Shrimp Industry:: An Overview of Bangladesh

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Industry Background

“Shrimp cultivation has a long and largely quiet history in Bangladesh, but during its rapid growth over the past two decades, in response to expanding global demand, it has acquired a highly contested status.”

Shrimp is a very important resource that supports a large industry in Bangladesh. Shrimp is the second most important source of export accounting for a yearly earning of over $US 300 million. Of all the exportable agro-based primary commodities, shrimp is by far the most important. It alone contributes more than 70% to the total export earning from all the agro-based products, including tea, raw jute, vegetables, fruit, etc.The shrimp industry also provides direct employment to over 600,000 people who in turn support well over 3.5 million dependents. This sector also supports large varieties of local level cottage industries (made out of the home) such as bamboo baskets, mats, traps, nets, rickshaw vans, tempos (tri-wheelers), boats, etc. Despite all these positive points, there are views that the shrimp industry is not without vices. While its supporters see it as a valuable way of generating foreign exchange, those against it point to the environmental damage, social disruption, and rising domestic inequalities that result from trying to meet the growing luxury demands of distant Western consumers. The debate has become very polarized between those who support shrimp farming, and those who are opposed to it.

The purpose of this paper is to highlight some of the key issues that will ultimately determine whether it is indeed possible for Bangladesh to meet the international market, environmental, and social challenges of shrimp cultivation. The consequences are huge: can the sector thrive and continue to benefit the hundreds of thousands of people who rely on this multi-million dollar industry for their living?

Although it is a controversial subject, shrimp farming is having a positive impact on the livelihoods of many people in Bangladesh, especially the poorer “small-holder” farmers who may simply have a small pond where they cultivate shrimp to sell, but which can increase their income significantly. It offers a reliable source of revenue that is often more profitable than other kinds of farming, or other non-farming employment. The objective of this paper is not to find a resolution to the conflict, but to show that there is a lot to be gained by looking closely at the human and economic consequences of the expansion of this industry and its future in Bangladesh.

© Syed Belal Reza :: All Rights Reserved

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Shrimp farming in Bangladesh is a relatively new industry, though an important one for the country’s economy. The rapid expansion of shrimp aquaculture throughout the southwestern coastal region of Bangladesh has led to both significant economic benefits and serious social and environmental impacts, thereby creating a hot debate over the pros and cons of developing an industry that has a great potential for growth, though not without certain problems. If it is going to survive, the industry will have to embrace changing trends in the global market with a strategy to meet a growing world demand for high quality shrimp, produced in an environmentally and socially sound way. This will necessitate some form of transparent and recognized certification program.

Early Initiatives

In the early seventies, Bangladesh entered the global export market for shrimp.This aquatic animal, which was locally much cheaper than any other seafood, suddenly became a very high priced commodity. Since then, much attention has been focused on increasing shrimp production. Initially, the public sector efforts concentrated on exploitation of the shrimp from the sea by employing trawlers which were not only costly to buy and import, but also expensive to operate. The increasing demand and steadily rising prices of shrimp encouraged its cultivation in the coastal belt of the country. See Figure 1 for a map of the shrimp farming districts in Bangladesh.

Once it got started with some success, the practices expanded very quickly, and with cheap land and cheap labor, shrimp farming expanded phenomenally. By 1982-83, the shrimp farming area occupied nearly 52,000 hectares, and by 1986 had spread to over 115,000 hectares. Currently, an area of an estimated 160,000 Ha is under shrimp farming, although actual numbers may differ somewhat. Of the total shrimp farming area, some 30,000 ha is fresh water shrimp farming while the rest is devoted to marine shrimp farming. The main districts in which marine shrimp are being farmed include Satkhira, Khulna, Bagerhat and Cox’s Bazar. The main Fresh water shrimp farming districts are Khulna, Bagerhat, Jessore, Narail, Gopalganj, Pirojpur and Noakhali. More or less 80% of the shrimp farming areas are in the country’s southwestern region while the rest are in the southeastern part.

As previously mentioned, shrimp is the second most important export item toBangladesh. The cultured (cultivated) shrimp constitutes more than 95% of the total shrimp export. The main cultured species is the tiger shrimp (locally known as bagda shrimp) of which the technical name is Penaeus monodon. It is a marine shrimp and is


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cultivated in brackish water. The next most important export is the fresh water species, locally called galda, technically known as Macrobrachium rosenbergii.Large-scale shrimp cultivation is a relatively new phenomenon to the country.Coastal shrimp aquaculture in Bangladesh was greatly aided by the country’s unique natural features, including large areas of low-lying tidal land, a favorable environment, and a high market demand and economic returns. Table 2 refers to exports of shrimp from the major exporting countries in the world. Notice thatBangladesh is ranked eighth by value.


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Shrimp as an agro based exporting commodity:

Shrimp farming: A brief history

Shrimp farming itself is not a new phenomenon in the southwestern region ofBangladesh. Farmers used to construct shallow, seasonal enclosures on the banks of rivers and canals, to grow brackish water finfish and bagda shrimp as an extra source of income. They also cultivated fresh water galda prawns.

In the 1960s, the government felt the need to enhance the country’s domestic rice production to feed its rapidly increasing population. Fortunately, this coincided with the development of High Yielding Varieties (HYV) of grain. To expand the area of cultivable land for rice productivity, the tidal flood plains of the southwestern region were then converted into permanent fresh water areas by building high embankments to create polders as well as by closing many canals, especially in the Khulna region. Eventually, due to large quantities of silt deposits in the riverbeds and to the embankments blocking the flood plains, water logging occurred and then spread from the north to the south, becoming a permanent feature of the region. With no agricultural alternative, a few farmers experimented with “small-scale shrimp cultivation in their water-logged plots.” Their success encouraged others and the practice [began to] spread gradually.


2005-2006

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Reasons for growth of the sector

International pressure on wild, caught species, increasing global incomes, importing significant quantities of seafood products, and a strengthening demand in these countries, have all combined to result in a steady rise in international prices for shrimp, and the growing importance for cultured shrimp. When the demand for shrimp began to increase during the 80s, the proportion of bagda shrimp also began to increase gradually, and ultimately dominated the economy of the brackish water regions of the southwest. The source of the demand was from foreign buyers and specifically from consumers’ preference for that kind of shrimp, i.e. “Tiger shrimp.” Bagda shrimp cultivation was started in these regions on a comparatively large scale, extensive basis and has remained that way.


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Findings

PESTLE ANALYSIS

The PESTLE analysis is a constructive instrument for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization. The PESTLE Analysis is often used as a generic 'orientation' tool, finding out where an organization or product is in the context of what is happening out side that will at some point effect what is happening inside an organization.

PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors, which are used to assess the market for a business or organizational unit.

Political Factors:

Despite obvious market potential, Bangladesh’s communication environment has been affected by the broader political climate. Prior to late nineties there had not been a clear, long-term strategy for sector development that is supported by the central government. To outside observers, industry reform proposals appear to be subject to changes in the political tide; both parties have sought to block initiatives vetted by the opposition, and each accuses the other of favoritism in assigning major projects.

Despite the political instability, government has quite open policy to pursue foreign investment in the country. Incentives for investors include: 100% ownership in most sectors; tax holidays; reduced import duties on capital machinery and spares; duty-free imports for 100% exporters; and tax exemptions. There are few performance requirements, and these do not generally present a problem for foreign investors. As there is no mechanical engineering firm in Bangladesh and as it is a very prospectus business venture, Bangladeshi government wouldn’t create any obstacle in the way of flourishing this type of business. Along with inviting foreign investment in the country, the government is also trying to shape up the communication industry, by introducing policy and reforms and strengthening the technological infrastructure of the country.


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Government institutions: Creating an enabling environment severe constraints exist in the framework for businesses that prevent Bangladesh from achieving its growth potential. Wide-ranging reforms – short- and long-term – are needed in particular in governance, infrastructure services and the financial sectors.

Trade liberalisation in the late 1980s and early 1990s made Bangladesh a more open economy than in was in the 1980s.Yet a large part of the trade reform agenda remains incomplete, with a substantial anti-export bias still and considerable tariff and non-tariff barriers to the free flow of goods and services still in place. Average tariff protection in Bangladesh is much higher than in all the other South Asian countries, except India (WB, 2002, Bangladesh: Globalisation, the Investment Climate and Poverty Reduction).

More open trade policies are, however, unlikely to generate large increases in investment and employment if the framework for PSD is counterproductive. A survey of Bangladeshi exporters, most of them locally owned RMG/knitwear and shrimp exporters, found severe constraints to growth and diversification. Most of the exporters complained about problems with obtaining export finance and problems connected to transportation to foreign markets, trade information and market intelligence. The majority complained about government and bank officials, complicated and changing government rules and regulations, and bribery. The majority reported constraints, especially with respect to electricity supplies, customs, port services, and shortage of skilled labour and low productivity in the workforce. They perceived unstable demand, advice on product development, telecommunication and air-fright to be more moderate problems.

Political Ideologies

Political ideologies mean the view for doing business of political party who are in the power. If the political party wants to build an industrial nation then it is a great advantage for the industries to do business in that country. This gives lot of benefits for the business and creates a business friendly environment. This is a significant issue for doing business all over the world. Another concern in this regard is to what extent the political parties believe in freedom of doing business.


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If the party wants to make money out by giving unfair favorite by taking up bribe then it is very difficult for companies who want to do fair business. In that case the business environment does not favor new investors who want to do business in the proper way. The companies who have the best relation with the party ruling the country and can give a huge contribution in raising the fund for the party get the unfair advantage over the other companies. They take privileges which in normal case people are not suppose to get. So they gain unfair advantage over the fair companies just because of the corrupt ideology of the political parties.

In a country like Bangladesh political ideology it is more significant matter for doing business than many other countries in the world. In most of the case giving money to the political people is must for starting and running business. The competitive advantage of a company can be political affiliation with the ruling party of the company. Companies in Bangladesh get lot of advantage just because they are some how affiliated with the company or they give money to the party fund. As a business man every one wants to maximize their profit, so the companies give money to the political parties tries to take the most out of it. They take lots of unfair benefit out of that. The companies who do not want to do that and be fair looses out.

They fail to compete in the business. RC Cola of Bangladesh had very good affiliation with the ruling party of Bangladesh so they convinced the government for not taking tax from the company. That gave them all the advantage they needed to build up a strong base. With the support of the political party they became the market leader in the beverage industry of Bangladesh. The other companies lost in the competition just because they did not have that unfair privilege RC got just for being affiliated with the ruling political party.

So for free and fair business condition in the country the ideology of the political party should be crystal clear. They need to unsure that all the companies have the same level of opportunity in overeating business in the country. A clear contentious of the political party can ensure a healthy business environment in the country. This fact is missing in Bangladesh. We have very corrupted political ideology in this regard.


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The situation might change in the country very soon. We are seeing some light at the end of the tunnel. The care taker government is trying to change the every lasting corrupt political ideology. The ideology of this government is, try to wipe out corruption. It will make the business environment free and fair for all companies of the market. They want to make sure that the situation of Bangladesh gets better. If they can succeed in their operations then there might be opening for doing free and fair business in this country.

Monopoly Legislation

A monopoly is defined as a persistent market situation where there is only one provider of a product or service, in other words a firm that has no competitors in its industry. Monopolies are characterized by a lack of economic competition for the good or service that they provide and a lack of viable substitute goods. The company which has monopoly power controls the whole industry. That company can charge any price they want as there are no substitutes to that product. So people have no option rather than buying from them if they need the product. This is not good for the society that is the reason government imposes ban on monopoly in many countries of the world. Monopoly may bring profit only to one or two person of the society, but it is mainly detrimental for the development of the society. Monopoly makes the industry inefficient. As there is no competition the company do not need to look for any development of the product or any such activity like that.

Monopoly by law is illegal for many places in the world but not in Bangladesh. Companies of Bangladesh can enjoy monopoly if they can attain such position and can sustain that. If there are high barriers to entry because of huge start up cost and lengthy process for starting up that business; a company which is already operating in that industry can enjoy monopoly. Government will not take any special action to prevent it like splitting the company into 2 or 3 parts. Some thing that has happened to Microsoft and AT&T Bell of USA, these companies were in the verge to getting into a monopoly business so the government took action to split the companies so that they are not strong enough to be the single seller or service provider in their respective industry.


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Companies of Bangladesh do not need to go through any such things; they can enjoy the fruit of monopoly if they are capable to be the single seller of that industry. There are no anti monopoly law in our country. City Cell was the first mobile phone company in Bangladesh. For a big time span they were the single provider of cell phone service in Bangladesh. They had the power of monopoly. They charged very high price for the service they provided. Government was silent in that time like it not any concern to them. So it is very easy for companies to operate in the monopoly market is they are strong enough to get in that spot.

Social and Security Policies

Social policies and security is a big factor for doing business in a country. If the society does not accept any product or service then that industry can not operate in that country. One should be aware of the social practices before going into business. If any one wants to do the business of selling ham in Bangladesh he/she will loose out big time.

Bangladesh is a Muslim country and no one eats pork here so it is absolute madness to get into such a business like that. So the business has to be socially accepted. People from all walks of life buy shoes. They are no religious of social restriction of leather shoes. So social policies have no effect on leather shoes any where in the world. Same thing goes for Bangladesh; in Bangladesh leather shoes can be bought by all the people of the society. There are no social barriers in buying leather shoes in Bangladesh.

