Consultative Group for International Agricultural Research (CGIAR) recently reported that Bangladesh’s shrimp farmers receive little financial aid, particularly from formal institutions.
The industry provides a living for more than 8 lakh (800K) farmers who harvest shrimp on 2.63 lakh hectares of land in coastal parts of the southwest section of the country.
According to a 2017 study done by the Bangladesh Fish and Shrimp Foundation, 77.3% of aquatic food producers in Bangladesh struggled to receive financing from traditional institutions such as banks or leasing firm as not having any collateral. As a result, small-scale producers of aquatic foods were forced to rely on unorthodox financial sources despite adverse circumstances such as increased interest rates and concealed fees.
Farmers need financial support for numerous reasons. The tiny shrimp ponds, known locally as ghers, hinder the output of shrimp production. According to a study, there is an urgent need to create the necessary infrastructure, particularly in terms of deepening ponds and other water management structures.
Lack of financial assistance also affects the technical aspects of shrimp aquaculture. In contrast to other species, shrimp production requires specialized knowledge.
In the lack of such expertise, shrimp farming for poor farmers becomes a high-risk endeavor, said Mohammad Mahfujul Haque, a professor of aquaculture at Bangladesh Agricultural University in Mymensingh.
Significant structural issues continue to plague the sector despite considerable production increases and the implementation of contemporary technological practices, such as farm and feed management.
While Bangladesh is prone to natural disasters and is frequently affected by cyclones, small-scale shrimp farmers are the ones that suffer the most.
Sohel Shaikh, a young farmer in the southern port city of Mongla, sustained significant losses from Cyclone Sitrang in October 2022, and then a virus devastated his remaining shrimp production.
Shaikh stated, “I had hoped to obtain help from the government in order to regain my position, but I have not gotten any assistance.”
According to a preliminary estimate by the Department of Fisheries, cyclone Amphan caused 40,800 shrimp, finfish, and crab growers losses of TK 217 crore ($21.7m). Due to the storm, 18,450 shrimp farms in the southern coastal districts suffered losses of around Tk 175 crore ($17.5m).
Belal Hossain, a farmer in Satkhira, started his shrimp firm with a loan of TK 25,000 ($250) from a local non-governmental organization (NGO), but has sustained losses, particularly since the recent cyclone.
“I’ve never had much success obtaining financing from banks for my shrimp farm,” he said.
He and other small-scale farmers lack financial expertise and assets that may be used as security for bank loans, but financial institutions view the shrimp industry as unsafe.
It is simpler to obtain credit through non-governmental organizations (NGOs) or loan sharks; however, the amounts are often lower, and the interest rates are very high.
To solve this issue, WorldFish partnered with Bank Asia to provide small-scale aquatic food producers with low-interest, collateral-free loans. As part of this agreement, WorldFish wants to deliver financial literacy training to 25,000 small-scale producers of aquatic foods in 2022. This will better prepare them for the future.
Bangladesh aquaculture sector is expanding, but its small-scale shrimp farmers require assistance. They lack the resources and understanding of international standards necessary to operate farms and hatcheries at full capacity. Hence it is necessary to provide farmers with technical training and access to financial services and build the capacity of the trade associations and government agencies.
These actions may improve livelihoods shrimp farmers, increase productivity in the industry and enhance food quality and safety in Bangladesh.
Jaber Bin Abdul Bari
Department of Oceanography, NSTU
