Professional Documents
Culture Documents
Abstract
Coastal aquaculture emerged as a sunrise sector in India during the 1990s. It was identified as
a sector full of promise for expanding exports and for adding to foreign exchange. The sector
has more than fulfilled its promise and has more in store. This paper gives an overview of the
role and development of fisheries in general and aquaculture in particular in India. Growth,
sources of growth, contribution to national gross domestic product, impact on rural economy,
socio-economic impacts, generation of backward linkages, and export growth of coastal
aquaculture in terms of composition, direction and penetration are reviewed. The paper
concludes on an optimistic note for development of coastal aquaculture in the country with
the streamlining of policy measures for production and marketing.
Overview
Agriculture in India occupies a prime position in terms of its contribution to gross domestic
product and factor incomes. It accounts for 27 percent of India’s gross domestic product, 65
percent of the employment of the total workforce and 21 percent of the total exports of the
country (Venkitaramanan, 2001). The sectoral shift has been less rapid and less pronounced
than anticipated in more than 50 years of independence. Its population and poverty weigh
down the Indian economy. India’s population at the last count was over 1 billion and the
percentage of people below the poverty line around 36 percent1. While the green revolution
stopped the imports of foodgrains, problems of distribution of food and low purchasing
power of the people persist.
1
Families (consisting of 4 members) below the poverty line earn on an average less than US $ 1 or 25 cents per capita per day in
India. This is about enough money only for food and insufficient for other basic needs. The Government of India estimates, using a
different yardstick of calories intake, that 330 million people are in poverty (www.members.tripod.com/tveducation).
Fisheries have always been a traditional avocation. Craft and gear have remained more or
less traditional despite rapid improvements in fishing technology in India. Traditional
outlooks, cultural values and insufficient penetration of institutional finance have been
responsible for low productivity of the fishers. Inland fisheries and aquaculture has made
rapid progress of late and are contributing around 50 percent of the total fish production in
the country (Krishnan et. al., 2001).
The introduction of the New Economic Policy of the Government of India in 1991 has
opened up India’s economy and has enabled rapid expansion of export market for Indian
seafood.
India’s contribution to global fish production increased from 3.26 percent in 1985 to 4.41
percent in 1997 (Table 1). Compared to growth in world fish production, fish production in
India has increased at a faster rate mainly due to increasing volume of inland fish production.
In 1997, India accounted for 4.9 percent of the world inland fish production and 4.07 percent
of its marine fish production.
On average its fisheries sector contributes about 0.8 percent of India’s gross domestic
product (Table 2). This has remained almost constant since 1970-71. However its
contribution to agricultural domestic product has been rising continuously (Krishnan et. al.,
2000). It increased from 1.98 percent during the decade of the 1970s to 2.74 percent during
the 1990s. This could be due to a declining share of the agricultural sector to gross domestic
product and faster growth in fisheries sector compared to the agricultural sector (Table 2).
Annual growth in gross domestic product from fisheries sector accelerated to 7.12 in the
1990s from 2.86 percent in the 1970s. In contrast, the rate of growth of agricultural gross
domestic product during these decades grew by 3.09 and 1.79 percent respectively.
The rate of growth in contribution of fisheries to India’s gross domestic product has
started to approach the rate of growth in its gross domestic product. This could be attributed
mainly to greater allocation of funds to fisheries sector. The fisheries sector outlay as percent
of outlay for agricultural sector over the five-year plans has been increasing continuously
(Table 3). It increased from 1.74 percent in the First Five-Year Plan to 5.49 percent in the
Eighth Five-Year Plan. Its share in total outlay during different plans has, however, varied
from 0.26 percent to 0.52 percent.
Table 3 Outlay for fisheries sector during five-year plans (million rupees)
Fish production in India increased steadily from 0.752 million tons in 1950-51 to 5.26 million
tons in 1998-99 (Table 4). Marine fish production remained the major contributor till 1980-
81. Its contribution to total fish production by 1960-61 was over 70 percent, but it declined
drastically to 61.85 percent in 1970-71. Since then, it remained almost constant till 1990-91.
In the 1990s, fish production structure underwent substantial changes. The share of inland
fisheries increased drastically reaching to 48.76 percent in 1998-99. These changes arose
from a deceleration in growth of marine fish production and a new policy perspective in favor
of inland fisheries, particularly aquaculture.
