Status of Shrimp Hatchery Industry in Bangladesh

FOURTH FISHERIES PROJECT

Funded by IDA / DFID / GEF and GOB

Status of the shrimp hatchery and nursery operations in Bangladesh

An output of the Shrimp Action Plan funded by the Department For International Development

By Md. Nuruzzaman, the Shrimp and Coastal Aquaculture Component, Fourth Fisheries Project

October 2002

Project Management Unit, Department of Fisheries, Matshya Bhaban, Ramna, Dhaka 1000

Tel: 9554716, 9560543, 9560525.Table of Contents

iExecutive Summary

1. Introduction12. Objectives of the study13. Background to shrimp hatchery development in Bangladesh13.1 The growth in demand for post larvae13.2 Selection of initial sites for hatcheries in Bangladesh13.3 The emergence of the private sector24. Number of hatcheries and production capacity24.1 Number of hatcheries24.2 Production capacity24.3 Growth of small hatcheries in the Khulna region34.4 Competition from wild supply of post larvae34.5 Golda production45. Investment status56. Hatchery processes and technical know-how56.1 Processes56.1.1 Bagda56.1.2 Golda66.2 Production costs66.3 Technical know-how77. Quality control77.1 The need for certification77.2 Current measures being taken to improve PL quality78. Brood Shrimp Collection88.1 Existing practices88.2 Emergence of specialised broodstock supply service89. Distribution system99.1 Supply chains99.2 Credit and commission system99.3 Transport of PL99.3.1 Air transport99.3.2 Road transport1010. Co-ordination of the hatchery sector1011. Role of research organisations1012. Farming practices1012.1 Bagda1012.2 Golda1113. Nursery operations1113.1 Current status1113.2 Economics of nurseries1213.3 Scope to engage fry catchers in nursery operations1213.3.1 Opportunities for establishing small scale nurseries1213.3.2 Past experience1314. Conclusions and recommendations1415. References17

Executive Summary

In Bangladesh, post larvae (PL) are derived from either hatchery or from wild sources. In the case of bagda, 50% is derived from fry collectors and 50% from hatcheries. In respect to golda, 90% of the PL is derived from wild sources and 10% from hatcheries. Wild sources are still preferred by farmers as many believe that wild PL have a higher survival rate and as a result the wild fry market generates higher sales than the hatchery supply due to the higher unit price. Between 1500-2000 million PL valued at Tk1742 million are still collected from the wild. The sale value of hatchery PL is estimated to be Tk1006 million.

Commercial shrimp hatchery operations are fairly a recent development in fresh water and brackish water aquaculture in Bangladesh. There are currently around 45 Bagda shrimp hatcheries, 39 of them along the Coxs Bazar beach, the remainder inland. A number of small scale Bagda hatcheries are located around the country adjacent to river banks. There are also 34 fresh water prawn (Golda) hatcheries scattered across the country. Golda hatcheries do not require such proximity to the sea because seawater can be transported to the hatchery and recycled over 3 to 4 cycles of operation.

The development of new Bagda hatcheries (45 hatcheries) and increasing production capacities by existing hatcheries in the Coxs Bazar region have caused the overall production capacity for Bagda PL to exceed demand (production capacity for Bagda stands at 6000 million PL per year compared to a demand of 3000 million). The hatcheries responded to this overcapacity by introducing quotas but a lack of unity within the industry led to the breakdown of the quota system this year. Moreover buyers in the farming areas were highly critical of moves to artificially lower the supply. This year production was between 2500-2750 million PL as several hatcheries suspended production due to a fall in the market price. The solution lies in rationalisation of the hatchery sector and better co-ordination and dissemination of market information. Moreover, excess capacity needs to be diverted into Golda production where possible using the existing expertise within Department of Fisheries.

There is an acute shortage of Golda PL due expanding culture activities with more than 90% of the demand deriving from wild sources. Out of 35 hatcheries producing Golda only 15 were operating and on average each hatchery was operating at only 13% of its capacity. The cost of Golda PL this year was three times higher than for 2001 and three times higher than Bagda PL. Hatchery PL is only marginally cheaper than wild PL. The Golda PL production process is more difficult due to the lower fecundity, longer rearing cycle and smaller marketing lots but the price differential is three times higher than for Bagda PL.

The production costs for hatcheries are high particularly in Coxs Baxar ranging from Tk100-270 per 1000 PL. Salaries for foreign technicians are often linked to production rather than profits which encourages the use of high cost inputs to maximise production. A number of small scale hatcheries have been established within the shrimp producing areas in Khulna, Satkhira and Bagerhat districts with production capacities of around 2-5 million PL per year. These hatcheries have lower production costs and higher PL survival rates from rearing under local conditions and reduced transport times. These hatcheries also benefit from direct links to farmers although they have to bring brood shrimps by Sea Plane and saline water from deep sea by barge.

The sector is constrained by a lack of quality control and poor management practices. Except the early investors (10 15 hatcheries set up before 1998), the performance of many hatcheries has been poor. The disease problems in the shrimp industry began with imported PL. Since then shrimp farmers regard hatchery produced PL as the main source of disease infection in their farms. In practice, outbreaks of disease are more likely to be a result of poor pond and water management on farms. However, quality assurance of PL through a certification scheme is needed to restore confidence in hatchery produced fry.

Brood shrimp collected from the wild and the resulting PL produced from hatcheries are not screened for disease. Procedures for ensuring the quarantine of brood shrimps and screening for disease in PL and brood shrimp (using PCR techniques) are urgently needed. The approximate cost of a PCR laboratory is between Tk.2-3 million. Improved methods for harvesting brood shrimp from the sea using trammel net instead of trawl nets are also required to increase survival rates and reduce the impact of trawl nets on breeding grounds. Existing methods of harvest should be phased out.

Currently the only source of shrimp broodstock for hatcheries is from the wild. Indiscriminate trawling for shrimp is likely to threaten stocks although a lack of survey data precludes a more accurate stock assessment. Enforcement of the current ban on shrimp trawling from 15th January to 15th February is considered to be important to conserve wild stocks and ensure the supply of broodstock. The legislation is currently in abeyance following an injunction from the High Court in 1995 after a writ petition was filed by the Bangladesh Marine Fisheries Association. Wild stocks are also under pressure from the collection of wild fry and the use of set bag nets (with mesh sizes smaller than 45 mm mesh size at the cod end prohibited under Fish Act) in the juvenile fishery.

Hatchery fry is usually flown from Coxs Bazar to Jessore and then transported by truck to the main shrimp producing areas. The transport costs vary from Tk30 per 1000 PL for road transport to Tk50 per 1000 PL for air freight. Higher mortalities occur during road transport (20-30%) compared to air (5-10%) but some hatcheries send PL by road in mixed batches with wild PL to secure higher prices.

There are too many intermediaries in the fry supply chain (agents receive 10-15% commission and intermediary vendors mark up 20-30% before selling to farmers). Intermediaries in the fry marketing chain extract considerable amounts of revenue from the supply chain for money lending operations. A reduction in the number of intermediaries would facilitate greater linkages and contact between hatcheries and farmers and ultimately lower prices at the farm-gate. The smaller hatcheries, in Coxs Bazar and Khulna and a few of the larger hatcheries market fry directly to the farmers. The use of field agents in the farming zones and the establishment of transit nurseries by hatcheries are regarded as positive developments. These agents are able to determine the demand for PL from farmers well ahead of time and adjust production to match demand.

There is weak governance and poor co-ordination within the hatchery sector. The absence of traceability in particular encourages bad practices such as lack of disease prevention and control, poor care of broodstock, sale of underage fry, poor acclimation and mixed packaging with wild fry. Shrimp farmers lack the necessary information on the condition of PL at the point of sale due to an absence of labelling. The PL bags should be labelled with the batch number, number, age, time of packing, water salinity, pH, hardness etc. These should also include clear instructions about handling and acclimation procedures for the range of salinities and temperatures found in farmers ponds throughout the producing zones in Bangladesh. The expected survival rate under standard conditions should also be stated and hatcheries should encourage buyers to provide feedback to the company about the survival of PL following stocking.

Given the inherent potential of the shrimp industry in Bangladesh, very little research work has so far been carried out. The development of farm raised brood and handling of wild brood shrimp is critical to the seed supply system. The BFRI, research organisations and universities need to be more closely involved in addressing the research needs of the industry.

Extension support for farmers remains weak due to the limited number of extension workers in the field. Extension of Good Management Practices on selecting and testing for viable PL, PL acclimation, stocking density, post stocking monitoring of growth and survival are required to increase shrimp production in extensive systems.

There is good potential to establish PL nurseries in the shrimp producing areas especially Khulna, Satkhira and Bagerhat districts. PL reared in nurseries have higher survival rates and increase production efficiencies for farmers. Nurseries can be operated cheaply rearing PL under ambient water conditions with natural feed. The small number of existing nursery operations suggest substantial potential for growth. The question is whether it is feasible for the extreme poor involved in fry catching. The key requirements are access to land/water and markets, expertise (technical, marketing and enterprise management), and capital along with organisational support. In addition, farmers need to be encouraged to develop their own nursery areas within their ghers to reduce losses from predation.

The potential for engaging fry collectors in developing an extensive network of small-scale nursery operations diminishes as the sector enlarges. Once others have moved in and become established in nursery operations it will be difficult for fry catchers to compete. An early intervention is required to enable the operators to establish links with farmers and traders.