If they are no security in the country there will be less business, plain and simple. Security is a prime concern of the investor. Is the environment of doing the business is not secured enough people will be scared to invest money. An appropriate business environment should consist with security factor. If people do not feel safe they will not invest their hard earned money. So the state has to provide enough security in order to create a good business environment.

Bangladesh lacks the security factor for doing business. Law and order and the police force have failed to give the companies enough security to the companies. That is a reason Bangladesh is not getting more industrialized. People do not feel like investing in business. They feel scared that they will loose the money because of lacking of security system. They require higher return from their money that increases the cost of capital for


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the business. So business has the pressure of earning high return for the investor of the company. That makes the internal rate of return much higher then it should be than regular times. Higher internal rate of return makes the net present value of the company negative. No one wants to take a negative net present value project and loose the money. So there is lot less investment going on in the country then it should be. Lack of security is making this entire problem for new investment.

Taxation policy

Tax policy of a country can be of various kinds. Corporate tax is collected from the earning a company has after paying its interest expenses. Sales tax is collected from the consumers it is sometimes termed as Value Added Tax (VAT). Tax has implication in a business from lots of different angles. If government increases corporate tax profit margin of the companies might go down.

As companies might not be able to increase the price of the goods or services according to the increased tax amount. Again if government does not have enough income from tax government will borrow money from the financial market and that will make the interest rate to go up. This might not be good for the company as they have to pay less tax but more interest.

If government decides to add VAT on products then the consumers need to pay a certain percentage of tax when they but that goods or service. So the price of the goods or services goes up for the consumers. The demand for the product goes down as the price goes up. This increase of price does not add any income to the manufacturer or the service provider. They have the same margin as before but their sales goes down just because of the imposed VAT in their product or service.

Any income collected or gained by a company doing business in Bangladesh, whether resident or not is taxable. Corporate tax rates for industrial companies whose shares are publicly traded are 35% and the rate of those whose shares are not publicly traded is 40%. None of the ice cream companies have their shares traded in the market so they need to pay corporate tax of 40% of their income after paying interest expense. Ice cream is not included in VAT. So consumers do not have to pay VAT for consumption of ice cream. But companies need to pay VAT on industrial machineries. If the companies buy machineries for production of ice cream they have to pay VAT on that.


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Tax holiday is a provision given by Bangladesh government to new companies. It is a great opportunity for new companies to build up a strong base and flourish in the future. In the tax holiday period companies do not need to pay income tax to government. Indeed they have to invest a certain percentage of income in other companies or buy treasury stocks. In this way their earning is not going away from them it gets invested. They earn profit out of it. And after the tax holiday period is over they can cash out the investment and use that money in their company. Companies enjoying tax holiday do not have to pay tax to government but they are required to invest only 25% to 30% of their income in other activities as per rules of the National Board of Revenue (NBR). Tax holiday gives companies a great advantage in their starting stage. It helps the companies to be profitable. The money invested in this tax holiday period works as a retained earning for the company.

Government Stability and Policy

The stability of the government and policy gives companies to make long term operation plans. If the policies of the government keeps on changing policies frequently companies face difficulty in their operations. They do not feel confident to make longer term structure. As they know the current policy might change after a while they fail to make long term plans. It makes them suffer in the long term. If the policies of a country is stable and the government has a vision for the long term future then companies feel positive about the situation. They make long term investment keeping an eye on the long term policies taken by the government.

If the government is stable and every government stays the full term of their legitimate time, it becomes helpful for them to give a stable policy for the country. In order to do business successful stable government and stable policies are must. But in Bangladesh the policies of the government are not stable. They frequently change make policies regarding doing business. Sometimes the policies get changed in a very short notice that becomes very challenging for the small and medium businesses. Many companies lose out due to the sudden change of policies.


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Government of Bangladesh tries to make such policies which are only fruitful full for their supporters not the whole business environment. This is very detrimental for the society. Many businesses are loosing out just because of unfair policies made by the government. When government change many of the policies get changed and made favored to the supporter of the other party who gets elected. So general businessmen, who are not involved with any political parties, has nothing to gain.

Civil UnrestPeople become very conservative in times of civil unrest. They try to consume less and save more as they are not certain of their future. Demand of the products goes down. Some middle man or distributors takes opportunities and hike the price of the good during civil unrest. The ultimate result is manufacturer of goods loose out in the whole process.

Civil unrest happens when country goes through a transaction. It is critical time for the country. Every person takes defensive strategy in this period of unrest in the country. People can not be sure about what will happen in the future so they don not want to take any new initiative they become defensive in nature. Same this goes for business. As they can not be sure about the future condition of the country and the market they take defensive strategy. Companies just try to stay in the business they do not want to take new steps of expunction. New investments are less likely to happen in the period of civil unrest.

So civil unrest is not welcomed by any company at any point of time. They want smooth business environment where they can fairly do business. Bangladesh is going through such a civil unrest right at this moment. No one knows where the country will end up. Everyone is uncertain about the future situation of the country. So it is not a good time for making a big investment in Bangladesh in any industry.


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ECONOMICS:

Leather sector is perceived to be one of the important economic sectors inBangladesh. As a single sector of the economy, the sector contributes modestly to the country’s GDP. Contribution of leather sector (hide &skin, leather and leather goods, and footwear except rubber) to GDP is 0.31% (at constant price) in FY 2003. There was a declining trend in this indicator following 1995. It came down to 0.30% in 2000 from 0.36% during 1995 and 1996.

As is true for most industries, the social impact of shrimp farming in Bangladesh has both positive and negative implications. The goal should be to find a way for shrimp farming to continue to develop in Bangladesh while seeking solutions to social and environmental issues. Key issues include, “human rights, employment, income, access to common property and other resources, gender, education, and cultural practices.” Although negative impacts are given most of the attention, especially by the more vocal wing of the NGO sector, the situation is not necessarily as dire as it appears. Both the positive and negative impacts must be taken into consideration.

Some negative social impacts of shrimp reported in early studies included the declining attention given by farmers to crop production, too much outside control, “strong-arm” tactics, growth of new trading groups, and declining land productivity. Some suggestions given to alleviate these negative factors were to reduce the intensity of production and to shift to freshwater prawn production. Other studies within the BCAS reports stated that shrimp farming eliminated traditional agricultural crops (such as paddy and sesame) and that local lease arrangements denied the owners access to their land for much of the year. Another stated negative social effect is an increase in dowry demands, although the reason for this is not clear. One suggestion is that men demand a higher groom price from households where women go to work as ‘compensation’ for marrying ‘dishonored’ women. Land-grabbing related violence is unfortunately not unheard of as well. Although physical abuse, rape and sexual harassment, and cases of torture and murder exist in most countries, including Bangladesh, it has been argued that shrimp cultivation exacerbates them. The main reason given for this is the disruption to traditional community life.

There are of course the positive effects of shrimp cultivation as well, including the substantial amount of foreign exchange generated by the sector for the country as a whole. Other positive impacts include widespread employment and an increase in the average wage rate and in the flow of money in the producing areas, more people in a


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household earning an income (women as well as men), better facilities and health, greater food security, more opportunities for women in shrimp fry collecting and depot work, etc.“The prawn industry supports a thriving local economy and generates important foreign exchange earnings for the country and many people’s livelihoods depend on the prawn industry.” The shrimp industry has created sustainable employment opportunities for the rural poor that wouldn’t have existed otherwise, with over 600,000 people employed. If the demand for shrimp suddenly disappeared, or if Bangladesh was unable to meet international standards of export, thousands of people would lose their primary source of income.

Although people cultivate crops such as rice and vegetables, and some raise fish as well, shrimp is by far their most profitable enterprise. The employment and income effects of shrimp culture therefore create a very positive impact. According to one study:Groups which previously would have participated in the labor market, now have an additional work opportunity. Furthermore, employment opportunities created by shrimp cultivation are not necessarily related to fry catching alone. Increased employment opportunities have been created in the construction and maintenance of embankments in and around shrimp fields, activities related to water management, guarding of fields, and the catching and cleaning of mature shrimp. In a way the local economy is now more diversified. In addition, shrimp cultivation also offers to many poor people the opportunity to engage in small trading in snails [as shrimp feed] as fry, as depot owners, etc.


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SOCIO-CULTURAL FACTOR:

The social factors that affect a firm involve the beliefs, values, attitudes, opinions, and lifestyles of person in the firm’s external environment, as developed from cultural ecological, demographic, religious, educational, and ethnic conditioning. As social attitude change, so does the demand for various types of clothing, books, leisure activities, and so on. Each of the social factors is described below from the context of Bangladesh.

Values:

Values are ideals that guide or qualify your personal conduct, interaction with others, and involvement in our career. Like morals, they

Help us to distinguish what is right from what is wrong and Inform us on how we can conduct our life in a meaningful way

Personal Values

Personal values are principles that define one as an individual. Personal values, such as honesty, reliability, and trust, determine how one will face the world and relate with people.

Most of the customers of the agrochemical industry are farmers. They earn their living by selling crops. Basically, if we think from the company’s perspective, the main customers of agrochemical products are the distributors. Some of them lack personal values like honesty, reliability and trust and some of them try to firmly stick to their personal values.

Sometimes, some of the customers buy products from the suppliers of agrochemicals in credit and at the end do not pay off their dues within due time. As a result supplying firms fall into awkward situation. This type of activity creates a tough situation for those suppliers who are new into the market.


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Social Values

Social values are principles that indicate how you relate meaningfully to others in social situations, including those involving family, friends, and co-workers. Since farmers are the major customers in this industry, firms need to act with the farmers in such a way that supports their social values. A marketing officer of an agrochemical firm may come from a high class society. But when he needs to sell products to farmers, he has to keep farmers’ social values in mind and act accordingly. He needs to go to a remote area where he may find potential customers. After going there, his customers may offer him tea in a dirty cup. Under this circumstance he has to take that tea for the sake of his business.

Since majority of the customers of this industry are poor, their social values are little different compared to that of customers in urban areas. Firms need to keep that in mind while doing business with them.

There has been a distinct change in the social and cultural environment in Bangladesh. For starters, more and more people are now inclined towards using foreign products. This is evident from the emergence of numerous distributors and retailers of foreign goods, starting from electronics to furniture. Even the fast food industry has seen a major rise in business as we have seen the entrance of a few giant global franchises, most notably Pizza Hut and the very well known KFC.

There has been an obvious rise in the economy, and an increasing number of the population is able to enjoy more luxuries. The newly established showrooms of a couple of famous car manufacturers, like Mercedes, BMW and Volvo, are also signposts to our advancing and ever-changing nation. A few restrictions like the technological drawbacks, government corruption, low literacy rate etc. have not let the progress carry on fluently. It is a good sign, although, that the social and cultural factors in Bangladesh are showing signs of an advancing nation, and hopefully with proper guidance and vision, this nation will rise to great heights.

This year has seen the welcome emergence of a new global commitment to make poverty history. But while debt alleviation, new levels of aid, trade justice and a focus on basic needs are all crucial, these important efforts will ultimately fail without support for a more entrepreneurial set of delivery models and more creative cadre of social entrepreneurs to turn good ideas into reality.


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The old development paradigms will fail us. New ways are needed to enable people to build the capabilities to end crises in health and sanitation, nutrition, environmental degradation, housing and education. But we must do so in ways which enable poor people to create new wealth, new organisingabilities and sustainable ocial and economic resources to leverage these new opportunities for an historic breakthrough in their future prospects.

We have come to understand that citizen involvement strengthens development and can often play a lead role in overcoming poverty. Social entrepreneurship can be vital to reform and development, as well as to job and income generating activities. Social entrepreneurs deserve a central role in change efforts and aid agencies, governments and businesses around the world need to work harder to learn how we can make it easier to enhance their impact.

In the public sector, existing institutions need to be strengthened with transparent implementation of laws and regulations. Already, the government has changed tender specifications and submission deadlines to assist a preferred bidder. New institutions need to be created to address gaps in oversight of governance.

Agencies like the Anti-Corruption Commission are a good start to creating oversight mechanisms. But without the proper enforcement tools, transparent processes, and expertise in law-enforcement, such commissions or agencies will remain under-utilized and ill-equipped.

Another area that is easily noticeable is lack of oversight on government spending. Ministries spend allocated funds as they see fit without adequate oversight over the types of spending and their results. Any reporting done is often years, if not decades late. An effective institution to oversee government spending that is adequately staffed and equipped to handle the large burden would go a long way towards curbing irresponsible government spending.

The socio – cultural factors in the Pest analysis include the following major components from the next page:


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DemographicThe animal population of the county is more or less stagnant over the period. The priority interventions during the first phase are geared to (i) improve case management, (ii) reduce delays and case backlog, and (iii) improve access to justice. The implementation period of the first phase is 6 years, and will include 21 of 64 Districts, as well as the Supreme Court. To facilitate the reform program, a permanent Judicial Administration Training Institute has been established.

Legal:

Laws and regulationsThe courts, except the Supreme Court, are perceived to be politicised and extremely slow. Knowledgeable observers in this field are of the opinion that the set of laws enacted till date and in force now are adequate although there is a need for some marginal modifications. The major problem is enforcement. The backlog in the lower courts is now more than a staggering 500,000 cases pending. The average time to complete litigation exceeds 10 years.

