Prawn
Comprehensive Sector Strategy
Prawn Comprehensive Sector Strategy
Table of Contents
Executive Summary................................................................................................... 0
Sector Profile ............................................................................................................. 1
1.1
Sector Overview ................................................................................ 1
1.2
Sector Status ..................................................................................... 1
1.3
Sector Trends .................................................................................... 2
2.
Sector Dynamics ........................................................................................... 4
2.1
Organization of the Sector ................................................................. 4
2.2
Productivity and Profitability Analysis................................................. 7
2.3
Opportunities and Constraints Analysis ............................................. 9
2.4
Sector Potentials and Vision ............................................................ 10
3.
Katalyst Strategy ......................................................................................... 12
3.1
Katalyst Vision of the Sector ............................................................ 12
3.2
Implementation Strategy .................................................................. 12
3.3
Sector Operational Plan................................................................... 16
3.4
Monitoring & Evaluation ................................................................... 16
3.5
Strategic Communication................................................................. 18
3.6
Budget ............................................................................................. 20
4.
Reference List ............................................................................................. 21
5.
Annex ............................................................................................................ 0
Prawn Comprehensive Sector Strategy
List of Abbreviations
ASPS
AFBI
BDF
BDS
BED
BEEG
BEI
BFFEA
BICF
BIDS
BMO
BOI
BP
BPC
BPC
BQSP
BSCIC
BSFF
BSTI
BTV
C&C
CCCI
CG
CHF
CIC
CIDA
CLT
CPI
CSR
DAE
DANIDA
DBSM
DoF
ESRB
EPB
EU
FAO
FIQC
FPBPC
GHAB
HPL
JIFSAN
MFI
MoC
MoFL
MoFA
PL
PRICE
REAP
USAID
USFDA
USDA
UM
UNIDO
WPL
Agriculture Sector Programme Support
Agri-Food and Biosciences Institute
Bangladesh Development Forum
Business Development Service
Business Environment Division
Business Enabling Environment Group
Bangladesh Enterprise Institute
Bangladesh Frozen Food Exporters Association
Bangladesh Investment Climate Fund
Bangladesh Institute for Development Studies
Business Membership Organization
Board of Investment
Business Plan
Business Promotion Council
Business Promotion Council
Bangladesh Quality Support Programme
Bangladesh Small and Cottage Industries Corporation
Bangladesh Shrimp & Fish Foundation
Bangladesh Standard Testing Institute
Bangladesh Television
Communication and Capacity Division
Chittagong Chamber of Commerce and Industry
Caretaker Government
Swiss Franc
Community Information Centres
Canadian International Development Agency
Core Leadership Team
Consumer Price Index
Corporate Social Responsibility
Department of Agricultural Extension
Danish International Development Agency
Developing Business Service Markets
Department of Fisheries
Environmentally and Socially Responsible Business
Export Promotion Bureau
European Union
Food and Agriculture Organization
Fish Inspection and Quality Control
Fisheries Product Business Promotion Council
Golda Hatchery Association of Bangladesh
Hatchery produced Post Larvae
Joint Institute for Food Safety and Applied Nutrition
Micro Finance Institution
Ministry of Commerce
Ministry of Fisheries and Livestock
Ministry of Foreign Affairs
Post Larvae
Poverty Reduction by Increasing the Competitiveness of Enterprises
Rural Enterprise for Alleviating Poverty
United States AID
United States Food and Drugs Administration
United States Department of Agriculture
University of Maryland
United Nations Industrial Development Organization
Wild sourced Post Larvae
Prawn Comprehensive Sector Strategy
Executive Summary
Prawn or fresh water shrimp (locally, known as Golda) is one of the three key
attributors to Bangladesh frozen food industry, together with brackish water shrimp
and fish products. Frozen food export is the second largest foreign exchange earner
of Bangladesh that adds around 4.86% of the GDP. Shrimp sector, containing nearly
30% share from prawn alone, constructs 93.75% of this export.
Overall, this sector has enormous opportunities in expanding its production and
export market. It has been increasing in Bangladesh over the years with a trend of
around 4% per annum. The major producing areas are located in the southern region
of Bangladesh, comprising of greater Khulna and Jessore districts. Particularly, the
district of Bagerhat was the pioneer in prawn farming, where it first started back in the
early 1980’s. Currently, around 27,000 MT of prawn per annum is being exported to
different EU countries, USA and other countries around the world leading to earnings
of around USD 150m. Around 60,000 hectare of land (gher and pond) are being
utilized for prawn production engaging around 120,000 farmers and employing near
200,000 on-farm laborers.
However, being a sector with enormous growth opportunities, prawn also face some
constraints and have some untapped opportunities which restrict the overall growth
of this sector. Poor quality and availability of inputs like PL and feed, absence of
better and improved farming techniques and practices, poor post harvest practices,
failure to meet the international export compliances and lack of adequate market
promotion are some of those major constraints and untapped opportunities hindering
the potential growth. Now, keeping in mind that this is one of the most important
sectors for national economy, a set of solutions with appropriate strategic plan is very
much needed in this respect. These solutions are required to be realistic, progressive
and market force-led. The strategic plan should address the problems and the
opportunities accurately and help unlocking the latent potential of this sector.
So, with a vision to contribute to the increase of prawn export, Katalyst devised four
strategic areas to intervene in this sector. The areas are: (a) Increased availability of
quality inputs; (b) Better production techniques available in and adopted by the
sector; (c) Better marketing & post harvest practices as per buyer compliance
followed by the sector; and (d) Promotion of fish culture in untapped areas and less
commercialized water bodies; and (e) Area expansion of prawn farming. All the
interventions of Katalyst are designed under these strategic areas with a view to
realizing the sector vision.
The work plan of each individual intervention is described with relevant timeline and
resource allocation later in this document. At the same time, the monitoring system
and the impact indicators are also explained according to the overall GANTT chart for
prawn sector.
Sector Profile
1.1
Sector Overview
Prawn is one of the important components of frozen food industry in Bangladesh.
This frozen foods export sector is the second largest foreign exchange earning sector
of Bangladesh after Ready Made Garments (RMG) and Knitwear (Export Promotion
Bureau (EPB), 2009). It contains shrimp and fish which accounts for USD 708.2m of
export in 2008-09. Out of this shrimp comprises of 93.75% (Department of Fisheries
(DoF), 2009, cited in Bangladesh Centre for Advanced Studies (BCAS), 2009), fish
and other value-added products are the rest. Bangladesh farmed shrimp industry is
dominated by two species; viz, brackish1 water black tiger shrimp or Bagda2 and
fresh water giant prawn or Golda3. These two species are relatively large in size
compared to other globally cultured shrimp species, due to which they have a high
export potential worldwide. Bangladesh captures 3% of the overall cultured shrimp
production and roughly 5% of fresh water farmed production.
Golda production has been increasing in Bangladesh over the years. The major
producing areas are located in the southern region of Bangladesh, comprising of
greater Khulna and Jessore districts. Particularly, the district of Bagerhat was the
pioneer in Golda farming, where it first started back in the early 1980’s.
Golda farming is environment-friendly as it does not put salinity threats on the land.
Hence unlike the case in Bagda, rice can also be produced in ghers4, where Golda
are mostly farmed. It is noteworthy that aside from ghers, fresh water prawns are
also cultured in ponds.
1.2
Sector Status
Generally fisheries5 are an important sector for Bangladesh. It contributes 4.86%
(Bangladesh Bureau of Statistics (BBS, 2006) of the GDP. As export commodities
fisheries constitute around 3% of the export basket and the foreign exchange
contribution is 6.28% (BBS, 2004).
The shrimp sub-sector is a major contributor in the fisheries sector with a huge export
