May/June 2010 - Global Aquaculture Alliance

Harvest size (shrimp/kg)
Farm gate value (bht/kg)
Cost of production/kg (bht)
Profit/kg (bht)
Profit (%)
Pond preparation
Postlarvae
Feed
Probiotics
Labor
Electricity, fuel
Maintenance
Depreciation
Miscellaneous
Table 1. Performance parameters for Lamae Farm.
Pond number
Culture area (ha)
Species
Annual cycles
Stocking density (shrimp/m 2 )
Harvest size (g)
Yield (kg/ha)
Survival (%)
Growth rate (g/week)
Feed-conversion ratio
set up to retain pond sludge removed
during and after harvests. Crab and bird
barriers were constructed, and many
farms invested in plastic liners to separate
water from soil. The risk of pond failure
was reduced, and pond productivity
increased.
Table 2. Profitability of Lamae Farm.
More From Less
The year 2009 was a good one for
Thai shrimp farmers, with crop failure
rates less than 2%, pond survivorship
above 85% and growth rates that enabled
farmers to harvest shrimp at a size of 60/
kg in less than 90 days with feed-conversion
ratios of less than 1.3.
Thailand harvested around 563,000
mt of shrimp from 52,000 ha of culture
ponds in 2009 – an increase of 126%
from 38% less pond area when compared
to 2002. Likewise, aquaculture worldwide
will harvest over 2.3 mmt of shrimp, a
76% increase over 2002.
While the world greatly increased the
supply of shrimp, the National Marine
Fisheries Service reported that consumption
in the United States increased from
1.45 kg/person in 2002 to approximately
1.86 kg in 2008. This was a 28% increase
in demand.
The supply increase was much greater
2002 2009
6
8.5
P. monodon
1.80
65
16.5
6,640
62
0.95
1.73
2002 2009
60
188.0
174.4
13.6
7.8
Table 3. Production costs at Lamae Farm (%).
71
112.5
89.7
22.8
25.4
2002 2009
23.0
9.1
28.5
10.3
6.4
7.0
2.8
8.0
4.9
14
18.5
L. vannamei
2.95
116
14.2
15,136
91
1.16
1.34
4.7
6.9
51.0
5.4
6.2
12.7
3.6
6.8
2.7
than the demand increase. Therefore,
would this not be a better explanation for
the decline in world shrimp prices and
lower retail prices for United States consumers?
The reason for the increase in supply
was not that Thailand and other shrimpgrowing
nations started using underpaid
“slave labor” in 2002. In fact, the transition
to the more sustainable, higher-productivity
technologies required both
technically competent and professional
aquaculturists, and the serious investment
of additional capital by farmers.
Cost Efficiency
After the introduction of white
shrimp, Lamae Farm acquired neighboring
ponds and increased the number of
culture ponds to 14 with an area of 18.5
ha. The farm produced 806 mt of shrimp
from 41 harvests in 2009 with no pond
failures (Table 1). Costs records at the
CPF accounting department showed an
average cost of production at Lamae of
89.7 baht/(U.S. $2.67)/kg for 2009 – a
48.5% cost reduction from 2002.
Figure 1 illustrates the effect of
changing to domesticated disease-free
shrimp and subsequent genetic selection
programs on cost of production. This is
at a time when there has been an increase
in the unit costs of both feed and energy.
But the gain in efficiency has offset the
increase in unit costs. Feed and energy
represent 64% of the current cost in producing
shrimp, whereas labor represents
only 6% of the cost (Table 3).
Cost efficiency has been driven principally
by the increased growth rate potential
of the shrimp, which has resulted in
higher survival rates and lower feed conversions.
The dramatic decline in pond
preparation costs resulted from increased
management efficiency. reducing the
amount of fallow time between crops from
73 days in 2002 to 18 days in 2009.
Wage Factor
Labor is only 6% of total costs, but
does this indicate the laborers are “barely
being paid”? Lamae Farm employees 21
staff members and laborers. In 2009, the
average cost per employee to the farm
was U.S. $573/month, of which each
employee received $510. The minimum
wage for this area in Thailand is 160 baht
(U.S. $4.77)/day. If a worker is employed
25 days in a month, this represents a
take-home pay of about $120.
Employees at Lamae Farm feel
rewarded both by their job-related
accomplishments and the financial compensation
they receive. By American or
European pay standards, their income
may appear lacking, but in the context of
the Thai cost of living, theirs is considered
a very good livelihood.
But what if Western Hemisphere wages
were paid at Lamae Farm? Could the farm
still be profitable selling into today’s world
shrimp market? The answer is yes.
If Lamae paid an average monthly
wage of U.S. $2,500, the cost of production
would increase to 108 baht (U.S.
In combination with improved stocks,
tighter biosecurity at farms and hatcheries
has led to higher survival and
better animal health.
Figure 1. Production costs for 60/kg shrimp in Thailand.
$3.22)/kg. The average selling price the
farm received in 2009 was 112.5 baht/kg.
Realize, however, that under a scenario
where the farm paid Western wages, the
industry would reduce the amount of labor
by increasing the mechanization of both
feeding and harvesting.
True Benefits
The true cost of Thai shrimp is clearly
based on technology and not lowly abused
or slave labor. Shrimp farming in Thailand
has provided hundreds of thousands of
well-paying jobs that resulted in a net gain
for Thai society. Many people have gained
educational opportunities and thus a better
place in society through the profits of Thai
shrimp farming.
Slavery was abolished by King Chulalonghorn
more than 100 years ago, and in
2008, newly enacted anti-trafficking laws
that carry heavy penalties were enacted.
Thailand is a country with modern laws
for the protection of workers rights that
are enforced when law-breaking activities
are discovered. Today, with the lower
prices paid for shrimp, there is no room in
the industry for gamblers, gold diggers or
non-professionals.
True Cost
Thai shrimp farming is just another
example of why farming is always more
cost effective than hunting. The dynamic
changes that started in 2002 not only
spawned claims that low international
trade prices were due to low wages, but
also charges that the low prices were due
to unfair subsidies by the Thai government.
For that charge, the Thai industry
has had to pay a duty to the United States
since 2004, after the industry began to
adopt more efficient, sustainable and environmentally
founded technologies.
We never question why chicken prices
have fallen, why pork prices have fallen or
why the United States is a leader in corn
products. The answer is technology and
not low-cost, abused labor or a subsidized
industry. The same can be said for shrimp
prices in this modern age of aquaculture.
88 May/June 2010 global aquaculture advocate global aquaculture advocate May/June 2010 89
Production Cost (baht/kg)
180
160
140
120
100
Year
% L. vannamei
% P. monodon
Changing Improving
Species Genetics & Technologies
0 2002 2003 2004 2005 2006 2007 2008 2009
1.5 50.0 80.0 95.0 98.0 99.0 99.0 99.5
98.5 50.0 20.0 5.0 2.0 1.0 1.0 0.5
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