The government has recognised the need for judicial reforms, and has prepared a strategy paper for a 10-15 year legal and judicial capacity-building program. The program includes legal reform measures, as well as measures to promote efficiency, productivity and accountability of the civil justice system. The program will be implemented in several phases, starting from 2002. The priority interventions during the first phase are geared to (i) improve case management, (ii) reduce delays and case backlog, and (iii) improve access to justice. The implementation period of the first phase is 6 years, and will include 21 of 64 Districts, as well as the Supreme Court. To facilitate the reform program, a permanent Judicial Administration Training Institute has been established.

Registration and licencesIncorporating a company in Bangladesh is required for Bangladeshi companies. A foreign company incorporated abroad, can register in Bangladesh by establishing a place of business. To register a company, 8 to 9 different licences are required. A survey of SME found that the average time to get all licences was around six months (IFC). The issuance of licenses most often requires facilitation payment (even to get the right forms). However, the inspection and control regime associated with the licences is claimed to be a much larger burden in terms of time consumption and costs.


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Rupsha approves all projects to be allocated in the Khulna. Rupsha also issues import/export permits, and provides work permits for foreign nationals. Rupsha offers one window same day service to the investors in Khulna. The government offices maintain three separate land-related registers: the directorate of land records and surveys established in 1888, the field level tax administration established in 1958, and sub-register (now managed by the department of law) established in 1865. These three systems are neither up-to-date, nor transparent, nor consistent with one another.

Public administration

Public administration has more than one million employees, of whom 700,000 in the ministries. The salary level is low and working conditions poor. As part of the political control, civil servants are often removed with change of government. An extensive system of ordered duty postings exists, where transfer is used as reward and punishment. During the 1970s and 1980s irregular recruitment independent of qualifications was common.

Thus, the public administration represents major constraints to PSD. There is an increasing dissatisfaction with the quality of services rendered. Foreign companies operating in Bangladesh as well as domestic firms consider “red tape” a serious problem. Policy implementation is perceived as slow and uneven and not up to standard, and unpredictable and highly politicised.

Corruption

“Extra costs” or “facilitation costs” are high throughout. In many cases it constitutes a major part of an enterprise’s transaction cost and contributes to lower the competitiveness of enterprises. A recent survey of public opinion, conducted by the World Bank in collaboration with several donors and a local NGO, confirms the deep distrust of public officials and dissatisfaction with public services (WB, 2002, Bangladesh: Public Expenditure Review Summary). A survey undertaken for the Ministry of Commerce shows those Bangladeshi exporters consider official corruption one of the two biggest problems with respect to doing business in Bangladesh. The survey shows that the exporters of Bangladesh, on an average spend 9 percent of their total revenue on bribes.


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ENVIRONMENTAL REGULATIONS

The Environmental Conservation Act 1995 (ECA) and the Environmental Conservation Rules 1997 (ECR) provide for regulatory measures concerning industrial waste and pollution.

Besides, the Factory Act 1965 and the Factory rules 1979 are directed to regulate industry related environmental problems. The Department of Environment (DoE) headed by the Director General (DG) under the Ministry of Environment and Forest is the regulatory Body responsible for enforcing the ECA’95 and ECR’97. As per provisions of the ECA’95 and ECR’97 all new and existing industrial units are obliged to apply for an Environment Clearance Certificate (ECC) from the DoE. For the purpose of granting ECC, industrials units are classified into four categories depending upon their environmental impact. The four categories requiring a gradually higher level of regulations are:

GreenOrange AOrange BRed

Child labour situation

In 2002/03, the Bangladesh Bureau of Statistics (BBS) conducted the second National Child Labour Survey (NCLS).1 This survey has been designed and conducted in the context of the commitments made by the Government of Bangladesh, following the ratification of the International Labour Organization (ILO) Worst Forms of Child Labour Convention (No. 182) 1999. According to the survey, there are 4.9 million working children2 — 14.2 per cent of the total 35.06 million children in the age group of 5-14 years.

The total working child population between 5 and 17 years old is estimated at 7.9 million._ The proportion of boy and girl child workers, in the age group of 5-17 years, is 73.5 per cent and 26.5 per cent, respectively;_ The total number of working children aged 5-17 years in rural areas is estimated at 6.4 million as against 1.5 million in urban areas;


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_ As many as 93.3 per cent of all working children in the age group of 5-17 years operate in the informal sector. Agriculture engages 4.5 million (56.4 per cent children), while the services sector engages 2 million (25.9 per cent), and industry, 1.4 million (17.7 per cent per part);

A total of 1.3 million children are estimated to be working 43 hours or more per week. More boys than girls are engaged in this form of child labour across all age groups.

Parallel to the National Child Labour Survey, an establishment survey and five baseline surveys on the worst forms of child labour in five segments (welding, automobiles, street children, battery re-charging, and transport) have also been conducted under the supervision of the BBS with technical and financial support from the ILO. The final reports of the establishment survey and the baseline surveys are now available. The factors that generate child labour in Bangladesh can be summarized as follows:

_ Extreme forms of poverty play a crucial role. Child labour is part of a vicious cycle, with poverty as a main cause as well as a main consequence. This implies that child labour cannot be addressed in isolation. Among factors contributing to child labour are rapid population growth, adult unemployment, bad working conditions, lack of minimum wages, exploitation of workers, low standard of living, low quality of education, lack of legal provisions and enforcement, low capacity of institutions, gender discrimination, conceptual thinking about childhood, etc. One or more of the above contribute to the large numbers of children working under exploitative or hazardous conditions;

_ There is a direct link between child labour and education. Nearly 50 per cent of primary school students drop out before they complete grade 5, and then gravitate towards work, swelling the number of child labourers. The high drop-out rates are correlated with the low quality of public primary education, low adult literacy, low awareness of the importance of education, teacher-student ratio (sometimes this goes up to 1 per 100), non-availability of didactic and learning materials, and the cost of education. Basic primary education is free as far as direct costs and school books are concerned.

But many indirect costs are involved as well, such as transport, uniforms, pens, pencils, and paper/notebooks. Bangladesh has only limited provision for pre-vocational/vocational skills training and there are related constraints such as the quality of the skills training, market and employment linkages and certification.


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While this could be an attractive option to working/ disadvantaged children and their families, neither the Government of Bangladesh nor many of the non-governmental organizations have the institutional capacity and technical expertise required to deliver skills training facilities effectively;

_ Finally, the level of awareness on the issue of child labour is still low. Society in general has a rather indifferent attitude towards the problem. In many cases, it is not realised that the children who are employed in, for example, domestic service, often have no access to education or medical care.

National legislation and policies against child labour

Legislation

Existing legislation is antiquated and fragmented and deals only with children working in the formal sector. There is no single code or law dealing with this area. Cooperation between the Ministry of Labour and Employment and the ILO's International Program on the Elimination of Child Labour (IPEC) will include a review of existing child labour laws with a view to removing anomalies, fixing a uniform minimum age for admission to work at 14 years (18 years for hazardous occupations), and prohibiting the employment of children in hazardous operations in shops and other establishments.

Minimum age for admission to employment in the formal sector

There are a number of statutes, which stipulate the minimum age at which children can legally work in certain sectors. These are:

_ Mines (Mines Act, 1923): 15 years (with medical certificate of fitness);_ Shops and other commercial establishments (Shops and Establishments Act, 1965): 12 years;_ Factories (Factories Act, 1965): 14 years (with medical certificate of fitness);_ Railways and ports (Employment of Children Act, 1938): 15 years;_Workshops where hazardous work is performed (Employment of Children Act, 1938): 12 years;_ Tea gardens (Tea Plantation Labour Ordinance, 1962): 15 years.


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Regulation of hours and conditions of employment

Broadly speaking, the existing legislation requires that non-prohibited work by children in factories, on the railways, in ports, shops, commercial and industrial establishments, and mines take place between the hours of 7 a.m. and 7 p.m. The Factories Act additionally imposes a limit of five hours' work per day for children and prohibits work in more than one factory on a given day.

Hazardous work

The Employment of Children Act, 1938, prohibits children under 12 years from working in workshops where any of a number of listed processes is carried on. Though not explicitly described as such, these processes are all hazardous. They include weaving, ing and the manufacture of bidis, soap, carpets, matches, explosives and fireworks. However, an important exemption to this prohibition is made in the case of family owned and family run workshops not using outside hired labour. The Factories Act, 1965, prevents children under 18 years of age from working on dangerous machines without proper instruction on the dangers, and necessary precautions, in addition to training or supervision. All forms of forced labour are prohibited under the Constitution. Unlawful compulsory

Government policies and programs

The situation regarding child labour in Bangladesh had been fairly understood during the 1990s by both the Government and civil society as more research studies were done and disseminated; most importantly, several initiatives to combat the problem were taken by the Government of Bangladesh.

In 1990, Bangladesh became one of the signatories to the UN Convention on the Rights of the Child and the ensuing Summit Declaration and Plan of Action. In 1990, Bangladesh passed the Primary Education Act and, in 1993, it established the compulsory primary education system for children aged 6 years and above. In collaboration with the World Food Program (WFP), the Government started the Food for Education program in 1993 with an aim to attract poor children and their families towards primary education.


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With the setting-up of the Primary and Mass Education Division in 1992 and the Directorate of Non-Formal Education in 1996, the Government introduced another remedy to tackle the high dropout and low attendance rates in the formal school system. This trend provided a sustainable solution to the primary education problem and made a substantial impact on solving the child labour issue.

In March 2001, the Government of Bangladesh ratified the ILO Convention No. 182 and, in December 2001, the Ministry of Labour and Employment took the initiative to begin developing a national policy on child labour that would constitute a policy foundation for the IPEC Time-Bound Program (TBP) and contribute to the implementation of Bangladesh's obligations under the ILO Convention No. 182. A draft policy developed in consultation with national stakeholders is being examined by the Ministry.

On a more practical level, the Ministry of Labour and Employment is currently implementing a USAID funded project titled and aimed at Eradication of Hazardous Child Labour in Bangladesh. Interventions under this "demonstration" project, which covers areas in Dhaka and Chittagong Municipal Corporations, include non-formal education and skills training for working children and micro credit support for their guardians/parents.

IPEC action

The National Steering Committee (NSC), constituted under the provisions of the Memorandum ofUnderstanding (MoU) signed in 1994, includes members from the Ministry of Labour and Employment, the Ministry of Education, the Ministry of Women and Children's Affairs, the Ministry of Social Welfare, the Ministry of Textile Manufacture, the Ministry of Commerce and Industry, the Ministry of Foreign Affairs, the NGO Affairs Bureau, employers' and workers' organizations, the ILO, and UNICEF.

IPEC activities in Bangladesh officially started in 1995 with the launch of the country program. The overall development objective of the IPEC country program in Bangladesh during the first stage (1995/ 99) was to identify good strategies and workable models to combat child labour and to build the capacity of the Government, employers, and workers' organizations, NGOs, and other social partners to deal with the problems of child labour and its gradual elimination from society.


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The specific objective was the creation of a congenial socioeconomic environment in the country. This was in line with the ILO country objectives in Bangladesh, i.e. to protect working people by promoting and realizing fundamental principles and rights at work and to eliminate child labour from the country. The interventions initiated to achieve this included first of all an analysis of the child labour situation in Bangladesh.

Based on this, IPEC developed strategies and models to determine what interventions could contribute to combating child labour effectively. Interventions varied from preventing children from entering the labour market to withdrawing children from hazardous work and finding ways to rehabilitate them; monitoring of workplaces; raising awareness and capacity building of the partner organizations. Successful measures in tackling child labour in one hazardous occupation are likely to have a multiplier effect that will ultimately benefit children working in other dangerous work.During this time, 75 action programs have been implemented under the IPEC country program in Bangladesh through the Government, NGOs, and employers' and workers' organizations. So far, more than 50,000 children have benefited directly or indirectly from these programs. During the course of this first stage, several modalities were developed in addressing the child labour issue effectively. The sectoral approach, tested in the garments industry through the project, Monitoring and Verification of Child Labour in the Bangladesh Garments Industry, proved to be successful in many ways, as it managed to create awareness within the sector against the use of children in hazardous occupations. At the same time, the project generated moral pressure on the employers of the sector for the removal and subsequentrehabilitation of the children. The project is now in Phase III.

During 2000, the many small action programs of the 1998/99 biennium were phased out and the implementation of 14 larger action programs for the 2000/01 biennium started. Since the beginning of 2003, the IPEC country program has already phased out all smaller pilot intervention programs. The IPEC program in Bangladesh has now broadened its focus from small-scale pilot interventions to larger projects that cover an entire sector, a particular geographical area or a combination of several sectors in a geographical region. Three large projects have been launched at the beginning of Phase II in 2000, with more focused and comprehensive action in addressing the worst forms of child labour in various hazardous sectors. In addition, the preparatory phase of the Time-Bound Program (TBP) was launched in March 2004.


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Other initiatives against child labour

UNICEF has — through the Directorate of Non-Formal Education (DNFE) — been implementing the Urban Hard-to-Reach Project. This Project aims at addressing the needs of underprivileged children, including those engaged in child labour. Non-formal education (NFE) programs have been established in six metropolitan cities. It aims at mainstreaming NFE graduates into the formal primary education.

The Bangladesh Institute of Labour Studies (BILS) implements a hazardous child labour project, funded by the Council of Denmark. The project's interventions include enhancing education through NFE, provision of vocational training to create employment opportunities for working children and awareness raising programs on children's rights. Their geographical coverage is limited to four mainly outer administrative areas within Dhaka, i.e. Tongi, Gazipur, Mirpur and Keranigonj.

