1 Introduction

This chapter draws findings from Suzuki (2021) and Suzuki et al. (2021, 2022). The authors thank Nguyen Thu Giang for her assistance in preparing the data used.

Global fish consumption increased rapidly over the past decades due to rising awareness of healthy diets. The aquaculture sector has contributed to this growing fish demand, providing a higher proportion of total fish consumed than the share supplied by capture fishing in 2018 (FAO 2020; ADB 2021). While fish farming has long been a tradition in many Asian countries, new technologies and farming practices have been introduced to meet the growing demand. Praised as the ‘Blue Revolution’ in many Asian countries, this sector is important for development as it can contribute to income generation of smallholder farmers as producers and nutrition improvement of the poor as consumers, and because of its potential impacts on the surrounding environment (Rashid and Zhang 2019; Suzuki 2021).

However, the sector faces one persistent issue: Disease outbreaks. Lafferty et al. (2015) noted that “Aquaculture’s history is one of the victories over diseases followed by new challenges” (p. 476). Recent intensification of farming methods to meet the growing demand for fish is also prone to disease outbreaks unless proper practices are in place. As fish vaccinations are not common, farmers tend to use antibiotics, which are prohibited internationally, to prevent the occurrence of such diseases (Lee et al. 2019). Although international and local guidelines for good fish farming practices have been developed, they are not adopted universally in developing countries. Due to the difficulty in managing the wide variation and number of small-scale farmers’ farming practices, exported seafood is notorious for the high rejection rates at the ports of developed countries (UNIDO-IDE 2013). Having high rejection rates harms the reputation of the exporting country and affects the volume of its exports. Thus, it is critically important for exporting countries to manage this traceability from the very upstream of the supply chain.

In this chapter, we will illustrate a brief history of the development of shrimp farming in Asian countries based on a literature review and present a case of Vietnam to show the sector’s role in the economy, particularly relative to rice production. Then we discuss the challenges of disease outbreaks drawing from our own research. We conclude with some policy recommendations and the way forward for the sector.

2 Brief History of Shrimp Farming in Asia

In the 1970s, shrimp were mainly caught in the ocean by trawler vessels (Murai 1988). However, due to the risk of depleting marine resources with this untargeted fishing, many governments placed bans and restrictions on trawling methods in the 1980s. Around the same time, a Taiwanese researcher succeeded in the induced spawning of black tiger shrimp in 1983, which resulted in the rapid growth of shrimp farming in Taiwan (Murai 1988). Taiwan was able to achieve high growth in this sector; this is because it has a long tradition of fish culture, flat coastal land, and appropriate climate. It also had advanced aquaculture technologies, such as mass propagation and disease diagnostics and prevention (Chen and Qiu 2014). Their innovations in shrimp farming technologies were also supported by the foundational works of Japanese researchers and amplified by the strong demand for shrimp imports from Japan (Murai 1988).

Technology developed in Taiwan and Japan spread to other countries in Southeast Asia in the 1980s, and the production of the black tiger species started in Indonesia, the Philippines, and Thailand (Belton and Little 2008; Yi et al. 2018). In the Philippines, the San Miguel Corporation played a key role in converting sugar land to shrimp ponds, responding to the depressed sugar sector. Meanwhile, government support was more apparent in Thailand and Indonesia. The Thai government started supporting the sector in the early 1970s, and the growth in intensive production started in the late 1970s and early 1980s. The Asian Development Bank had a large project on this sector in 1981, and a joint venture between the largest Thai conglomerate, the Charoen Pokphanand Group (CP), and the Japanese conglomerate Mitsubishi was established in 1986 (Hall 2004). In Indonesia, the government promoted shrimp aquaculture after the ban on trawler shipping, which was the major form of shrimp production at that time, and declining oil prices in the export market.

