rapid transformation of the aquaculture value chain in bangladesh by ricardo hernandez
TRANSCRIPT
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Rapid Transformation
of the Aquaculture
Value Chain in
Bangladesh
Workshop on
Evidence-Based Policy Options
For Food And Nutrition Security
in Bangladesh
1 October 2014, Dhaka
Ricardo Hernandez, Ben Belton,
Thomas Reardon, Shahid Rashid,
Kaikaus Ahmed, Xiaobo Zhang and
Akhter Ahmed
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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
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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%
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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)
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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
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The Rapid Growth of Aquaculture and the Local Market
Source: Statistical Yearbook of Bangladesh,
Fisheries Statistical Yearbook of Bangladesh
0%
2%
4%
6%
8%
10%
12%
0
500
1,000
1,500
2,000
2,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Pe
rce
nta
ge
Vo
lum
e (
tho
usa
nd
s M
T)
Capture Marine Culture Export Exports (Q/Share) Exports (V/Share)
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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
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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
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• 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
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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
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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)
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Fish consumption by species and income
in 2011-12
Quantity consumed per capita in the last 7 days. Source:
IFPRI BIHS survey 2011
0
10
20
30
40
50
Pangas SilverCarp
Tilapia Rui Puti Taki Mrigel Dry Fish Koi Shrimp Hilsa
Qu
anti
ty in
g Q1
Q2
Q3
Q4
Q5
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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
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• 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”.
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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.