It should be noted that IPEC projects have been coordinating with all these projects and programs regarding geographical areas and child labour sectors to avoid duplication.Under its poverty and working children program, Save the Children UK has been approaching the child labour issue by:

_ Reducing child labour by reducing families' dependency on their children, conducting research and advocating/influencing major development NGOs to incorporate child labour issues in theirmainstream development activities. Targeted interventions on the economic/social empowerment of families are undertaken through the BRAC (Bangladesh Rural Advancement Centre) ultra-poorprogram in Rangpur and PKSF in Jamalpur.

_ Pilot programs focusing mainly on the informal economy (selected areas in Dhaka, Jamalpur,Kurigram and Khulna), including the provision of non-formal education and improvement ofworkplaces (environment and conditions) through employers' participation and establishing community pressure groups.

A Joint Child Labour Working Group (JCLWG) was formed in 1999 as there was a felt need for broader cooperation, information sharing, and joint advocacy initiatives to tackle the vast problem of child labour in Bangladesh. The group argues that with the ILO


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Convention No. 182 and the UN Convention on the Rights of the Child — all of which have been ratified by the Government of Bangladesh — there is a strategic opportunity for all concerned to work together in a comprehensive way towards specific goals and make the rights of children in the most hazardous and exploitative forms of child labour a living reality.

The JCLWG aims at achieving greater program synergies through systematic sharing of information and lessons learnt from the various activities of the group members, as well as planning joint research agendas, policies, and strategic plans. The JCLWG focuses on the development and effective implementation of the national Time-Bound Program, within the frameworks of the ILO Convention No. 182 and the UN Convention on the Rights of the Child. The present members of the group are the ILO, UNICEF, the Bangladesh Shishu Adhikar Forum (an alliance of NGOs), the Dhaka Ahsania Mission, the Centre for Mass Education in Science, and the Save the Children Alliance.


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ECONOMIC & FINANCIAL

TRENDS IN THE ECONOMYBangladesh achieved good growth performance during the nineties. Between1991 and 2000, real GDP in Bangladesh increased by 60 percent, averaging a growth rate of about 5 percent per year. Combined with the country’s notable success in reducing thepopulation growth rate over the past two decades, this economic performance resulted in real per capita GDP in the country rising by 36 percent over the decade, twice the 18 percent increase achieved by low and middle income countries during this period (WDR 2000/2001).Economic growth was most robust in the industrial sector. The industrial sector increased in importance from 21 percent to 26 percent of GDP, with real GDP in this sector increasing by an impressive 86 percent during the nineties. The export-oriented ready-made garment (RMG) sector recorded double-digit growth during this period. The share of the services sector remained unchanged at about one-half of GDP, while agriculture – the slowest growing sector – declined in importance from 29 percent to 25 percent of GDP. However, even within the agricultural sector, there were notable achievements during this period, with the country attaining food grain self sufficiency in FY2000 and aggregate production estimated at approximately 25 million tons. Despite the declining importance of agriculture in Bangladesh, this sector continues to be the main source of employment.

The national economy has shown a steady growth since independence, especially during the 1990s (ref. table 1). Trends in GDP per capita as well as poverty trends are positive. Unfortunately, the growth in income has also been accompanied by a rise in income inequalities.


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Table 1: Bangladesh Growth and Poverty ReductionPeriod Avg GDP

growthAvg per capita GDP growth

Poverty headcount (%) end of period

Extreme poverty head-count (%) end of period

1974-80 3.79 1.39 58.5* 40.91*1981-90 3.73 1.56 58.8** 42.7**1991-00 4.80 3.01 49.8*** 33.7***

* refers to 1983-84; ** refers to 1991-92; *** refers to 2005Source: Bangladesh Bureau of Statistics and staff estimates, in WB (2002) Bangladesh: Globalisation, the investment climate and poverty reduction.

It can be argued that the economy has been managed reasonably well in recent years, having weathered several financial shocks, avoided debt crises, hyperinflation, and having realised economic growth rates of about 4.3 percent annually over 1980-2000. Combined with the country’s success in reducing the population growth rate over the past two decades, the economic performance resulted in real per capita GDP in the country rising by 36 percent over the last decade, twice the 18 percent increase achieved by low and middle income countries during this period. The growth performance over the nineties can in large part be attributed to prudent macroeconomic management, as well as reform measures introduced in the early 1990s. Domestic inflation remained low throughout the decade. The fiscal and foreign exchange situations, however, became precarious in the latter part of 2001 despite a registered growth for 2001 at 6 percent and inflation of about 2 percent.

The difficulties were characterised by significant current account and budget deficits. A major cause of the current account deficit is weak demand in the dominant market for in the USA and a record fall in prices for shrimp world-wide. Moreover, the textile industry is to a large extent dependent on import of raw materials. All machinery, equipment and non-agricultural based raw materials are imported, and, despite the production of gas, Bangladesh is still a net importer of energy. The result is pressure on exports and private investments. The budget deficit is largely financed by domestic loans (corresponding to 3.5% of GDP in FY 00/01). This will probably have a 'crowding-out' effect in the private sector, both through decreasing credit opportunities of private enterprises and consequently, decreasing investment, and through lower private consumption.


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Increasing the soundness of the financial sector is a priority for both growth and poverty reduction, but the reforms have associated political costs. Successive governments have delayed taking firm action. The World Bank refers to a study estimating that if the financial sector inefficiencies in Bangladesh had been removed 20 years earlier, real GDP per capita would have been 15.5–37.3 percent higher by 1995 (Policy Brief Financial Sector, 2001).

The public requirements regarding accounting, auditing and corporate taxation as practised today create high transaction costs and do not offer a level playing field. Reforms of enforcement seem appropriate.

Bangladesh exports 1997/87-1999/00 (USD million)Merchandise 1997/98 1998/99 1999/00Ready-made garments 2,843.3 2,985.0 3,056.6Knitwear and hosiery products 940.3 1,035.0 1,268.2Jute goods (excl. carpets) 278.6 303.4 266.4

Frozen shrimp and fish 293.8 274.7 343.9Leather and leather products 190.3 168.7 195.0Raw jute 107.8 71.6 71.5

Tea 47.5 38.6 17.7Total exports 5,161.2 5,312.2 5,748.0

Source: IMF, Bangladesh: Recent economic developments, March 2000, and Export Promotion Bureau, 1999 and 2000.

The impressive growth performance over the nineties can in large part be attributed toprudent macroeconomic management, as well as to wide-ranging reforms introduced in the early 1990s. These reforms included steps to remove excess direct controls on economic activity, liberalize foreign trade, deregulate the investment climate, as well as in general introduce more market-oriented policies to create a more supportive policy environment for the private sector. Rapid integration with the global economy saw the ratio of the country’s trade to GDP more than double over the decade. Domestic inflation remained at low levels throughout the decade.


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Trends in Consumption-Based Poverty and Inequality Measures

Consistent with the growth performance, survey-based consumption poverty estimates confirm that the nineties were a period of declining poverty. Analysis of various Household Expenditure Surveys (HES) conducted by the Bangladesh Bureau of Statistics during the nineties shows that the incidence of poverty, as measured by both the upper and lower cost-of-basic needs (CBN) poverty lines, has fallen considerably (Table 1 and Background paper 1).1 In 2000, 50percent of the country’s population was poor (as measured by the upper poverty line), compared to59 percent in 1991-92. Similarly, the extreme poverty rate (below the lower poverty line) declined from 43 percent in 1991-92 to 34 percent in 2000. Thus, according to both the upper as well as lower poverty estimates, the incidence of poverty in Bangladesh declined by about 9 percentage points over the course of the decade.Table 1. Trends in CBN Poverty Measures

The poverty gap (P1) estimates how far below the poverty line the poor are on average as a proportion of that line. The squared poverty gap (P2) takes into account not only the distance separating the poor from the poverty line, but also inequality among the poor. Trends in these measures broadly mirror those observed with the headcount rates.2


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Growth in rural areas was broad-based while urban growth mainly benefited therelatively affluent. Even though average growth in mean per capita expenditures over the decade was lower in rural as compared to urban areas (1.7 vs. 2.8 percent per annum), it was much more evenly distributed across income levels (Figure 6). As a result, poverty declined by an equivalent magnitude (about 8 percentage points) across both sectors. In contrast to rural areas, the differencein growth rates across the income distribution in urban areas is striking: the average growth rate for the bottom 20 percent was less than one-fourth the rate for the top 20 percent of the urban population (0.8 percent vs. 3.7 percent per annum).

Figure 6. Rural and Urban Growth incidence curves, 1991-92 to 2003

Virtual stagnation in poverty rates in Chittagong division is related to both slowergrowth and an underlying growth process that mainly benefited the rich. Comparing growth incidence curves across administrative divisions shows why poverty levels have stagnated in Chittagong. Not only did incomes grow at a slower pace in this region, growth in Chittagong was concentrated amongst the relatively affluent, with the bottom three-tenths of the populationrecording negative growth rates over the decade

If we examine the growth incidence curves for urban Dhaka and Chittagong, the average growth rate for the bottom-fifth in these two cities falls even further to a meager 0.3 percent per annum. Preliminary results from the recent population census suggest that the urban population of Bangladesh has grown roughly four times as fast as in rural areas.


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Higher average incomes in urban areas along with better (on average) provision of services may have attracted large numbers of the rural poor to migrate to large cities like Dhaka and Chittagong, thus contributing to the low observed rate of growth amongst the urban poor.

Even though their incomes in their new homes are low by urban standards, they may still consider themselves better-off in their new residence. Further analysis is needed to understand the nature and causes of migration trends in Bangladesh.

Trends in Non-Income Measures of Living Standards

Food Consumption and Nutrition Indicators

Other non-income measures of living standards also suggest declining poverty in the1990s. The considerable improvement in income poverty measures over this period is corroborated not only by rising incomes, but also by significant improvements in the composition of the food bundle consumed by the population. Analysis using HES data on the average quantities of different food items consumed reveals that per capita consumption of virtually all major food groups (with the notable exception of rice and wheat) increased substantially during this period. For instance, between 1991-92 and 2000, per capita consumption of fish increased by 9 percent, meat by 48 percent, poultry by 120 percent and milk by 55 percent. While per capita consumption of wheat declined substantially and rice consumption declined marginally (3 percent), consumption of potatoes increased by 25 percent during this period. Similarly, the 13 percent decline in consumption of pulses is probably also due to substitution away from pulses towards higher-value sources of protein. Furthermore, these improvements are not confined to upper income groups: consumption of fish, meat, poultry, and milk and other such relatively high value items by the poor increased considerably during this period in both rural and urban areas Anthropometric data from various household surveys conducted during the nineties suggests that there has also been good progress on child nutrition. For instance, stunting, wasting, and underweight indicators derived from various Child Nutrition Surveys (CNS) conducted by BBS and the Bangladesh Demographic and Health Surveys (BDHS) show considerable improvement over the nineties, particularly in contrast to the relatively small improvement observed during the eighties. Yet much remains to be done in this area: child malnutrition (as measured by prevalence of underweight for under-5 years children) is still among the highest in the world.


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These are impressive achievements, but tremendous challenges remain. Even withthe 1998 flood when a major food security disaster was averted, repercussions were far-reaching, since households lost or sold their productive assets, forcing a long-term cost for short-term benefits (del Ninno et. al., 2001). Inadequate risk coping mechanisms still compromise nutrition in poor households, particularly amongst children. A study of child nutrition status shows that wasting – an indicator of recent or current under nutrition – is still highly seasonal amongst children, tending to peak in June-August of each year (Helen Keller International, 2001). While food security has certainlyimproved for much of the population, there are groups such as children, distressed female-headed households, and the elderly, for whom current household mechanisms for dealing with such risk are far from sufficient. Other types of deprivation and vulnerabilities stem from the inability of poor people to influence decisions that affect their lives. This may be manifest in the ineffectiveness of state institutions for the poor, compounded by a feeling that redress is not possible.15 Domestic violenceand crime, and an overall sense of insecurity are also growing concerns. Deteriorating law and order is a concern cited not just by the poor: A Power and Participation Research Center (PPRC) perception survey on Dhaka citizens identified insecurity as the foremost concern voiced by nearly ninety per cent of the population (Rahman and Islam, 2001).

Economic growth has been instrumental in reducing poverty in the 1990s. PovertyDeclined by 9 percentage points between 1991-92 and 2000, a period over which real per capita expenditures increased 2.5 percent annually. In tandem inequality, as measured by the Gini, rose from 0.259 to 0.306 over the same period. How much would the reduction in poverty have been, had there been no change in the distribution of incomes over the decade?18 In order to separate the effects of growth from inequality, changes in poverty can be decomposed into growth and redistribution components, where the former measures the effect of the change in mean income at a given income distribution, and the


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latter indicates the effect of the change in income distribution at a given mean income. Of these two effects, economic growth was the main source of poverty alleviation in Bangladesh during the nineties, while worsening income distribution during this period mitigated the extent of poverty reduction. Had the observed rate of growth during this period been distribution-neutral, poverty would have fallen by 17 percentage points, or almost twice the actual observed rate (Background Paper 2). Understanding the factors that lead to sustained and sustainable economic growth, while keeping inequality from rising, is therefore key to developing strategies for reducing poverty.

