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Using Sustainability Indicators to Evaluate the Economic, Social and Environmental (ESE) Effects of Alternative Shrimp Production Systems

by

Gerald D. Toland, Jr. and Raphael O. Onyeaghala

  • Abstract
  • Outline of the Research Paper's Major Headings/Topics:
    1. Introduction – Trends in Aquacultural Production
    2. Purposes of Research – Assess Sustainability of Alternative Shrimp Farming Systems
    3. Review Methodologies to Assess ESE Sustainability Effects of Selected Shrimp Farming Practices
    4. Recent Innovations in Intensive Shrimp Production Systems – trū® Shrimp Case Study
    5. ESE Sustainability Analysis of Alternative Shrimp Aquaculture Systems
      1. ESE Effects of Selected Extensive, Semi-Intensive and Intensive Shrimp Farming Practices
      2. Predicting ESE Effects of an Innovative Shrimp Production Technology
      3. Evaluating the overall ESE effects of alternative shrimp production technologies on sustainable production
    6. Results and Discussion
      1. Summary and Conclusions
      2. Usefulness and Limitations of this Research
      3. Avenues for Future Research
  • Acknowledgements
  • References

Abstract

Samuel-Fitwi, et al. (2012) observe that global aquacultural production increased forty-times between 1957 and 2008. Advancing aquacultural technologies and management practices contributed to these dramatic increases. Rising global aquacultural output also necessitates producers to allocate limited resources to satisfy accelerating global fishery food demand. Gains in aquacultural output consequently generate market-external effects. Adverse externalities influence social, economic and environmental (ESE) welfare on a local, regional and global scale.

Competitive aquacultural shrimp production practices include extensive, semi-intensive and intensive systems (Hatch and Tai, 1997). Our research examines the ESE sustainability of alternative shrimp production systems. Utilizing Valenti, et al.’s (2018) methodologies, we evaluate shrimp aquaculture systems across a range of ESE sustainability indicators. We also review a case study of an intensive system (known as trū® Shrimp) where advanced techniques and management practices alter the current and future ESE effects of shrimp production.

We assess the efficacy of using sustainability-indices to investigate gains or shortfalls associated with alternative shrimp production-systems. We utilize our research results to suggest management practices for shrimp aquaculture that are economically, socially and environmentally sustainable.

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1. IntroductionTrends in Aquacultural Production

The UN’s Food and Agriculture Organization (FAO) and the US Department of Agriculture (USDA) both define aquaculture as a farming activity distinguishable from the wild harvest of marine and freshwater resources:

Aquaculture implies…intervention in the rearing of aquatic organisms to enhance production, such as stocking, feeding and the protection from predators (FAO 1995)…It is the part of the seafood industry where growers control the conditions for the production of aquatic plants and animals (USDA 2004, 2018).

Samuel-Fitwi, et al. (2012) observe that total aquacultural production increased nearly forty-times between 1957 and 2008. Global aquacultural output recently exceeded the total tonnage from capture fisheries (FAO, 2014). Troell et al. (2014) observe that the 7.8% per year global growth of marine and freshwater aquacultural production during 1990-2010 exceeded the worldwide expansion rates for most major agricultural products, including poultry, pork, dairy, beef and grains.

Improvements in aquacultural production technologies and management practices play a key role in achieving the dramatic advances. Expanding global aquacultural output also requires the world’s economy to allot substantial scarce natural and human resources to satisfy intensifying global demand for fishery food products. Similar to other global growth industries, spectacular gains in aquacultural output are accompanied by market-external effects. Aquaculture’s adverse externalities influence economic, social and environmental (ESE) welfare on a local, regional and global scale.

Aquaculture’s positive contributions to a sustainable global food economy should be evaluated in relation to its harmful side-effects. The future success of aquacultural production depends on establishing systems that respond to global food demand growth, while limiting negative externalities that deplete natural resources and/or damage the earth’s ecological carrying capacity.

2. Organization and Purposes of this Research

Troell et al. (2014) observe that aquaculture produces over 600 species of freshwater and marine organisms to serve global commercial markets. Aquaculture’s diversity is a challenge to researchers engaged in building “representative fish-farm models” to analyze the industry’s management practices. On the other hand, the multiplicity of aquacultural production systems offers a rich opportunity to examine a variety of individual markets to discover meaningful patterns and connections.

Shrimp farming is an aquacultural market with a global reach. Since the mid-1950’s, shrimp cultivation has been among the world’s fastest growing aquacultural sectors. Competitive aquacultural shrimp production practices are often subdivided into three broad categories: extensive, semi-intensive and intensive systems (Hatch and Tai, 1997). Rӧnnbӓck’s (2001) detailed shrimp study reveals that shrimp aquaculture actually varies from low-density traditional fish-farms that serve local markets to high-density, super-intensive, recirculated-water systems that can supply both domestic and export markets.

