of Information: International Journal of Agricultural Economics, 2018; 3(1): 9-13; ISSN: 2575-3851 (Print); ISSN: 2575-3843 (Online)

Article Link (Online Journal): doi: 10.11648/j.ijae.20180301.12

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Paddy production is the traditional means of livelihood for a majority of the farmers of Bangladesh. In contrast, shrimp production is a comparatively new practice in the country which has started its journey since 1980s. It is a traditional aquaculture in southwest coastal Bangladesh. A short-run lucrative profit of shrimp production attracts the attention of the farmers. They initially ignored the decrease in paddy productivity due to shrimp production. The economic cost and return analysis show that the BCR of shrimp production is 1.67 and the BCR of paddy production is 1.36. However, the BCR of shrimp production including the costs of land degradation due to shrimp culture in paddy field is 1.04, which is very close to one and might decrease to less than one after considering other unaccounted indirect costs. The environmental impact of shrimp production on land is very much hazardous. Shrimp production has negative externality on society. The external social cost of shrimp production falls upon another party rather than the shrimp producer. So, by considering economic and external costs and benefits of shrimp culture, it can be concluded that, the costs of shrimp production might be higher as compared to the benefits from it. The benefits of shrimp production are limited within export earnings and employment generation, whereas the costs of shrimp production are multidimensional. The farmers in the study area have identified a gradual declining trend of shrimp production over the time period against a comparatively stable paddy production. Moreover, some farmers have realized the external and indirect costs of shrimp farming which are mostly unobserved, invisible and ignored. As a result, the farmers are again attempting to shift towards paddy production. However, the shrimp expansion led salinity intrusion creates constraints in the said shift in some cases. The farmers are handling the constraints and gradually moving back towards the traditional paddy production in the southwest coastal region of Bangladesh. Active cooperation of government through limiting shrimp cultivation in some selected saline areas and through enforcing associated rules and regulations might be helpful for the farmers of the southwest coastal region to protect their livelihood and efficiently resolve the shrimp-paddy conflict.

Knowledge Management: Journal