Although not properly exploited yet, Bangladesh does have quite a few inherent strengths which can be used as the launching pad for making this country a potential offshore source of Software and Data Processing Services. Some of these advantages are:

A substantial number of educated unemployed youth force, with ability to read and write English, exists in the country. They can be trained in the required skill (particularly in Data Processing Services) within a short time.

Quite a few Bangladeshi skilled professionals have been working abroad. They can be encouraged to return to the country and/or collaborate with Bangladeshi entrepreneurs, provided proper environment is created.

Universities in Bangladesh are turning out an increasing number of graduates in Computer related subjects every year, although the number is much less than the requirement.

A large number of Bangladeshi students are studying overseas in Computer related subjects.

A wide range of Hardware platforms, from Mainframe to PC, are available. Reasonable skills exist in the following areas :

o Operating System - Windows, Windows 95, MAC/OS, Novell Netware, Windows NT, UNIX, OS/400.

o Programming Language - C++, Visual Basic, Visual FoxPro, COBOL, RPG, OOP, J++

o RDBMS - Oracle, Informix, DB/2

Bangladesh offers a very attractive cost-effective wage level, viz.

Bangladesh India U.S.A.


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Programmers (per month) US$ 400 to 800 US$ 1,200 US$ 4,500

Data Entry (Per 10,000 keystrokes) US$ 3 to 5 US$ 10 US$ 30 to 50

The government has taken a decision recently (June, 1998) to withdraw all import duties and VAT from all computer hardware and software. This has brought the prices of computers down to a level affordable by middle income households and sales of PCs have soared during the last few months. A 80-90% annual growth in the number of PCs sold is expected this year.

An Information Technology village is going to be set up very close to Dhaka. The government has already made 18 acres of land available for setting up this IT village. This would be similar to the Software Technology Parks in India. All the infrastructure, including high-speed telecommunication facilities ( 2 Mbps link) would be provided. These would enable the small companies to move into buildings with readily available facilities. Since this is going to take at least two years, a decision has been taken to initially set it up in an existing building in Dhaka.

Some of the local firms have already succeeded in exporting software, although the total amount is not very large. One firm has been producing CDs with searchable database for US and Latin American clients. CAD conversion work and web-page design work are also being undertaken. Taking advantage of the considerable number of COBOL programrs who were trained in the sixties and seventies, a number of firms are doing work related to the Y2K problem. ERP software is being developed by a local firm in partnership with Microsoft.

The government has placed top most priority to human resource development in the IT field. At present, the annual output of graduates in the IT field would be around 500. The target is to produce 10,000 programrs annually by the year 2001. There are about 24 Universities offering undergraduate degree programs in IT-related fields. All the four BITs (at Rajshahi, Chittagong, Khulna and Gazipur) are also planning to offer undergraduate degree programs in computer science and engineering from next year. The 20 Polytechnics are also introducing 3-year diploma programs in Computer Technology. In addition, a large number of educational and training institutes, many of them with linkage with foreign institutions, are also offering training courses. One of the major problems faced by these institutions is the shortage of trainers. Recognizing this problem, the GOB Committee (referred to earlier) recommended that BCC should take up a crash


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program to train at least 1000 high-level trainers by the end of 1999. Moreover, the absence of adequate physical resources (e.g. computer hardware and software) and weakness in course contents in the training institutions will adversely affect the quality of output from these institutions. An accreditation system is planned to be introduced by the government soon.

BUET was the first institution to offer post-graduate degrees (M.Sc. and Ph.D.) in Computer Science and Engineering. Some other institutions have also initiated research programs in IT related fields. These include Machine Learning, Pattern Recognition, Speech Recognition, Automatic Translation, Computational Algorithm, VLSI and 3-D Vision. Considerable research work has been done in the use of Bangla in computers. Unfortunately like R&D in other fields of science and technology, there is very little interaction between academia and industry.

Efforts were initiated about 13 years back to introduce computers in schools and colleges. ‘Computer Studies’ has been introduced as an optional subject both in SSC and HSC examinations. The lack of adequate physical facilities, computers and qualified teachers has resulted in very few students opting for these courses. Experience of other countries shows that teaching of computer programming by incompetent teachers may do more harm than good. Therefore, teacher training is one of the priority actions to be taken.

In order to co-ordinate the computerisation activities of government and semi-government agencies a National Computer Committee was set up in 1983. This was transformed into the National Computer Board in 1988 and the Bangladesh Computer Council was set up in 1989 by an Act of Parliament. It had some initial problems and faced a lot of criticism from the IT community when it became more of a regulatory body, rather than a promotional body as originally envisaged. It is planned to strengthen BCC by inducting more IT professionals, so that it can play a bigger role in IT development in the public sector, particularly in human resource development.

A large number of Bangladeshis are now working in the IT field in different companies in USA and are gradually moving up the organizational hierarchy. The government is trying to get the assistance of these non-resident Bangladeshis (NRBs) in IT development, particularly by giving them incentives to set up software companies in Bangladesh.


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The lack of any copyright protection for software has been one of the major deterrents in the growth of software industry. A software Copyright Protection Act has already been drafted and is expected to be enacted very soon. Although the banking sector had been among the pioneers in computerization in Bangladesh, the present level of computer usage in banks is very low. The foreign banks operating in Bangladesh have taken a lead in computerizing their front office operations. It is only during the last 4/5 years that some of the Bangladeshi banks have started gradually computerizing their front office activities and very soon a network of automatic teller machines (ATMs) using VSATs would be set up by the private banks throughout the major towns.

At present, Internet access is available only in a few Universities. The University Grants Commission is setting up BERNET (Bangladesh Educational and Research Network) establishing linkage among the Universities and providing access to the Internet.

One of the major constraints in the initial stages of computerization of government offices was the non-availability of Bangla software and Bangla fonts in printers. The breakthrough came when the PCs were introduced in the early eighties and very soon desktop publishing using computers became very popular. Bangla version of many of the commonly used packages like world processing, spreadsheet and database management has been developed.

Almost all the IT related developments which have taken place during the last few years are concentrated in the capital city, Dhaka; in other cities and towns, only a small number of computers are being used, mostly for word processing. (The government funded training institute NTRAMS at Bogra, with a few hundred PCs is a notable exception). The danger of increasing the already existing disparity between urban and rural areas looms large in the horizon. In order to enable rural populace to get the benefits of IT, Grameen Communications is trying to develop a system linking the mobile telephone systems (which are already being used in a large number of villages) with solar-powered computers. This would enable the large number of rural educational institutes, offices and households to get the benefits of e-mail and Internet access. Moreover, some of the data processing services could be rendered by people living in villages, rather than moving into urban areas.

The present government has recognized IT as one of the priority sectors and is providing all support to the private sector to enable them to enter the export market for software and data processing services. Recognizing the bright future of IT, a large number of students, young professionals and businessmen are taking keen interest in acquiring knowledge about computers and its applications. This is reflected in the tremendous enthusiasm


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generated in the on-going International Computer Show organized by Bangladesh Computer Samity. It is expected that within the next 3 to 4 years, IT applications in Bangladesh would not only spread to various private and public sector offices and industrial units, but Bangladesh would emerge as a regional hub for software development.

Disaster-coping mechanisms are also much stronger

As evidenced by the reduced Impact of the 1998 floods relative to previous natural disasters. The 1998 flood inundated over two thirds of the country, leading to widespread crop loss and displacement in affected areas, and was unprecedented in its duration, especially in the central part of Bangladesh. Despite the scale of damage, this was the first major flood after which agricultural output increased, food prices remained stable (albeit slightly higher), no major shortages of food items were reported at any time throughout the flood period, and households were by and large able to maintain consumption levels. Several factors were at play: household food security was strengthened as a result of rapid and massive scaling-up of government and donor supported food transfer programs;13 large amounts of rice and wheat imports by the private sector, aided by government policy;14 improved transport infrastructure that enabled distribution of relief supplies to flood-affected areas; and credit provided by NGOs to flood-affected households.


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COMPETITIVE DIAMOND MODEL

In 1990, Michael Porter attempted to determine why some nations succeed and others fail in international competition. According to Porter, four attributes of a nation shape the environment in which local firms compete and these attributes promote or impede the creation of competitive advantage.

Porter is also particularly recognized for his competitive 'diamond' model, used for assessing relative competitive strength of nations, and by implication their industries:

Factor Endowments

Factor endowments means that extend to which a country is endowed with such resources as land, labor and capital. From Porter’s view, a nation’s position in factors of production such as skilled labor or the infrastructure is necessary to compete in a given industry. In addition, he distinguishes between basic factors (e.g. natural resource, climate, location and demographics) and advanced factors (communication infrastructure, sophisticated and skilled labor, research facilities, and technological know-how). In fact, advanced factors are more important than basic factors because the more a nation or government invest on the advanced factors (investment on higher education, improvement education standard etc. will rise the number of skilled labor force)

In this analysis there is less emphasis for the production factor, but few more advanced factors are mentioned


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The industry ensured the best curriculums and better facilities for the buyers

Shrimp is a very important resource that supports a large industry in Bangladesh. Shrimp is the second most important source of export accounting for a yearly earning of over $US 300 million. Of all the exportable agro-based primary commodities, shrimp is by far the most important. It alone contributes more than 70% to the total export earning from all the agro-based products, including tea, raw jute, vegetables, fruit, etc.

The shrimp industry also provides direct employment to over 600,000 people who in turn support well over 3.5 million dependents. This sector also supports large varieties of local level cottage industries (made out of the home) such as bamboo baskets, mats, traps, nets, rickshaw vans, tempos (tri-wheelers), boats, etc. Despite all these positive points, there are views that the shrimp industry is not without vices. While its supporters see it as a valuable way of generating foreign exchange, those against it point to the environmental damage, social disruption, and rising domestic inequalities that result from trying to meet the growing luxury demands of distant Western consumers. The debate has become very polarized between those who support shrimp farming, and those who are opposed to it.

Competitive market price is offered by Bangladeshi processing companies


Shrimp farming in Bangladesh is a relatively new industry, though an important one for the country’s economy. The rapid expansion of shrimp aquaculture throughout the southwestern coastal region of Bangladesh has led to both significant economic benefits and serious social and environmental impacts, thereby creating a hot debate over the pros and cons of developing an industry that has a great potential for growth, though not without certain problems. If it is going to survive, the industry will have to embrace changing trends in the global market with a strategy to meet a growing world demand for


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high quality shrimp, produced in an environmentally and socially sound way. This will necessitate some form of transparent and recognized certification program.

Demand Conditions

Demand conditions measures the nature of home demand for the industry’s product or service. When the local demand for certain products or services is very high, the industry has to response to the demand in such way a that creates cost pressure and for innovation and quality among the competitors in the industry. Thus, the characteristics of local demand play important role in shaping the attributes of domestically made products. Therefore, Porter argues that sophisticated and demanding customers will create pressure on the local firms to meet high standard of product with low cost, and help the nation’s firm become more efficient and gain competitive advantage.

Growing demand of high quality shrimp led tie government to take legal benefits which proved to be unsuccessful

In the early seventies, Bangladesh entered the global export market for shrimp.This aquatic animal, which was locally much cheaper than any other seafood, suddenly became a very high priced commodity. Since then, much attention has been focused on increasing shrimp production. Initially, the public sector efforts concentrated on exploitation of the shrimp from the sea by employing trawlers which were not only costly to buy and import, but also expensive to operate. The increasing demand and steadily rising prices of shrimp encouraged its cultivation in the coastal belt of the country. See Figure 1 for a map of the shrimp farming districts in Bangladesh.

Once it got started with some success, the practices expanded very quickly, and with cheap land and cheap labor, shrimp farming expanded phenomenally. By 1982-83, the shrimp farming area occupied nearly 52,000 hectares, and by 1986 had spread to over 115,000 hectares. Currently, an area of an estimated 160,000 Ha is under shrimp farming, although actual numbers may differ somewhat. Of the total shrimp farming area, some 30,000 ha is fresh water shrimp farming while the rest is devoted to marine shrimp farming. The main districts in which marine shrimp are being farmed include Satkhira, Khulna, Bagerhat and Cox’s Bazar. The main Fresh water shrimp farming districts are Khulna, Bagerhat, Jessore, Narail, Gopalganj, Pirojpur and Noakhali. More or less 80% of the shrimp farming areas are in the country’s southwestern region while the rest are in the southeastern part.


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Many people are living on this industry as primary source of income

As previously mentioned, shrimp is the second most important export item toBangladesh. The cultured (cultivated) shrimp constitutes more than 95% of the total shrimp export. The main cultured species is the tiger shrimp (locally known as bagda shrimp) of which the technical name is Penaeus monodon. It is a marine shrimp and is cultivated in brackish water. The next most important export is the fresh water species, locally called galda, technically known as Macrobrachium rosenbergii.Large-scale shrimp cultivation is a relatively new phenomenon to the country.Coastal shrimp aquaculture in Bangladesh was greatly aided by the country’s unique natural features, including large areas of low-lying tidal land, a favorable environment, and a high market demand and economic returns. Refers to exports of shrimp from the major exporting countries in the world. Notice that Bangladesh is ranked eighth by value.

Relating and Supporting Industries

It indicates the presence or absence supplier industries and related industries that are internationally competitive. When the related and supporting industries are strong (capable to compete internationally) in their areas, it also affect positively to that particular industry; because, the quality suppliers provide quality factors of production, which causes quality output or products, and enables that industry to compete in the international market. Consequently, the related successful industries within the country tend to be grouped in clusters. This cluster helps and benefits each other with flow of knowledge and skills within the geographic area.

