Rice versus Shrimp Production in Thailand: Is There Really a Conflict?

By Mekhora, Thamrong; McCann, Laura M. J. | Journal of Agricultural and Applied Economics, April 2003 | Go to article overview

Rice versus Shrimp Production in Thailand: Is There Really a Conflict?


Mekhora, Thamrong, McCann, Laura M. J., Journal of Agricultural and Applied Economics


Shrimp farming in Thailand has had disastrous effects on the environment in the past, which has prompted a government ban on shrimp production in inland areas. However, a new low-salinity shrimp farming system has developed that seems to have fewer disease and environmental problems than previous systems but competes with rice production for land and water resources. The present study found that shrimp farming exhibits increasing returns to scale and is much more profitable than rice farming, which offers opportunities for rice farmers to improve their incomes through diversification. No evidence was found for external environmental effects of shrimp production on rice production or vice versa. A total ban on shrimp production in rice farming areas does not seem justified, although further analysis on the environmental effects of this farming system is warranted.

Key Words: environment, rice, shrimp, technical change, Thailand

JEL Classifications: Q12, Q16, Q24, Q28

For several decades, agricultural development has been central to economic growth in Thailand, contributing to growth in employment and foreign exchange earnings and to improvements in nutrition and standard of living. Rice and shrimp were among the top 10 export commodities for Thailand in 2000. Thailand is the world's largest rice exporter, followed by Vietnam and the United States, and is the world leader in farm-based shrimp production. Because of recent technical changes in shrimp production, these two major agricultural industries, both supported by the government, are potentially in conflict. The present study examines this conflict from the point of view of the environment and land allocation, to evaluate the ban on shrimp production in freshwater areas that has been imposed by the government. A discussion of the developments in the shrimp industry is presented to put the study in perspective.

Development of Shrimp Culture in Thailand

In the past, an extensive form of shrimp culture was practiced in low-lying areas that flooded with seawater at certain times of the year. In this system, both rice and shrimp yields were low. This situation changed in the 1980s with the development of new aquaculture technologies that enabled the propagation and cultivation of tiger shrimp in captivity and a government policy goal of increasing production for export rather than for local consumption (FAO). Thailand's investment in shrimp production has led to the development and adoption of modern and intensive culture systems, improved knowledge of nutrition, and well-developed infrastructure and support industries such as hatcheries. Modern intensive shrimp production in Thailand has occurred in three phases.

Thailand's intensive shrimp culture industry was first established in the upper Gulf of Thailand around Bangkok, primarily in mangrove areas, and was very profitable, allowing most farmers to recoup their investment in 1 year (Chong). However, the widespread proliferation of intensive culture systems contributed to the loss of habitat and nursery areas for aquatic species because of the removal of mangrove forests. Inadequate regulation of the operation and expansion of the industry by government allowed shrimp farms to harvest in mangrove reserve areas. Groundwater aquifers, domestic water supplies, and adjacent rice areas became contaminated by saline water intrusion (Baird and Quarto; Dierberg and Kiattisimkul; Flaherty and Karnjanakesorn).

Several problems had also arisen within the shrimp culture industry itself. During the early 1990s, farms began to experience high mortality rates due to disease outbreaks which were quickly transmitted between the densely concentrated farms. A lack of coordination of pond construction and water supply infrastructure led to water quality along the coast quickly deteriorating because of the discharge of pond effluents (Phillips, Lin, and Beveridge). Poor management of the farms due to limited technical skills resulted in high fry densities, overfeeding, plankton blooms, and poor water circulation, which contributed to self-pollution of the earthen ponds. …

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