Webinar insights: Opportunities and challenges of upgrading shrimp value chains through smallholder clusters in Bangladesh

Shrimp is Bangladesh’s main agricultural export and a substantial source of income and employment. However, global supermarket supply chains require traceability and certification systems that are challenging for many small-scale farms to meet. Can organizing farms into clusters overcome this challenge? 

Bangladesh’s shrimp production and exports have been in steady decline in recent years. Most shrimp exports from Bangladesh are used by niche food markets in Europe, but there is rising interest to enter global supermarket supply chains as these can be more profitable. 

However, this is challenging due to the complex nature of the shrimp value chain in Bangladesh. It is comprised of thousands of fragmented small-scale farmers and traders, making it difficult to adapt to global supermarket requirements for more stringent traceability and sustainability labelling. Many small-scale farmers are unable to individually absorb the costs of implementing traceability and certification systems. There are also barriers in acquiring new skills to upgrade practices, and in exercising negotiating power over prices and access to markets. 

These barriers could be addressed by organizing farmers into cooperatives or clusters. These clusters represent networks and partnerships between farmers and other actors within the shrimp value chain, such as retailers, extension services, and buyers. They typically consist of 20-25 smallholder farmers who focus on collectively implementing practices and innovations that improve the productivity and efficiency of the value chain. These include deepening ponds to increase yields, providing training, coordinating harvesting with other farmers, and selling to the same dedicated buyer. But what are the opportunities and challenges of this type of intervention on the shrimp value chain in Bangladesh?

To explore this topic further, KISM - the Knowledge Platform for Inclusive and Sustainable Food Markets - hosted a virtual session on 28 November 2023 with a diverse range of stakeholders to reflect on the opportunities and challenges of cluster-based interventions in Bangladesh. During the session, Ben Belton shared preliminary findings from ongoing research under the CGIAR ‘Rethinking Food Markets’ Initiative, whilst Mahfujul Haque (Bangladesh Agricultural University), Willem van der Pijl (Global Shrimp Forum) and Pla Duangchai (Aquaculture Stewardship Council) shared important cross-sectoral insights:

• Cluster farms are promising for improving shrimp value chains in Bangladesh. Forming cooperatives or clusters of farms can improve the flow of knowledge, technology, market information, and support services between farmers and other value chain actors. The opportunities that this type of intervention can bring are vast. They can enable farmers to meet international market access and certification requirements, improve logistics along the value chain, facilitate the adoption of sustainable shrimp practices and new technologies, as well as build trust and tighten relationships between members.
• Sustainability systems can support small-scale farmers in improving their practices towards certification. Some sustainability systems are supporting producers and small-scale farmers to continuously improve their farming practices towards certification. Farms receive locally-led training on sustainable farming practices and technologies to improve their sustainability performance in the long-term. Such improvement programmes give visibility of progress and performance over time, provide clarity on the key actions and investments required to improve performance, and help raise farms to a level that allows them to apply for certification. This also opens up opportunities for seafood and aquaculture companies to play a more active role in steering producers within their supply chains towards entering these improver programmes.
• There is still much to learn on the path towards certification. Preliminary research findings in Bangladesh suggest that there are positive impacts of cluster farms on productivity and yield when members adopt a package of new technologies to improve their practices. Cluster farms can add value by improving shrimp productivity and boosting farmer incomes, yet there are still challenges within these clusters for establishing traceability and certification systems. There is a strong need to define good practices for implementing traceability systems, such as understanding how data will be accurately monitored, verified and reported, establishing robust data governance structures and how the cost of implementation will be covered. 
• Tapping into the right markets is key. Traceability and certification are required to enter more international markets such as supermarket supply chains, but are not a prerequisite for entering many domestic supply chains. To remain sustainable, cluster farms need to assess which types of markets bring the most value to them – whether that’s international or domestic markets - and how to connect with key value chain actors to provide better access to these markets. Having strong market connections alongside high productivity is key, which is a challenge that many cluster farms still face. 
• There is not a one-size-fits-all strategy that will work across all cluster farms. Given the wide diversity of shrimp farms, producers and value chain actors in Bangladesh, it is not possible to advocate for a single approach that will work across all cluster farms. Context is important, and flexibility is needed to support the abilities of different farm clusters to innovate and improve their practices towards higher productivity or better market access.

Vi Nguyen is a Senior Coordinator for Innovations and Learning with ISEAL. 

To learn more about cluster-based interventions on shrimp value chains in Bangladesh, explore the study that this session was based on from the CGIAR ‘Rethinking Food Markets’ Initiative.