That will ultimately determine whether it is indeed possible for Bangladesh to meet the international market, environmental, and social challenges of shrimp cultivation. The consequences are huge: can the sector thrive and continue to benefit the hundreds of thousands of people who rely on this multi-million dollar industry for their living? Shrimp farming is having a positive impact on the livelihoods of many people in Bangladesh, especially the poorer “small-holder” farmers who may simply have a small


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pond where they cultivate shrimp to sell, but which can increase their income significantly.

It offers a reliable source of revenue that is often more profitable than other kinds of farming, or other non-farming employment. The objective of this paper is not to find a resolution to the conflict, but to show that there is a lot to be gained by looking closely at the human and economic consequences of the expansion of this industry and its future in Bangladesh.


Firm Strategy, Structure and Rivalry

It indicates the conditions governing how companies are created, organized, and managed and the nature of domestic rivalry. According to Porter, different nation with different management ideology may be helpful or not helpful to build national competitive advantage. Moreover, Porter also argues that vigorous local rivalries induce the firms to find more efficient ways of running business, which enable them to more efficient competitors in the international market. Domestic rivalry creates pressure to innovate, to improve efficiency, to minimize cost, and to invest on and upgrade the advanced factors. All these steps help create world-class competitors.

One of the ways they are doing this is through a new closed fresh water shrimp cultivation method, launched in 2003 by the USAID-funded Agro-based industries andTechnology Development Project (ATDP) that provides “technical assistance for the promotion of virus-free shrimp farming in Bangladesh,” which is now bringing hope to many farmers. The method reuses and recycles water rather than discharging it and


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letting new water in, which greatly reduces risk to local shrimp farms suffering from repeated virus attacks. “The closed system works by allowing the water in the shrimp pond to be purified through chlorination.”ATDP experts have said that the new method can also significantly increase yield production over the traditional methods of farming, increasing yields by up to ten times. By increasing yields ten-fold, it takes enormous pressure off the land and so greatly reduces the need to expand aquaculture, thereby limiting its impact on the environment. It may reduce water resource utilization as well. This technology will be crucial for the country, especially as international buyers have imposed certain restrictions on imports from Bangladesh to ensure high-quality and disease-free shrimp, produced in an environmentally and socially sound way. ATDP has developed a program that offers farmers and producers the opportunity to begin cultivating high quality, disease-free shrimp with reduced negative social and environmental impacts.

This model program offers new technology and a new approach to cultivating shrimp. “The Seal of Quality is a “legally registered symbol owned by the Seal ofQuality Organization that certifies that the product was produced and processed in strict compliance with standards and codes of conduct.” The Codes of Conduct are standards or regulations defining “minimal, internationally acceptable operations and management practices pertaining to technical, environmental, and social standards.” The organization provides training, technical support, laboratory services, and market research and development. A member of the organization must meet certification standards. An outside third party certifier monitors them to ensure that there is no cheating or corruption of the program. The Program will also ensure that Bangladesh can continue to sell its shrimp in international markets in the future. “Failure to establish an effective, privately run Seal of Quality Program would mean that eventually Bangladeshi entrepreneurs would be unable to sell their shrimp because international buyers will refuse to deal with countries whose shrimp do not meet international standards.” This would be devastating for Bangladesh’s economy.

To ensure that Bangladesh never reaches that point, it is essential that the Government of Bangladesh take part in the process. One important role the government has is to “enact legislation that would restrict the participation in the shrimp export industry by entrepreneurs who do not meet SOQ standards.” By supporting the Program, the government has much to gain. Production and export volume would increase significantly with improvements to technical management, and would in fact reduce its expenses because it is funded and operated by the private sector and costs the government nothing;


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in fact the government would save money that is currently being spent on an ineffective government-operated quality assurance program.

It is also the government’s responsibility to enforce law and order in the shrimp producing areas, especially concerning human rights and fair labor practices and to “assist the private sector and NGO’s in the development of alternative employment opportunities for the poor for whom the shrimp industry is no longer viable.”

Two Other Variables: Chance & Government

Porter also mentions about two other variables that can influence the Diamond structure. They are chance and government. Chance events (e.g. major innovations) can reshape the industry and provide the opportunity for one nation’s firms to supplant another’s. Government, by its choice of policies, can detract from or improve national advantage.

Despite obvious market potential, Bangladesh’s communication environment has been affected by the broader political climate. Prior to late nineties there had not been a clear, long-term strategy for sector development that is supported by the central government. To outside observers, industry reform proposals appear to be subject to changes in the political tide; both parties have sought to block initiatives vetted by the opposition, and each accuses the other of favoritism in assigning major projects.

Despite the political instability, government has quite open policy to pursue foreign investment in the country. Incentives for investors include: 100% ownership in most sectors; tax holidays; reduced import duties on capital machinery and spares; duty-free imports for 100% exporters; and tax exemptions. There are few performance requirements, and these do not generally present a problem for foreign investors. As there is no mechanical engineering firm in Bangladesh and as it is a very prospectus business venture, Bangladeshi government wouldn’t create any obstacle in the way of flourishing this type of business. Along with inviting foreign investment in the country, the government is also trying to shape up the communication industry, by introducing policy and reforms and strengthening the technological infrastructure of the country.


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Government institutions: Creating an enabling environment severe constraints exist in the framework for businesses that prevent Bangladesh from achieving its growth potential. Wide-ranging reforms – short- and long-term – are needed in particular in governance, infrastructure services and the financial sectors.

Trade liberalisation in the late 1980s and early 1990s made Bangladesh a more open economy than in was in the 1980s.Yet a large part of the trade reform agenda remains incomplete, with a substantial anti-export bias still and considerable tariff and non-tariff barriers to the free flow of goods and services still in place. Average tariff protection in Bangladesh is much higher than in all the other South Asian countries, except India (WB, 2002, Bangladesh: Globalisation, the Investment Climate and Poverty Reduction).

More open trade policies are, however, unlikely to generate large increases in investment and employment if the framework for PSD is counterproductive. A survey of Bangladeshi exporters, most of them locally owned RMG/knitwear and shrimp exporters, found severe constraints to growth and diversification. Most of the exporters complained about problems with obtaining export finance and problems connected to transportation to foreign markets, trade information and market intelligence. The majority complained about government and bank officials, complicated and changing government rules and regulations, and bribery. The majority reported constraints, especially with respect to electricity supplies, customs, port services, and shortage of skilled labour and low productivity in the workforce. They perceived unstable demand, advice on product development, telecommunication and air-fright to be more moderate problems.


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RecommendationThe shrimp sector has a responsibility to ensure environmental sustainability, economic liability, and social equality. We believe that with programs such as ATDP andSOQ in place, it is possible to bring Bangladesh’s shrimp industry up to international standards, to produce in an environmentally and socially acceptable way. With government support and greater public awareness concerning shrimp farming,Bangladesh can become one of the leaders in the shrimp industry and ensure its future.Bangladesh can increase its share of the global market if it facilitates change within the sector in order to meet changing trends in market demand in an environmentally and socially sound way.

We believe that within the next couple of years, there will be a lot of changes within the shrimp sector (hopefully for the better!) and I think it’s crucial and would be very interesting to continue researching these changes because of the great impact they will have on so many people. If we could continue on in my research, or maybe branch off a little and look more in depth at one aspect of it, I would look at women in the industry, or perhaps children. We’d do a lot of case studies, find out how and why they got into shrimp farming, what their husbands thought about it, if there are equal opportunities for them, if they had ever been discriminated against or abused because of it, and how their involvement has made them more independent, etc. Because shrimp farming is a relatively new industry to Bangladesh, and is still growing and developing, it will be interesting to see if it survives and how it changes to meet international standards and, in so doing, provide a model for other sectors of the economy, which it definitely has the potential to do.

Is it really a worthwhile offer to be involved in this industry?

Shrimp is a very important resource that supports a large industry in Bangladesh. Shrimp is the second most important source of export accounting for a yearly earning of over $US 300 million. Of all the exportable agro-based primary commodities, shrimp is by far the most important. It alone contributes more than 70% to the total export earning from all the agro-based products, including tea, raw jute, vegetables, fruit, etc.The shrimp industry also provides direct employment to over 600,000 people who in turn support well over 3.5 million dependents. This sector also supports large varieties of local level cottage industries (made out of the home) such as bamboo baskets, mats, traps, nets, rickshaw vans, tempos (tri-wheelers),


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boats, etc. Despite all these positive points, there are views that the shrimp industry is not without vices. While its supporters see it as a valuable way of generating foreign exchange, those against it point to the environmental damage, social disruption, and rising domestic inequalities that result from trying to meet the growing luxury demands of distant Western consumers. The debate has become very polarized between those who support shrimp farming, and those who are opposed to it.

The purpose of this paper is to highlight some of the key issues that will ultimately determine whether it is indeed possible for Bangladesh to meet the international market, environmental, and social challenges of shrimp cultivation. The consequences are huge: can the sector thrive and continue to benefit the hundreds of thousands of people who rely on this multi-million dollar industry for their living?


Should we go for in depth of this industry?


Development Plan


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The United States and the European Union (EU) each import 40 percent of the shrimp, with the remaining 20 percent going to Japan. Bangladesh is already among the top 10 exporters of shrimp in the world and accounts for some 3 percent of global production.

The project, known as Shrimp Seal of Quality (SSOQ), is a major part of the second phase of the “Agro-based Industries and Technology Development Project (ATDP II)” managed by the Louis Berger Group, a global consulting firm that won a $10-million contract from USAID in 2001. That contract has since been supplemented by a $5 million input from the Bangladesh government for mostly training purposes. Other project partners are Cargill Technical Services of Cargill Inc., an agribusiness company, and Land O’ Lakes, a dairy farm cooperative, both based in Minneapolis, Minnesota.

ATDP II, scheduled to end in December, is providing technical assistance to selected agribusinesses dealing with shrimp, fish, poultry, livestock, grains, fruits and vegetables. Set up in 2003, the $3-million SSOQ program aims to raise the volume and value of Bangladesh shrimp exports. This effort to impose uniform quality standards became necessary after the EU imposed a ban on Bangladesh shrimp imports in 1997 because of a failure to comply with EU quality regulations in shrimp processing plants in Khulna and Chittagong. At the same time, the Bangladesh government realized that up-to-date scientific methods were needed to maximize shrimp production for export.

A major thrust of the SSOQ program is to get rid of a wide-spread viral disease that has been responsible for declining production since the early 1990s of the marine shrimp known as “Black Tiger,” or “Bagda,” which dominates the export market. The other main variety of Bangladesh shrimp is actually a giant fresh water prawn known as “Galda,” which is immune to this viral disease. The Bagda proliferates in tidal basin areas along the Bay of Bengal coastline in brackish water, while the Galda can flourish farther inland in ponds.

The disease known as White Spot Syndrome Virus (WSSV) was detected through tests in a laboratory set up by the SSOQ program. The tests found the incidence of WSSV at over 70 percent. Although WSSV is harmless to the human consumer, it cuts down shrimp production in the farms drastically. The laboratory in Cox’s Bazar, at the southeastern tip of Bangladesh, screens shrimp fry, or larvae, for the disease from four designated hatcheries the fry are then put in plastic bags of saline water and transported by air to designated nurseries in Khulna in the southwestern part of the country for storage. Then the mature larvae are distributed to shrimp farmers participating in the SSOQ’s Farm Management Program. So far, only 4 percent of the total larvae used in shrimp production are screened by this laboratory.


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In addition to screening for WSSV, the SSOQ program seeks to put into practice shrimp farming techniques to improve yields, while decreasing the risk of the white spot virus spreading. Demonstration farms and field schools disseminate information about best management practices while providing training and consulting services to shrimp farmers.

Finally, the SSOQ, through its voluntary certification program, aims to assure buyers overseas that the Bangladesh shrimp industry has met international food safety standards, has addressed global environmental concerns, and has followed to international labor practices.

By adding to international food safety standards, Bangladesh is able to assure overseas buyers that the shrimp are free from disease and harmful chemicals and additives that are sometimes used to reduce spoilage. Global environmental concerns address the depletion of valuable mangrove swamps brought about by indiscriminate shrimp farming. International labor standards include banning of child labor and ensuring fair treatment of seasonal workers.

“The SSOQ program is a very holistic approach and it can serve as a model for certification of other exports such as fruits, vegetables and other fish.” according to McDonald Homer, the team leader of Enterprise Development at the USAID Mission in Dhaka, the Bangladesh capital.

Homer stressed that the SSOQ program is a “partnership between the private sector and the government of Bangladesh” and that “USAID’s role is that of a catalyst.” Louis Berger's Ron Gillespie, who the heads the company's Agro-based Industries and Technology Development Project in Bangladesh said the SSOQ program is part of a broader effort in Bangladesh to raise the quality of food produced in the country.

According to Gillespie, the focus on seafood has come at the right time for Bangladesh. “Compared with other shrimp-exporting countries such as Thailand and Vietnam, Bangladesh has a comparative advantage in heap labor and ample water resources that will stand in good stead in the future if the shrimp export market tightens,” the industry said.

According to Quazi Kudrat-e- Kabir, SSOQ’s regional director in Khulna, Bangladesh, the shrimp industry benefits three to four million “mostly poor” Bangladeshis while providing livelihood directly to 142,000 farming households numbering some 600,000 people. Kabir said that over 200,000 hectares are now under shrimp farming.