Year Total fish production Share of marine fisheries Share of inland fisheries
(m. tons) (%) (%)
1950-51 0.752 71.01 28.99
1960-61 1.160 75.86 24.14
1970-71 1.756 61.85 38.15
1980-81 2.442 63.68 36.32
1990-91 3.836 59.96 40.04
1998-99 5.262 51.24 48.76
Source: Department of Agriculture and Cooperation: Statistics at a Glance, 2000.
Since 1980-81 fish production has been increasing at a rate of 5.21 percent a year (Table
5). The inland sector contributed increasingly to the observed growth. Inland fish production
grew at an annual rate of 6.20 percent. A disaggregated view of the pattern of growth shows
acceleration in growth of inland fish production during the 1990s. On the other hand, growth
in marine fish production decelerated to 2.50 percent during 1990-99 from 3.73 percent
during 1980-90.
Source Period
1980-81 to 1989-90 1990-91 to 1998-99 1980-81 to 1998-99
Marine 3.73 (4.302) 2.50 (4.200) 4.48 (13.992)
Inland 5.14 (13.301) 6.34 (17.558) 6.20 (37.763)
Total 4.30 (7.826) 4.19 (9.767) 5.21 (24.15)
Figures in parentheses are percentages of totals.
Source: Department of Agriculture and Cooperation: Statistics at a Glance, 2000.
Culture fisheries comprising freshwater and brackishwater fish culture is the main source
of the growth in inland sector. The share of culture fisheries in inland sector has increased
tremendously during recent years (Table 6). It increased from 43.33 percent in 1984-85 to
71.72 percent in 1989-90 and then to 84.07 percent in 1994-95. Within the culture fisheries,
the major contribution to enhanced production was from freshwater aquaculture, which
increased from about 30 percent in 1984-85 to about 65 percent in 1994-95.
2
A lakh equals 100,000 units.
hectares of ponds and tank area, and 0.788 million hectares of beels, oxbow and derelict
water. The brackishwater area for fish production is estimated to be 1.422 million hectares.
India’s inland resources have not been tapped to their potential. Only about 16 percent of
its freshwater area and 10 percent of the brackishwater area has been utilized for fish culture.
The productivity however is low while average productivity of freshwater aquaculture in
1998-99 was about 2.2.tons/ ha, there is a potential to raise yield to 10 tons/ha. The realized
average productivity of brackishwater aquaculture in 1998-99 was 472 kg/ha as against the
potential of about 10 tons/ha.
Brackishwater aquaculture
Brackishwater shrimp farming has been a growth area since the initiation of the process of
economic liberalization in 1991. Tiger shrimp is the main cultured species in brackishwater.
This is a high value commodity and has ample export potential. However, as indicated
earlier, the production potential of brackishwater aquaculture has remained grossly
underutilized in terms of both area and yield.
Table 8 Potential brackishwater area, area covered, production and yield of shrimp production in
different states, 2000-2001.
State Potential Area covered Percent area Production Yield
area (ha) (ha) utilized (tons) (kg./ha)
Andhra Pradesh 150000 74220 (50.87) 49.48 53100 (54.69) 715.44
Goa 18500 930 (0.64) 5.03 970 (0.99) 1043.01
Gujarat 376000 440 (0.30) 420 (0.43) 954.54
Karnataka 8000 2980 (2.04) 0.12 2730 (2.81) 916.10
Kerala 65000 14740 (10.10) 22.68 7320 (7.53) 496.61
Maharashtra 80000 420 (0.29) 0.53 320 (0.33) 761.90
Orissa 31600 7420 (5.09) 0.02 7360 (7.58) 991.91
Pondicherry 800 Not available Not available
Tamil Nadu 56000 2540 (1.74) 4.54 3790 (3.90) 1492.1
West Bengal 405000 42210 (28.93) 10.42 21080 (21.71) 499.40
Total 1190900 145900 (100) 17.11 97090 (100) 679.33
Figures in parentheses are percentages of totals.
Source: MPEDA, 2001.
