TRENDS & PROSPECTS FOR AQUACULTURE IN DEVELOPING COUNTRIES: DRIVERS OF DEMAND AND SUPPLY IN CHANGING...
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TRENDS & PROSPECTS FOR AQUACULTURE IN DEVELOPING COUNTRIES: DRIVERS OF DEMAND AND SUPPLY IN CHANGING GLOBAL MARKETS. Mahfuzuddin Ahmed Director Policy, Economics, and Social Sciences WorldFish Center, Penang. FAME Workshop, University Of Southern Denmark June 2005.

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Mahfuzuddin ahmed director policy economics and social sciences worldfish center penang

TRENDS & PROSPECTS FOR AQUACULTURE IN DEVELOPING COUNTRIES: DRIVERS OF DEMAND AND SUPPLY IN CHANGING GLOBAL MARKETS

Mahfuzuddin Ahmed

Director

Policy, Economics, and Social Sciences

WorldFish Center, Penang

FAME Workshop, University

Of Southern Denmark

June 2005


Mahfuzuddin ahmed director policy economics and social sciences worldfish center penang

Presentation OutlineIntroductionPutting Aquaculture in ContextConcerns in Aquaculture DevelopmentAquaculture & Food Security in Developing CountriesRole of Environmental Practices & Policies in Aquaculture Role of International Trade & Trade PoliciesAquaculture R & DConclusion


Introduction

29%

10%

39%

Source: World Bank

Introduction

  • 1.1 billion live with <US$1.08/day; 2.7 billion below US$2.15 per day

  • 32% South Asians and 49% Sub-Saharan Africans live with less than US$1.00 a day

  • 68% of absolute poor lives in South Asia and Sub-Saharan Africa

  • Some 800 million people are suffering from hunger and malnutrition, which remains one of the most devastating tragedies in Asia and Africa


Introduction1

Subsistence Fishing

Commercial Fishing

CHANGING ROLE OF FISHERY IN DEVELOPING COUNTRIES

Introduction

From -

  • Traditional diet and major source of nutrition

  • Livelihood strategy:

    Probably supports over 200 million people worldwide

    Of these, majority are poor, living in pockets of poverty in Asia, Africa, Latin America and the Pacific

    Landless fish workers and artisanal fishers are among the poorest of the poor

To -

  • Engine for economic growth and export benefits to developing countries

Women & children

Fish Processing


Introduction2

FISH ONE OF THE BIGGEST TRADE STORIES

Fish gone Global

Introduction

  • Nearly US$60 billion export industry

  • Nearly half of it shared by the developing countries

  • LIFDCs share of trade greater than 20%

  • Fish paying for growing food imports in LIFDCS

  • Fish export is nearly 45% of food imports


Mahfuzuddin ahmed director policy economics and social sciences worldfish center penang

Introduction

FISH ONE OF THE BIGGEST TRADE STORIES

Value of fish export higher than meat, all cereals combined, and all beverages combined

Highest Share for Fish in Major Agricultural Commodity Trade


Mahfuzuddin ahmed director policy economics and social sciences worldfish center penang

Introduction

FISH ONE OF THE BIGGEST TRADE STORIES

Vietnam’s Agricultural Export

$ Fish > $ Rice + $ Coffee


Introduction3

Outlook to 2020

Introduction

Escalating Demand for Fish in Developing Countries


Per capita demand for fish products 1997 2020

Introduction

Outlook to 2020

Per Capita Demand for Fish Products, 1997-2020

(kg/cap)


Mahfuzuddin ahmed director policy economics and social sciences worldfish center penang

49%

51%

65%

35%

52%

48%

59%

41%

69%

31%

Putting Aquaculture in Context

WHY AQUACULTURE MATTERS?

  • Growing share of aquaculture to the total food fish production


Putting aquaculture in context

Putting Aquaculture in Context

WHY AQUACULTURE MATTERS?

  • Low value food fish from aquaculture is expected to surpass the capture fisheries in the future


Putting aquaculture in context1

22%

78%

23%

77%

20%

80%

21%

79%

27%

73%

  • WHY AQUACULTURE MATTERS?