potential. The country is currently producing around 90,000 MT of shrimp and prawn,
excluding fish per year (FSY, 2007-08).
Finally, fresh water prawn cultivation contributes nearly 30% (FSY, 2007-08) of the
overall shrimp production. In 2008, around 27,000 MT of prawn is being exported
leading to earnings of around USD 150m per annum.
Currently, around 60,000 hectare (Katalyst team calculation from Fisheries Statistical
Yearbook (FSY), 2007-08) of land (gher and pond) are utilized for prawn production
engaging around 120,000 farmers and employing near 200,000 on-farm laborers
1
Fresh water and salt water mixture in coastal area; usually where river drains fresh water in
sea and creates brackish water zone
2
Bagda is the common Bengali name for brackish water shrimp (Penaeus monodon)
3
Golda is the common Bengali name for freshwater prawn (Macrobrachium rosenbergii)
4
Prawn cultivation land, created by artificial embankments in low lands
5
Fisheries include cultured and captured fish, shrimp (Bagda), and Prawn (Golda), all from
marine/brackish water and inland/fresh water sources.
1
(Katalyst team calculation, 2009). Women play an important role in farm
management and prawn processing plants.
1.3
Sector Trends
Growth trend of the sector
Currently the sector is growing at 4% per year. If this growth prevails at this rate in
2014 it will produce 35,530 MT and create 39,610 additional employment
opportunities. (Katalyst team calculation, 2009)
Figure 1.1: Production trend (Katalyst team calculation from FSY, edition 19th – 25th)
Volume (MT)
Production trend
80000
70000
60000
50000
40000
30000
20000
10000
0
Total Volume
Fresh water Prawn
Volume (MT)
Brackish Water Shrimp
Volume (MT)
2001-2 2002-3 2003-4 2004-5 2005-6 2006-7
Year
Export/Import – current contributions and future expectations
Around 90% of the Bangladeshi products go to the USA and EU countries (BFFEA,
2009). Bangladesh was successful in penetrating new export markets in 1998 which
increased the growth of the industry. Currently, 90% of the total Bangladeshi prawn
production is being exported. The world prawn market has a volume of USD 2.25
billion and Bangladesh share in it is 6.7% (Trademap, 2009).One exported MT of
prawn fetches apparently around USD 8,500 (Katalyst team calculation, 2009).
However, in 2009, Nitrofuran6 contamination found in exported samples of prawn in
European laboratories became a chief concern for food safety, which is a prerequisite for the continued export of Bangladeshi prawn to Europe. As such the
exporters were receiving frequent Rapid Alerts7. An export ban from EU countries
was imminent as foreseen by the industry stakeholders; they necessitated a
contemporary voluntary, self-imposed 6 months long ban on Bangladeshi prawn
export to EU countries.
Supply/Demand gap
6
Nitrofuran & its metabolites is a group of antibiotics that is harmful to human health in case
of intake of food containing such.
7
Nitrofuran & its metabolites is a group of antibiotics that is harmful to human health in case
of intake of food containing such.
2
The current export numbers show that the contribution is only 6.7% and is growing
at a stagnant rate, whereas the world demand grows at an ever increasing rate of
1.15% per annum (Trademap, 2009). So, there is a huge untapped potential in
gaining a greater share as the world demand considerably exceeds the stagnant
supply for shrimp.
Furthermore frozen food processing plants are currently operating at 30% of their full
capacity. Various interviews with processing plant owners reveal that given the
plants’ optimum capacity utilization and comparing benchmarks from other prawn
producing countries, the plants would be able to consume an additional 20 to 30% of
supply. (Field observation, 2008-09)
Comparison with other countries
Bangladesh fetches the second highest prawn price (USD 9.71 per kg) in the USA
because of its larger size and organic value. Figure 1.2 sketches the comparison of
price and percentage of export in the USA. Even though Bangladesh gets a higher
price the export contribution is the lowest (3.74%), primarily resulted from low
production of the country, whereas Thailand has the highest percentage (37.3%) with
a relatively lower price (USD 6.59 per kg).
Figure 1.2: Price comparison with other exporting countries (Katalyst team calculation from
Solidarity, 2008)
Price comparison among the exporters in USA
37.30
40.00
Price (USD per kg)
35.00
30.00
25.00
20.00
15.00
10.00
11.59
7.14
9.71
3.74
5.00
9.24
5.25
9.10
6.81
11.30
7.33
India
Maxico
Indonesia
11.43
6.70
3.92
6.59
5.46
Malaysia
Thailand
Ecuador
13.12
4.86
0.00
Vietnam
Bangladesh
Price
China
Export Percentage
3
2. Sector Dynamics
2.1
Organization of the Sector
The prawn industry has three major components, namely input and backward
linkage, production and procurement, and forward market for export. Figure 2.1
shows the value chain actors along with other supporting organizations. In the next
paragraphs the actors in the sector and their interrelations are described.
Brood supplier: There are two types of brood suppliers working in the prawn sector.
In the first case a group of collectors/fishermen collect brood from the rivers and
provide those to the nearby brood suppliers. These suppliers sell the brood again to
the hatcheries. The other type of suppliers have brood banks where they raise
broods themselves in a pond or gher and then sell them to the hatcheries.
Figure 2.1: Prawn Value Chain
Government
Processor/Exporter
BFFEA
Agent
Forward
Market
Access
Ice Factory
Depot
Local Association
Farmer
PL Trader/Vendor
Feed Retailer
Nursery
Hatchery
Wild PL collector
Production
and
Procurement
Feed Company
Input and
Backward
Linkage
Brood Supplier
Wild PL collector: Collects Wild Post Larvae (WPL) mainly from the coastal areas
and supplies those to PL traders. In the coastal region around 330,000 persons
collect PL for 3-4 months a year. (Winrock, 2009)
However, due to the detrimental effects on the environment and biodiversity,
Government of Bangladesh has already banned the wild PL collection from early
2005. So these collectors are apparently doing an illegal work. As most of these
collectors are from the least income group, WPL collection has always been a
profitable business for them and their existence. One WPL collector can get 2000 PL
for selling price up to 8000 BDT per day during pick season (Winrock, 2009).
Furthermore the extraction has not stopped due to unmet market demand. 80% of PL
supply still comes from wild sources.
4
As WPL extraction causes environmental degradation and destroys bio-diversity.
HPL introduction by expanding the hatchery business addresses positive effects on
Environmentally and Socially Responsible Business (ESRB) issues. Fresh water
Prawn farming is famous for its environment friendly procedures as there is no need
to add brine water for cultivation.
Hatchery: Produces Hatchery Post Larvae (HPL) and sells those to the farmers,
nursery owners and PL traders. Hatcheries operate for around 7 to 8 months a year.
According to Golda Hatcheries Association of Bangladesh (GHAB), there are more
than 50 prawn hatcheries (55 to be exact) all around the country of which 40 or even
less hatcheries are currently venturing into hatchery operation. These operational
hatcheries are producing only 200 m or less PL per year in the country and given the
sector’s overall yearly demand of 1000 m PL per year (PL needed to farm 60,000
hectares in one season), HPL only caters to 20% of the entire PL demand (Winrock,
2009). Therefore, smuggled low quality PL and WPL are still penetrating the PL
market to fulfill the unmet demand for PL.
Feed Company: Produces or imports prawn feed and sells those to the farmers with
the help of feed retailers. There are 35 fish feed companies operating in the market
and all of those have their own branded Prawn feed (Feed Market Study, Winrock,
2009). Feed use in the prawn farm needs improved farming techniques where the
used prawn feed would result with better productivity and hence, with higher
profitability for the prawn farmers. So, feed companies could provide knowledge on
better farming techniques through their distribution channel. Here, farmer’s better
farming techniques will result with huge benefits for these companies. The
companies’ benefits can be realized from a higher amount of feed sale and with
retention of the feed buyers.
Nursery: These lead farmers collect PL and nurse those on their ponds for about 2
months to make juveniles. Nurseries sell their product to the farmers who prefer
juveniles upon PL.
PL trader: Collects PL from hatcheries and wild PL collectors and sells them to the
farmers. Most of them do not have any fixed establishment. Their selling points are
haats or the farmers’ doors.
Farmer: Produces prawn by collecting all the input from hatcheries, directly or from
PL traders, feed companies through feed retailers/distributors and cultivates the PL
or juvenile until the product reaches a marketable size. Afterwards farmers are
trading their products to depots.
Women play an important role in farm management as well. In many areas of
Greater Jessore and Greater Khulna they are responsible for feeding the fish in the