The main shrimp producing areas in the south west and are likely to be the most appropriate place to establish a network of nurseries with fry catchers particularly considering Department of Fisheries and MOFL are considering introducing a complete ban on fry catching in the Sunderbahn area. The NGO network in south west Bangladesh is extensive and easily capable of working at the grass roots level with fry catchers although some capacity building is necessary.

Previous trials by the Bay of Bengal Programme illustrate the vulnerability of carrying out aquatic based small enterprises in the coastal zone to, natural calamities (a severe cyclone destroyed the cages in one year), and fluctuations in market conditions (price varies according to wild supply from year to year). The internal rate of return was shown to be highly sensitive to variations in selling and buying price. Maintaining survival rates of 80% is also considered important highlighting the need for robust technology. The profits were not sensitive to investment cost suggesting the technology could be viable for small scale operators.

Trials with Bagda were less successful than with Golda. This could be attributed to the undeveloped cage technology which has substantially improved since the trials in 1994. Sites were also poorly selected, cages were set in a river were exposed to strong currents. The supply of hatchery fry was also limited at this time ensuring a reliance on wild fry (that require less nursing). Probably the most important factor was the low selling price of nursed fry. Nursing bagda fry under the prevailing market conditions at this time simply wasnt viable.

Rearing of freshwater prawn fry was more successful and can take place from June through to October during the main monsoon season (whereas Bagda fry would be reared from February to May). Production increased over the three years of trials and was most successful for wild fry (80% survival) although stocking hatchery fry was shown to extend the season by three months as hatchery fry were available from early May and June. However, survival of hatchery fry was quite low (54%) due to overstocking and inadequate sorting and also probably because the hatchery fry were stocked at an earlier stage in the life cycle compared to the wild fry BOBP.

The results from the BOBP trials indicate that the potential is greatest for Golda nurseries. Golda currently fetches a higher price and can be carried out in sheltered freshwater areas (and hence cages will not be subjected to erosion). A key requirement is for strong organisational support from a competent NGO and one that can successfully chart the route away from fry collectors dependence on the dadonars. The most successful form of support would assume a holistic approach encompassing all the basic needs of the community: basic sanitation, shelter, education and access to clean drinking water, in conjunction with support for alternative income generating activities. The holistic approach adopted by Caritas in Satkhira under the SEMP project is a potential entry point for any future trials with fry collectors and nursery operations.

According to the BOBP report, one of the success factors was the investment of time in group formation and strengthening and soliciting support from the local elites. The optimum marketing lot was 50,000 PL regarded as a sufficient amount to allow bargaining for a fair price. Group selling and access to buying agents are therefore necessary and linked to the need for strong cohesiveness within groups.

1. Introduction

In Bangladesh, post larvae (PL) are derived from either hatchery or from wild sources. In the case of bagda, 50% is derived from fry collectors and 50% from hatcheries. In respect to golda, 90% of the PL is derived from wild sources and 10% from hatcheries. Wild sources are still preferred by farmers as many believe that wild PL have a higher survival rate.

Commercial shrimp hatchery operations are a recent development in fresh water and brackish water aquaculture in Bangladesh. There are currently around 45 Bagda shrimp hatcheries, 39 of them along the Coxs Bazar beach, the remainder inland. A number of small scale Bagda hatcheries are located around the country adjacent to river banks. There are also 34 fresh water prawn (Golda) hatcheries scattered across the country. The Golda hatcheries do not require such proximity to the sea because seawater can be transported to the hatchery and recycled over 3 to 4 cycles of operation.

2. Objectives of the study

The main objectives of this study were to:

assess the factors impacting on the growth and distribution of hatcheries including brood stock strategies, transportation of PL, and pre-grow-out management policies, and

review opportunities to involve poor people in hatchery operations, specifically in nursing and grow-out of PLs.

This review forms part of the Shrimp Action Plan developed jointly by DFID and representatives of Fourth Fisheries Project, Department of Fisheries in February 2002. The report describes the measures needed to improve farming and hatchery management practices to ensure a more sustainable and equitable shrimp aquaculture in Bangladesh.

3. Background to shrimp hatchery development in Bangladesh

3.1 The growth in demand for post larvae

With the rapid growth of shrimp farming during the 1980s, farmers started selective stocking of wild PL in their farms. Prior to this, farmers practised traditional methods of trapping PL and fish seeds flowing in naturally to their farms with the tide. Following the switch to selective stocking, shrimp farming became more profitable and there was rapid growth accompanied by a sharp increase in the demand for wild PL. This led to the emergence of a large wild PL fishing industry in the coastal zone. However, temporal and spatial fluctuations in abundance and distribution of wild PL meant that as the industry grew, the supply of PL remained uncertain from year to year. During the late 80s there was a severe shortage of PL in the Khulna-Satkhira region prompting expansion of the wild fry collecting areas eastwards to Coxes Bazar. This resulted in PL being transported long distances from Coxs Bazar to the main shrimp producing areas in Khulna in south west Bangladesh.

3.2 Selection of initial sites for hatcheries in Bangladesh

The development and location of the hatcheries was largely guided by an MOFL report on site selection in August 1994. The Ministry formed a site selection committee to identify suitable sites for Bagda hatcheries and semi-intensive Bagda shrimp farms. The committee identified 9km of sea frontage at five locations along the beach of Teknaf and Ukhia (Coxs Bazar district). These locations were in addition to the Kolatoli beach where two km of sea front area had earlier been identified as suitable for hatchery development. The IDA, Pioneer, Niribili and Modern hatcheries had already been built there before the release of the MOFL report.

The site selection committee used the following criteria to identify appropriate sites:

a. Supply of pollution free saline water (28 to 32 ppt salinity from Nov to May),

b. Existence of a stable narrow beach for easy intake of water into the hatchery (within 200 m),

c. The beach should be partly strewn with pebbles and boulders and covered with relatively course sands and the water should not be silty,

d. Situated close to Bagda shrimp breeding grounds to minimise the transport time of broodstock to hatcheries,

e. Have a good elevation to ensure the sites are above the highest high tide zone,

f. Good road access,

g. Electricity supply,

h. Supply of fresh ground water.

This resulted in most of the Bagda hatcheries being located in the south eastern part of Bangladesh, some 700 km away from the main shrimp farming areas in the south west.

3.3 The emergence of the private sector

For the last two decades, the Department of Fisheries has been trying to support the shrimp sector. In 1988, its IDA funded project successfully demonstrated spawning and larval rearing of P. monodon using a makeshift hatchery arrangement in Kolatoli, Coxs Bazar. In 1992, the first private hatchery, Pioneer Hatchery, began producing Bagda PL commercially. Up until 1996, there was a gradual increase in the number of private Bagda hatcheries followed by rapid expansion between 1997 and 2000 fuelled by a number of financial incentives provided by the Government.

4. Number of hatcheries and production capacity

4.1 Number of hatcheries

Presently there are 45 hatcheries producing exclusively bagda PL, 39 in Coxs Bazar, four in Khulna, one in Satkhira, and one in Chittagong (See Table 1 and Figure 1). Two more hatcheries are under construction in Ukhia, Coxs Bazar and likely to begin production at the beginning of 2003. There are a further 15 hatcheries producing golda. Golda hatchery production is well below capacity.

4.2 Production capacity

Based on the larval rearing tank (LRT) capacity for 39 hatcheries, the total PL production capacity for Bagda is estimated to be around 6000 million per year. Each plant produces around 28M PL per cycle. One tank holds 30,000 PL, each tank holds 30 t of water. One mother produces 7-8,000. SHAB and Department of Fisheries reported production rates of 3027 million and 3460 million in 2000 and 2001 respectively. It is believed that this figure is higher due to some unreported PL production. It is likely that, with present the SHAB quota system, people hide production information. The market demand, at current utilisation rates, is equivalent to 3,000M PL and 500M PL respectively (Banks 2002). Prior to 2002, the markets were flooded with hatchery PL due to the increase in the number of hatcheries producing fry. There was no tracking of market demand and a huge quantities of PL were dumped on the markets in Khulna and Satkhira during March and April pushing the PL price down below the production cost.

Fig 1: Number of Bagda hatcheries

SHAB responded to the resulting price falls by introducing a quota system to reduce the supply. The quota system broke down this year as SHAB failed to mediate a quota distribution that was acceptable to all the hatchery owners. There was no production information available from SHAB this year. Department of Fisheries, however, report that this year PL production was between 2500 and 2750 million.

Fig 2: Production of Shrimp PL from Hatcheries

This year many hatcheries have upgraded their capacity and 4-5 new hatcheries were established (Banks 2002). However, a number of hatcheries suspended production this year due to the drastic fall in market price. The annual demand for the whole shrimp industry could actually be produced by five to six of the large hatcheries (e.g. Beach Hatchery, Sea King, Modern, Sonar Gaon) which produce a combined total of around 3000 million PL annually. The average prices (2001) for bagda and golda PL were Tk740/1,000 and Tk2,200/1,000 respectively.

4.3 Growth of small hatcheries in the Khulna region

There are already 5 small hatcheries (3 in Khulna district, 1 each in Satkhira and Bagerhat districts) with production capacities ranging from 2 to 5 million PL per year. The investment costs associated with these hatcheries were much lower (Tk5-10 million) compared to the average investment cost in Coxs Bazar (Tk.22 million).

