Sanitary and Phyto-Sanitary Barriers to Trade and its Impact on the Environment
Beginning in the 1980s, shrimp grew as a major non-traditional export item, and today, shrimp is the second largest export from Bangladesh. Commercial culture of shrimp increased rapidly in the coastal belts of Bangladesh and has gone through several stages of transformation.
Currently, there are approximately 37,397 farms cultivating bagda (tiger shrimp) with an average farm size of 4.5 hectares. Twenty-five thousand tonnes of bagda were produced in 2001, and production has increased by 20 per cent per annum in the last 15 years. There are 124 shrimp processing factories in Bangladesh, mostly in Khulna and Chittagong, and around 60 hatcheries mostly in Cox’s Bazar. There are also 30,000 hectares of land, representing 105,000 farms, under golda (sweet water shrimp) production, which produced 11,942 tonnes of golda in 2001. Because golda farms, which are mostly located in the Khulna division, are generally smaller than bagda farms (averaging 0.28 hectares compared to 4.5 hectares) golda cultivation supports a greater proportion of poor and marginal farmers. Moreover, golda shrimp farming is usually conducted in family farms by small farmers who have transformed their tiny plots of agricultural land into shrimp-cum-rice farms. Unlike brackish water cultivation of bagda, freshwater golda cultivation is not restricted to the coastal regions and is expanding at a rate of 10–20 per cent per annum.
There are 600,000 people employed in the shrimp sector in Bangladesh generating US$301 million annually from bagda and golda farms (US$243 million from bagda alone). However, the industry suffers from significant production inefficiencies and is exposed to important social and environmental risks.
One of the risks has emerged out of sanitary and phyto-sanitary agreements and subsequent standardization of production and processing methods using HACCP (Hazard Analysis and Critical Control Point) methods. As of now, HACCP is applied on the processing plants, but to ensure the quality of production and to reduce risks, shrimp farms are also required to adopt HACCP methods. Processing plants, being the large investors and the ultimate risk takers in the business, have already adopted the procedures mentioned in HACCP rules, but it has been quite difficult for them to impose it on small shrimp farms. Overall, the industry is in crisis—low production capacity at the plant and a very low yield at the shrimp farms.
The farming community lacks capital education and the motivation to accept the changes under the current conditions of the market. This study has shown that while most shrimp farmers are aware of the risks in business, they are not actively adopting the standards. Also, most farmers need to be trained on the impact of chemicals (used during crop production) on shrimp quality. Using field data, the study developed a simulation exercise to show that under the current situation, the trend in the industry is toward intensive shrimp farming. This trend will threaten the social fabric in rural Bangladesh and will increase conflicts, as an important source of smallholder income is removed from the picture and the ownership in Bangladesh’s most important export sector is intensified in the hands of relatively few operators.
The mitigation options available are to provide training to the farmers and make them aware of the risks in business; create meaningful liaison with the processing plants; and reduce inefficiencies in production. This is a more socially desirable response to resolve the current crisis in the industry.
The report was presented at the TKN policy workshop in Dhaka, April 24–25, 2003, attended by representatives of government, IGOs, NGOs, farmers, processors and scientists interested in the industry. In the ensuing discussion, it was observed that different stakeholders in the industry lack understanding in terms of their role and responsibilities. The mutual mistrust among the farmers and the processors, and the high rate of commission enjoyed by the middlemen, is a genuine problem for this industry. Because of this situation, it is suggested that a multistakeholder dialogue process be initiated by a neutral organization in order to build-up trust. The dialogue will also include developing a common policy prescription for the industry in an effort to move it towards environmental sustainability.