ponds. Significant female labor is as well involved in post-harvest activities and
processing. However, female family members who are engaged in fish farming are
unpaid and cannot influence the income or expenditure of the farming. Male farmers
and entrepreneurs are responsible for the trading therefore they are controlling the
income.
Depot: Works as a collection point with a fixed establishment containing equipments
to preserve the prawn in a fresh condition. Small depots supply their products to
large depots which eventually send those to the processing plants via agencies.
5
Ice factory: Sells ice to the processing plants and depots. Ice factories in southern
part of Bangladesh provide 80% of their product to the prawn industry. (Katalyst team
finding, 2009)
Agent: Agent, account holder or supplier is basically a procurement agent for the
processing plants. Every processing plant has few fixed agents who ensure their
supply with prawn. Processing plants pay to the agents who pay back the depots.
Agents take a commission from each transaction. They are also the actors who inject
money into the sector by providing credit to the depots and to the farmers. They have
fixed establishments mostly in the region of Khulna.
Processor/Exporter: Buys raw material (prawn) processes those according to the
buyers’ requirements and exports it to various destinations. The processing plants
have a vibrant association called Bangladesh Frozen Food Exporters Association
(BFFEA). Furthermore, 50% out of the quarter million workers in the plants are
women as the processing of prawns requires intricate handling.
Bangladesh Frozen Foods Exporters Association (BFFEA) is the apex body of
processors, agents and exporters. It was established in 1984 and approved by the
Government of Bangladesh as a company with limited liability. BFFEA is the only
trade body for fish processing units in Bangladesh. Since its inception, the
association has been working to promote and protect the interest of frozen food
processors, packers and exporters in the country. It also acts as a vital link between
the trade bodies and the different government and private agencies.
BFFEA is also devoted to establish and promote contacts with overseas buyers,
business associations and the Chamber of Commerce and Industries to develop
export and marketing of frozen foods, primarily shrimp, prawn and fish. BFFEA has
also playing a vital role in advising the government in relevant policy, quality control
of the products, packaging, marketing and developing the fishery industries of the
country.
Government: The government institutes are involved in this sector as prawn is an
export item. The Fish Inspection and Quality Control (FIQC) and the laboratory wing
of Department of Fisheries (DoF) play a vital role as exporters need clearance
certificates for every consignment they are exporting. Moreover the Ministry of
Fisheries and Livestock (MoFL) has the legislative power and supports the sector by
providing appropriate laws (e.g. hatchery law or feed law).
Table 2.1: Number of companies operating in the sector (Katalyst Team calculation, 2009)
Companies
Processing plant
Hatcheries
Feed Companies
Agencies
Ice factories
Frequency
145
55
35
40
54
Table 2.1 shows the number of value chain actors with fixed establishments. Out of
the 145 processing plants 74 are licensed and 68 of those are EU approved. 40-45 of
the EU approved plants are processing fresh water prawn. (BFFEA, 2009)
Labor involvement
Prawn is a moderately labor intensive sector which involves around 250,000 labors in
different value chain processes. These labors have different work duration in a year
(Table 2.2) with different wages.
6
Table 2.2: Labor Wages (Team calculation, 2009)
Working Area
Processing plant worker
Supervisor in Agencies
Depot worker
Farm labor
Hatchery worker
PL trader’s assistant
Ice factory worker
Feed company worker
Wage/person/year (in
thousand BDT)
42
21
12
24
36
9
36
36
Duration
(months)
12
7
5
8
12
3
12
12
Furthermore, 50% out of the quarter million workers in the plants are women. The
reason behind employing women is that the processing of prawns requires intricate
handling. The plants in the locality have opened a scope for female workers to earn
income and be part of the sector value chain and to some extent have control over
their income and expenditure. However, the room temperature inside a processing
plant is kept as constant as 18 to 24 degree Celsius the entire year (Field
Observation, 2009) because of strict compliance regulations enforced by
international buyers. Working in a relatively cooler atmosphere for long hours can
have negative effects on the workers’ health. Incidence of cold related infections and
skin diseases are very common. (Field observation, Winrock, 2009)
Other Donor Projects
There are a few donor projects working in prawn sector. Most of the projects do not
have prawn as a sector, rather they have aquaculture which covers both fish and
shrimp (both fresh water and brackish water species). Table 2.3 describes the 4
major donor involvements in the sector.
Table 2.3: Other Donor Projects (website)
Organization
USAID-PRICE (Poverty Reduction by Increasing
the Competitiveness of Enterprises)
DANIDA-ASPS II (Agriculture Sector Programme
Support)
UNIDO-BQSP (Bangladesh Quality support
Programme)
USDA-REAP (Rural Enterprise for Alleviating
Poverty)
2.2
Scope of work
Aquaculture,
private
sector
development
Aquaculture, technical support,
improved livelihood
Shrimp, traceability of shrimp
Aquaculture, value-chain approach
Productivity and Profitability Analysis
This section analyses the production and profitability scenario of the different prawn
value-chain actors in Bangladesh. The analysis is divided into two parts: firstly, the
production scenario of the backward (input) and forward (export) linkages of the
value-chain are presented. Secondly, the profitability scenario at the production
(farms) level is laid down. The production/ processing volume of the actors in the
backward and forward linkages of the value-chain is outlined in the Table 2.4.
7
Table 2.4: Production/Processing volume of different actors in the backward and forward
value-chain (Katalyst Team calculation, 2009)
Companies
Processing plant
Hatchery
Feed Company
Agency
Ice factory
Production/ Processing volume
27,000 MT
200,000,000 PL
32,400 MT
27,000 MT
33,000 MT
The above table shows that in the backward linkage, hatcheries are producing 200 m
post-larvae and feed companies 32,400 MT of shrimp feed annually. And in the
forward linkage, the processing plants are processing a volume of 27,000 MT of
shrimp annually for exports. It is also evident from the table that the processing
volume of the processing plants and the agents are at par, which emphasizes the
fact that all export-ready shrimps have to go through the agents from depots to
processing plants. This makes the agents important members in the prawn valuechain.
The average profitability scenario at the production/farm level is laid down in table
2.5. The figures are for a single representative farm. The table gives a comparative
picture between the traditional culture method and the improved method.
Table 2.5: Profit margin at farm level (Rahman, 2009)
Cost Item
PL
Feed
Lime and fertilizer
Labor
Total cost
Average Production
Average Price per kg
Revenue
Profit
Farm profit margin
Cost (BDT per acre)
Traditional
Improved
24,000
15,000
10,000
24,000
2,500
3,000
5,000
6,000
41,500
48,000
180
220
400
400
72,000
88,000
30,500
40,000
42%
45%
Although the total cost of production per acre of pond area is lower in the traditional
method it is evident from the table above that the production per acre is much higher
in the improved method (220 kg/acre) as compared to the traditional one (180
kg/acre). So by adopting improved culture methods, the farmers can increase the
productivity from 180 kg/acre to 220 kg/acre- an increment of 22% in production.
Mostly, the change in productivity or production in the prawn farms occurs from a
change in the farmer’s knowledge on improved farm management and with more
investment capacity. Other than the using better modern technology, like Paddle
Wheel Aerators8, a better management of farms with more input investment (Like
more feed, PL and Labor intensity) also helps improving the farm productivity. And
with the additional usage of aerators, the productivity can be even further augmented
to the huge figure of 800 kg/acre. Consequently, the revenue and most importantly,
8
Paddle Wheel Aerator is used to create artificial flows in the water in prawn farms. The machine has a
set of wheels and a mechanical motor. The artificial flow of water helps generating more oxygen for the
prawn.
8
the profit per acre can be increased substantially. To note, the farm level profit
margin in the traditional method is 42%, while in the improved method it is 45%.
2.3
Opportunities and Constraints Analysis
Constraints
The constraints can be divided into input and backward linkage, production and
procurement and forward market access constraits.
In Input and Backward Linkage, the constraints are