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A primary goal of this research is to examine the overall sustainability of alternative shrimp production systems. We review the economic, social and environmental (ESE) effects of shrimp aquacultural practices. The ESE criteria are known as the “three pillars of sustainable development” (Adams, 2006). The methodologies introduced by Valenti, et al. (2018) can effectively evaluate shrimp aquaculture system outcomes across a range of ESE sustainability indicators.

Advanced production technologies have the potential to influence the future status of shrimp aquaculture’s sustainability. In this research paper, we examine a case study of an intensive system (known as trū®Shrimp) where efforts to incorporate forward-looking techniques and management practices influence the current and future ESE effects of shrimp production.

Valenti, et al.’s (2018) methodologies allow us to evaluate diverse shrimp aquaculture systems across a range of ESE sustainability indicators. We initially review the ESE performance of extensive, semi-intensive and intensive shrimp-farm systems. We then introduce our case study of an innovative super-intensive system (known as trū®Shrimp) to examine how advanced techniques and modern management practices can alter the current and future ESE effects of shrimp aquacultural production.

Based on our analysis, we suggest avenues for future research to help identify and implement shrimp aquaculture management practices that are economically, socially and environmentally sustainable.

3. Methodologies to Assess ESE Sustainability Effects of Selected Shrimp Farming Practices

Troell et al. (2014) openly discuss the pluses and minuses associated with aquaculture’s increasing economic importance. On the one hand, the aquaculture industry boosts global economic growth via capital investments that increase production efficiency and capacity. Fish-farming has also assisted the world’s consumers to economically afford a noticeable increase in per capita protein consumption.

On the other hand, there are substantial costs to aquaculture’s expansion. The wild harvest of our global fisheries has reached its upper limit (Bunting 2013). Aquacultural activity might serve as a reasonable fishery alternative to sustainably increase output. However, many aquacultural production systems require further wild catch efforts because growers feed fish-meal to higher-trophic organisms (salmon and shrimp) with the protein from lower-trophic species (e.g., anchovies, herring, mackerel, and sardines). In this instance, aquaculture activity further depletes the already-strained natural fishery resource and significantly threatens the viability of aquatic ecosystems.

Bunting (2013) and Rӧnnbӓck (2001) summarize a considerable body of scientific evidence demonstrating that aquacultural practices create a wide range of adverse environmental consequences. For example, the negative external effects of fish-farming include natural-habitat loss, eutrophication, outbreaks of disease and pathogens, and the release of exotic and/or genetically-modified material into the environment.

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In the aquacultural economy and beyond, how do we balance our growth demands relative to our earth’s capacity to serve them? The Brundtland Commission (1987) defined sustainable development as meeting the needs of the present without compromising the ability of future generations to meet their own needs. The Global Reporting Initiative (2013) recommends that corporations, businesses and other economic entities should actively manage their operations to produce sustainable outcomes. To realize sustainable performance requires that private- and public-sector decision-makers guide their choices to achieve favorable economic, social and environmental (ESE) progress.

What is ESE progress, and how should we measure it? Following the logical approach suggested Jiang, et al. (2018) we use a modified two-stage approach.

The first stage (ESE-1) requires that we separately (ESE-1) assess the economic, social and environmental effects associated with the product’s supply-chain. The second stage (ESE-2) requires methodologies that jointly evaluate ESE effect of alternative aquacultural production systems.

Among the scientific methods to examine ESE effects are Life Cycle Costing (LCC) (Reich, 2005; USGSA, 2015)1, Social Life Cycle Assessment (SLCA) (Siebert, et al., 2018)2, and Life Cycle Assessment (LCA) (Finnveden, et al. 2009; Fazeni, Lindorfer and Prammer, 2014)3. We use a qualitative approach in the second stage (ESE-2) of our analysis to evaluate the ESE impacts of alternative shrimp production systems.

In the next segment of our paper, we conduct a case study guided by the two-stage ESE evaluation methodology. Our objective is to investigate the ESE sustainability of an innovative shrimp production technology.


1 Life Cycle Costing (LCC) is used in companies’ decision making on major investments and life cycle of products. It is a tool in Life Cycle Management, which is an application of life cycle thinking in management towards sustainable production and consumption. LCC covers assessments of costs in all steps in the life cycle during the lifetime of products. The methods define the main cost factors (also called cost drivers) including the costs connected with the demands that are not expressed in product price on the market. The unpriced demands can be the cost of emission reduction to attain high environmental qualities, or option values for natural resources and other social interests. LCC includes depreciation of investments, operational costs, allocation of overheads to a product or service (activity-based costing) and sometimes even infrastructure and related services that are needed to comply with demands. (Yoram Krozer, Life Cycle Costing for Innovations in Product Chains. Journal of Cleaner Production. Volume 16, Issue 3, 2008, Pages 310-321).

2 Social Life Cycle Assessment (SLCA) reflects the capacity to generate benefits to local communities, including jobs and food security, equitable income distribution, equality of opportunities and inclusion of vulnerable populations. Social benefits, such as health insurance paid by the company and opportunities to continue studies also should be considered. (Valenti, et al., 2018)

3 Life Cycle Assessment (LCA) is a tool to assess the potential environmental impacts and resources used throughout a product’s lifecycle, i.e., from raw material acquisition, via production and use phases, to waste management. (Finnveden, et al., 2009).