Although the development of shrimp farming was one step forward in reducing the negative impacts on marine resources, in the 1990s, many environmental issues related to aquaculture emerged, such as land subsidence due to pumping too much groundwater, frequent disease outbreaks, destruction of coastal areas, and severe damage to the sector. In the same period, the shrimp sector in all the countries was hit by disease. The Thai shrimp sector was more resilient in that it was able to sustain itself by shifting the major production area from the Gulf of Thailand to the south and applying various farming techniques innovations. Hall (2004) noted that the relative success was mainly due to the following: (1) farmers changing their risky production practices; (2) government support, including investment in infrastructure and the establishment of water treatment centers; and (3) various farming innovations developed in Thailand by both the CP group and small-scale farmers. The CP group operates at every stage of the shrimp supply chain, from hatcheries, feed mills, shrimp ponds, laboratories, research institutes, and marketing stages, and it plays an important role in educating independent small-scale farmers on farming techniques (Goss et al. 2000). Hall (2004) also noted that feed mills in Thailand have incentives to teach farmers good practices as receiving returns on their investment in feed manufacturing takes time. Moreover, small-scale farmers have been actively developing on-farm innovation technologies in Thailand. Conversely, the separation of landowners and farm managers in the Philippines was not conducive to promoting on-farm innovations as it reduced incentives for farmers to be more creative to increase productivity.

The CP group also greatly influenced shrimp farming in other parts of Asia via their subsidiaries or joint ventures in Indonesia, Cambodia, Vietnam, and India. In Indonesia, the response to the disease outbreak by small-scale shrimp farmers was either to move under the control of large-scale corporations or exit production. The government also promoted the relocation of shrimp ponds to other regions through their transmigration programs, which assisted farmers with pond infrastructure and credits. The largest of these corporative complexes became as large as the size of Hong Kong, with 1,600 km of canals and 18,000 ponds (Hall 2004). Indonesia attempted to address this problem by centralizing the water control system.

Environmental issues caused by shrimp farming combined with the depletion of marine resources due to capture fisheries led to the launch of the ‘Code of Conduct for Responsible Fisheries,’ which was endorsed by all the FAO member countries. This code outlines the importance of managing fisheries and aquaculture sustainably, and many technical guidelines and instruments have been developed to realize the principles of the code. Thus, many international organizations joined together to form a consortium to prepare specific guidelines on shrimp farming. After many years of careful research and discussions, the ‘International Principles for Responsible Shrimp Farming’ (FAO et al. 2006) was launched in 2006 and endorsed internationally (Corsin et al. 2008). Further, more detailed guidelines for actual practices that are effective in implementing these principles were developed in many countries (e.g., Vietnam, India, and Thailand) and are referred to as ‘better management practices’ (BMPs) and ‘good aquaculture practices’ (GAPs) (Corsin et al. 2008). These are translated into local languages and disseminated to shrimp farmers via their agricultural extension officers. In addition to these foundational efforts, there have been many international guidelines, standards, and certifications to minimize the adverse effects of shrimp farming on the environment, such as GlobalG.A.P. and certifications by the Aquaculture Stewardship Council (ASC). Many countries have also adopted national certifications in the aquaculture sector. For example, there are three national certification standards in Thailand: GAP, code of conduct, and TAS-7401. The Thai government also requires traceability from hatcheries to the export and registration of shrimp farmers (Suzuki and Nam 2019). Meanwhile, in Vietnam, the government has developed VietGAP, a national standard encompassing various international standards.

Despite all these international efforts to minimize adverse effects, issues associated with sustainable fish farming remain in many countries. First, this may be caused by the diversity of the countries involved in modern aquaculture and the location-specificness of aquaculture, similar to that of agriculture. Second, most of the primary fish farmers in Asia are small-scale farmers operating in ponds less than 1 hectare in size (Hall 2004). Owing to this scale, the number of farmers involved, and the decentralized system involved, controlling all fish farming practices on the ground is extremely difficult. Third, according to Bush et al. (2019), in recent years, the aquaculture sector, which was a ‘south–north’ trade driven by the north lead firms, has transformed itself into a “multi-polarity driven by competing producers, traders, and consumers across, within, and between southern and northern countries” (p. 428). This structure makes it difficult to manage good practices for smallholders as required practices and standards vary across markets.

