CERTIFIED ORGANIC SHRIMP: A NEW APPROACH TO MANGROVE PES?

Jake Brunner, IUCNJakarta, May 2014

28%

70%

Ca Mau50%

Vietnam’s Mangroves

January 2013

Nhung Mien Forest Management Unit

Integrated mangrove-shrimp

1. Low yield: 300 vs. 10,000 kg/ha/year2. Low costs: no chemicals, feed, or antibiotics 3. Low risk: no crop failure in 20124. Diverse: crab, fish, oysters, etc.5. Profitable: $2,100 vs. $1,100-$1,300/ha/year

Mangroves & Markets

• 2012-2016, BMU funding, IUCN and SNV• Starting off with 740 farmers in Nhung Mien• Minh Phu has signed 5-year contracts with farmers:– 10% price premium– All sizes

• Organic standard: Naturland– Requires 50% mangrove cover per national law

• Auditor: IMO, Institute of Market-Ecology• Supports provincial vision of “organic coast”

PES brief history

• 1993-1998: Program 327 introduced household protection contracts (VND/ha/year)

• 1998-2010: Program 661 (5 Million Hectare Reforestation Program)

• 2006: USAID/Winrock/IUCN ARBCP in Lam Dong• 2008: Decision 380 on piloting PES• 2010: Decree 99 nation-wide, specified payments for

hydro (VND/KWhr) and water utilities (VND/m3)• 2012: Work started on aquaculture PES decision

supported by IUCN and GIZ

Weaknesses

1. Low willingness to pay– Buyers are state-owned companies that were instructed to

pay; private hydropower plants reluctant because existing contracts

2. Potentially low compliance– Monitoring is based on self-reporting, raising questions

about conflict of interest and credibility; government sees PES as welfare support

3. Doubts about permanence– New market opportunities (e.g., cassava) may make PES

unaffordable; high and fluctuating opportunity costs

Certification approach

1. Willingness to pay– International consumer is ultimate buyer; Minh Phu, the

intermediate buyer, has identified organic shrimp as key market opportunity

2. Compliance– Forest management board, annual audits, internal control system in

place, farmer groups encourage peer pressure, satellite monitoring

3. Permanence– Transforming the threat ; significant up-front costs (training, GIS,

toilet kits, etc.) but incremental costs modest; strong financial incentive to stay certified