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4. Recent Innovations in Intensive Shrimp Production Systems – trū®Shrimp Case Study

Land-based Shrimp Production. In 2014, Minnesota-based Ralco Nutrition, Inc. (Ralco) obtained the necessary patents to launch an innovative and intensive land-based shrimp production system. Following three years of intense research and development toward advancing these technologies to commercial viability, Ralco spun off the project and created created The trū®Shrimp Company (trū Shrimp). trūShrimp aspires to “revolutionize the shrimp market” by offering a traceable and nutritious product for consumers while simultaneously meeting superior standards of ESE sustainability (Rosenberry 2018).

trū Shrimp coordinates its production and marketing using a vertically-integrated approach to supply-chain management. By adhering to strict bio-security and food safety standards at each step in the marketing channel, trū Shrimp encourages its consumers to transparently trace their product from hatchery to retail purchase.

In a global market where aquacultural products are often undifferentiated and characterized by highly competitive markets, trū Shrimp aims to establish itself as a unique product offering. Industry publications recognize the trū Shrimp system as a breakthrough in aquaculture production technology (Shrimp News International 2016).

An indoor, super-intensive stacked-raceway production system is at the heart of trū Shrimp’s advanced approach to shrimp aquaculture. Implemented under the Tidal BasinTM trademark, trūShrimp utilizes aerated, shallow-water apex-tank raceway systems to simulate ocean current conditions favorable to raising Pacific white shrimp (Penaeus vannamei). The width-and-depth (~ 12 ft. by 1.1 ft.) of each apex tank allows for vertical-stacks up to nine-Tidal Basins high. A treated steel structure makes it possible to support the vertically-stacked Tidal Basins (apex raceways). Recent developments in engineering design enable trū Shrimp to extend these Tidal Basins to 600-feet in length. trū Shrimp refers to a vertical-stack of these long Tidal Basins as a Reef. Multiple Reefs are housed within a single facility to increase shrimp production while not increasing biosecurity risks (Lingenfelter 2013; Rosenberry 2018).

trū Shrimp: Large-scale Aquaculture Output Technology. trū Shrimp uses the Reef technology as an essential component when constructing large-scale aquaculture farms that efficiently and effectively serve the sizable US consumer shrimp market. trū Shrimp’s vision is to establish a number of large shrimp production facilities (known as Harbors) at strategic locations across the US, and eventually at selected sites overseas.

Each trū Shrimp Harbor is a complete aquacultural system. While all of the system’s components are important, the most impressive aspect is the Harbor's massive 9-acre indoor facility where trū Shrimp manages the bulk of its shrimp production. Each immense and enclosed facility houses 32 Reefs (256 Tidal Basins). The forecasted annual output of each Harbor is approximately 8-million pounds of shrimp. Achieving a Harbor's predicted annual shrimp-yield will require about 20 million pounds of feed per year (AURI 2015).

It is challenging to determine a feeding regime to safely raise millions of shrimp within a super-intensive aquaculture system. Parent company Ralco’s 45-plus years of business experience in feed ration management and animal nutrition prepared it to meet this challenge. Ralco was able to transfer its agricultural feed technology for swine, poultry and ruminant animals to develop solutions for aquacultural production. Today, trū Shrimp has nutrition plans and feed delivery systems that successfully facilitate the growth of healthy shrimp on a very large scale (trū Shrimp Website 2018).

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Another advantage of the trū Shrimp System is geographic. With its headquarters located in Southwest Minnesota, trū Shrimp operations-center and shrimp production facility have ready access to valuable feed sources (e.g., soybeans) that can be processed into proper rations for raising shrimp.

trū Shrimp’s ESE Sustainability Effects.

Thus far, our case-study discussion emphasizes the promising aspects of trū Shrimp’s production technologies. But achieving ESE sustainability outcomes requires more than innovative production systems. We ought to assess the broader economic, social and environmental impacts of trū Shrimp entry into today’s markets.

Valenti, et al. (2018) demonstrated that aquaculture’s sustainability effects are multifaceted. Depending on the external effects of a particular production system, the assessment of sustainable outcomes includes evaluations of multiple economic, social environmental indicators.

A sampling of aquacultural sustainability indicators (Valenti, et al. 2018) includes:

  • Economic indicators
    • Efficient use of financial capital to promote short- and long-term profitability
    • Capacity of permanence within the aquaculture sector
    • Capacity of resilience to changing scenarios
  • Social indicators
    • Development of the local economy
    • Permanence in the activity
    • Remuneration of work per unit of production
  • Environmental Indicators
    • Use of Space and Water
    • Potential of Eutrophication
    • Use of Energy and Proportion of Renewable Energy

Within the constraints of a case study, we cannot review all of the ESE effects associated with implementing trū Shrimp technologies. But we can focus on some of the more critical impacts. We examine some of the likely consequences of establishing trū Shrimp Harbors in rural areas of the US.