  • Developing countries continue to dominate food fish production with a high proportion in aquaculture

Putting Aquaculture in Context


Putting aquaculture in context2

  • WHY AQUACULTURE MATTERS?

  • Aquaculture has grown faster and become more important in low income food deficit countries (LIFDC)

Putting Aquaculture in Context

Ahmed and Lorica, 2002


Putting aquaculture in context3

Source: Fish to 2020

Net Export: Developing World Continue to be Net Exporters, though at a Lower Rate than Presently

Putting Aquaculture in Context


Outlook to 2020

Putting Aquaculture in Context

Outlook to 2020

More Regions in Developing Countries Joining the Rank of Net Importers by 2020

Growing south-south trade


Poor to feel the pinch of rising fish prices

Putting Aquaculture in Context

Fish meal & oil efficiency

Ecological collapse

Slower aquaculture expansion

Faster aquaculture expansion

Most likely (current trend)

Outlook to 2020

Poor to Feel the Pinch of Rising Fish Prices


Putting aquaculture in context4

Putting Aquaculture in Context

  • Environmental Context

    • Dependence on the wild for species and seedlings for culture

    • Dependence on fisheries for feeds and feed ingredients

  • Socio-economic Context

    • Resource users and stakeholders and their varying interests

    • Costs and benefits of the aquaculture enterprise

    • Domestic and international demand for aquaculture commodities

  • Legal and Institutional Context

    • Property rights

    • Regulations and standards


Concerns in aquaculture development at various levels

Concerns in Aquaculture Development at Various levels

Local

  • High influence of income on fish consumption and similar nutritious food, though nutritional status may not necessarily improve as income increases

  • Increasing labor productivity

  • Increasing global demand for food supply

  • Increasing consumer awareness and demands

  • Increasing competition for resources


Concerns in aquaculture development

Concerns in Aquaculture Development

National

  • Food security

  • Export Earning

  • Intersectoral Conflict

  • Environmental Sustainability

  • Increasing seafood imports and decreasing prices

  • Increasing nutrient and input costs


Concerns in aquaculture development1

Concerns in Aquaculture Development

Global

  • Environmental and ecological responsibility

  • Use of technology to produce transgenic fish

  • Social acceptance as an economically viable means of producing much needed high quality food for an ever increasing and hungry population

  • Market access / barriers in trade

  • Health and safety issues

  • Capture-Culture Relationship


Aquaculture and food security in developing countries

Aquaculture and Food Security in Developing Countries

LESSONS FROM ASIA

  • Aquaculture is regarded worldwide as one of the fastest growing food-producing sub-sectors, especially inlow-income food deficit (LIFDC) countries

  • Asia accounted for over 90% of world aquaculture output in 1998, regional production having increased from 14.3 million mt to over 35.8 million mt between 1989 and 1998, equivalent to growth of nearly 11% per year (FAOSTAT, 2003)


Aquaculture and food security in developing countries1

Aquaculture and Food Security in Developing Countries

LESSONS FROM ASIA

  • In Asia, major contributors to aquaculture are small-scale family managed fish farm and subsistence-oriented farmers

  • Global importance for rural and coastal societies, both in terms of economy and as a means of improving food security for the growing population

  • Effect of own production on household fish consumption

  • Moving away from cereals and crop commodity supply

  • Income and employment effects on poor people, women and children


Aquaculture s link to food security

Aquaculture and Food Security in Developing Countries

AQUACULTURE’S LINK TO FOOD SECURITY

Figure2: Framework for Analyzing Aquaculture’s Linkages to

Food & Nutritional Security

ADOPTION-EMPLOYMENT LINK

ADOPTION-CONSUMPTION LINK

ADOPTION-INCOME LINK

High income effect from aquaculture production and sale-profit

Ability to create alternative employment

High home-consumption

Ability to earn higher wage or income

Price effect and increased demand

Higher return to capital from aquaculture

High income effect on nutrient rich food consumption

Ability to increase labor productivity

Source: Ahmed et al. (2002) – in press


Mahfuzuddin ahmed director policy economics and social sciences worldfish center penang