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By the end of the project in December, Kabir expects “over 300 shrimp farmer field schools” to sustain the program with 20 technicians trained to provide management advice to the farmers. SSOQ demonstration farms have already produced shrimp yields three to five times the national average yield of 350 kilograms per hectare, Kabir said.

The industry added that the U.S. Red Lobster chain of restaurants has contracted to buy the first batch of SSOQ program-produced shrimp. The chain’s parent company, Darden Restaurants, Inc. headquartered in Orlando, Florida, is already the largest U.S. importer of Bangladesh shrimp.

Location of Factory:


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Integrated Planning Perspective:

In Bangladesh, there is a lack of integration of ecological and environmental considerations into planning for a truly multispectral approach to project design and implementation. Without such an approach, development efforts cannot be sustained over the long run. Another example is the coastal embankment project where an integrated planning approach to water management can lead to increased income for all. Neither the fisheries sector nor the livestock sector nor the agriculture (crop) sector nor the water development sector can work this out alone.

Environmental changes induced by development projects of other sectors have already pushed major threats to the fishery development in the country in general, and shrimp cultivation in particular. Despite these constraints, the fisheries itself is now expanding with scant regard for its own environmental impacts. The tragic decline in fish availability particularly in the Inland Open water Capture Fisheries is a direct reflection of haphazard environmental disruption. Water projects including flood control and irrigation project activities have destroyed fish habitats over vast areas of our inland open water systems of fisheries, biocide applications and toxic chemical pollution form untreated industrial effluents have had unmeasured destructive effects and deforestation of mangroves, has depleted the nutrient - rich stores of our coastal environments and at the same time, the fish availability to the people has been declining, whereas the shell fish (shrimp) exports have become the nation’s third Important foreign exchange earner. This is a good news for us, but unplanned shrimp culture activities have again destroyed the valuable mangrove forests both in Khulna and Cox’s Bazar regions is a threat to our coastal environments and this gives rise social conflict

We are well aware of the fact that the Flood Control drainage, and irrigation projects adversely affect fish habitats, migration routes, and breeding grounds. These works reduced flood lands by about 2.1 million ha, thereby reducing the potential for coastal fishery production. The adverse impact of FCD/FCDI projects on fisheries habitat is well known yet the Ministry of Irrigation, Flood

Control, and Water Development has not taken necessary and adequate measures to minimize this problem. The problem of discriminate use of pesticides and fertilizers in the paddy fields are serious problems in Bangladesh, has harmed fish habitats, fries and declined fish production in the coastal areas year after year and creating environmental problems more serious than earlier days. The use of fertilizers and pesticides in


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Bangladesh has increased according to ESCAP (1987), more than 25% of chemicals applied (more than 40% of fertilizer applied) are washed away; the ràsidues of the other chemicals can kill fish, especially the shrimp fries. It is essential to limit the use of chemicals in areas where rice and fish or shrimp are grown in rotation. In Bangladesh 90% of all agricultural pesticides are used on rice, mostly on HYV. The initial results indicates that the use of pesticides can be cut in half by adopting Integrated pest Management (IMP) techniques practiced in other countries of the region.

Distribution of Shrimp Culture Area

Although the country-wide annual growth of pond area appears to be about 15% during the period 1982-85, the annual rate of growth in the Khulna division was about 27%. The most important factors determining the location of shrimp farms are: (a) Salinity (h) pre-existing older or ponds (c) land elevation (d) flood hazard (e) source of shrimp fry and (f) establishments of infrastructures. The Khulna Division has the best overall condition for shrimp farming and is considered as the most suitable area for shrimp cultivation. Since a significant percentage of the Khulna area with the best salinity range for shrimp culture is low-lying paddy lands that are already protected by Water Development Board embankments, the cost to upgrade these paddy fields for shrimp culture is reasonably low.

At present the stage of practice involves the construction of a small wooden sluice-gale through the main WDB embankment and the upgrading of existing paddy field dikes so that water depth of at least 0.5 m can be maintained. The Khulna Division is also a good source of natural shrimp seeds and distribute shrimp fry and with available infrastructures i.e. roads. electricity, transportation etc. to the major culture areas. Given these and other favorable conditions 86,191 ha of ponds (gher) have already been developed in the Khulna by 1991. This accounted for 60% of the total area under shrimp culture in Bangladesh while expansion of this activity in this region of the country appeared to be growing by 27% per year and this rapid expansion implies a direct negative impact on ecology.

In Cox’s bazar, there were 39,468 ha of land under shrimp culture during 1987-88. This represents about 30% of the country’s total shrimp culture area. the potential for shrimp finfish culture and arterial production holds promise in Saitpans in Cox’s bazar and little investment was required to upgrade the existing saltpans to accommodate shrimp and finfish during the rainy season while continuing to produce salt during the dry season.


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However, future development of new ponds in Cox’s Bazar requires huge capital investment to clear and construct embankments. A further impediment to expansion in the Cox’s Bazar Division is the acid soil conditions that exist in many areas that would otherwise not be suitable for development. It is also more difficult for farmers to culture shrimp throughout the year because of the generally lower high tides that prevail in this area during the dry season. To increase the duration of the shrimp culture period, most existing farmers would have to install pumps, Because of these limitations. expansion of shrimp farming into new areas appears to be growing at a slower annual rate of 7% and existing farmers have been slow to adopt improved pond management practices due to unplanned and unmanaged shrimp culture which have already destroyed both the valuable mangrove forests and agricultural land in Khulna and Cox’s Bazar regions.

Shrimp Culture

The spread of shrimp culture has been unplanned, uncoordinated and essentially uncontrolled. In some instances it has been observed no matter whether the land is suitable or unsuitable for shrimp, is flooded with saline water. As the intensity (unit productivity) of shrimp culture increases, it is imperative that this should only be done on the most suitable land, preserving the remainder lands for paddy or forests. The shrimp culture area, however should strictly be demarcated sooner for better management of coastal zone. In case of intensification of culturepractices, it should be done in a limited area and the semi- intensive culture practice would be the most suitable farming system in Bangladesh.

Water supply

In order to implement Thana Parishad’s responsibility for water supply in coastal areas, technical assistance of the Directorate of Public Health Engineering of the Ministry of LORD is needed. This should take the form of hydro-geological mapping (as is now being done on a pilot scale in Shyamnagar, Satkhira) showing, for each Thana, the least-coast water supply options for each hydro-geological zone-considering the technical options of shallow and deep tube wells, sand filtration, infiltration gallery, and cistern for rainwater collection and water reservoirs which may act as source of water supply for fisheries as well as for crop production water supply must be ensured for all sectors.


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Biomass Production

The over-cutting of village trees and shortage of livestock for draught power are serious impediments to increased agricultural production and ecological stability in Bangladesh. These issues are made worse in the coastal areas by the already severe shortage of draught animals in Noakhali and Satkhira district and pressures on trees and livestock grazing brought about by the rapid, uncontrolled expansion of shrimp farming in coastal areas is a regular practice.

Collective Resource Management

The third major problem of coastal area development is the lack of collective resource management approach which will facilitate, and even be a prerequisite for sustainable development approach. Unplanned privatization is a disaster for the environment and therefore in the long-run, sustainable development plan may not be possible. This is because the market does not concur price loss to future generations, loss to the poor and powerless people, or loss to the ecological base upon which the Bangladesh coastal economy is based. This certainly does not mean that there is no management of coastal zone. In case of intensification of culture practices, it should be done in a limited area and the semi- intensive culture practice would be the most suitable farming system in Bangladesh.

Village Environmental Perspective

The fourth major problem is that in Bangladesh the environmental crisis is not seen at the micro-level, from the coastal village perspective; (i) The energy crisis of declining availabilities of fuel, animal feed and organic material for soil fertility maintenance, (ii) the nutritional crisis for increasing numbers of mal-nourished people; (Hi) the water supply crisis of little improvement in village water supply situation in coastal Bangladesh, and (iv) the waterlogging and salinity crisis of vastareas of land made unfit for highly-productive agriculture.


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Traditional Cher Fisheries

This is an age-old traditional practice for shrimp cultivation in some enclosures which is locally known as gher. The flow of water into the enclosed areas is usually controlled by small wooden sluice box. From February to April sluice gates are opened to allow the entry of saline water carrying juveniles of various varieties of coastal fin fish and post-larvae of shrimps which breed in the sea and the estuarine water get into the enclosures are allowed to grow until they attain harvestable size. This practice of natural stocking of the ghers is being progressively replaced by artificial stocking with the PLs of desired species of shrimps. This type of shrimp culture is termed “Extensive culture”, done in an unmanaged manner in our coastal areas and the yield per annum not exceeding200-300 Kg/ha, of course, with higher production is also observed.In Khulna region, the cropping pattern in brackish water shrimp culture in dry months followed by a crop of local variety of paddy (Amati) in the wet months from July—December. In Cox’s Bazar area, more than 35,000 ha of tidal land are utilized for salt and shrimp production on alternative way.

Bheries (Shrimp plus paddy) Fisheries

Chers constitute one of the important fishery resources mainly in the Khulna areas. With a waterspread area of over 50,000 ha and spawning across the lower, medium and high saline zones, a modified with a little scientific practices offer immense scope and potential for augmenting fish and shrimp production through improvement of traditional practices along with paddy production.

The Sherie Fisheries practised through ages in brackishwater tidal wetlands, namely rnudflats, swamps, marshes, and paddy fields typically located in Khutna regions, This traditional fishery is reported to have first developed in spill area of Satkhira district, which have been silted due to sewage discharge for many years.

Certain portions of rivers, canals and spillway were embanked and ôonverted into bheri fisheries in Bangladesh. Later, this fishery has been developed in the tower dettaic region known as the gher fisheries in Sundarbans with the advancement of transport facilities. Since the effect of tides is felt far inland even in silted up rivers and also in tributaries,


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Ghers in good numbers also exist in the upper low saline zone far away from the sea face in the coastal areas.Earlier some contributions on the development of bheri fishery has been made by Refauzi and Nair (1944), Naidu (1952), Pitlay (1954), pillay et at, (1962) and Parks et at., (1962) and Parks et at. (1964) and Prakash (1965). Available information on this vast fishery resources is meager in Bangladesh, if available, they are not even updated and most of them are kept under dump condition.

Over the passage of years bheri fisheries have assumed a new dimension in brackishwater aquacutture as these have formed a very important productive areas which needs development efforts and continuous thrusts. The salt water in bheries are important in Khulna are prepared by putting up strong embankments on the bank of the tidal rivers, enclosing areas to be reclaimed.

The fish culture operations commence in bheries or Ghers from January—February, when ponds are stocked with shrimp fries. During high tide, water enters through the sluice gate along with a wide variety of fish seeds, including predatory fishes. After stocking of ponds, no attention in respect of feeding, water quality, health care of the stocked animals and these management aspects is not paid by the fish farmers. Fish feed depend on autochthonous food materials as well as that are brought in by tidal water.

Shrimp culture followed by Paddy Cultivation

In this pattern, one crop of transplanted rice is grown between July and November following a crop of shrimp. Under this system, he harvesting of brackishwater shrimp is completed by June or July before the water salinity decreases below.the tolerance limit Df P. Monodon. Water in the deeper canals in the Gher is retained and the stocks of linlish like liza parsia, Rhinomugil corsula, lates ca/canter, Mystus, etc. Thereafter, rain water is allowed to accumulate and is drained out to remove salinity in the field. After the plantation of T. Aman, rain water is allowed to accumulate inside the Gher to flood the land to a depth of 60-100 cm. At this time, fin fishes retained in the deep canals move back into the inundated lands, feed and grow there until harvested. At the same Lime, post.larvae of the Macrobrachium rosenberg/i, rui, cat/a, mrigal, Rajputi and Telapia are also liberated in the inundated paddy fields. Thus during the monsoon months, paddy-cum-fish culture to the real sense can be properly practised, if the farmers are aware of the simple culture technology through integrated method.


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Shrimp Culture tollowed by Salt production

About 14,600 ha of salt beds produce an estimated 46,000 ml of salt per hectare in Cox’s bazar. Salt beds are encircled with low earthen dikes where sea water is brought in, preserved and evaporated druing the dry months between November and April. Between May and early December, when salt cannot be produced because of the rains, some 10,000 ha of salt beds are used for growing a crop of brackishwater shrimp and finfish in Cox’s Bazar area. It also depicts the semi-intensive cropping pattern that can be adopted in future.

Advanced Culture system

In this farming method, the improvement over the traditional approach is in the introduction of a systematic pond configuration. Each pond has seperate inlet and outlet gates to facilitate water exchange, pond preparation and harvesting is done scientifially.This method involves higher stocking rates, use fertilizers and sometimes addition of supplementary feeding along with regular water management activities. The typical rate of stocking fry for semi-intensive cluture operation varies from 50,000 to 150,000 fry per hectare. This operation also requires the use of water pump to facilitate water exchange. This method may not require supplementary feeding but only fertilization of pond water would be good enough and if feed is given, would be, of course, better.