Economic Indicators. One indicator of economic stability is the prospective return on investment for establishing a profitable state-of-the-art trū Shrimp production system. Minnesota’s Agricultural Utilization Research Institute (AURI) examined a two-year financial model for trū Shrimp, and estimated that a 34.2 million dollar investment in this super-intensive production system could potentially earn an approximate 36% net margin (AURI 2015).

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The trū Shrimp enterprise is a privately-held company with proprietary financial records. Quantitative revenue and cost data associated of this unique aquaculture production system are not available. We can still make some important observations by engaging in qualitative analysis. For example, we can use a qualitative approach to address Valenti’s economic sustainability indicators of permanency and resilience. One useful method is to apply the Porter Five-Forces model, and use it to examine the short- and long-term economic conditions surrounding the trū Shrimp enterprise.

Porter’s five factors can be summarized as: 1) Supplier Power, 2) Buyer Power, 3) Competitive Rivalry, 4) Threat of Substitution, and 5) Threat of New Entry.4 It is also common to add government regulatory power as a sixth factor in the Porter Model.

When we introduce Porter’s model to assess a firm’s economic sustainability, we can raise important questions that require us to anticipate likely scenarios. We summarize the application of Porter’s model to evaluate trū Shrimp’s economic sustainability in Table 1 below.


Table 1. Application of Porter’s Five-Forces Model to Evaluate the Permanence and Resilience of trū Shrimp’s Economic Sustainability
Porter’s Five Forces Competitive Force Strength in the Shrimp Industry trū Shrimp’s Economic Sustainability – Permanence and Resilience Indicators
1. Market Rivalry Medium to High: US Shrimp market relies strongly on foreign producers offering a largely undifferentiated consumer product

trū Shrimp’s Permanence and Resilience: To be determined (TBD)

trū Shrimp first enters US consumer market in 2020.

Sustainability dependent on success of trū Shrimp’s product differentiation (Supply chain transparency and superior product quality)

2. New Entrants High:Ultimately, the shrimp market is globally competitive. In most scenarios, there are relatively low barriers to entry for industries with undifferentiated products.

trū Shrimp’s Permanence and Resilience: TBD

trū Shrimp’s patented production technologies are difficult to replicate.

In the long term, new entrants may attempt product differentiation via alternative technologies

3. Substitutes Medium to High: The US Consumer food market is very dynamic. It is difficult to predict the trends. Currently, there is considerable consumer interest in supply-chain transparency and verifiable product quality.

trū Shrimp’s Permanence and Resilience: TBD

trū Shrimp’s early adoption of transparent technologies potentially establishes reputation as a market leader.

Many alternative markets for animal and plant protein products may challenge or imitate trū Shrimp’s product differentiation strategy.

4. Buyer Power High: The product volumes needed to supply food products to large retail chains are extremely large. One estimate is that trū Shrimp would be required to build and operate 40+ Harbors to meet the large scale product demands of the well-known US food retailers.

trū Shrimp’s Permanence and Resilience: TBD

trū Shrimp’s offers an exciting new food product for large retail chains (e.g., Walmart, CostCo, etc.) to attract customer traffic.

The complex web of local, state and federal agencies with jurisdiction to regulate the farm-to-fork supply chain will challenge trū Shrimp’s capacity for market expansion.

5. Supplier Power and Government Regulatory Power

Medium to High: trū Shrimp’s location in the Midwest US provides ready access to reliable feed sources (e.g., soybeans).

At the federal level, the USDA has jurisdiction for farm-level agricultural products, while the FDA has jurisdiction over processed foods.

State and local government regulations are not consistent. Adjoining states can have very different regulatory environments.

trū Shrimp’s Permanence and Resilience: TBD

trū Shrimp’s patented technologies and vertical integration strategy to manage the supply chain facilitate a sustainable relationship with its suppliers.

The complex web of local, state and federal agencies with jurisdiction to regulate the farm-to-fork supply chain will challenge trū Shrimp’s capacity for market expansion.



4 https://www.innovationtactics.com/porter-five-forces/

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When we utilize Table 1 to evaluate trū Shrimp’s economic sustainability with the Porter Model, we arrive at conclusions that are conditional. We discern that trū Shrimp’s economic sustainability depends on creating risk management strategies that can effectively produce both market permanence and resilience.

The trū Shrimp product becomes commercially available in 2020-2021. Until then, then Porter’s various forces will not have their full effect. Nevertheless, our analysis anticipates that trū Shrimp will encounter medium-to-high competitive pressures associated with Porter’s six factors (including government policy).

Social Indicators. Valenti, et al. (2018) observe that two social sustainability indicators are local/regional economic development and activity-permanence.

trū Shrimp’s decision to build a smaller-scale Reef in Balaton, MN, to serve as a training facility for future Harbor employees, and a full-scale Harbor in Madison, SD will affect the region’s rural economy. The investment required for a 9-acre indoor shrimp production facility is evidence of a business who plans on maintaining a long-term presence in the region.