Farmer’s dependency on the WPL over HPL. All over Bangladesh there is a
common perception among prawn farmers that the wild PL is better in quality
than that of HPL. However, it’s the lack of knowledge about HPL that influences
these farmers on this wrong conception. HPL is as good as that of WPL in quality
as long as it is farmed with better farming techniques and it is also very cheap in
price compared to WPL.

The HPL popularization has positive environmental impacts so as to reduce the
damage of bio-diversity. At the same time, there is the underlying risk of driving
out poor WPL collectors from their earning source.

Unavailability and poor quality of input, such as feed, PL and fertilizer.
Production and Procurement involves the following constraints

The lack of proper farming knowledge and technology results in low productivity.

Lack of access to finance for the farmers to invest in prawn farming. As prawn is
all out an export item, the entire prawn sector relies on timely investment and
proper credit flow among actors. So, more often farmers do lack a reliable and
constant source of finance to invest in their farming.

Poor post-harvest handling results in loss of production and export earning.
Prawn and prawn products need to be handled properly right from the harvest
and up to where it ends within the consumer’s dinner table. Proper post harvest
handling as per the international compliance is a must for this sector as this is a
perishable and food related export item.
The constraints entailing the Forward Market Access are

Under-utilization of the capacity of processing plants is a major impediment. It is
already mentioned in the document that the processing plants of this sector are
running on maximum 30% utilization. (Field observation, 2008-09)

Failure to meet the foreign buyers’ compliances such as contamination free
traceable product, labour issues and code of conduct.

The working conditions are not up to the mark in the processing plants both for
male and female labours. (Katalyst field observation, 2009)
9

Lack of export market promotion results in less number of export destination and
bargaining capacity for the processors and thereby, the overall growth of this
sector is hampered.
Opportunities
The prawn sector in Bangladesh has huge opportunities amongst other agricultural
products. Some of them are outlined below:

There lies an opportunity for the horizontal (area) expansion of the prawn sector.
Currently prawn is cultivated on 60,000 hectares. Being a fresh-water species, its
production can be further expanded to an additional 100,000 hectares through
poly-culture and mixed culture where the bottom layer fishes like grass carp and
others can be replaced with Prawns and keeping the fishes in the other layers
same.

Vertical (productivity) expansion is another prospective area accounting the
application of modern farming techniques like high-density cultivation with using
modern technologies like paddle wheel aerators and applying better farming
methods with better farm, PL and feed management and improved culture
knowledge.

There international market demand for large-sized prawn is huge and
Bangladesh is one of the largest exporters of large-sized prawn due to its
favourable climatic conditions and extensive culture methods. It can further
expand its market share through penetrating new unexplored niche markets or
expanding existing ones by exporting value-added and labour-intensive products.
Such as value added hand-cooked, machine-cooked and canned prawn
processing.

A more conducive working condition in processing plants for workers can be
availed through forming partnership with concerned stakeholders such as
Bangladesh Frozen Food Exporters Association (BFFEA) and diagnostic centers
for health check up facilities. However, to formulate an implementation strategy a
more detail study on the plants and concerned stakeholders (e.g. BFFEA) is
needed to be carried out.