Hatcheries located close to the farming areas benefit from direct links to farmers but they have to bring brood shrimps by Sea Plane and saline water from deep sea by barge. Farmers buying locally produced PL report higher survival rates compared to PL brought in from Coxes Bazar because the PL have been produced and acclimatised locally and are not exposed to long transport times. By locating their hatcheries in the shrimp producing areas the owners can avoid selling PL through Satkhira based traders (aratders).

4.4 Competition from wild supply of post larvae

Around 1,500-2,000M PL are collected annually from the wild by an estimated 440,000 wild PL collectors (in 2001). By 2001, PL production from hatcheries had already surpassed the existing demand in the market and wild collection has reportedly fallen drastically this year. Presently, more than 50% farmers stock hatchery PL while stocking of wild PL is on the decline. The total sales value of hatchery and wild caught PL is estimated to be equivalent to Tk1,006M and 1,742M respectively (Banks 2002).

Despite the continuing trend towards hatchery PL, wild PL still commands a higher price because farmers believe wild PL have higher survival and growth rates compared to hatchery produced PL. In the case of bagda, the price is 12% above that of hatchery produced PL, whereas with golda the price differential is 7% above the hatchery price. The wild caught PL usually has a higher average age (15-25 days) than the hatchery-produced product. Price differences have been created for three reasons:

1. Wild caught PL is considered more robust and has a lower mortality rate (40% as compared with 60-80% for hatchery produced PL) and can command a higher premium.

2. Hatchery produced PL is associated with the perception of a higher likelihood of contracting white spot virus (WSV). This is largely because the outbreak of the WSV was associated with (imported) hatchery produced PL.

3. Hatcheries and wholesalers deliberately reducing the supply of hatchery produced PL against the background of a shortage in supply so as to force an upward shift in the market.

Most PL collectors sell to farias, who subsequently transport wild PL to the arats (wholesale depots). These arats are usually the same intermediary depots, which handle hatchery produced PL. The aratdars may sell directly to farmers or through a network of additional farias. More information on fry collectors can be found in Frankenberger (2002). Usually wild caught PL is stocked by farmers in remote areas while hatchery produced PL is increasingly popular in the farms close to better a transportation network. Wild PL is largely available throughout the year, whereas hatchery PL is available only during late February to June. Those who stock early, depend on wild PL. Farmers are still unaware of the problems of early stocking, particularly during November to mid February because of cold weather.

Scientifically, there should be no difference between hatchery produced and wild-caught PL. A CARE study in September 1999 has reported good survival of hatchery PL of golda. If proper care is taken (acclimation, nursing and optimum handling during transport and storage) hatchery produced PL should give good results because of the homogenous age group. In wild caught PL, heterogenous age groups of PL prevails and this encourages cannibalism, the larger animals take advantage of the smaller ones during moulting.

4.5 Golda production

The last 10 years have seen a rapid growth in Golda production but hatchery development has lagged behind Bagda although production capacity for Golda is increasing. More than 90% of golda PL is derived from wild sources: 60% from Khulna; 35% from Comilla and Noakhali; and 5% from Coxs Bazar. As a result of expanded culture initiatives, there appears to be an acute crisis in the availability of golda PL. There are 34 golda hatcheries spread throughout the country, of which 15 are in the Khulna district and a further 9 in Chittagong district. There are 15 hatcheries reported to be in production, producing an average 2.7 M PL. Each factory produces an average 13% of its total production capacity (Banks, 2002).

The Department of Fisheries operates three Golda hatcheries. Two of these, the DOF Golda Project hatchery and the Kaligonj Hatchery in Satkhira district produced 3.5 lack PL and 5.5 lack PL respectively this year. The ADB hatchery has produced both Bagda and Golda since 2001. Niribili hatchery, Borac hatchery and a small number of other hatcheries in Coxs Bazar have also started to produce Golda PL over the last two years. Moreover, a total of eight Golda hatcheries under BRAC have produced and distributed Golda PL at the field level for the last couple of years. As of August 2002, around 7.5 million Golda PL were produced against a target of 10 million for the current production season. Other Bagda hatcheries could easily be converted to Golda hatcheries or utilized for Golda PL production during the slack season for Bagda production (Banks, 2002).

In 2001, the cost of golda PL was about 3 times that of the previous year, and 3 times that of bagda. The current price (April 2002) of wild PL is Tk3,000/1000 PL, which is nearly 40% higher than the 2001 price (Tk1500-1600 per 1000 PL). Hatchery PL are only marginally cheaper currently selling for Tk100-200 less per 1000 PL (CARE, 2001).

5. Investment status

The growth of the hatchery industry has benefited from numerous government incentives (lower import duty for feed, chemicals and equipment and machinery for projects listed under the Board of Investment, loans, tax free earnings, Advance Income Tax is collected on exports at a rate of 0.25% instead of the normal rate of 3%). For shrimp hatcheries and processing plants, there is a complete exemption from advanced income tax. Many of the hatcheries are over capitalized in terms of optimum investment needs. The average cost of establishing nine hatcheries in Coxs Bazar was Tk.22 million (US$0.38 million). Around 22% of hatchery owners took credit from banks. One of the larger hatcheries (Beach Hatchery Ltd.) had invested Tk.200 million (US$3.44 million) to create an annual production capacity of 500 million PL. It was observed that the luxurious infrastructure along with expensive residential facilities in many hatcheries located on remote beaches could easily be avoided. One reason for this high investment may be the high degree of profitability in the hatchery business. Most of the investors in the Coxes Bazar areas are wealthy businessmen with no technical background. In the Khulna region, however, hatcheries were established at comparatively lower cost. This low investment may be due to the inherent uncertainty about operational success in this area.

6. Hatchery processes and technical know-how

6.1 Processes

6.1.1 Bagda

Most hatcheries use flow-through systems. Brood shrimps are collected from the commercial offshore fishery (Tk1,500/mother). Eye stock ablation is rarely used to induce the shrimp to spawn due to high mortalities. The eggs generate within 1 week. The full cycle for the production of PL takes 1 month. To get to post larvae stage takes 5 days. PL is then sold between 12 and 18 days after reaching the PL stage. The hatchery period takes place from January to April. It is believed that the current method of collection causes high stress. High mortality and premature abortion are reported in many hatcheries (Banks 2002). There are also complaints this year that importers have difficulties in clearing imported goods from customs warehouses. Sometimes it takes the whole production season to clear imported items even when they arrive well ahead of time.

Some hatcheries reported that the two key constraints were salinity, the ideal production period being between the months of November to April; and temperature, November to January was considered to be too cold for production, albeit that technicians can and do add heaters. The ideal hatchery conditions are from February to April.

Seven hatcheries at Teknaf and 15 hatcheries at Ukhia are located more or less in a single line along the beach of Coxs Bazar. In Kolatoli, 16 private hatcheries and one government hatchery are located very close together resulting in water intake points of one hatchery being set adjacent to the effluent outflow points of another hatchery. Hatcheries in Kolatoli are very susceptible to the spread of disease.

6.1.2 Golda

There has been huge growth in demand for Golda PL in Khulna, Satkhira and Bagerhat districts over the last five years. Golda PL production from hatcheries continues from March to July. Compared to Bagda, Golda PL production is more difficult due to: a lower fecundity, a longer rearing cycle, and a smaller marketing lot. However, Golda broods are easily available at a comparatively cheaper price and handling the brood shrimp is easier than with Bagda. The technology is not widely available in Bangladesh but a number of hatcheries are successfully producing Golda PL and given the higher price of Golda PL and higher market demand the prospects are good for existing hatchery operators. A number of Department of Fisheries/BRAC/DANIDA workers are experienced in Golda breeding and could be utilized to train private hatchery operators (Banks 2002). All the hatcheries use closed systems. The lack of growth in production of hatchery PL is constrained by:

The lack of technology,

Availability of brackish water in close proximity to the plants (required to be 10-12 ppt)

The perception that wild caught PL is more robust.

The perception is that hatchery produced PL has a slower growth rate Golda hatchery produced PL has a higher price because it is required to be older, more than 35 days. Therefore, most of the available PL (presently perceived to be around 90%) is caught wild in estuarine river systems. Generally, a similar collection process is used as with bagda PL but discarding is much reduced. The distinction is that in this industry wild caught PL tends to be beyond the post-larval stage (4-7 cm). Major problems occur in the transportation of golda PL from the river systems.

6.2 Production costs

The cost of production ranges from Tk100 to Tk270/1000. High production costs are due to the use of foreign technicians, high price of feed (brine shrimp cysts) and the use of antibiotics. Most of the hatchery owners use foreign technicians from Taiwan, Philippines, Thailand, China and India. Some commentators in the industry complain that since salaries are linked to production targets, many of the foreign technicians use expensive inputs (feed, chemicals and brood shrimp) to maximise production resulting in higher production costs per PL.

The cost of inputs is known to have increased following the large-scale replacement of Taiwanese technicians for Indian specialists. The Taiwanese are said to have used less input and achieved significantly greater yields. Hatchery owners switched to hiring Indian technicians largely because the method of payment to the Taiwanese (by Commission) proved to be unpopular. Transport costs are also high (Tk54/1000). Air freight is used for hatchery produced PL as it reduces mortality significantly (Banks 2002).

6.3 Technical know-how

A major constraint on hatchery production is technical know how. There was no clear understanding of technical issues among the investors or Department of Fisheries officials and there has been little exchange of ideas and problem solving among different hatcheries. There is a lack of local technical know how among local workers and a heavy reliance on foreign technicians (Indian, Thai and Taiwanese). The lack of expertise manifests itself in several areas: care of brood mothers, use of chemicals, and relative costs of technical labour (higher for imported technicians as opposed to Bangladeshi workers).