It is advisable to not overstate the effects of new businesses on local economic development. For example, the entry of a new industry into a regional economy often causes shifts of labor supply. New investments can cause some unemployed resources (jobless workers, idle warehouses, etc.) to reenter the economy. On the other hand, these initiatives also cause already-employed resources to be reallocated. In these instances, assessments of investment project’s economic impact should report on changes in the local economy’s overall Real GDP and as well as the effects on the area’s income distribution.In the case of trū Shrimp, we reasonably predict that some regional resources will shift away from current uses and be redirected towards the shrimp industry. But we also forecast that the introduction of a new industry into the regional economy will likely reduce rural unemployment and possibly increase the region’s workforce participation rate.

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AURI’s review (2015) of trū Shrimp’s effects on social sustainability also involved comparisons of social impacts connected with the management of alternative shrimp production systems in the global economy. For example, selected aquaculture farms in Thailand reportedly utilized slave labor within their shrimp production operations. The AURI study (2015) contrasted trū Shrimp’s approach to shrimp farming in relation to global aquacultural practices. trū Shrimp’s Harbor in Madison, SD is expected to employ a direct labor force of approximately 150 employees for wages that approximately will range between $15 and $21 per hour to produce output within the trū Shrimp Harbor.5

Environmental Indicators. In this case study of the trū Shrimp system, it is also important to review the expected effects of this new aquacultural technology on environmental sustainability. On its website, trū Shrimp publicly states a corporate mission for its product:6

trū Shrimp is focused on sustaining a growing global population with healthy, clean shrimp. It is our social responsibility to exceed food safety standards while limiting our environmental impact.

How does trū Shrimp implement its mission? One aspect of environmental sustainability is whether the production technology makes efficient use of space and water. trū Shrimp’s vertically-stacked Reefs conserve on the land area required for shrimp output. Water conservation is also made possible by technical innovation. The water in each Reef is continuously cleaned and re-used, thanks to a connected system of bio-filtration tanks, pump-powered rapid-sand clarification components and UV purification units (Lingenfelter 2013).

Aquaculture systems that can recycle substantial amounts of water reduce the likelihood of generating eutrophication of natural ponds and waterways. No system is perfect, and waste management is always an important environmental consideration. When an aquaculture technology, such as the trū Shrimp Tidal Basin, can significantly increase water recovery levels, then pollution control is a more straightforward and sustainable endeavor.

In addition to high rates of water recycling, each Tidal Basin includes a sump system that syphons-off residual feed, molts and fecal material from the farmed-shrimp. These residuals are subsequently separated, redirected and reprocessed to produce useful by-products. For example, chitin from the shrimp molts can be re-used for applications in cosmetics, biomedicine and pharmaceuticals. In addition, shrimp fecal matter can be processed into plant and crop fertilizers (trū Shrimp Website 2018).


5 https://www.auri.org/assets/2015/09/tru-Shrimp-Systems-presentation.pdf

6 http://trushrimpcompany.com/mission/

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All super-intensive indoor shrimp production systems, including trū Shrimp’s Harbor operations, require sufficiently-large energy sources to maintain ideal shrimp-growing water temperature conditions. Lingenfelter’s (2013) study predicted that the best environment for shrimp vitality in shallow-water apex raceways requires water temperatures between 87.8 and 90.5 Degrees Fahrenheit (or 31 to 32.5 Degrees Celsius).

The relatively-high temperature requirements of super-intensive shrimp production systems (such as the trū Shrimp) create additional environmental stress associated with the energy resources necessary to maintain warm and stable water temperatures in the Tidal Basins, 24-7.

trū Shrimp’s decision to erect a Reef in rural Balaton, MN, to serve as a training facility for its future Harbor employees, as well as a to build a full-sized Harbor in the more-populated region surrounding Madison, South Dakota (SD), is fortunate from an environmental/energy perspective. When the trū Shrimp Harbor is fully operational, it will draw upon an energy grid that is increasingly reliant on renewable energy.

The Minneapolis Star Tribune newspaper reported in March 2018 that MN’s renewable energy generation is now the state’s second largest source of electrical power generation, next to coal.7 The Black Hill Energy Corporation (based in Rapid City, SD) is seeking regulatory approval to build and operate a 40-megawatt wind farm that will supply power to consumers in both South Dakota and Wyoming.8 As long as MN and SD continue on their current paths to produce additional power from renewable sources, then projects such as trū Shrimp will increasingly be sustainable from the standpoint of a smaller carbon footprint.

 

Summary of trū Shrimp’s Case Study.

Our case study investigates the ESE Sustainability effects of a super-intensive indoor shrimp production system implemented by The trū®Shrimp Company in rural Minnesota. Using Valenti, et al. (2018)’s sustainability indicators, favorable economic results emerged from trū Shrimp’s investment in aerated, shallow-water apex-tank raceway system to simulate ocean current conditions. Social effects include effects on rural economic development. Investments facilitate the reentry of unemployed resources into the local economy and also cause reallocation of already-employed resources. Environmental effects of trū Shrimp’s patented Tidal BasinTM technology are a significant increase in water recovery to reduce the risk natural pond and waterway eutrophication, as well as reliance on an energy grid that increasingly utilizes wind- and solar-based technologies to power the electrical grid.