It is to find out whether the income decline of the WPL collectors is greater than
the positive impacts the HPL popularization will create. If HPL popularization
creates enterprise competitiveness and economic growth greater than the income
loss of the collectors we can conclude that the strategy is generating
environmentally and socially responsible impacts. A study has been designed to
find out the impact of HPL popularization on collectors based on which future
strategies will be formulated.
2.4
Sector Potentials and Vision
Bangladesh Frozen Foods Exporters’ Association (BFFEA) demonstrates an
ambitious plan of expanding frozen fish and shrimp (including Prawn) export from the
present level of around USD 534 m to USD 1.5 billion up to 2015. According to the
association, frozen fish is targeted to comprise around 40% of the entire export value
in 2015 compared to that of now which is below 10%. The association bases their
arguments mainly on the expanding number of Bangladeshi workers abroad
10
(currently estimated to be around 6 m) coupled with the rapidly expanding domestic
aquaculture sector (comprising carp, tilapia, pangas etc together with shrimp and
prawn). (BCAS, 2009)
Discussions with the Golda Hatchery Association of Bangladesh (GHAB) in various
occasions reveal that to meet the growing demand of prawn production and export,
more than 300 hatcheries are needed for the sector within 2014 that can supply the
growing need of PL for the sector.
Finally, discussion with foreign industry stakeholders (during a visit on the
investigation of occurrence of nitrofuran to Thailand) illustrates the trend of the
international market. The shrimp/prawn producing countries like China, Thailand,
Vietnam and others are increasingly specializing in other species. This gives a
competitive edge for Bangladeshi shrimps and prawns as Bangladesh can now have
huge potential in the near future tapping into the niche markets for prawns. Hence,
the BFFEA vision can further be justified through this trend.
11
3.
3.1
Katalyst Strategy
Katalyst Vision of the Sector
In phase I, Katalyst focused on developing the prawn hatchery sector and making
appropriate information on cultivation techniques available to the farmers through
different value chain actors. Phase II focuses on deepening these interventions with
efficient leverage points and reaching more SMEs. Katalyst also focuses intensely on
the compliance issues in order to maintain the flow of export and create a scope for
market expansion through promoting the prawn industry.
Katalyst vision
Contribute to the increase of prawn export by ensuring quality inputs with improved
cultivation techniques and enhancing market access by promoting proper post
harvest handling and buyers’ compliance.
Katalyst is influencing the augmentation of overall prawn production cutting on
different issues and factors. Hence situation of women in the sector, mainly in the
plants, will also improve through Katalyst activities. Improved working conditions for
the labor in processing plants will also increase the productivity. Furthermore the
HPL popularization will lead to reduced environmental risk on bio-diversity and
certainly will propel over all fisheries sector growth, including prawn.
Katalyst’s targets by 2014
Katalyst’s interventions will respond to the needs of 140,000 farmers in three
categories. Table 3.1 describes that an additional production of 8,120 MT can be
produced by 2014 through adopting better cultivation practices and new
technologies.
Table 3.1: Outreach with additional production due to Katalyst by 2014 (Katalyst Team
calculation, 2009)
Category
Pond/gher < 2 acre
Pond/gher > 4 acre
Poly farming with fish
Total
Farmer (No.)
79,500
4,500
56,000
140,000
Extra production
per acre (kg)
40
600
40
Total Extra
production (MT)
3,180
2,700
2,240
8,120
With the current wage structure, an additional labor Income of BDT 1.2 billion can be
realized among the value chain labors. (Katalyst Team calculation, 2009)
3.2
Implementation Strategy
Katalyst strategy
Katalyst prawn sector strategy is developed based on the constraints and
opportunities of this sector to fulfill Katalyst’s target by 2014. Table 3.3 gives the
synopsis of the four strategies with a list of public and private entry points for the
implementation.
12
Table 3.3: Implementation Entry points
Strategy
Increased availability of quality inputs
Better production techniques available in
and adopted by the sector
Better marketing & post harvest practices
followed by the sector resulting in a
better market penetration
Area expansion of prawn farming
Entry Points
Hatchery association, Feed company,
Aqua-chemical company, Technical
consultancy provider, Media house
Feed company, Media house, ICT center,
DoF, BFRI, MFIs
BFFEA, DoF, MoFL, FPBPC, MFIs,
JIFSAN
Hatchery association, Nursery, BFFEA,
DoF, MFIs
Strategy 1: Increased availability of quality inputs
1.A National awareness on Hatchery Produced PL
This intervention is intended to ignite the prawn farmer’s demand on HPL over WPL.
The farmers’ negative perception about HPL always made them vulnerable in
maintaining quality, getting better productivity and resisting various alien diseases. At
the same time, their dependency in WPL led to environmental degradation, which is
a key national/global concern.
In Phase I Katalyst has worked with individual prawn hatcheries and now is looking at
prawn hatchery association, namely Golda Hatchery Association of Bangladesh
(GHAB) to take the lead on popularize the usage of HPL. To ensure that farmers are
discouraged to procure larvae from the wild source, a national awareness campaign
will be initiated. The intervention will contain documentary in electronic media and in
farming areas, filed demonstration, discussion sessions etc. National and local media
will be heavily involved with these activities.
A study has been designed to find out the impact of HPL popularization on collectors
based on which future strategies will be formulated. This will help to find out whether
the income decline of the collectors is greater than the positive impacts the HPL
popularization will create. If HPL popularization creates enterprise competitiveness
and economic growth greater than the income loss of the collectors we can conclude
that the strategy is generating environmentally and socially responsible impacts.
1.B Ensuring availability of quality prawn brood
Quality and timely brood sources for hatcheries have always been a key issue in
ensuring quality PL to farmers. So far, a sharp decline in the natural broodss forced
the hatchery industry to become depended on local farms that provided immature,
not properly treated, low quality offspring, resulting in a bad quality PL production.
Now, unlike salt water shrimp, fresh water prawn broods can be raised in farms with
few special treatments and become as qualitative as that of wild source ones for the
hatcheries.
Linking brood suppliers with key stakeholder in the prawn hatchery industry can
ensure the supply and proper management of brood throughout the country. The
prawn hatchery association contains members from all existing prawn hatcheries and
can be an efficient platform in implementing this linkage. Katalyst will also partner
with Bangladesh Fisheries Research Institute (BFRI), an autonomous Government
institute in order to enhance advanced technical assistance on proper brood
management.
13
1.C Build up hatchery technicians
Professionally skilled hatchery technicians are essential for the growth of the
hatchery industry. Currently around 50 Golda hatcheries are in operation but to meet
the demand for PL around 300 hatcheries will be needed up to 2014. Thus trusting
the prognosis at least 600 technicians will be required to run these hatcheries
successfully.
The Proshika Prawn Hatchery, a commercial wing of the national NGO “Proshika”
has already in a pilot arranged a technician training program for 31 participants
commissioned by Katalyst. Proshika has already invested in training infrastructure,
They find the venture a profitable business and will continue their training activities in
future. In the upcoming year Katalyst will work with Proshika to refine the training
module develop promotion and communication material to illustrate the success
stories to different stakeholders.
1.D Develop resource pool for prawn hatcheries
The prawn hatchery survey (Winrock-Katalyst, 2008) brought to light that out of 80
hatcheries in greater Khulna region, 24 are either non-operational or abandoned and
some of the running ones are operating below capacity due to their design,
management, financial and technical problems. Katalyst will work to develop a self
sustaining one-stop solution center for prawn hatchery industries which can provide
technical and management solutions on a payment basis.
In order to back up contents for the information centers Katalyst will collaborate with
the two already existing technical support providers for prawn hatcheries which are
currently operating in Khulna and Chittagong region. The idea is to establish a
linkage with the hatchery industry and find out market opportunities for their
business. Katalyst will also support the resource pool on profitable product
developments and further skill developments as required.
1.E Establish effective distribution channels for quality inputs in prawn farming
Prawn farmers of Bangladesh usually face a lower yield than other countries mainly
due to lack of knowledge on cultivation techniques and insufficient access to quality
inputs (PL and Feed). To ensure availability of information and input in a sustainable
