The Financial Express

Shrimp producers\' woes: High-tech innovation is the answer

Published: May 18, 2016 19:21:30 | Updated: October 20, 2017 23:32:27

Shrimp producers\' woes: High-tech innovation is the answer

One of the most promising frozen food sectors appears to be struggling for survival. The shrimp aquaculture not only contributed more than half a billion (U$509.72 in 2015, according to media report) dollar to our export earnings, it is also provides livelihood to more than 800,000 shrimp farmers in the country. The growing constraint appears to be the rapid decline in international price, which recently slumped as low as 30 per cent reaching BDT 650/Kg at the farmers' level. Such drastic decline appears to be due to the fall of global price from U$6.0 to U$5.5 per pound, over a span of just one year.
Against the backdrop of the declining price trend, several measures have been taken to protect the local shrimp aquaculture industry. Notable ones are manoeuvring with interest rate and waving accumulated bank interest. Following the history of exercising traditional tools to give support to sinking competitiveness, the fisheries and livestock ministry recommended that the finance ministry take steps to offer a financial incentive. The government has already increased cash subsidies for frozen fish exporters. The obvious question now: are these measures going to offer sustainable support to the promising sector? Are we hoping that price dynamics in the global market is cyclical in nature? Without devising ways to reduce the cost of production by increasing productivity, should we just keep afloat the sector with artificial support for better days to show up? Well, there might be a possibility, but its probability appears to be very low. The core challenge is to produce better products at lower cost by paying more to workers while generating growing tax revenue for the government and causing less harm to the environment.
Let's look into the issue from a broader perspective.  The need of feeding more than 9.0 billion people in 2050 in a manner that advances development and reduces pressure on the environment is a major challenge for the world. According to various estimates, aquaculture production must grow more than double by 2050 to satisfy projected fish demand. It's estimated that aquaculture production will reach 140 million metric tonnes by 2050, generating more than U$300 billion farm gate value per year. On the other hand, there is a growing competition originating from advanced and developing nations alike to increase supply. The issue is not just to have the capability to produce. The core challenge is to acquire competencies continuously to harvest more while costing less and causing less harm to the environment. Instead of applying conventional tools to cover up productivity cost and waiting for sunny days of the higher price to show up, it's time for Bangladesh to allocate resource to attain sustainable capability to produce more with less.
Competing countries have been acquiring the competence to transition to industrial production capacity in shrimp farming. Among many other steps, they have been bringing automation by installing 'controlled pond system'. They have also been systemising farm management by integrating information technology.  
Integration of technology has been the key for Thailand's four-fold productivity increase over a span of seven years: shrimp yield grew from 11,952 kg/ha/yr in 2002 to 44,651 kg/ha/yr in 2009.  During the same period, the cost of production went down from USD 5.27/kg to USD2.71/kg.  Such data indicates that price reduction trend of shrimp in global market does not appear likely to reverse. It's rather due to productivity improvement that many countries are making more profit than before by supplying shrimp at lower prices while producers in Bangladesh are counting losses. Instead of pointing to consumers' preference and global slump of price to justify protection, we should look into the underlying cause and figure out ways to deal with it in a sustainable way. With the large productivity gap, dependence on low-cost labour, weak environmental compliance and protection from the government are not sustainable means. The shrinking wage difference between advanced and developing nations cannot cope up with productivity difference of a factor of 20 between North America (59.3 tons/worker) and Asian countries (3.2 tons/worker). It's time to integrate technology in all stages of aquaculture to offer better products at lower cost to make more profit. No other alternative appears to be open for sustainable exploitation of this growing opportunity of shrimp aquaculture.
Proper application of scientific methods of cultivation has the potential to improve productivity and lower cost of production while causing less harm to the environment. Reliance on human sensing, perception and intuition to understand different attributes to take the precise decision is far from optimal. For example, the feed to meat conversion ratio largely depends on time as well as the duration of feeding. To maximise this key ratio, feeding should start at an optimum level of the state of appetite and must stop at the right moment as well. Variation of this timing will lead to less than attainable yield. Moreover, non-consumed feed leads to pollution causing harm to the health of shrimp. It appears that controlled pond with the capacity of diverse factors including maintaining oxygen level of water, feeding timing and early detection of symptoms of diseases may lead to the reduction of cost and growth in quality. The steady improvement of 5.0 per cent per year over a prolonged period, say ten years, may lead to a significant competitive advantage. The challenge is not just deploying the same technology incurring the same cost to attain the same benefit what competitors are achieving. Rather, the challenge is to deploy better technology at less cost to have the better result. How to address this problem is a crucial issue to deal with.      
The conventional approach of importing production technology to take the advantage of low-cost labour and government's protection is no longer enough. Reliance on importing the same technology from the same source, from where our competitors are also importing, is not likely to offer competitiveness at faster rate than them. With the imported production technology, competitiveness may jump, but due to lack of incremental innovations and competition, it will keep declining. To address this challenge, we need to develop local innovation capacity. This innovation capacity will take into consideration diverse factors including local natural advantage to innovate technology solutions to enable local producers to be in the more advantageous situation than their overseas competitors. To benefit from growing knowledge and underlying technology development, we have to update continuously our production processes through incremental innovations. To benefit from incremental innovations, close interactions between innovators and lead users are required. Due to lower cost of our science and engineering graduates than that of the technology-exporting countries, there is a potential to enjoy the lower cost of production technology as well. Moreover, such strategy of developing local innovation capacity to upgrade our shrimp production capacity incrementally will also create high-paying high-tech jobs for our science and engineering graduates.
To exploit this potential of empowering our shrimp producers to produce better quality shrimp at lower prices through locally sourced production technology, we need to strengthen both the supply and demand carefully. We need to invest in our universities to develop technology and innovation capability to apply the knowledge of biological science in a more precise manner to produce better quality shrimp at less cost. The advent of low-cost sensors and computing as well as actuating devices have opened the opportunity to engage our computer scientists and engineers to work with agricultural scientists to evaluate global developments, adapt and innovate most appropriate production technology solutions for local shrimp producers.
There should be investment in universities to develop technology and innovation potentialities to harness growing yield of shrimp aquaculture. Once, economic feasibility is demonstrated, it's likely that there will be entrepreneurial initiatives to turn that potential into useful production solutions. To support such entrepreneurial initiatives, incubation facility and seed capital should also be provided. To create the demand for locally deliverable productivity improving process solutions, incentive should be given to shrimp producers to source these solutions. Once we close this loop of pursuing local technological innovations leading to higher profitability of shrimp production and export, the government as well as the shrimp producers will be relieved from providing unsustainable life support. It's an excellent time for the policy makers to prime the local innovation pump to provide sustainable support not only to address woes of shrimp producers but also to create high paying jobs for our science and engineering graduates.

M. Rokonuzzaman Ph.D, academic, researcher and activist on Technology, Innovation and Policy, is Professor, Department of Electrical and Computer Engineering, North South University, Bangladesh.

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