7 http://www.startribune.com/renewable-energy-now-produces-25-percent-of-electricity-in-minnesota/475552393/

8 https://journalstar.com/business/local/black-hills-boosting-renewable-power-in-south-dakota-wyoming/article_2111bdf3-25a0-5dc8-8ce5-13db62b38608.html

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5. ESE Sustainability Analysis of Alternative Shrimp Aquaculture Systems

Our trū Shrimp case study focused attention on the ESE effects of new shrimp production methods typically classified as super- or ultra-intensive. Such innovative technologies have the potential to change the future worldwide ESE impacts of shrimp aquaculture.

While future trends are important, the current status of the global shrimp industry today also demands our attention. Extensive, semi-intensive and intensive shrimp farming practices dominate global shrimp markets.

To divide shrimp production practices into three categories, we primarily separate the different shrimp operations based on alternative stocking densities (e.g., # shrimp raised per square meter of water) and harvested weight per pond area (# tons per hectare).

In Table Two, we review the primary considerations that identify each of the three major shrimp farming systems.


Table 2. Characteristics of Extensive, Semi-Intensive and Intensive Shrimp Production Systems (Rönnbäck 2001, Bunting 2013, Valenti, et al. 2018)
Shrimp Production Systems Stocking Density (# Shrimp per square meter) Annual Production (# Tons per Hectare per Year) Pond Size (# Hectares)
Extensive 1 - 3 0.6 - 1.5 1.0 - 10.0
Semi-Intensive 3 - 10 2.0 - 6.0 1.0 - 2.0
Intensive 10 - 50 7.0 - 15.0 0.1 - 1.0

Rönnbäck’s (2001) comprehensive study of these three prevailing shrimp production methods and their associated externalities provides key insights into the industry’s ESE effects. We can combine Valenti, et al.’s ESE blueprint for ESE analysis with Rönnbäck’s wide-ranging research on the positive and negative impacts of the shrimp industry’s overall sustainability. In Table Three below, we use results in Rönnbäck’s and Buntings’ research to evaluate ESE sustainability impacts categorized with Valenti, et al.’s indicators.

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Table 3. Evaluating the Outcomes of Extensive, Semi-Intensive, Intensive and Super-Intensive Shrimp Production Systems Using Alternative ESE Sustainability Indicators (Rönnbäck 2001, Bunting 2013, Valenti, et al. 2018)

Key: (+) = Augments Sustainability, (0) = Uncertain Sustainability Effect, (-) Diminishes Sustainability

Shrimp Production Systems Economic Sustainability Indicators Social Sustainability Indicators Environmental Sustainability Indicators
Extensive

Financial capital efficiency (0)

Aquacultural permanence (+)

Changing Scenario Resilience (+)

Local economic development (+)

Social Permanence (+)

Per unit work remuneration (0 or -)

Space and water use (-)

Eutrophication potential (+)

Renewable and Total Energy Use (+)

Semi-Intensive

Financial capital efficiency (+)

Aquacultural permanence (0)

Changing Scenario Resilience (-)

Local economic development (-)

Social Permanence (-)

Per unit work remuneration (-)

Space and water use (-)

Eutrophication potential (-)

Renewable and Total Energy Use (0)

Intensive

Financial capital efficiency (+)

Aquacultural permanence (-)

Changing Scenario Resilience (-)

Local economic development (-)

Social Permanence (-)

Per unit work remuneration (-)

Space and water use (-)

Eutrophication potential (-)

Renewable and Total Energy Use (-)

Super-Intensive trū®Shrimp Technology

Financial capital efficiency (+)

Aquacultural permanence (0)

Changing Scenario Resilience (0)

Local economic development (+)

Social Permanence (0)

Per unit work remuneration (+)

Space and water use (+)

Eutrophication potential (+)

Renewable and Total Energy Use (+)


Table Three’s ESE evaluations deserve elaboration. Extensive shrimp production requires inexpensive land and labor costs, and makes greater use of the ocean’s natural shrimp production capacity. Also an absence of government regulatory action is associated with converting coastal areas into extensive shrimp aquaculture operations. The end-product of extensive shrimp farms generally serves local consumer markets. Compared to other shrimp farming systems, extensive methods offer an easier entry into the industry because the methods require fewer management skills and modest input levels.

Semi-intensive shrimp production systems are distinct from extensive practices because the shrimp producer utilizes feed rations to manage shrimp nutrition and growth. Capital inputs and more advanced technical skills are necessary to farm a larger shrimp harvest from a smaller pond production area. Across ten shrimp exporting countries, an average of 52.5% engage in semi-intensive practices, followed by 30.5% and 17% of the countries using extensive and intensive production methods, respectively (Rönnbäck 2001)

Intensive shrimp production typically occurs with a very small pond area, compared to the semi-intensive and extensive methods. To manage the large amount of waste generated by growing many shrimp with a confined pond requires constant aeration and pumping of fresh ocean water into the production ponds. The pumping exchange causes negative externalities as the ocean is expected to absorb the waste-filled waters and transfer fresher-waters into the production ponds. The technical skills associated with intensive shrimp production are more demanding than those associated with semi-intensive operations.

