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Title: Risk management practices of small intensive shrimp farmers in the Mekong Delta of Viet Nam
Authors: Pongthanapanich, Tipparat
Anh, Nguyen Thi Kim
Jolly, Curtis M.
Keywords: Intensive shrimp farming
Good aquaculture practice
Risk management
Shrimp insurance
Mekong Delta
Viet Nam
Issue Date: 2019
Series/Report no.: FAO Fisheries and Aquaculture Circular No. C1194;pp. 1 - 31
Abstract: Viet Nam is one of the top producers and exporters of farmed shrimp. More than 80 percent of the total production comes from small intensive farms, which occupy less than 10 percent of the land area devoted to shrimp farming. It is the main source of income for many rural households in the Mekong Delta provinces. This study examines the characteristics of small intensive shrimp farms and socio-economic status of the farm households, and farming practices and performance that are associated with the strategies and preferences for managing production risks. The analysis was based on primary data from a survey of farms raising the whiteleg shrimp (Penaeus vannamei) conducted in Bac Lieu, Ben Tre and Ca Mau provinces from September 2017 to February 2018. The results show that shrimp farming contributes significantly to poverty alleviation. The average income per capita of a shrimp farm household member was seven times higher than the national average. It generates employment in rural areas both from the hiring of farm workers and by the self-employment of household members. The study, however, also highlights the risk of relying on a single income source from shrimp, as many of the responding households do. Increasing productivity, i.e. improving yield, and keeping unit cost low, are significant factors affecting a farm’s competitiveness. This is clearly a result of an efficient use of farm inputs. The study found that a proper farm design and layout to ensure good management of water supply and pond effluent improved the performance of the farms. Most farms suffered from disease outbreaks during 2013–2016; some events were not controllable and caused total loss of stock. This supports the widely held view that shrimp farming is a high-risk-high return enterprise. Adoption of good farm practices, following certain guidelines, could help mitigate the risks. In addition, insurance may be developed to help shrimp farmers mitigate the risk impacts of an ‘act of God’ or an uncontrollable event. It may be designed specifically for individual farms or a group of small farms that can comply strictly with the required farm practices or standards. The farmers expressed interest in buying insurance that covers loss from disease outbreaks as well as bad weather that causes wide fluctuation in water parameters. Presented three scenarios to find out their willingness to pay, a majority of the farmers preferred two schemes: a maximum compensation rate (sum insured) of 80 percent and of 50 percent of total production cost. With the 80 percent scheme, the willingness to pay for a premium was VND 10 852 per kilogram of shrimp (USD 0.49). This was 9.2 percent of the farm gate price received, 11.0 percent of total production cost, or 17.8 percent of the net farm profit. This scenario would earn for the insurer VND 14.7 million (USD 670) per pond per crop. With the 50 percent scheme, the willingness to pay for a premium was VND 2 765 per kilogram of shrimp (USD 0.13). This was 2.3 percent of the farm gate price received, 4.2 percent of the total production cost, or around 4.6 percent of the net farm profit. The insurer would earn VND 9.6 million (USD 438). Nearly all of the Ben Tre province respondents were interested in buying insurance, preferring the 50 percent scheme. Those who participated in the Government’s shrimp insurance pilot programme of 2011–2013 would be willing to pay a higher premium than those who did not. Overall, the results can inform national development programmes that promote sustainable intensification, especially in countries where small-scale farms predominate and natural hazards continue to be a serious threat to farming.
Appears in Collections:Agriculture and rural development

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