Training of local technicians is a pre requisite to better hatchery care. However, there is presently no training of technicians within Bangladesh and foreign technicians are reported to be reluctant to share their experiences with their co-workers. Training facilities similar to those in the Philippines and Thailand are needed. The Department of Fisheries has planned to train 250 hatchery and nursery operators under its Bagda Project using the ADB Hatchery facility in Coxes Bazar. However, this has been no progress to date due to budgetary constraints and a lack of capacity to deliver this type of training.

7. Quality control

7.1 The need for certification

Farmers complain that hatchery PL are more susceptible to disease compared to wild PL. They argue that spoon fed animals reared under artificial conditions where several types of chemicals are used suffer high mortality rates when released in the grow-out ponds. Early sale of underage PL (PL12 - PL14 instead PL18 PL22) also enhances the mortality rate. Inadequate salinity acclimatisation during packing in the hatchery may also cause mortality. The absence of any labelling on the PL packs leaves farmers ignorant of age, ambient salinity, packing time, number of PL in pack and handling instructions for stocking the PL.

The scope for certifying the processes used in hatcheries and the quality of PL was assessed as part of the Shrimp Action Plan. The approximate costs for establishing a hatchery certification scheme were estimated to be around US$500,000 per annum, excluding the costs for setting up laboratories (US$265,000). Given that the shrimp sector is highly profitable, there should be sufficient liquidity within the sector to finance certification with monies raised through a standing charge (administered by SHAB) on use (Huntington, 2002).

7.2 Current measures being taken to improve PL quality

Until now there has been no quality assurance system for shrimp PL produced under hatchery conditions. Awareness of the need for improved quality control is increasing but there are still no PL quality control laboratories in Bangladesh. The Department of Fisheries Bagda Culture Project has been trying to establish a quality control laboratory but the project suffers from a lack of technical support. There is still no Polymerase Chain Reaction (PCR) facility widely available in Bangladesh for viral detection and screening of diseased brood shrimp and shrimp PL although it was learnt that one private hatchery named Unique Bengal Hatchery has recently installed a PCR device. Department of Fisheries has prepared a TAPP to provide PCR based shrimp seed certification system and submitted recently to the FAO for financial support (more information can be obtained in the Certification Report, Huntington 2002).

8. Brood Shrimp Collection

8.1 Existing practices

Currently, all hatcheries in Bangladesh rely on the collection of broodstock from the wild. There are three fisheries targeting wild stocks of shrimp: fry collection, fishing for juveniles by a large artisanal fleet and shrimp trawling. Marine shrimp trawling is thought to be very destructive for the brood stock in the wild. There are about fifty shrimp trawlers engaged for exclusively harvesting shrimp. The total annual harvest from the Bay of Bengal is dwindling rapidly (Fig 4). It is learnt that the seasonal ban has not been enforced. A Department of Fisheries source informed that the number of marine trawlers is also likely to increase shortly under pressure from Marine Fisheries Association (BMFA).

In Bangladesh, brood shrimps are collected by using trawl nets rather than trammel netting. During trawl netting for shrimp, many other fish are caught along with mud and sediments. The pregnant brood shrimp become are exposed to high levels of stress from compression and abrasions inside the net. When brought to hatcheries most of them die or have premature abortions providing only a small quantity of poor quality eggs.

Bagda shrimp breed almost round the year, but mid-February to mid-March is thought to be the peak period. Considering the fact government banned shrimp trawling from 15th January to 15th February in 1994 but could not enforce at all due to the injunction coming from the High Court in 1995 after the writ petition filed by the BMFA. Similarly, the use of set bag nets with less than 45 mm mesh size at the cod end is also prohibited under Fish Act but this law is not enforced due to a lack of alternative livelihood opportunities for poor fishers.

There are rarely any attempts to keep brood shrimp in quarantine to reduce the chance of disease contamination from brood to offspring. If using the mothers from the trawl fishery, the mother should be quarantined. The operation is simple and short-lived and reduces the stress levels in the mother. The perception is that the brood stock may be gravid and as such hatchery technicians are reluctant to undertake any quarantining. This process is standard in most practising countries.

8.2 Emergence of specialised broodstock supply service

This year there was a shortage of brood shrimp. This year five to six trawlers were engaged under three private companies in collecting brood shrimp from the Bay of Bengal. These trawls are of shorter duration (usually for about an hour) than normal trawls and the harvested broods are stored in aerated containers on board. Hatchery operators collect the brood shrimp by speed boat to transport them to the hatcheries. The supply of brood shrimp was sufficient up to April, but after the last week of April there was a severe shortage of brood shrimp and of those caught, most suffered high mortality immediately after collection. The causes of the fluctuation in brood shrimp abundance are not well understood. The scope for introducing a code of conduct for the collection of broodstock has recently been assessed (more information can be obtained in the Certification Report, Huntington 2002).

9. Distribution system

There is substantial waste in the seed collection and distribution system. High mortality occurs from the time the PL is landed until it reaches the farmer. In addition there are mortalities due to poor pond and water management practices by farmers. It is likely that mortality from landing to harvest is up to 65%.

9.1 Supply chains

The features of PL markets are highly variable, sometimes they are fully controlled by hatchery owners and sometimes they depend on local intermediaries in the Khulna-Satkhira areas. There are local level agents in Khulna, Satkhira and Bagerhat districts who distribute PL transported by air to vendors to sell in remote markets. Usually the hatchery owner sets the price of PL and receives booking requests from the agents. As per the booking, the delivery of PL is made by air cargo to Jessore and the agents arrange for collection and transport to the main markets. The shrimp PL is distributed to the respective farmers depending on prior contracts made with vendors.

9.2 Credit and commission system

The hatcheries provide PL on credit to the agents who take a 10-15% commission to market their PL. The agents sell to the vendors at a price fixed by the hatcheries. The vendors will usually add a mark up of 20-30% to the price for farmers. Again the PL are sold on credit to the vendors who then provide around 50% credit to farmers. The agents receive up to 50% of the full payment from the vendor at the end of the day, the balance is paid at a later date depending on the solvency of the respective traders largely determined by the market price.

The agents do not pay hatchery owners in advance, and try to sell on cash or on credit terms according to the demand of the vendors. Later towards the end of PL business season, the agents often find excuses for not paying the hatchery owners in full. The main excuse used is that they have not recovered the credit from the chain of intermediary traders and ultimately from the shrimp farmers. There have been no moves yet to distribute PL directly to the shrimp farmers from the hatcheries. The intermediate PL agents are thus extracting huge amounts of money with little investment and using it for money lending operations and other businesses.

9.3 Transport of PL

9.3.1 Air transport

Cargo air-planes are used to transport shrimp PL from Coxs Bazar to Jessore airport. Small trucks (3 tons) carry the PL packed in styrofoam boxes to Khulna, Satkhira and Bagerhat from the Jessore airport. It requires 4 to 5 hours to reach these district level markets and an additional 2 to 4 hours to reach the grow out ponds depending on the distance, types of transport used and road condition. From Coxs Bazar Air Port, the cargo plane cannot fly until it is clear daylight, because, the air port has no ground lighting system. If the planes could fly earlier in the morning, PL could be delivered and released in the ponds around two hours earlier to reduce transport mortality.

9.3.2 Road transport

A significant number of Bagda hatchery PL are still carried by road from Coxs Bazar to Khulna-Satkhira areas. There are high mortality rates associated with road transportation of PL because it takes 24-30 hours to reach the main PL markets in Khulna or Satkhira compared to 4 to 5 hours by air. The PL mortality is between 20 to 30% for road transport compared to 5 to 10% for air transport. The road transport cost is about Tk0.03 per PL against Tk0.05 for air transport. Traders use land transport when air transport is not available. As the wild PL commands a higher price than hatchery PL, it is thought some traders mix hatchery PL with wild PL and use road transport in blue plastic barrels to fetch a higher price (packaging of hatchery fry is in distinctive polystyrene boxes). The survival of shrimp PL during transportation is not measured and packages are not normally labelled. Hence, farmers remain uninformed about the source and quality of fry arriving at their pond sites.

10. Co-ordination of the hatchery sector

The private shrimp hatcheries have organised to form the Shrimp Hatchery Association of Bangladesh (SHAB) to safeguard the interests of the shrimp hatcheries. SHAB was successful in controlling PL production to reduce oversupply of the PL markets in Khulna and Satkhira through quotas and benefited from associated price rises. The SHAB quota system operated during 2000 and 2001 but during 2002 the quota system broke down as certain hatcheries exceeded their quotas. The Shrimp Fry Traders Association based in Satkhira was highly critical of the SHAB quota system blaming hatchery operators for creating an artificial PL shortage. The fry traders benefit more when there is no quota system in place. The Department of Fisheries have no control over hatchery production and PL marketing, although the MOFL tried to negotiate between SHAB and Shrimp Fry Traders Association on a number of occasions to break the deadlock that arose when the Shrimp Fry Traders Association refused to trade hatchery PL last year. However, the MOFL and Department of Fisheries are now actively considering introducing a hatchery licensing system to provide institutional support to the newly developed sub-sector of the industry.

11. Role of research organisations

The Fisheries Research Institute plays no role in the shrimp hatchery business. There are numerous problems associated with poor handling of brood shrimps, rearing of PL, stress and shock to PL during transport that could be address through applied research but FRI has been slow to respond. This is despite evidence that scientists around the world have been successful in inducing spawning of freshly captured wild ovigerous female, induced maturation in marine or high saline ponds of reared adults and wild non-ovigerous females and rematuration and conditioning of previously spawn wild adults of penaeid shrimp.