way it is necessary to establish an efficient and easily accessible distribution channel.
The distribution channels for businesses involved in agriculture, fisheries and
livestock sector offer room for improvements. Currently, feed companies rely largely
on their own distribution system involving small dealers which are difficult to control.
At the same time the market for distribution companies which focuses on fast moving
consumer goods is becoming more competitive day by day. By partnering with such
companies which are interested in diversifying their portfolio Katalyst attempts to
increase the market access for prawn SMEs.
Strategy 2: Better production techniques available in and adopted by the
sector
2.A Increase productivity through improved management tools
The reason behind introducing improved management tools and some specific
practices like better farm management with proper feeding techniques and
14
maintaining/tracking proper PL density in the farms is to increase the production from
a unit area of pond/gher. In the current practice, an average a farmer gets around
200 kg of prawn from 1 acre (Inception report, Winrock, 2006). If farmer use modern
technologies (e.g. paddle wheel aerator) along with increased PL, feed and improved
farm management they could take the production up to 700-900 kg per pond acre
(Katalyst Field observation, 2009). Consequently this creates the opportunity to
generate extra employment in prawn farms.
Katalyst has gained previous experiences working with ‘Pranti Traders’, a paddle
wheel importer and feed agent and MAWTS (Institute of Technology Engineering &
Technological Services, Dhaka) to develop and promote a low cost and efficient
paddle wheel model. In order to scale up the use of paddle wheels among farmers
Katalyst will engage through feed companies who desire to sell an increased amount
of feed. Furthermore, Katalyst will also collaborate with BFRI to promote further
technologies increasing the productivity of prawn farmers.
Strategy 3: Better marketing & post harvest practices followed by the sector
resulting in a better market penetration
3.A Tackle Contamination, Develop Code of Conduct and Establish Traceability
The sustainability of the Bangladeshi prawn industry can come under huge threats if
it fails to consistently demonstrate that its export items are fully complied with the
international food standards.
Katalyst supports MoFL/DoF to prepare an overall National Action Plan (NAP) on
tracing and preventing contamination and addressing food safety related issues to
improve the market access for the prawn industry. The comprehensive plan is a
coordinated effort from diverse organizations including MoFL, DoF, Katalyst-BSFF,
PRICE-USAID, FAO, BFFEA, UNIDO-BQSP and others. It contains both curative
and preventive measures with immediate, short and long term actions for the next 5
years. Katalyst is implementing its part of the plan which will continue up to 2013 and
include tracing the source of contamination, analyze the incidents of rejection,
creating awareness to prevent contamination, develop a suitable Code of Conduct,
design and implement a traceability system for the prawn industry. Katalyst, along
with BSFF (implementing partner) is already working with BFFEA, GHAB, Feed
industry and other international expert organizations, like AFBI (Agri-Food and
Biosciences Institute) and JIFSAN (Joint Institute For Food Safety and Applied
Nutrition, a combined effort of USFDA and UM) in implementing its share of the NAP.
Regarding labor issues a more conducive working condition can be availed through
forming partnerships with concerned stakeholders such as BFFEA and diagnostic
centers for health check up facilities. However, to formulate an implementation
strategy a more detailed study dealing with working conditions in the plants needs to
be carried out. The study should reveal information like the number of existing
plants, the diseases mostly seen in labors, the number of labors getting health
checkups, the quality of the checkups, the location and incentives of diagnostic
centers and the constraint and opportunities to avail the facilities for owners.
3.B Industry promotion and market exploration
Currently Bangladeshi prawn is exported mostly to the European Union and USA.
Only few products are also exported to Japan and Russia. So far neither the
government nor the exporters have taken much initiative to promote its product
15
further. New market exploration and industry branding will give our exporters, hence
our farmers, more options to sell and fetch higher prices than the current ones.
Therefore Katalyst will work with the Export Promotion Bureau (EPB), MoFL, MoFA,
BFFEA and private marketing companies to develop and implement a marketing
strategy for the prawn sector and provide regular promotion services to exporters.
Strategy 4: Area expansion for prawn farming
4.A Expansion of prawn farming in potential areas
This intervention aims to increase the horizontal production of prawn in new areas.
Generally prawn can be cultivated where sweet water is available for 6-8 months in a
year. Most of the pond fish farmers are able introduce prawn cultures as bottom layer
species in poly cultures. However, other than in the southern part of Bangladesh,
prawn culture is not very popular among farmers.
In this regard Katalyst’s goal is to establish a network between value chain actors
(hatcheries, nurseries, depots and processing plants) and the farmers. Private sector
partners will promote prawn, disseminate information on cultivation techniques and
therefore open new high end market to the farmers. Katalyst will partner with GHAB
and BFEEA to implement the expansion plan. The integration of national and local
media along with governmental extension programs will be a major key for the
success of the intervention.
3.3
Sector Operational Plan
Katalyst is currently implementing its activities through 2 (two) co-facilitators and
planning to work in a same way in future. Katalyst will search for other competitive
co-facilitators when current contracts with the co-facilitators expire. A detailed
GANTT chart describing all the interventions is attached in the annex section.
3.4
Monitoring & Evaluation
Intervention level regular monitoring:
All ongoing and future interventions will have an intervention plans containing logics
and detailed M&E plans. The logics are used as planning tools; therefore,
intervention logic will be developed before any contract signing or before an activity is
rolled out. It is a key component in the design phase of interventions. The M&E team
will check the strength of association at each levels of the logic using the ‘causality
criteria’ and evidence based tools. Once the logic is finalized, regular monitoring and
evaluation activities will be carried out as outlined in the M&E plan of the intervention
plan. Depending on the type of intervention teams may need to carry out baseline,
interim and post baseline impact studies. For majority of the interventions in-house
in-depth interviews and surveys will be used for this purpose. However, depending
on type of intervention and need, other external studies to ‘explain and improve’ the
interventions’ impact and diagnostic or need assessments studies to design new
interventions will be conducted. (See GNATT chart for details of preliminary M&E
planning)
16
Sector level overall impact monitoring:
Katalyst works in a number of sectors. For each sector Katalyst will conduct a
qualitative study in the beginning of intervening. The qualitative study will be conduct
to understand the sector and its dynamics; this will help set the vision and strategies
at the national level. Once interventions are implemented, for each sector Katalyst
will conduct a study to develop the KMDI (Katalyst Market Development Index); this
will allow monitoring and evaluation of the over all progress of the sector in relation to
Katalyst activities especially focusing on the quality of growth.
In order to monitor the quantity of growth, Katalyst will rely mainly on secondary data
to measure the observed changes in the sector. It will then associate its contribution
to the observed change. 1. e the strength of all the interventions which have played a
role in bringing about the sector change. To monitor the sustainability of change,
Katalyst will conduct regular financial monitoring and compare Katalyst-private sector
contributions with outreach figures. It will monitor sustainability at three levels:
individual, sector and at institutional level.
The indicators to be monitored:
Table 3.4: M&E indicators
Levels
Sector Level
Indicators
Prawn production, export volume,
(noncompliance notification)
Data sources
quality DoF, BFFEA
Contamination
DoF, BFFEA, Feed Company,
 Possible source identified
 Operation of awareness tools (national and Hatchery, Farmer
local)
 Relevant government activities
Traceability
Processing Plant, DoF,
 System in operation
BFFEA
 Number of processing plants adopting
 Cost-benefit analysis of the plants
 Accreditation process
Code of conduct
 Manual preparation and dissemination
All actor of value chain, DoF
Market promotion
 New markets identified
 Branding activities
EPB, BFFEA, DoF
 Opportunities for premium price
Prawn farming area
 New area, farmers, stakeholders
DoF, GHAB, Farmer
 Extra production
Enterprise
Level
HPL promotion
GHAB/Hatcheries, farmer, PL
 Hatchery HPL production
trader
 HPL use by farmers
 Farming knowledge (perception of quality as
compared with WPL)
 Number of documentary shows in national
television channels and local gatherings
Hatchery resource pool
17