Aquaculture and Food Security in Developing Countries

FOOD SECURITY THROUGH AQUACULTURE DEVELOPMENT: LESSONS FROM BANGLADESH

  • In Bangladesh, nearly half the population suffer from chronic under nutrition

  • Green revolution overlooked the role of diversified production, employment and income

  • Role of critical vitamins and minerals in the diet, improvements in sanitation, hygiene and living environment

  • Improving access to diverse and quality food types

  • Moving away from cereals and crop commodity supply perspective

  • Integration of fish and livestock in discussion and debate on food security

  • Examine aquaculture’s impact to food and nutritional security at the farm and household level


Adoption income linkages

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

ADOPTION – INCOME LINKAGES

  • Income and purchasing power have a tremendous influence on household demand for food

  • Income has high influence on fish consumption and other nutritional food

  • Though, nutritional status may not necessarily improve as income increases


Income effects

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

INCOME EFFECTS

Higher Household Income Following Aquaculture Intervention

Source of IncomeBefore Aquaculture After Aquaculture Intervention Intervention

Farm income (excluding fish)15,74718,388

Income from fish culture7585,053

Off-farm income10,86913,884

Total income27,37437,325

Contribution of fish to farm

income (%)4.621.6

Contribution of fish to total

income (%)2.813.5

Source: Gupta, et al. (1999)


Adoption employment linkages

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

ADOPTION – EMPLOYMENT LINKAGES

  • Household ability to earn income depends on the nutritional health of the household labor

  • Family labor is an important production factor in developing country agriculture

  • Ability to earn higher wage or income

  • Ability to create higher employment

  • Increase in labor productivity


Employment effects

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

EMPLOYMENT EFFECTS

  • Relatively low use of labor in aquaculture compared to crop agriculture

  • Post-adoption labor/ employment in aquaculture is much higher than pre-adoption

  • Use of hired labor is also becoming common in aquaculture

    • Impact of Aquaculture Practices in Employment

Source: Miah (2000)


Employment effects1

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

EMPLOYMENT EFFECTS

Wage Rate (Tk/day) of Pond Aquaculture and Agriculture Compared 1998

Source: Thompson et al (2000) & BBS (1999)

Higher return to labor (Tk/day) from technology adoption in aquaculture

Source: Islam (2000)


Adoption consumption linkages

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

ADOPTION – CONSUMPTION LINKAGES

  • Adopting households consume a disproportionately higher amount of fish that are rich in micro-nutrient

  • Adoption of aquaculture increases market supply that pushes fish prices down


Consumption effects

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

CONSUMPTION EFFECTS

  • Increased access to fish in both rural and urban areas in last five years

  • higher per capita consumption for producer households compared to non-producers and national average consumption

  • Price and income elasticity of fish are higher than those of other food items

  • Consumer demand for fish will increase at a higher rate for income increase and supply increase

  • Adoption of improved pond management and species composition will direct more fish to on-farm household consumption


Consumption effects1

Aquaculture and Food Security in Developing Countries:

Lessons from Bangladesh

CONSUMPTION EFFECTS

Comparison of Production and Home Consumption Before and After Adoption of Improved Aquaculture in Kapasia Thana, Bangladesh

Source: 1. Ahmed, et al. 19932. Ahmed, et al. 1995

3. Extrapolated estimate by the authors based on the proportion disposed for the consumption.


Policy isseus for food security poverty reduction

Aquaculture and Food Security in Developing Countries

POLICY ISSEUS FOR FOOD SECURITY & POVERTY REDUCTION

  • Aquaculture development: is it a panacea for poverty reduction?

  • Much of reported increase of aquaculture come from low-income food deficit countries

  • How much can aquaculture contribute to poverty reduction? There are opportunities as well as constraints

  • Can the constraints be removed through policy measures and policy actions?