ENVIRONMENT, FISH AND SHRIMP CULTURE

The use of aquatic resources in Bangladesh nowadays raises a range of environmental issues: The nature of various environmental considerations will depend on the nature of various environmental considerations will depend on the nature of the biological resources, raising of various fishes, the fishing operations, their social, economic and administrative contexts. According to environmental conditions, the following fisheries environments of Bangladesh could be categorized as:

a. Competition and interaction between these fisheries can be a source of serious social problems. The problems caused by long-range fishing fleets have been


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qased by the general introduction of 200 mile as Exclusive Economic Zones (EEZ), but there are still serious questions needed to be addressed regarding conditions of access when the coastal state does not fully explioit its EEZ, and collaboration between countries in the conservation of resources shared, highly mobile or highly migratory stocks. To a large extent, human activities other than fishing have only a limited impact on offshore resources, and environmental problems are associated with conserving and managing target species. However, several important stocks, notably the valuable penaeid shrimps, have their nursery areas in coastal waters and estuaries and pollution, land reclamation and destruction of mangrove areas can seriously affect offshore catches of the adult fish or shrimp. Many of the countries receiving Danida assistances boardering the Indian ocean where there are few large- scale distant-water fisheries. Offshore srimp fisheries, particularly in Bangladesh, tend to be the most important and it is this which is showing the classic signs of overexploitation of resources in the coastal areas.

b. This problem escalates with increasing human population and already fishing has reached the limit for optimum sustainable yield of the resources in many places. Attempts to improve conditions for fishermen by introducing more efficient measures, but more costly, fishing methods, can be counter-productive, with the same gross income having the shared between the same number of fishermen, but with higher production costs.

c. The impact of other human activities can be considerable, ranging from the physical destruction of habitats by land- reclamation, dynamiting and use of trees for building, to the effects of pollution. Sometimes the damage is done by fishery-related activities such as the use of coastal areas for aquaóulture, or waste from fish processing plants, but more often it is done due to other aspects of development activities.

The successful conservation of auatic resources and system management of fisheries inevitably involves restrictions and controls at the same time, oven though they can be minimized by suitable patterns of development. In legislative terms this involves two stages. (a) The first is the basic framework, under which fisheries departments should be granted the powers to set various measures (closed seasons, minimum sizes of net meshes, the number of licenses that are issued, restrictions on size of vessel, and the type of fishing gear attached to such license as a single door delivery system. as is thought now to be the best solution. b. The second is the determination of specific measures to be


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used in particular cases for example that there should be a closed season and that shall last from May 1, to october 1, or that 100 licences shall be issued for trawlers or mechainzed boats not more than 20 m in overall length, are likely be in operation.

Environmental Awareness and Education

Environmental awareness cannot be addressed adequately through the form& education system. Awareness must also be created through non-formal means since the national overall literacy rate is only around 25 percent, with female literacy estimated at only 15 percent in the country which lies the minimum in the region. People are in general articulate and perceptive and have a developed traditional knowledge and 7eel’ for environmental issues, particularly as they affect their daily life. But very unfortunately little formal or informal information reaches the rural population. An environmental awareness drive is urgently needed and the Government and the NGO’s could share the burden of spread of awareness side by side with the common goal for development with particular emphasize or environmental conservation.

Marine and Offshore Environments

To a large extent, human activities other than fishing have only a limited impact on offshore resources, and environmental problems are mainly associated with conserving and managing the desired species of economic importance. However, several fish stock in open sea is seriously responding to environmental degradation, notably the valuable pinhead shrimp breeding grounds have their direct relationship with nursery areas in coastal waters and estuaries, and pollution, land reclamation and destruction of mangrove areas can seriously affect offshore catches of the adult fish or shrimp. Once the environmental degradation occurs even in main land will have similar adverse effects on the marine stocks.

Inshore and Coastal FisheriesIn Bangladesh there is no marine aquaculture until now in operation and a very few existing brackish water aquaculture practices are in operation in almost exclusively of shrimp raising in Khulna and Cox’s bazar areas.


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However, possible harmful consequences of converting poldered areas, mangrove and agricultural land to shrimp farming are rendering the soil too saline for agricultural use and also weaken the embankments, and resulting the lower shrimp production.Some of the major environmental concerns include the following:

a. The impact of mangrove removal in the Sundarban areas on the natural shrimp nurseries of the open sea fishery.

b. Widespread collection of shrimp larvae in the coastal areas followed by wastage and destruction of natural resources by colossal loss.

c. Fishing groups collect millions of Juvenile and if released to the sea would regenerate the resources many more times, there is also a large number of other fishes of economic importance are lost at every catch of juveniles of shrimps as .‘colossal lose which warrants immediate investigations Or (PL of shrimps 1 species or after elides are lost).

Sediment eroded into large rivers increases turbidity of the coastal water around the mouth of the river as well as the in the river itself. The resulting decline in the primary productivity of coastal waters can cause a parallel decline in coastal fisheries.

Inland Waters

Fisheries in these inland wetlands are highly seasonal depending on movements of the fish into the flood plains, and their concentrations as they move off at the end of the flood season. These stocks can- suffer from overexploitation and are also vulnerable to other human interventions, especially water uses of multidimensional of activities that change the pattern of river flow. large dams, embankments, reduced seasonal floods can cause almost as much loses to the flood plain fisheries and also in up and down the streams. A continuous process of conversion of haors to paddy cultivation has led to extensive and rapid deforestation and decrease of aquatic habitat over the last three decades, large scale clearing of wetland forest of hizol, koroch and other inundation tolerant tree, brush and reeds, has undoubtedly reduced the floodplain environment and its capacity to produce more fish. Sedimentation re-excavation. Overfishing of many fish stocks is widespread. Community based fisheries management programs should be implemented along with fish sanctuaries.


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Potential land for shrimpThere exists substantial potential for expension of brackishwater shrimp culture in Bangladesh considering the followings factors: (a) international demand for shrimp (b) improvement of shrimp culture technology from the existing extensive pattern to semi-intensive and intensive patterns and (c) expansion of more suitable areas for shrimp culture operation.

International demand of Shrimp

The shrimp is expected to grow at a rate of between 5 percent per year during the next 10 years (MPO, 2005). This demand has given a great boost to the shrimp culture industry. Frozen shrimp has become a major export item for Bangladesh.

Semi-Intensive Shrimp Farming Area

The FAO/UNDP 20-year fishery development plan for Bangladesh prepared in 2005 envisages that a total of 129,530 ha of coastal land will come under shrimp and finfish aquaculture by the year 2025. But all we need at the moment is a vertical development rather than the horizontal expansion of shrimp culture areas in the context of Bangladesh. We have a limited areas for development, we can not very well afford to provide unnecessary lands for shrimp culture. All we do at the moment is to grow shrimp in limited areas without affecting other resources belonging to other sectors.

The above plan, could be possible if the hatchery technology is established in the country which has no alternative. It indicates a continuous view in respect of technological improvements and inputs to raise the level of yield between 500-1000 kg/ha/yr. until hatcheries are established no further increase could be achievable.The IDA-funded shrimp culture projects, implemented by DOF, envisages a total production of 31,720 mt of exportable shrimp and 2,340 mt of mistaneous varieties of shrimp and fin fish obtainable per year from the ninth year of project operation from 9,524 ha of farms. In terms of yield, per year, will mean 180 kg/ha/yr of exportable


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shrimp and 245.7 kg/ha/yr. of miscellaneous produce. However, it is worthwhile to mention that out of 7,024 ha, 5,594 ha (80%) are located in Cox’s bazar where the current yield is low because of unfavorable soil conditions, i.e. acid soil. We should welcome the ideas indicated in the project, if it succeeds in future.

Spatial Distribution Of Shrimp Area (Potential)

According to the MPO’s estimate, a future net cultivable area (NCA) suitable for Brackish water aquaculture in Bangladesh. All lands within 2 km of a brackish water source were included in the potential available land. The above observation also indicated that within 2 km of brackish water source falls within a suitable range of salinity for getting at least one crop of shrimp (the February isotherm contour of 6000 micron/cm was selected as the limit) were categorized as prime lands.

The availability of prime land for brackish water aquaculture is not a constraint to development. The MPO estimated that there are 108,00 ha of prime land remaining the Southeast region and although a less detailed study was conducted in Cox’s bazar, a roughly estimate by the author that there are not less than 35,000 ha in that region, are suitable for further development of shrimp culture. In recent years the area under production in Khulna has expanded at an annual rate of 27% as compared to about 7% in Cox’s Bazar. However, as explained earlier, future expansion will be more expensive so the rate of growth is likely to decrease, especially considering the limited supply of stocking material.

Existing Yield of Shrimp

The yield of shrimp varies from one place to another and the production depends on the skillful management and the ecological conditions of the sites. Data from various districts over recent years can be ascertained from farms located in Satkhira district seem to be good performers under the existing traditional system of Shrimp culture programmers in the country.

When shrimp and finfish are disaggregated, finfish occupy second place of the total production, but their value compared with P. monodan looks rather insignificant. In terms of price, the farmers hardly get even 10% of the price of shrimps. The major conventional practice for stocking the farms with Post-Larvae, Juveniles shrimp and finfish of various


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types get entry through water exchange at the time of tidal inflow. Thus, the natural composition and concentration of the fry in the river and the distance of the farm from river usually determines the stocking density on the farm. As a result of this traditional stocking, various types of undesirable species of fish can get in. But some species which are high prized fishes e. g. mullets, Bhetki and other tasty fishes, could be raised in the farms, if the management techniques if properly practiced. As the number of farms increase, obviously such as natural stocking become inadequate. Supplemental stocking has thus become a major determinant of increase of yield. Limited evidence indicates that a positive correlation may exist between such supplemental stocking and yield.- An MPO’s report estimate the average stocking density in satkhira at 16,000 p1/ha. However, the medium number of such fry released on a supplemental basis as reported by Delta Development project appears to be 4000-5000 per ha which really looks very understcicking. The national average production of shrimp appears to be 120 kg/ha/yr (workshop Chamber of Commerce, Chittagong, May 2002) and 190 kg/ha (Nuruddin, M. 2001), and now (2003), the production rate exceeds 200 Kg/ha/yr. but even then the production rate seems to be too low in comparison with the production rate of other countries.lt is, therefore, a need to gear up the process of production as a whole. Instead of extending the shrimp culture area right and left in the coastal zones of the country, we should go for adopting a technology to rise the production rate in a limited area. The vertical development through semi-intensive and intensive methods should be introduced by the interested farmers, which is the only way to produce 70,000 mt in limited areas in the country by the year 2020. The author (2000) identified the following areas indicating the area wise production rise through intensive and semi-intensive culture method as shown earlier part.

Since the natural resources of shrimps are diminishing, there is a genuine demand for cultured prawns. In term the supply of wild PLs is insufficient for culture purposes because of the degradation and pollution of their environment. There is no doubt that hatchery production is the best model for fry supply because the natural resources can not be relied upon forever and it finite.

Finally

Coastal aquaculture is relatively new and strange for many organizations concerned with fisheries development and may be misconceived from impresions and advice gleaned mainly from the intensive commercial aquaculture systems. Most agriculturists are


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unaware of the merits of aquatic food production, particularly its high effciciency and scope for integration with agricultural activities.

Some shrimp species spend their entire life cycles in dóep water; others spawn at sea, and then the larvae migrate to the coastal wetland nurseries, where, together with larvae of crabs, many fish, grow quickly in the food- rich environment. Mangroves support a wealth of shellfish, prawn, oyster, clams, mussels and crabs. The mudskippers feed on crabs and snails which in turn feed on decaying mangrove leaves or other vegetation. Snails range from the soil and sediment to roots and trunks where they may graze algae. Worms and microscopic plants and animals, all abundant in mangrove soil, process organic material, recycle nutrients and are used as food for higher animals. Mangrove crabs hatch their eggs to coincide with spring high tides each month, when the maximum flooding allows their larvae the best chance of survival, shrimp species and white prawn, depend on mangroves as food-rich nursery areas, and in turn support major fishes in the coastal Bangladesh. Freshwater prawns, spawn in the brackish waters of mangroves; the larvae feed in the estuary before migrating upstream to the freshwater environment. The mangrove crab (scylla serratta) has now become an important industry in the Khulna region but we have still go a long way for cultLring them in mangrove ponds.

Aquaculture is not easy, especially where it has no continuous tradition. It has a far weaker technological base than agriculture. Moreover, the aquatic medium is in direct and intimate contact with the metabolic processes of fish and its composition/quality are crucial factors in fish health and culture performance. The aquatic medium is shared by many users and supports diverse fauna and flora. As aquaculturists develop better domesticated breeds, international demand for these will increase. This means increased transfers of exotic breeds, as has been of immense benefit for crop and livestock farming. However, cultured aquatic organisms often escape and form populations which may : a. displace or interbreed with wild stocks, thereby threatening natural genetic resources; b. disrupt natural habitats by causing proliferation or clearance of vegetation or increasing turbidity (benthic foraging); and c. introduce aquatic pathogens, predators and pests inadvertently. Here again a balanced view is essential, weighing the benefits of using exotic breeds against possible environmental consequences.

In conclusion, the best socio-economic return from mangrove forests is obtained through the exploitation of inshore fisheries, provided the production form the fisheries is sustained through proper management, some limited timber extraction is also feasible. At least part of the mangroves should be maintained as virgin forest for the conservation of


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wildlife species. Mangrove forest should never be cleared for urban and industrial development, nor for agricultural or aqua cultural projects. Finally, the shared fisheries resources in conjunction with the associated mangrove forests should be managed jointly by all concerned departments to arrive at the national goals.


Shrimp Industry:: An Overview of Bangladesh

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