12. Farming practices

12.1 Bagda

The most important costs for farmers are fry, costing just under Tk.15,000/ha, or approximately Tk1000/1,000. The average stocking rate is 1.6 PL/m2 (15,808 PL/ha around 15,000 PL/ha) while many farmers stock around 3 PL per square meter (29,640 PL/ha around 30,000 PL/ha). During 2000, farmers stocked both wild and hatchery PL almost in equal proportion. However, the dependency on wild caught PL increased in 2001 as a result of deliberate attempts by the hatchery owners to keep down production in order to increase the price of their product. The average PL price from wild source was Tk0.86/PL (Tk860/1000PL) while for hatchery source it was Tk0.74/PL (Tk740/1000PL). Wild PL is sold at 12% above the price of hatchery produced PL. The major stocking in Bagerhat and Satkhira takes place in February, whilst in Coxs Bazar, stocking may take place (in the farm side canals) as early as November.

Many farmers start stocking during the winter months from November through to February, stocking PL continuously depending on the availability of PL. Farmers initiate stocking gradually using PL from wild source. After mid February, when the weather becomes warmer, farmers start stocking hatchery PL. These practices are probably resulting in high losses and unnecessary costs due to low survival rates of PL during the cold winter months and stocking of different sized PL throughout the season (from cannibalism). Experience shows that lower stocking results in larger sizes of shrimp

12.2 Golda

Most of farmers stock post larvae in their gher directly at a density of 40 PL/decimal to 120 PL/decimal (10,000 - 30,000 PL/ha) and 8,000 - 20,000 juveniles/ha without rearing them in a nursery system. Again, the cost of PL is high relative to other costs averaging Tk2,200/1,000. Some of the nursed PL are stocked in the trench of the gher or small ditches at densities of 2000-3000 PL/decimal. The farmers also cultivate silver carp, rohu, catla and silver barb with prawn for additional income and their own consumption.

Almost all the farmers stock wild post larvae (PL) of freshwater prawn in their ghers rather than hatchery PL due to an incidence of high mortality of hatchery PL in 1995 associated with imports from Thailand. Because golda PL is often mixed with other wild caught (marine) PL, farmers may attempt to discard the latter. There are however examples of increasing incidences where farmers regard bagda as a useful alternative crop to golda since it allows for early stocking (March/April). Production cycles are quicker (2.5 to 3 months as compared to 7 months for golda) and sales prices are higher, PL costs around one-third the price of golda. There is nevertheless a perception of high risk associated with white spot disease in bagda (Banks 2002).

13. Nursery operations

13.1 Current status

Most of the hatcheries are in Coxes Bazar whilst the majority of the production comes from the south-west. In these farming areas (Khulna, Satkhira and Bagerhat districts), farmers stock PL directly into their ghers resulting in high mortality rates due to poor acclimatisation and predation. Hatchery PL are sold much earlier than wild caught PL so when farmers switch to hatchery PL losses due to predation etc. become more prevalent. Nursing of PL is known to increase survival rates yet there are very few PL nurseries and secondary hatcheries in the shrimp producing areas. Some fry traders are diversifying into nursery production though in reality these centres are really fry buying stations since they only store the fry for 3-4 days before selling on. Extending the nursing time would increase survival further.

In Satkhira, most of the nurseries are situated along the Kaliganj highway and buy their PL from Coxes Bazar. The nurseries vary in structure from concrete tanks to earthen ponds. Some hatchery owners are also starting to diversify their operations and develop nurseries. This operation could also be an alternative livelihood for fry catchers if land, credit and training could be made available to them (see section 14.3). Larger sized PL obtained from this type of nurseries stocked into ghers are likely to achieve 80 90% survival during grow out. In addition farmers need to be encouraged to develop their own nursery areas within their ghers to reduce losses from predation.

13.2 Economics of nurseries

The nurseries in Satkhira are very profitable. One operator was buying 16-17day PL at Tk0.2 per PL direct from the hatcheries and sell 20-22 day PL at Tk0.875 per PL. Mortality rates are around 30%. Hence per batch of 10,000PL he made a profit of Tk4125 (less labour, input and lease costs) in 4 days. This nursery operator had 15 tanks from which he produced 1.5 crore PL over 3 months generating profits of more than Tk600,000 (8600). Another operator in Shamnagor bought at Tk0.8/PL and sold at Tk1.3/PL producing 30,000 PL (3 lack) for every 4 day cycle. Assuming 5 months production per year, 30% mortality rate and subtracting the leasing costs this would have generated profits of Tk375,750 (5200).

13.3 Scope to engage fry catchers in nursery operations

13.3.1 Opportunities for establishing small scale nurseries

Nursing enterprises should be an attractive occupation on account of its quick returns. The small number of existing nursery operations suggest substantial potential for growth. The question is whether it is feasible for the extreme poor involved in fry catching. The key requirements are access to land/water, expertise (technical, marketing and enterprise management), and capital. None of these are presently within reach of most fry catchers and the support of a strong NGO and other key local structures (Union Parisad, trade and market associations) would be vital. The potential for engaging fry collectors in developing an extensive network of small-scale nursery operations diminishes as the sector enlarges. Once others have moved in and become established in nursery operations it will be difficult for fry catchers to compete. An early intervention is required to enable the operators to establish links with farmers and traders.

The main shrimp producing areas are in the south west and this would be the most appropriate place to establish a network of nurseries with fry catchers particularly considering Department of Fisheries and MOFL are considering introducing a complete ban on fry catching in the Sunderbahn area. The NGO network in south west Bangladesh is extensive and easily capable of working at the grass roots level with fry catchers. A history of confrontations with the authorities over water management (in water logged areas) and rights abuses within the polders has resulted in the emergence of a strong civil rights movement, athough not co-ordinated to any great extent. A number of NGOs are well equipped to negotiate resource rights on behalf of fry catchers to ensure they get access to areas for nursery development. They would however, require some capacity building (in adaptive technology and financial management) to enable them to facilitate low risk strategies with fry catchers on nursing and marketing fry to farmers.

13.3.2 Past experience

A number of cage nursery culture trials with both tiger shrimp (Bagda) and giant freshwater prawn (Golda) were carried out with fry catchers in Bangladesh by the Bay of Bengal Programme in 1994. The aim was for fry catchers to increase their earnings through sales of nursed post larvae and juveniles and to increase the survival of PL in the distribution system. The report concluded that it was unlikely that tiger shrimp fry nursing could be made profitable under the prevailing market conditions at the time although a mix of wild caught and hatchery reared Golda would be profitable.

The work took place in Chokoria and was supported by an NGO (UBINIG) which implemented the technical trials and organised the participating groups over three years. The cage nurseries were set in the Matamuhari River adjacent to the fry collectors village. Initially, the trials suffered from a lack of expertise in cage culture. The community was engaged from the very beginning in the trials, this had the advantage that it engendered community ownership but it also exposed the beneficiaries to considerable risks associated with the undeveloped technology. The technology gradually improved over the three years but the trials illustrated the vulnerability of carrying out aquatic based small enterprises in the coastal zone to, natural calamities (a severe cyclone destroyed the cages in one year), and fluctuations in market conditions (price varies according to wild supply from year to year). The internal rate of return was shown to be highly sensitive to variations in selling price and mortality BOBP (1994).

There could be a number of reasons why the Bagda trials were unsuccessful and why trials undertaken today could be more successful. Firstly, the cage technology was undeveloped at that time, cage culture technology has considerably improved since the trials in 1994. CAGES project successfully developed and introduced improved technology with landless groups throughout Bangladesh from 1996-2001. The second issue is one of site selection, the trial took place in a river and cages were exposed to strong currents, experience from CAGES project indicates the technology is more successful in sheltered water bodies such as canals and beels. Thirdly, the supply of hatchery fry was limited at this time implying a reliance on wild fry. Finally, the apparent failure of the Bagda trials was due to the low price for nursed fry, Tk27-50 per 100 fry. Nursing bagda fry under the prevailing market conditions at this time simply wasnt viable BOBP (1994).

Rearing of freshwater prawn fry took place from June through to October during the main monsoon season (whereas Bagda fry were reared from February to April). As the technology developed, production increased over the three years from 3000 fry in 1990 to 16,500 fry in 1992 and was most successful for wild fry (80% survival) although stocking hatchery fry extends the season by three months as hatchery fry were available from early May and June. However, survival of hatchery fry was quite low (54%) due to overstocking and inadequate sorting and also probably because the hatchery fry were stocked at an earlier stage in the life cycle compared to the wild fry BOBP (1994).

The marketing of fry was affected by the indebtedness of the participants to the dadonars. Fry collectors were required to sell fry at sub market prices to their creditors. According to fry collectors interviewed in 2002, dadon is still a major problem and is likely to remain a major obstacle in enabling fry collectors to transition to nursing operations. Another observation was that although women were involved in preparing feed and mending happas, they were not involved in decision making and did not participate in the group meetings despite several attempts by UBINIG to overcome these social pressures BOBP (1994).