3 Development of the Shrimp Sector in Vietnam

Vietnam was one of the newly-emerging shrimp exporters in the ‘00 s. The country’s rapid growth of shrimp production and exports started when the government issued a decree that allowed farmers to convert their rice farms to shrimp ponds in 2000. This decree was highly appreciated by people in the coastal areas in the south because their rice yields were not as high as in other parts of the country due to the saltiness of their water. Ca Mau, which is located in the southernmost part of the country, produced the largest proportion by volume of farmed shrimp (22%) and farmed fish (4%) in the country in 2018 (General Statistics Office of Vietnam 2020), and the areas for aquaculture ponds and production volume increased after 2000. This was accompanied by a significant decline in paddy production from the same province (Fig. 21.1).

Fig. 21.1
figure 1

Change in rice and aquaculture production in Ca Mau Province. (General Statistics Office of Vietnam various years)

It was reported that farmers may earn returns ten times more in shrimp farming than those in rice farming (Belton and Little 2008). Figure 21.2 shows that the gross output of product per hectare is higher for the aquaculture surface area than the cultivated area in Vietnam, and the recent growth of the former has been exponential. Black tiger prawn (Penaeus mondon), which was originally popular in the area, was cultured up to twice a year, while Vannamei (Litopenaeus vannamei), currently the dominant variety, can be cultured up to three times a year as their production cycle is only for three months. Over time, shrimp production in Ca Mau became more intensive, and since 2017, a new farming method known as ‘super-intensive’ has emerged (Nguyen et al. 2019). The required capital differs across the farming methods adopted. While extensive farming does not require industrial feed, intensive production requires various inputs, such as industrial feeds, aerators, electricity, pumps to remove waste from the pond floor, automatic feeding machines, shade, and water reservoirs. Shrimp needs to be fed 4–5 times a day, and as shrimp are nocturnal, farmers also feed shrimp during the night. Further, farmers need to maintain the water quality in the pond. This high-risk, high-return nature of intensive farming makes it unsuitable for all farmers, even if they have suitable land. In Indonesia, Yi, et al. (2018) provided quantitative evidence that, while there is no barrier to entry for Vannamei shrimp farming, there are barriers to starting intensive farming methods, largely due to capital constraints.

Fig. 21.2
figure 2

Gross output of product per hectare in Vietnam. (General Statistics Office of Vietnam various years)

We examined how the development of the shrimp sector took place in relation to rice production based on the Vietnam Household Living Standards Surveys (VHLSS) 2008 and 2018 conducted by the General Statistics Office of Vietnam (Table 21.1). Over the decade, the annual income of households increased by 124%. We notice that the area of rice fields declined sharply by 49% and the value of output by 29% over the period, while the production cost increased by 51%, suppressing the profit margin for farmers. However, the profit per square meter (m2) increased, indicating improved production efficiency.

Table 21.1 Change in production costs of rice and aquaculture

During the same decade, while the area for aquaculture did not increase much when we examined the nationwide data, the value of aquacultural outputs increased by 186%. The increase in the value of farmed shrimp was particularly large at 268%, while the value of farmed fish increased by 89%. The production costs also rose by 170%, reflecting the introduction of more intensive farming methods, which require more inputs. Even with the increasing production costs, profits from aquaculture also surged at 209%. The increase in the profit per m2 was insignificant, but it should also be noted that the number of observations for this variable is limited due to missing data.

Per m2 profit is much larger for aquaculture than for rice production in both years, confirming farmers’ comments we received during fieldwork. Another important difference between rice production and aquaculture is the dispersion of the data. The value of output and production costs for aquaculture have much larger standard deviations relative to those of rice production. These reflect various farming methods of aquaculture and their accompanying risks.

