Though fish has long been the largest source of protein in Bangladeshi diets, for decades persistent high prices made it difficult for most to acquire. In the early 1990s, per capita annual fish consumption was a low 10 kilograms. In 2005, the UN Food and Agricultural Organization (FAO) suggested that even reaching a per capita annual consumption of 18 kg would be a remarkable improvement. But only five years later, national survey estimates put the annual per capita consumption of fish in Bangladesh at 23 kg.
Exponential growth in Bangladesh’s aquaculture industry saw a two-fold increase in fish consumption. In addition to improving technology and infrastructure, we found factors such as intensification and specialization in fish production, and the clustering of various players were critical to the transformation of the aquaculture industry. Bangladesh has seen significant growth across the entire fish value chain: the number of hatcheries, feed mills, feed dealers, and fish traders more than doubled during 2004-2014. Our fish value chain survey found that farmers have made greater use of hatchery seed, fish feed, chemical applications, and quasi-fixed capital.Clustering has been a key dynamic in the industry’s growth. The numbers of fish traders and farmers have increased in concert with their growing physical proximity. Fish traders and feed dealers are increasingly acting as middlemen, with the traders connecting buyers to sellers, while the dealers bring feed to the production zones. This combination of proximity and diversity means easier access to markets, which in turn brings more modern inputs to the farmers and less difficulty in marketing and communication.
Contrary to findings of earlier studies, growth in aquaculture has had a large positive welfare effect across all income levels in the country. Fish supply outpacing demand, along with lower transaction costs, lowered prices for all consumers, leading to greater fish consumption. Our analysis showed that consumption increased across the gender, regional, and income spectrums, with poorer households having gained the most from the change.
The growth in fish production has also significantly contributed to poverty reduction nationally. Long-run welfare estimates indicate that aquaculture’s contribution to poverty reduction was 1.74 percent between 2000 and 2010. Aquaculture’s overall contribution to poverty reduction during that time period was around 10 percent.
Despite the explosive growth of the last 30 years, the full potential of aquaculture has yet to be realized in Bangladesh. The nation’s aquaculture productivity is only 4.26 metric tons per hectare. If even half the pond area currently used were converted to intensive farming systems (which have yields of over 100 metric tons per hectare), production would increase more than twelve-fold.
For aquaculture in Bangladesh to reach its full potential, including tapping the export potential of surplus fish, its remaining production constraints must be addressed. It may present a unique challenge since most seafood export is controlled by corporate entities, while fish farming is composed of multiple small holdings. To address these challenges, it would require a redesign of fish export industry institutions and regulations. In addition, the institutional capacity of the aquaculture market needs updating: A National Fisheries Policy was adopted only in 1988. While it contained many points relevant to fish farming, it had no separate section regarding aquaculture.
Bangladesh has two great endowments: water, and labour. Just as the availability of cheap labour fuelled the expansion of the garments sector, the nation’s waters are now fuelling a boom in fish production. A push in the right direction can move the industry into its next, still more promising, stage of growth.The writers are director of the International Food Policy Research Institute (IFPRI), South Asia; senior research fellow of
IFPRI and distinguished professor in Peking University and a research analyst with IFPRI respectively.