The results from these trials indicate that the potential is greatest for Golda nurseries. Golda currently fetches a higher price and can be carried out in sheltered freshwater areas (and hence cages will not be subjected to erosion). A key requirement is for strong organisational support from a competent NGO. Moreover, given the inherent poverty within fry collecting communities the support should assume a holistic approach which encompasses all the basic needs of the community. A good example of this approach is the ongoing Caritas project which targets small scale shrimp producers under the Sustainable Environmental Management Programme (SEMP) in Satkhira. This approach allows for issues such as the lack of basic sanitation, shelter, education and access to clean drinking water to be addressed in conjunction with income generating activities. This project could be a good entry point for any future trials with fry collectors and nursery operations since it is based in the main shrimp producing area and the NGO Caritas (and other NGOs in the area) has a high level of competence in aquaculture related activities. The CAGES forum also has a presence in this area and could provide technical oversight of the activities.

Nursery rearing of tiger shrimp was also tried in India (West Bengal) in floating cages. The technology was successful and profitable with the main determining factor for profit being price margin between the selling and buying price for.fry. Maintaining survival rates of 80% was also considered important. The profits were not sensitive to investment cost suggesting the technology could be viable for small scale operators. The study concluded that future expansion of cage culture should be directed to areas where salinity conditions offer the longest possible season. The study also noted that the poorest fry collectors were the most persistent in continuing the culture. According to the report, one of the success factors was the investment of time in group formation and strengthening and soliciting support from the local elites. The optimum marketing lot was 50,000 PL regarded as a sufficient amount to allow bargaining for a fair price. Group selling is therefore necessary and linked to the need for strong cohesiveness within groups. Proximity to a buying agent of around 1-2 hours was considered adequate (BOBP 1993).

14. Conclusions and recommendations

1. The development of new Bagda hatcheries (45 hatcheries) and increasing production capacities by existing hatcheries in the Coxs Bazar region have caused the overall production capacity for Bagda PL to exceed demand. The hatcheries responded to this overcapacity by introducing quotas but a lack of unity within the industry led to the breakdown of the quota system this year. The solution lies in rationalisation of the hatchery sector and better co-ordination and dissemination of market information. Moreover, excess capacity should be diverted into Golda production where possible using the existing expertise within Department of Fisheries.

2. There is an acute shortage of Golda PL due expanding culture activities and more than 90% of the demand derives from wild sources. Out of 35 hatcheries producing Golda only 15 were operating and on average each hatchery was operating at only 13% of its capacity. The cost of Golda PL this year was three times higher than for 2001 and three times higher than Bagda PL. Hatchery PL is only marginally cheaper than wild PL.

3. The hatcheries compete with supplies of wild fry for a share of the market. The wild fry market generates higher sales than the hatchery supply due to the higher unit price resulting from the farmers continuing preference for wild fry. Between 1500-2000 million PL valued at Tk1742 million are still collected from the wild. The sale value of hatchery PL is estimated to be Tk1006 million.

4. A number of small hatcheries have been established within the shrimp producing areas in Khulna, Satkhira and Bagerhat districts with production capacities of around 2-5 million PL per year. Higher survival rates are associated with these PL which are reared under local conditions and subject to reduced transport times. These hatcheries also benefit from direct links to farmers although they have to bring brood shrimps by Sea Plane and saline water from deep sea by barge.

5. The production costs for hatcheries are high ranging from Tk100-270 per 1000 PL due to the use of foreign technicians, high feed costs and the use of antibiotics. Salaries for foreign technicians are linked to production rather than profits which encourages the use of high cost inputs to maximise production.

6. A lack of quality control and poor management practices constrains the sector. The disease problems in the shrimp industry began with imported PL. Since then shrimp farmers regard hatchery produced PL as the main source of disease infection in their farms. The quality assurance of PL through a certification scheme is urgently needed.

7. Brood shrimp collected from the wild and the resulting PL produced from hatcheries are not screened for disease. Procedures for ensuring the quarantine of brood shrimps and screening for disease in PL and brood shrimp (using PCR techniques) are urgently needed. Improved methods for harvesting brood shrimp from the sea using trammel net instead of trawl nets are required to increase survival rates and reduce the impact of trawl nets on breeding grounds. Existing methods of harvest should be phased out. Improved post harvest handling and quarantine procedures are also required for brood shrimp used by the hatcheries. Moreover, the wild brood shrimps should be checked for disease using PCR facilities before using as brood.

8. Currently the only source of shrimp broodstock for hatcheries is from the wild. Indiscriminate trawling for shrimp is likely to threaten stocks although a lack of survey data precludes a more accurate stock assessment. Enforcement of the current ban on shrimp trawling from 15th January to 15th February is considered to be important to conserve wild stocks and ensure the supply of broodstock. The legislation is currently in abeyance following an injunction from the High Court in 1995 after a writ petition was filed by the BMFA. Wild stocks are also under pressure from the collection of wild fry and the use of set bag nets (with mesh sizes smaller than 45 mm mesh size at the cod end prohibited under Fish Act) in the juvenile fishery.

9. Hatchery fry is usually flown from Coxs Bazar to Jessore and then transported by truck to the main shrimp producing areas. The transport costs vary from Tk 30 per 1000 PL for road transport to Tk 50 per 1000 PL for air freight. Higher mortalities occur during road transport (20-30%) compared to air (5-10%) but some hatcheries send PL by road in mixed batches with wild PL to secure higher prices.

10. There are too many intermediaries in the fry supply chain (agents receive 10-15% commission and intermediary vendors mark up 20-30% before selling to farmers). Intermediaries in the fry marketing chain extract considerable amounts of revenue from the supply chain for money lending operations. A reduction in the number of intermediaries would facilitate greater linkages and contact between hatcheries and farmers and ultimately lower prices at the farm-gate. The smaller hatcheries, in Coxs Bazar and Khulna and a few of the larger hatcheries market fry directly to the farmers. The use of field agents in the farming zones and the establishment of transit nurseries by hatcheries are positive developments. These agents are able to determine the demand for PL from farmers well ahead of time and adjust production to match demand.

11. There is weak governance within the hatchery sector. The absence of tractability in particular encourages bad practices such as lack of disease prevention and control, poor care of broodstock, sale of underage fry, poor acclimation and mixed packaging with wild fry. Shrimp farmers lack the necessary information on the condition of PL at the point of sale due to an absence of labelling. The PL bags should be labelled with the batch number, number, age, time of packing, water salinity, pH, hardness etc. It should also contain clear instructions about handling and acclimation procedures for the range of salinities and temperatures found in farmers ponds throughout the producing zones in Bangladesh. The expected survival rate under standard conditions should also be stated and hatcheries should encourage buyers to provide feedback to the company about the survival of PL following stocking.

12. Given the inherent potential of the shrimp industry in Bangladesh, very little research work has so far been carried out. The hatchery sector needs applied research on techniques for shrimp breeding and rearing of PL up to pre-grow out stage. The development of farm raised brood and handling of wild brood shrimp is critical to the seed supply system. The BFRI, research organisations and universities need to be more closely involved in addressing the research needs of the industry.

13. Extension support for farmers remains weak due to the limited number of extension workers in the field. Extension of Good Management Practices on selecting and testing for good PL, PL acclimation, stocking density, post stocking monitoring of growth and survival are required to increase shrimp production in extensive systems.

14. There is good potential to establish PL nurseries in the shrimp producing areas especially Khulna, Satkhira and Bagerhat districts. PL reared in nurseries have higher survival rates and increase production efficiencies for farmers. Nurseries can be operated cheaply rearing PL under ambient water conditions with natural feed. Existing nurseries in Satkhira are highly profitable, low risk ventures. The key requirements are access to land/water and markets, expertise (technical, marketing and enterprise management), and capital along with organisational support. High levels of competence from NGOs would be required to successfully chart the route away from fry collectors dependence on the dadonars and soliciting support from the local elites. In addition, farmers need to be encouraged to develop their own nursery areas within their ghers to reduce losses from predation.

15. The potential for engaging fry collectors in developing an extensive network of small-scale nursery operations diminishes as the sector enlarges. Once others have moved in and become established in nursery operations it will be difficult for fry catchers to compete. An early intervention is required to enable the operators to establish links with farmers and traders.

16. The main shrimp producing areas are in the south west would be the most appropriate location to begin establishing a network of nurseries with fry catchers particularly considering Department of Fisheries and MOFL are considering introducing a complete ban on fry catching in the Sunderbahn area.

17. Previous trials by the Bay of Bengal Programme illustrate the vulnerability of carrying out aquatic based small enterprises in the coastal zone to, natural calamities and fluctuations in market conditions. The internal rate of return was shown to be most sensitive to variations in selling and buying price. Maintaining survival rates of 80% is also considered important highlighting the need for robust technology. The profits were not sensitive to investment cost suggesting the technology could be viable for small scale operators.

18. The results from previous trials suggest that the potential is greatest for Golda nurseries. Golda currently fetches a higher price and can be carried out in sheltered freshwater areas (and hence cages will not be subjected to erosion). The most successful form of support would assume a holistic approach that addressed all the basic needs of the community: basic sanitation, shelter, education and access to clean drinking water, in conjunction with support for alternative income generating activities. Optimum marketing lots will also need to be determined to allow bargaining for a fair price. Group selling and access to buying agents are therefore necessary and linked to the need for strong cohesiveness within groups.

15. References

Banks (2002). Brackish and marine water aquaculture. Report from the Fisheries Sector Review. DFID.

BOBP (1994) Cage nursery rearing of shrimp and prawn fry in Bangladesh. BOBP/WP/92

BOBP (1993) Nursery rearing of tiger shrimp post larvae in West Bengal, India. BOBP/WP/92

Huntington (2002). Scoping study for the certification of shrimp aquaculture in Bangladesh. Report from the Shrimp Action Plan. Department of Fisheries/DFID.