4 Challenges of Disease Outbreak

While the contribution of the shrimp sector is undeniable, it has also faced the issue of disease outbreaks. The common types of disease are acute hepatopancreatic necrosis disease, formerly called the early mortality syndrome, and white spot syndrome. Some diseases are fatal, and farmers may lose all the shrimp harvest. The causes of disease are varied and largely not very well known. The intensification of shrimp farming to meet the rising global demand has increased the density of shrimp stocked and inputs used. Higher density meant greater stress for shrimp. More inputs meant more polluted water due to shrimp waste and uneaten feed. Good management of water quality is essential to maintain the health of shrimp and reduce the likelihood of disease outbreaks.

4.1 Spatial Spillovers in Disease Outbreak

One issue that has not received sufficient attention is the role of spillover among farmers. As farmers are connected by waterways, a farmer’s neighbor’s action likely affects the farmer. Water quality is unobservable unless tested frequently, and it is also difficult to monitor farmers’ actions all the time. To quantify the effect of spillovers, we considered two channels in which spillovers can affect farmers’ outcomes.

First is the physical spillover of pathogens or polluted water across farmers’ ponds. The second is the influence of neighbors on the behavior of a farmer, often called peer effects. Recent studies have shown the importance of peer effect in farmers’ choice of technology adoption (Conley and Udry 2010). In our case, certain areas may have a higher likelihood of disease because farmers tend to adopt similar, less appropriate farming practices.

Identifying these effects faces the reflection problem posed by Manski (1993). That is, because an individual’s outcome tends to be simultaneously determined by his neighbors’ outcomes, and an individual tends to choose his own group, decomposing these will be necessary. In this chapter, we show spatial associations among shrimp farmers in their farming practices as well as in the likelihood of disease outbreak. Those interested in further analyses on causal relation should refer to Suzuki et al. (2022).

To examine possible spatial spillovers, we collected primary data from about 600 shrimp farmers in one district in Ca Mau province in Vietnam in 2019, which was also the census survey of shrimp farmers who employed intensive or super-intensive shrimp farming. We explored the possibility of spatial autocorrelation by plotting the global Moran’s I (Fig. 21.3). Moran’s I was 0.0772 and statistically significant, indicating a positive spatial correlation in the occurrence of disease outbreaks among the shrimp farmers in our field.

Fig. 21.3
figure 3

Moran’s I plot (Global Moran’s I)

To examine more rigorously, we conducted regression analyses. Table 21.2 shows the determinants of farming practices using neighbor’s practices as covariates. We find that neighbors’ practices are positively and statistically significant in columns (1) and (2), indicating a peer effect on farmers’ farming practices.

Table 21.2 Spillover effects on farming practices

Table 21.3 shows the determinants of disease outbreaks using neighbors’ disease outcomes as covariates. The percentage of disease outbreak is instrumented with higher-order neighbors' outcomes in the IV model. In both models, we found consistent evidence that the higher likelihood of a neighbor’s disease outbreak leads to a higher likelihood for the farmer. This suggests that there is a physical spillover of disease across farmers.

Table 21.3 Spillover effects on disease outbreak

Overall, our study results confirm the presence of spillover among farmers both via physical spillover and peer effects in adopting similar practices. This suggests that in implementing policies to reduce disease outbreaks, government and donor agencies should consider farmers and their neighbors as a unit to conduct interventions.