Access to resources

Aquaculture and Food Security in Developing Countries

ACCESS TO RESOURCES

  • Access to land is a major impediment for poor

  • richer people established greater access to land and water that were brought under aquaculture

  • Liberal government policies encouraged large-scale conversion of public land by the rich

  • Forced the poor out of common property fish harvest from public water or quasi-private land

  • Targeted development by NGOs and government have helped poor people access land and water

  • Flexible technology choices for more intensive use of labor


Access to resources1

Aquaculture and Food Security in Developing Countries

ACCESS TO RESOURCES

Percent distribution of households of some aquaculture

projects by size of land owned in Bangladesh in 1998

Source: Thompson et al. (2000)


Role of environmental practices and policies in aquaculture

Role of Environmental Practices and Policies in Aquaculture

  • Damaging impacts on the ocean and coastal resources

  • Interactions of escaped fish stocks with wild stocks

  • Introduction of exotic species


Role of international trade and trade policies in aquaculture development

Role of International Trade and Trade Policies in Aquaculture Development

Trade and Market Expansion

  • significant export orientation and focus on high value species

  • shift in the balance of trade in fish commodities in favor of developing countries

  • dependence on few developed country markets such as the EU, USA and Japan

  • global trade liberalization agenda vs. different forms of non-tariff barriers

  • resolutions and agreements on market access issues

  • regulatory measures on health and food safety requirements,

  • host of other forms of technical barriers to trade


Role of international trade and trade policies in aquaculture development1

Role of International Trade and Trade Policies in Aquaculture Development

  • Trade Policies

    • Liberalization of trade (UNCTAD – WTO)

    • Reduction of import tariff and import restrictions

    • Free trade agreements

    • Preferential market access


Role of international trade and trade policies in aquaculture development2

Role of International Trade and Trade Policies in Aquaculture Development

  • Trade Barriers

    • Technical barriers

    • Health, sanitary and food Safety barriers

    • Environmental regulation


Aquaculture r d technology need prospect

Aquaculture R&D: Technology Need & Prospect

  • Reducing Aquaculture Dependence on Capture Fisheries for Feed

  • Nearly one-third of the world’s wild caught fish is consumed as aquafeed

  • As aquaculture trend increases, the pressure on wild fish stock increases

  • Technology to replace aquafeed with nutritious grains and protein rich oilseed

  • Remove the dependence of aquaculture on wild stock


Aquaculture r d technology need prospect1

Aquaculture R&D: Technology Need & Prospect

2) Increase Productivity in Aquaculture

  • Selective breeding of Nile tilapia (o.niloticus) in WorldFish

    • Selective bred Nile tilapia outperformed the most widely farmed strains of Tilapia in Asia by growth and survival rate

    • 85% growth increase over six generation

    • Yield improvement of 25-78%, depending on local conditions


Aquaculture r d technology need prospect2

Aquaculture R&D: Technology Need & Prospect

2) Increase Productivity in Aquaculture

  • Genetic modification for improving quality and quantity of fish

    • developed strains of genetically modified salmon for potential use in cage aquaculture in China and India

    • benefits of genetic modification includes:

      • survival of endangered species

      • improve the reproductive success

      • address consumer issue such as taste and aesthetics

    • comes with significant controversy and risk


Conclusion

Conclusion

  • Challenge for aquaculture is to expand production to meet the future shortfall in fish supplies

  • Greater need for enforcement mechanisms for sustainable and environmentally safe aquaculture in developing countries

  • Aquaculture for the Poor

    • Devolution of institutions to ensure access to resources

    • Equal opportunity to the poor to access inputs and market


Conclusion1

Conclusion

  • Fish for the poor at affordable prices

    • Semi-intensive and extensive aquaculture of low value food fish

    • Mass-production of low-value food fish by small-scale producers

  • Balancing fish trade for the poor

    • Greater access to export markets, and fair share of benefits for the poor

    • Inclusion of small-scale producers and women in trade arrangements

  • Pro-poor technology and policy support

    • Credit and infrastructure

    • Low-cost and low-input technologies

    • Increased institutional and infrastructure support for diversification of production and trade by the poor households


Thank you

Thank You


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