Frankenberger (2002). A livelihood analysis of shrimp fry collectors in Bangladesh: future prospects in relation to wild fry collection. Report from the Shrimp Action Plan. Department of Fisheries/DFID.

Table 1: Status of hatcheries producing Bagda PL in Bangladesh

Serial Number Name of HatcheryLocationEstd. LRT capacity

in tonPL Production capacity (105)PL Production in 1999 (105)PL Production in 2000 (105)SHAB quota for 2001Actual Production 2001(105)Technician involved in 2001

1BMC Hatchery Ltd.Teknaf19991480800na60057,460,554875Indian

2Moon Star Hatchery Ltd.Teknaf200011202000na116543,483,663563Indian

3Aquaventure Hatchery Ltd.Teknaf199988060009534,165,735440Phillipino

4Sea King (Bashundhara) HatcheryTeknaf20004800600003100186,358,5542528Indian

5Beach Hatchery Ltd.Teknaf19962646500013104252.75102,730,1532318Indian

6A & I Bagda Hatchery Ltd.Teknaf1998700500050027,177,289300Phillipino

7Al-Monsur Hatchery Ltd.Teknaf20008752000na35033,971,611726Phillipino

8Sea King Hatchery Ltd.Ukhia200010701200na45041,542,428600Phillipino/Local

9Unique Bangal Hatchery Ltd.Ukhia2000427500na016,578,146100Inoperative*

10Sea Gold Hatchery Ltd.Ukhia2000700500na027,177,289400Taiwan

11Diamond Hatchery Ltd.Ukhia2000864500na28033,544,540450Local

12Inter Export Hatchery Ltd.Ukhia2000760500na151.529,506,7711000Indian

13Royal Hatchery Ltd.Ukhia19995400200030095090,461,5481200Local/Indian

14Borac Hatchery Ltd.Ukhia2000873500nana33,893,963800Indian

15Sorex Hatchery Ltd.Ukhia20001051300na20040,804,759500Local

16S Alam Hatchery Ltd.Ukhia200016421000na100063,750,1551400Indian

17Mostafa Hatchery Ltd.Ukhia200074002600na40090,112,1261200Phillipino

18Radient Hatchery Ltd.Ukhia1996142410007040055,286,371400Thai

19White Gold Hatchery Ltd.Ukhia199817006005220023,916,015500Thai

20Bengal Bay Hatchery Ltd.Ukhia1998726280096040028,186,731500Local

21Marrygold Hatchery Ltd.Ukhia19996277000024,343,086700Indian/Local

22Sea Queen Hatchery Ltd.Ukhia19962587006008010,016,7730N/A

23Gold Coast Hatchery Ltd.Sadar1999768100022548529,817,369500Taiwan

24Unique Tiger Hatchery Ltd.Sadar20005441800na021,120,636500Local

25Satkhira Hatchery Ltd.Sadar199890910007058535,291,651500Local

26Silvia Hatchery Ltd.Sadar20009352000na100036,301,094600Local

27Sonar Gaon Hatchery Ltd.Sadar19953250360018301295126,180,2712500Indian

28Golden Shrimp Hatchery Ltd.Sadar1996447100018032517,354,640600Local

29Pioneer Shrimp Hatchery Ltd.Sadar19918885002002534,476,333500Inoperative*

30Niribili Hatchery Ltd.Sadar1993271512007302670105,409,0582300Indian

31Prime Shrimp Hatchery Ltd.Sadar20007952000na78030,865,6351300Indian

32Thai Bangla Hatchery Ltd.Sadar199959960020059023,255,995500Thai

33United Hatchery Ltd.Sadar200010171500na039,484,719900Local

34Bally Hatchery Ltd.Sadar19971478200060068557,382,9051100Indian

35Sea Gull Hatchery Ltd.Sadar199830480025440511,802,709500Local/Indian

36Flora Hatchery Ltd.Sadar200088120000180034,204,5601000Inoperative*

37Shimizoo Hatchery Ltd.Sadar199511971800775115546,473,1641100Local

38Modern Hatchery Ltd.Sadar19943377450044003900131,111,0052700Indian

39ADB HatcherySadar19841405015Local

40Mausumi Hatchery Ltd.Chittagong2000??????Indian/Local

41Gulf Hatchery Ltd.Dacop1999??????Indian/Local

42Red Star Hatchery Ltd.Dacop1999??????Taiwan

43Gazi Hatchery Ltd.Dacop2000??????Thai

44Blue Star HatcheryPaikgacha2001??????Thai

45Chingri Bangla Hatchery Ltd.Satkhira1998??????Thai

Total57667596501275630274.251,875,000,00034615

* Remained inoperative in 2001 and quota fulfilled by other operative hathcery

Source: District Fisheries Office, Cox's Bazar; Shrimp Hatchery Association of Bangladesh (SHAB)

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Trammel nets when correctly operated have been shown to be less stressful for brood shrimp

MOFL Report on the site selection of Bagda shrimp Hatchery zones and Semi intensive shrimp farming areas, 1994

Department of Fisheries prepared TAPP for FAO on April 2002: Developing National Seed Certification System.

Abedin, op cit

Shah Ahmed Masud, Prawn Hatchery in Charge, BRAC, Barisal

CARE: Costs and benefits of Golda production, 2000

The interest rate is 7% for export oriented industries while it 10% for non-export types of industries.

Investment cost of Khulna region shrimp hatcheries were reported about Tk5 million to Tk10 million

Fecundity is the number of eggss produced per brood fish/shrimp

Golda PL require about 38 to 45 days to become marketable size

Golda PL is sold in smaller quantities as the farm size is smaller

There are 4/5 Department of Fisheries workers, 2/3 BRAC and DANIDA workers with proven experience in Golda hatchery

Transported by boat, rickshaw, van, bus, tempos and bicycles. Metallic containers e.g. aluminium handles (aluminium container with rope handle), galvanised iron drums, are used for transportation by road. Boats are used for long distances. Containers are placed on open deck of the transport and exposed to heat thus creating large-scale stress on the animals. The holding water is often changed with canal / pond water without any consideration to shrimps physio-chemical requirements. Large-scale mortalities result. Use of oxygen during transport is uncommon. (95 % transported without artificial quantum) (Karim, 1999). Only hatchery produced larvae are transported with oxygen

The estimated costs for a PCR lab would be in the region of. Tk1 M, together with 3 M for the equipment (autoclaves, refrigeration) (Banks 2002).

There is official rule not to harvest shrimp during mid January to mid February by shrimp trawlers but the BMFA has lodged court case against the rule.

Department of Fisheries Coxs Bazar source informed that 1710 million and 400 million PL had been transported in 2002 by air and by road respectively.

The DG, Department of Fisheries has placed a set of recommendations including hatchery registration and licensing system to the MOFL on August 02.

FFP, 1998

The type of disease was fairly isolated. Specific diseases applicable to golda include: spongy body, black gill disease, antenna rot, tail rot, de-shaped rostrum, brown spot and de-shape of carapace. Most diseases are curable by increased nutrition, the application of antibiotics and liming. However some can only be eradicated by cleaning the ponds entirely (antenna rot, tail rot, de-shape of carapace)

Test results show that the mean weight of bagda was 27.9g ranging 47.3g to 17.8g The mean production was 112.2 kg / ha

These are really buying stations rather than nurseries.

One nursery had 14 earthen ponds (15 by 12 ft) employing 6 skilled staff and spending Tk1.5 lack in daily labour (at Tk60 per day). Now that the nursery is fully constructed these daily labour costs will reduce by 75% next year. Another 6 pond nursery, started in 1999, was operated by its two owners and 3 hired labourers. This nusrey supplied 192 farmers in the surrounding area in Shamnagor and Kaliganj areas.

Operators do not apply fertiliser or feed.

Some at 8 by 12ft and 6ft deep and some at 10 by 15ft and 6ft deep.

Less labour (this nursery employed 12 people) and lease costs.

In Shymnagor this nursery had leased land at Tk3000 per bigha paying Tk18,000 annually for their 6 bigha nursery.