4.2 Effective Intervention to Promote Changes in Farmer’s Practices

To prevent disease outbreaks, some farmers use antibiotics, which are prohibited internationally. We conducted a randomized controlled trial (RCT) in our study site to examine effective methods to encourage a change in farmers’ behavior. Based on our fieldwork, we hypothesized that the reasons why farmers use antibiotics may be due to (1) lack of technical knowledge, (2) lack of awareness of how much residue remains in their shrimp, and (3) lack of financial incentives to comply with good farming methods. We designed an RCT with three arms, each addressing these issues. In particular, we conducted a technical workshop for farmers, quantified antibiotic residues by taking shrimp samples from farmers’ ponds, and offered a price premium for farmers whose shrimp passed the quality test ex-post. We collected primary data from shrimp farmers in 2015, 2016, and 2017 while conducting the workshop experiment in 2015, quantification of quality information intervention in 2016, and price premium intervention in 2016. The shrimp samples were taken only in the 2015 and 2017 surveys.

Our intention-to-treat (ITT) results show that quantifying quality intervention was the most effective, while price premium also worked for those who tested positive for residues at the baseline (Table 21.4). Quantifying the quality of shrimp had positive effects on increasing chemical knowledge and conducting better recording practices, while it worked to reduce antibiotics detection ex-post in full sample analyses. When we divided the sample into those who received positive and negative detection results at the baseline, we found that the previous positive effects observed came from those whose shrimps tested positive at the baseline (Panel B). The same result was not observed among the farmers whose shrimp tested negative at the baseline survey. For the price premium group, those whose shrimp tested positive improved their water management practice and reduced the probability of detection ex-post. This also translated into higher revenue ex-post.

Table 21.4 ITT effects on knowledge, practice, detection, and revenue

Our RCT result indicates the importance of quantifying quality for farmers to improve their practices. Many aspects of aquaculture are unobserved unless tested, such as various aspects of water quality and shrimp health status. While this is a challenge in this sector, it is becoming easier for farmers to obtain such information via smartphone apps with recent advancements in digital technology. In fact, many IT start-up companies have already introduced various digital apps for farmers, with which farmers can search for market information, calculate the appropriate amount of feed to give, learn about technical issues, and even predict shrimp health status by taking photos (ADB 2021). Farmers themselves upload their farming methods using YouTube or Facebook pages to share information (Lee and Suzuki 2020). Assuring traceability from the upstream, which is critically important to tackle the issue of disease outbreaks and prohibited chemicals, can now be implemented more effectively with digital technologies. It has been implemented at a large scale using IBM Food Trust in countries like Norway and Ecuador, although not at the small-scale farmers’ level in Asia. This area needs further work to develop this sector more sustainably.

5 Conclusion

In this chapter, we have illustrated the recent development of the aquaculture sector in Asia, with a particular focus on the case of shrimp farming in Vietnam, and examined the persistent issue of disease outbreaks more in-depth based on our fieldwork. The benefits of the sector to the economy and livelihoods seem undeniable, particularly in terms of increasing income opportunities for producers, improving nutrition for consumers, and the important role that the sector plays in maintaining a good natural environment. However, as farming methods become more intensive to meet the growing global demand, better farming management becomes essential. Our studies have shown that consideration of spatial spillovers, both by physical spillover and peer effects among farmers, is important in reducing disease outbreaks, and quantifying unobserved quality is important in changing the behavior of farmers. For this, effective use of digital technology is a promising way forward.

Recollections of Professor Keijiro Otsuka

I was truly lucky to be in the first batch of the FASID-GRIPS International Development Studies Program, led by Professor Keijiro Otsuka and Professor Yujiro Hayami. Learning development economics with their guidance changed my life thereafter. Among the things I respect most about Professor Otsuka were his sharp insights to grasp the essence of problems in the field, his willingness to always provide thorough editing of his students’ writings, and his utmost optimism in facing any challenges. I am very honored to be a part of this book to celebrate my sensei’s lifetime achievement.−Aya Suzuki.

I first met Professor Kejiro Otsuka in 2003 when I joined the IDS Master program in GRIPS. I went to the field for a survey for the first time in my life with him in 2007 in Vietnam. That changed my life and career as a researcher. I am honored to be part of this book to celebrate Professor Keijiro Otsuka’s achievement.

Vu Hoang Nam.