Number of entrepreneurs / service recipients
Number of hatcheries opened / reopened /
strengthened
Technician training
 Number of training institutes
 Number of technician trained
 Number of technician employed
 Cost saving / quality improvement of
hatcheries
Brood bank / sources
 Number of brood bank/ sources established
 Sales , profit scenarios of brood banks /
sources
 Quality of broods at farmer level (mortality
rate)
 Outreach of brood banks / sources
Effective distribution
 Value-chain actors linked with companies
 Sales, profit, and knowledge of companies
and farmers
Better production techniques
 Number of machineries sold
 Number of information packages sold
 Difference in production, cost and profit of
the farmers
3.5
GHAB, Resource pool
Training providers, Hatcheries,
Trainees
Hatcheries, Brood
BFRI, Farmer
banker,
Feed company, depot owner,
MFIs, farmers
Farmer, machine
feed company
supplier,
Strategic Communication
Sl no
1.
Sector objectives
Increased availability
of quality inputs
Nature of change
To increase supply of
quality inputs – policy
and behaviour level
Quality control of inputs
– policy level
To promote HPL and
quality feed among
farmers – behaviour
level
Key stakeholders
Hatchery association
Feed companies
Aqua-chemical companies
Technical consultancy
providers
MoFL and DoF
2
Better production
techniques available
in and adopted by the
sector
Adoption of better
production techniques –
behaviour level
Availability of better
production techniques –
behaviour level
Feed companies
Hatchery association
DoF
BFRI
MFIs and Banks
3
Better marketing &
post harvest
practices followed by
the sector resulting in
a better market
penetration
To develop code of
conduct – policy and
behaviour level
To ensure traceability –
policy and behaviour
level
To tackle contamination
BFFEA
DoF and MoFL
FPBPC
MFIs and Banks
JIFSAN
Development partners
18
– policy and behaviour
level
4
Area expansion of
prawn farming
To promote prawn
farming in new areas –
behaviour level
Hatchery association
Nurseries
BFFEA
DoF
MFIs and Banks
Objective 1: Increased availability of quality inputs
To promote quality inputs to farmers, especially HPL and quality feed, it is imperative
to change mindset of farmers in many cases. Apart from giving information and
knowledge to farmers, strategic communication can play a crucial role in
demonstrating benefit of using quality inputs and in changing farmers’ behaviour and
perceived cost of using those inputs. Input providers like hatcheries and feed
companies can be partners in this regard. On the supply side, partnering with the
government, feed law and hatchery law can be communicated to all the stakeholders
to ensure production and consumption of quality inputs and overall quality control. It
is also important to showcase success stories of input providers who take technical
consultancy services and produce better.
Objective 2: Better production techniques available in and adopted by the
sector
Lead farmers, the first movers, must be communicated effectively to adopt better/new
farming techniques. Their success and learning have to be demonstrated to a wider
audience in due course of time. Input providers, government agencies are the
potential partners in these cases. Government RnD entities like BFRI can be a
crucial partner in availing and disseminating better technology. MFIs and banks have
to be motivated to extend their hands towards initiatives adopting new technologies.
Objective 3: Better marketing & post harvest practices followed by the sector
resulting in a better market penetration
Massive campaigns will be needed to create awareness against contamination and
to establish traceability and code of conduct among all the stakeholders. Necessary
policy level adjustments have to be widely circulated. All stakeholders need to
understand they must comply with those to sustain the industry. Effective
communication is a must in this respect. It is also important to regularly communicate
with relevant development partners to ensure a coordinated effort. We will also need
to establish some pilots to demonstrate traceability and code of conduct in practice.
Strategic communication is crucial firstly to establish the pilots and finally to
disseminate the learning. Government institutes, private sector and international
organizations are potential partners in this case.
Objective 4: Area expansion of prawn farming
To sensitize the stakeholders, strategic communication will play a major role in new
areas. At a later stage, to demonstrate the success stories to those areas we will
need further communications. We will partner with government, processors,
hatcheries nurseries and financial institutes accordingly.
19
3.6
Budget
In 2009-10 Katalyst will spend CHF 516,693 for prawn sector through two cofacilitators. This amount is derived from the estimated spending in each of the
following intervention areas.
Table 3.6 Budget for 2009-10