When the final shrimp product leaves the farm level, and is distributed through the later channels of the supply chain, it becomes a highly profitable enterprise. Export markets are hungry for this popular ocean-based output, and intermediary marketers receive strong prices for its delivery.

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ESE Sustainability Effects of Extensive, Semi-Intensive and Intensive Shrimp Production Methods. The premium prices and high profitability associated with the shrimp export supply-chain does not reflect the negative external costs associated with the three major shrimp farming systems. Rönnbäck (2001) and Bunting (2013) document serious socio-economic and environmental problems connected with shrimp aquaculture.

Bunting (2013) observes that shrimp are carnivorous. Consequently, semi-intensive and intensive shrimp farming operations require high levels of fish-meal protein derived from lower-trophic species. Shrimp aquaculture’s feeding regimes are responsible for continued depletion of the world’s ocean ecological carrying capacity.

Bunting (2013) discusses further aquacultural externalities. Aquaculture operations have released eutrophicating-substances, diseases and pathogens into the environment, resulting in adverse effects on the ecology of native aquatic species. Bunting also observes that fishery-derived animal protein is not necessarily superior to conventional land-based meat and livestock products.

Rönnbäck (2001) offers evidence that the dramatic growth in shrimp farm production volume has created harsh socioeconomic consequences. Semi-intensive and intensive shrimp operations often replace or damage coastal mangrove environments. Mangroves generate ecological contributions that are vital to local economic growth and a more equitable income distribution.

Mangrove destruction consigns local fishermen and their households to diminished income-earning potentials. Shrimp aquaculture offers high returns to an exclusive list of landowners, but fails to distribute economic value to politically- and economically-disadvantaged groups. Aquacultural shrimp production via semi-intensive and intensive production technologies worsens local food insecurity, depletes the public good value associated with healthy mangroves, and lowers the fishery catch of local fishermen and agriculturalists (Rönnbäck 2001).

Deforestation has damaged or eliminated more than half of earth’s mangroves. Shrimp pond construction for aquacultural production is largely responsible for the endangered status of mangroves. Such destruction is not environmentally or economically sustainable because mangroves provide essential habitats that support the vitality and growth of shrimp in their early stages of development (Rönnbäck 2001).

6. Evaluating the Overall ESE effects of Alternative Shrimp Production Technologies on Sustainable Production

As we reviewed the research performed by Bunting (2013), Rönnbäck (2001) and Valenti, et al. (2018), we recognize that need to apply analytical methods that help us to understand the overall ESE effects of shrimp aquaculture. One qualitative investigative approach that enables the researcher to assess a variety of important factors as the basis for establishing a comprehensive strategy is known as SWOT Analysis. In brief, SWOT analysis requires a researcher to predict an organization’s current/future performance based on its internal strengths and weaknesses, as well as its external opportunities and threats.

 

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While SWOT analysis is best known for its applications in the business management literature, we perceive that we can use the SWOT evaluation to make some overall assessments of the shrimp aquaculture industry’s capacity to achieve economic, social and environmental (ESE) sustainability. In Table Four below, we employ the SWOT methodology to review the sustainability effects of extensive, semi-intensive, intensive and super-intensive shrimp aquaculture systems.