Trammel nets when correctly operated have been shown to be less stressful for brood shrimp

PAGE

_1095414083.xlsChart2

0.1

0.6

1.3

3

3.5

Shrimp PL production (in billion)

Sheet1

Performance status of the Shrimp Hatcheries in Cox's Bazar

Serial NumberName of HatcheryLocationEstablished.LRT capacity in tonPL Production capacity (105)PL Production in 1999 (105)PL Production in 2000 (105)SHAB quota for 2001Actual Production 2001(105)Technician involved in 2001

1BMC Hatchery Ltd.Teknaf19991480800na60057,460,554875Indian45968443

2Moon Star Hatchery Ltd.Teknaf200011202000na116543,483,663563Indian34786930

3Aquaventure Hatchery Ltd.Teknaf199988060009534,165,735440Phillipino27332588

4Sea King (Bashundhara) Hatchery Ltd.Teknaf20004800600003100186,358,5542528Indian149086843

5Beach Hatchery Ltd.Teknaf19962646500013104252.75102,730,1532318Indian82184122

6A & I Bagda Hatchery Ltd.Teknaf1998700500050027,177,289300Phillipino21741831

7Al-Monsur Hatchery Ltd.Teknaf20008752000na35033,971,611726Phillipino27177289

8Sea King Hatchery Ltd.Ukhia200010701200na45041,542,428600Phillipino/Local33233942

9Unique Bangal Hatchery Ltd.Ukhia2000427500na016,578,146100Inoperative*13262517

10Sea Gold Hatchery Ltd.Ukhia2000700500na027,177,289400Taiwan21741831

11Diamond Hatchery Ltd.Ukhia2000864?na28033,544,540450Local26835632

12Inter Export Hatchery Ltd.Ukhia2000760?na151.529,506,7711000Indian23605417

13Royal Hatchery Ltd.Ukhia19992330120030095090,461,5481200Local/Indian72369238

14Borac Hatchery Ltd.Ukhia2000873?nana33,893,963800Indian27115170

15Sorex Hatchery Ltd.Ukhia20001051300na20040,804,759500Local32643807

16S Alam Hatchery Ltd.Ukhia200016421000na100063,750,1551400Indian51000124

17Mostafa Hatchery Ltd.Ukhia200023211000na40090,112,1261200Phillipino72089701

18Radient Hatchery Ltd.Ukhia1996142410007040055,286,371400Thai44229097

19White Gold Hatchery Ltd.Ukhia19986163005220023,916,015500Thai19132812

20Bengal Bay Hatchery Ltd.Ukhia1998726280096040028,186,731500Local22549385

21Marrygold Hatchery Ltd.Ukhia19996277000024,343,086700Indian/Local19474469

22Sea Queen Hatchery Ltd.Ukhia19962587006008010,016,7730N/A8013418

23Gold Coast Hatchery Ltd.Sadar1999768100022548529,817,369500Taiwan23853895

24Unique Tiger Hatchery Ltd.Sadar20005441800na021,120,636500Local16896509

25Satkhira Hatchery Ltd.Sadar199890910007058535,291,651500Local28233321

26Silvia Hatchery Ltd.Sadar20009352000na100036,301,094600Local29040875

27Sonar Gaon Hatchery Ltd.Sadar19953250360018301295126,180,2712500Indian100944217

28Golden Shrimp Hatchery Ltd.Sadar1996447100018032517,354,640600Local13883712

29Pioneer Shrimp Hatchery Ltd.Sadar19918885002002534,476,333500Inoperative*27581066

30Niribili Hatchery Ltd.Sadar1993271512007302670105,409,0582300Indian84327246

31Prime Shrimp Hatchery Ltd.Sadar20007952000na78030,865,6351300Indian24692508

32Thai Bangla Hatchery Ltd.Sadar199959960020059023,255,995500Thai18604796

33United Hatchery Ltd.Sadar200010171500na039,484,719900Local31587775

34Bally Hatchery Ltd.Sadar19971478200060068557,382,9051100Indian45906324

35Sea Gull Hatchery Ltd.Sadar199830480025440511,802,709500Local/Indian9442167

36Flora Hatchery Ltd.Sadar200088120000180034,204,5601000Inoperative*27363648

37Shimizoo Hatchery Ltd.Sadar199511971800775115546,473,1641100Local37178531

38Modern Hatchery Ltd.Sadar19943377450044003900131,111,0052700Indian104888804

39Mausumi Hatchery Ltd.Chittagong2000??????Indian/Local?

40Gulf Hatchery Ltd.Khulna1999??????Indian/Local?

41Red Star Hatchery Ltd.Khulna1999??????Chinese?

42Koia Hatchery Ltd.Khulna2000??????Inoperative?

43Chingri Bangla Hatchery Ltd.Satkhira1998??????Thai?

44Gazi Hatchery Ltd.Satkhira2000??????Taiwan?

Total48294554001275630274.251,875,000,000346001500000000

* Remained inoperative in 2001 and quota fulfilled by other operative hathcery

Source: District Fisheries Office, Cox's Bazar; Shrimp Hatchery Association of Bangladesh (SHAB)

Sheet2

Up to 199710

19986

19998

200020

Up to 19970.1

19980.6

19991.3

20003

20013.5

Sheet2

0

0

0

0

No of hatcheries

Sheet3

0

0

0

0

0

Shrimp PL production (in billion)

_1095413660.xlsChart5

1010

616

824

2044

number established

cumulative numbers

Number of hatcheries

Sheet1

Performance status of the Shrimp Hatcheries in Cox's Bazar

Serial NumberName of HatcheryLocationEstablished.LRT capacity in tonPL Production capacity (105)PL Production in 1999 (105)PL Production in 2000 (105)SHAB quota for 2001Actual Production 2001(105)Technician involved in 2001

1BMC Hatchery Ltd.Teknaf19991480800na60057,460,554875Indian45968443

2Moon Star Hatchery Ltd.Teknaf200011202000na116543,483,663563Indian34786930

3Aquaventure Hatchery Ltd.Teknaf199988060009534,165,735440Phillipino27332588

4Sea King (Bashundhara) Hatchery Ltd.Teknaf20004800600003100186,358,5542528Indian149086843

5Beach Hatchery Ltd.Teknaf19962646500013104252.75102,730,1532318Indian82184122

6A & I Bagda Hatchery Ltd.Teknaf1998700500050027,177,289300Phillipino21741831

7Al-Monsur Hatchery Ltd.Teknaf20008752000na35033,971,611726Phillipino27177289

8Sea King Hatchery Ltd.Ukhia200010701200na45041,542,428600Phillipino/Local33233942

9Unique Bangal Hatchery Ltd.Ukhia2000427500na016,578,146100Inoperative*13262517

10Sea Gold Hatchery Ltd.Ukhia2000700500na027,177,289400Taiwan21741831

11Diamond Hatchery Ltd.Ukhia2000864?na28033,544,540450Local26835632

12Inter Export Hatchery Ltd.Ukhia2000760?na151.529,506,7711000Indian23605417

13Royal Hatchery Ltd.Ukhia19992330120030095090,461,5481200Local/Indian72369238

14Borac Hatchery Ltd.Ukhia2000873?nana33,893,963800Indian27115170

15Sorex Hatchery Ltd.Ukhia20001051300na20040,804,759500Local32643807

16S Alam Hatchery Ltd.Ukhia200016421000na100063,750,1551400Indian51000124

17Mostafa Hatchery Ltd.Ukhia200023211000na40090,112,1261200Phillipino72089701

18Radient Hatchery Ltd.Ukhia1996142410007040055,286,371400Thai44229097

19White Gold Hatchery Ltd.Ukhia19986163005220023,916,015500Thai19132812

20Bengal Bay Hatchery Ltd.Ukhia1998726280096040028,186,731500Local22549385

21Marrygold Hatchery Ltd.Ukhia19996277000024,343,086700Indian/Local19474469

22Sea Queen Hatchery Ltd.Ukhia19962587006008010,016,7730N/A8013418

23Gold Coast Hatchery Ltd.Sadar1999768100022548529,817,369500Taiwan23853895

24Unique Tiger Hatchery Ltd.Sadar20005441800na021,120,636500Local16896509

25Satkhira Hatchery Ltd.Sadar199890910007058535,291,651500Local28233321

26Silvia Hatchery Ltd.Sadar20009352000na100036,301,094600Local29040875

27Sonar Gaon Hatchery Ltd.Sadar19953250360018301295126,180,2712500Indian100944217

28Golden Shrimp Hatchery Ltd.Sadar1996447100018032517,354,640600Local13883712

29Pioneer Shrimp Hatchery Ltd.Sadar19918885002002534,476,333500Inoperative*27581066

30Niribili Hatchery Ltd.Sadar1993271512007302670105,409,0582300Indian84327246

31Prime Shrimp Hatchery Ltd.Sadar20007952000na78030,865,6351300Indian24692508

32Thai Bangla Hatchery Ltd.Sadar199959960020059023,255,995500Thai18604796

33United Hatchery Ltd.Sadar200010171500na039,484,719900Local31587775

34Bally Hatchery Ltd.Sadar19971478200060068557,382,9051100Indian45906324

35Sea Gull Hatchery Ltd.Sadar199830480025440511,802,709500Local/Indian9442167

36Flora Hatchery Ltd.Sadar200088120000180034,204,5601000Inoperative*27363648

37Shimizoo Hatchery Ltd.Sadar199511971800775115546,473,1641100Local37178531

38Modern Hatchery Ltd.Sadar19943377450044003900131,111,0052700Indian104888804

39Mausumi Hatchery Ltd.Chittagong2000??????Indian/Local?

40Gulf Hatchery Ltd.Khulna1999??????Indian/Local?

41Red Star Hatchery Ltd.Khulna1999??????Chinese?

42Koia Hatchery Ltd.Khulna2000??????Inoperative?

43Chingri Bangla Hatchery Ltd.Satkhira1998??????Thai?

44Gazi Hatchery Ltd.Satkhira2000??????Taiwan?

Total48294554001275630274.251,875,000,000346001500000000

* Remained inoperative in 2001 and quota fulfilled by other operative hathcery

Source: District Fisheries Office, Cox's Bazar; Shrimp Hatchery Association of Bangladesh (SHAB)

Sheet2

Up to 19971010

1998616

1999824

20002044

Up to 19970.1

19980.6

19991.3

20003

20013.5

Local9

Indian17

Phillipino5

Thai4

Taiwan3

Chainese1

Sheet2

0

0

0

0

No of hatcheries

Sheet3

0

0

0

0

0

Shrimp PL production (in billion)

0

0

0

0

0

0

No of hatcheries

00

00

00

00

number established

cumulative numbers

Number of hatcheries