Intervention areas
Increased availability of quality
inputs
Better production techniques
available in and adopted by the
sector
Better marketing & post harvest
practices followed by the sector
resulting in a better market
penetration
Area expansion of prawn farming
Total
Year 2009-10 (CHF)
133,623
44,933
232,117
106,020
516,693
20
4. Reference List
Bangladesh Bureau of Statistics (BBS), 2006, Statistical year book of Bangladesh,
Dhaka
Bangladesh Centre for Advanced Studies (BCAS), 2009, A comprehensive study on
the fisheries sector of Bangladesh, Dhaka, pg 34-35
Bangladesh Frozen Food Exporters Association (BFFEA), Quarterly newsletter,
March-May, 2009, Khulna
Bangladesh Quality Support Programme (BQSP), www.bqsp.org, sighted on
November 2009
Danish International Development Agency (DANIDA), www.danidadevforum.um.dk,
sighted on November 2009
Faruq, M. O., Export Promotion Bureau (EPB), 2009, A Review in Retrospect, Dhaka
Fisheries Statistical Yearbook of Bangladesh (FSY), 2001-08, DoF, MoFL, Dhaka
International Trade Center, Trade Map, November 2009, www.trademap.org,
Switzerland
Poverty Reduction by Increasing the Competitiveness of Enterprises (PRICE),
www.price-bd.com, sighted on November 2009
Rahman, K. A., Fisheries Officer, DoF, 2008, Savar, Dhaka
Solidarity Center, The true cost of shrimp, 2008, Washington DC, pg 9
Winrock International, 2006, Inception Report of Fresh Water Prawn (Golda) Subsector, Dhaka
Winrock International, 2009, Wild Post Larvae collection in Bangladesh, Dhaka
Winrock International, www.winrock.org, sighted on November 2009
Winrock-Katalyst, 2008, Golda Hatchery Scanning in the Country, Dhaka
21
5. Annex
Annex-1: Detaled GANTT chart for prawn sector
Sl.
1
1.A
1.B
1.C
1.D
1.E
2
2.A
3
3.A.a
3.A.d
3.A.e
3.B
4
4.A
5
Interventions
Availability of quality Input
National Awareness on Hatchery Produced PL
Ensuring Availability of Quality Prawn Brood
Buildup Hatchery Technicians
Develop Resource Pool for Prawn Hatcheries
Establish Effective Distribution Channels for Quality
Inputs in Prawn Farming
Better Production Technique
Increase Productivity Through Improved Management
Tools
Better Marketing/post harvest Practices
Tracing nitrofurans and preventing their transmission to
the shrimp
Develop a Code Of Conduct (CoC) for each segment of the
Shrimp Industry Value chain
Establish, implement and promote a credible traceability
system for Shrimp Industry
Industry promotion and Market exploration
Area expansion for prawn farming
Expansion of prawn farming in potential areas
M& E Activities
Q1
2010
Q2 Q3
Q4
Q1
2011
Q2 Q3
Q4
Q1
2012
Q2 Q3
Q4