Table 4. Using a SWOT Analysis to Interpret the ESE Sustainability of Alternative Shrimp Production Systems
Shrimp Production Systems Internal Strengths and Weaknesses Influencing Shrimp Aquaculture ESE Sustainability External Opportunities and Threats Influencing Shrimp Aquaculture ESE Sustainability
Extensive Strength:
  • Low input requirements
  • Easy entry & exit
  • Diversification to reduce risk
Weaknesses:
  • Mangrove endangerment to construct shrimp ponds
  • Low income earning potential
  • Lack technical expertise to efficiently manage economic and ecological risks.
Opportunities:
  • Small scale aquaculture to serve local and regional markets
  • Diversified fish products provide resilience as markets or growing conditions change.
Threats:
  • Semi-intensive and intensive operators absorb or outcompete extensive producers
  • New technologies cause extensive production methods to become obsolete.
  • Increased government involvement changes input requirements and creates entry barriers.
Semi-Intensive Strengths:
  • Access to financial capital
  • Increased technical expertise and management skills
  • Utilize advanced aquacultural technologies
Weaknesses:
  • Increased output intensity associated with output variability, disease and eutrophication.
  • Mangrove endangerment
  • Use of antibiotic treatments to reduce shrimp mortality rates.
Opportunities:
  • Larger output volumes can serve profitable export market demand.
  • Improved management and technical expertise can reduce adverse ESE effects.
Threats:
  • Deforestation of mangroves reduces shrimp aquaculture’s long-term ESE sustainability.
  • Intensive shrimp production enterprises use advanced output technologies and economies of scale to replace semi-intensive operations.
  • Increased government oversight alters the flexibility and resilience of semi-intensive shrimp production.
Intensive Strengths:
  • Well-developed infrastructure
  • Enhanced access to financial capital
  • Less water and land area required for increased shrimp output
  • High technical expertise and management skills
  • Utilize advanced aquacultural technologies
Weaknesses:
  • High production intensity escalates output variability, disease and eutrophication.
  • Mangrove endangerment
  • Use of antibiotic treatments to reduce shrimp mortality rates.
Opportunities:
  • Very large shrimp output volumes well adapted to meeting the demands of profitable export markets.
  • Improved management and technical expertise can reduce adverse ESE effects.
Threats:
  • Deforestation of mangroves reduces shrimp aquaculture’s long-term ESE sustainability.
  • Increased government oversight alters the flexibility and resilience of intensive shrimp production.
Super-Intensive: trū Shrimp Case Study Strengths:
  • Advanced infrastructure
  • Strong access to financial capital
  • Highly-controlled shrimp grow-out conditions with the capacity to clean and recycle water for optimal shrimp output.
  • Traceable production and output from hatchery to final consumer.
  • Extremely high technical expertise and management skills
  • Invent and utilize advanced aquacultural technologies.
Weaknesses:
  • High cost of capital investment to achieve necessary scale economies.
  • Unknown challenges until full commercialization occurs.
  • Challenges to seek and hire qualified professionals prepared to efficiently use and manage high technology production practices.
Opportunities:
  • Build a market for differentiated shrimp product based on quality, transparency and service.
  • Meet the growing global demand for shrimp market with a product that improves ESE Sustainability across multiple indicators.
Threats:
  • Competitive environment associated with Porter’s Five Forces, plus government oversight
  • Long term consumer interest in and satisfaction with aquacultural products.
  • Capacity to meet strong growth in consumer demand while achieving ESE sustainability.
  • Capacity to be resilient and sustainable as ESE conditions change.

What can we conclude about shrimp aquaculture sustainability when we employ the SWOT approach? Our assessments are sobering. We summarize our perspectives below:

  • In a SWOT analysis, it is important to assess how the internal strengths and weaknesses of an organization or entity interact with the external opportunities and threats.
  • When we view the strengths and weaknesses of the extensive, semi-intensive, intensive and super-intensive shrimp aquacultural systems, and compare them to the outside opportunities and threats to sustainability, we make the following observations:
    • Shrimp aquaculture faces serious challenges in the areas of social and environmental sustainability, particularly with extensive, semi-intensive, intensive shrimp farming systems.
    • We expect ongoing negative consequences because the internal weaknesses often mean that shrimp aquaculture systems do not have the capacity to overcome the external threats to social and environmental sustainability.
    • We conclude that internal strengths and external opportunities for sustainability lie primarily in the area of economic effect. But we also have to qualify this statement because social and environmental threats (such as disease, pathogens and an absence of technical expertise) ultimately reduce an operation’s long-term economic sustainability.
    • In the area of super-intensive shrimp production systems, such as trū Shrimp, we do not know enough at this time to arrive at firm conclusions. When these methods reach full commercialization, we can expect some new SWOT conditions to arise. At this time, the sustainability prospects for the trū Shrimp systems are promising.

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7. Summary of this Study and Avenues for Future Research

We conducted this research is to investigate the sustainability of alternative shrimp aquaculture systems. Aquaculture is separate from the fishery industry; it requires active management to grow and harvest products in the aquatic environment. It is important to study key aspects of aquacultural production because of its major role in today’s global economy.

The three pillars of sustainability are economic, social and environmental (ESE). In our study, we reviewed aquaculture economic literature to investigate the ESE sustainability effects of shrimp farming enterprises. We also utilized a case-study approach to review the ESE impacts of a new super-intensive shrimp aquaculture system known as trū Shrimp.

Our case study examined some of the anticipated outcomes of using high technology to raise shrimp in a controlled environment. While we cannot make definitive statements about all of the impacts of this new production system until it is fully commercialized, we are able to determine that an organization’s intentional and genuine efforts to achieve sustainability can make a difference.

Based on our analysis of current ESE effects associated with shrimp farming, we conclude that the industry is a mixture of opportunities and challenges. The opportunity lies in the use of modern technology to cultivate new sources of aquatic-based plant and animal protein to sustainably feed a world whose population is expected to reach nine-billion by the year 2050. The challenge lies in applying new management methods that can reduce the adverse environmental and social side-effects of aquacultural systems.

Areas of future research should likely focus on how to institute innovative policies that can take advantage of technologies that enhance ESE sustainability. Another area of study should examine the current state of consumer knowledge about aquacultural practices and their various impacts. Trends in consumer awareness can be powerful forces for change. If consumers begin to seriously seek healthier and/or environmentally-safer aquaculture products, then pressures to reduce the adverse aspects of shrimp farming and related enterprises.

Finally, there are many avenues for research yet to explore, especially where there are opportunities to reduce aquaculture’s social and ecological footprint while growing its capacity to be economic growth and sustainable development.

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