The states of Andhra Pradesh and West Bengal contribute 77 percent of the total
brackishwater shrimp production in the country (Table 8). In fact, more than half of the
shrimp production comes from Andhra Pradesh alone. West Bengal contributes 22 percent
and is followed by Kerala (7.53 percent) and Orissa (7.58 percent). The altered uneven
pattern of distribution of production compared to aquaculture area is due to differences in
yields (Table 8). Per hectare yield is the highest in Tamil Nadu (1492 kg/ha) and the lowest in
Kerala (496 kg/ha). The national yield is estimated to average 679 kg/ha. Except for Kerala
and West Bengal, the yield in other states is higher than the national average. Shrimp culture
is location specific and the interstate variation in yield maybe due to differences in agro-
climatic, soil and water characteristics, technology, socio-economic factors, development of
markets, infrastructure and institutions and so on.
87
Aquaculture Economics and Management 6(1/2) 2002
88 Aquaculture development in India • M. Krishnan & P.S. Birthal
continuous contribution to production from yield increases, giving way to area contribution
only in the recent years, Andhra Pradesh, Tamil Nadu and Gujarat seems to have increased
their production basically from increase in area under culture. Andhra Pradesh has more than
50 percent of its potential area under culture and also contributes more than 50 percent of the
total farmed shrimp production in the country. The states of Orissa, Karnataka, Goa has
contributed consistently to production by yield increases. But the absolute contributions from
these states are quite low. Again, these states including West Bengal have weathered the
losses better than others during 1994-95, when the whole of the sector suffered from the
white spot disease.
The intensity of culture seems to have a definite inverse relationship to the stability of
shrimp production (Table 10). While Kerala, West Bengal and Orissa where some form of
traditional aquaculture was already in vogue, seem to be relatively stable in terms of area,
production and yield, the states in which aquaculture has made in-roads in the last one decade
like Tamil Nadu Andhra Pradesh and Gujarat seem to exhibit more instability (Ravisankar et.
al. 2001). Attempts at increasing production by improving yields by greater intensity of
cultivation seem to have disastrous consequences. The sector itself seems to be reaching a
natural equilibrium with the adoption of improved extensive methods of culture.
Table 11 Kandaleru shrimp farms located in Nellore district by site by size of land holdings in
hectares
The data reveal that farm ownership status varies with farm size (Table 12). Ninety-six
percent of KAA farms operating on five or more hectares and 82 percent of those operating
on an area between one and two hectares are owned by the operators. In the case of the larger
farms, the owners are the individual farmers. In the case of the larger farms, wealthy shrimp
farmers own 71 percent and 29 percent are either corporate entities with publicly owned
shares or private limited companies.
Table 12 Ownership status of shrimp farms by size of land holdings in hectares in Nellore district
The majority of shrimp farmers who leased land operate on land holdings between two
and five hectares and are mostly non-natives of the Nellore district. Their motivation for
coming to this region and entry into the industry was in most cases entirely profit-driven. In
most cases, these farmers came to the Kandaleru region in 1993 with the announcement of
incentives given for export-oriented enterprises under the New Economic Policy of the
Government of India.
All the 152 farmers reporting that they received land via a government transfer scheme
were entitled to this benefit due to their classification as members of one of India’s scheduled
castes or scheduled tribes (SC/ST). Each one of them operates on a total area of less than one
hectare of land.
Patil and Krishnan (1998a) also found that shrimp farms operating on the smallest land
holdings are owned and operated by local resident villagers (Table 13).
Table 13 Share of Kandaleru shrimp farms by size of land holdings
In fact of the 202 of farms less than one hectare in size, 150 of them or 29 percent of all
KAA shrimp farms are operated by members of the Scheduled Cast/Scheduled Tribe
community who are considered the poorest and most deprived among those inhabiting the
Kandaleru region (BFDA, 1997). Again, the dramatic rise in the number of small farm
holdings between 1993 and 1997 suggests that shrimp farming has low barriers to entry for
small farmers. This is believed to be because small farm production has low capital intensity
and local availability of key inputs, such as feed and seed, keep variable costs relatively low.
In addition to direct on-farm employment, ancillary industries have provided
employment opportunities for both skilled and unskilled workers. It is estimated that the 33
seed hatcheries employ approximately 1650 workers; the 14 feed mills employ approximately
840 workers; the 8 processing plants employ approximately 1200 workers and the 16 new ice
plants employ approximately 400 workers in total (Table 14).
It is clear that there are strong direct and indirect employment opportunities associated
with the development of ancillary industries to aquaculture.
Table 15 Factor shares (percent ) in rice and shrimp production in Karaikal region in Pondicherry,
India
a
Table 16 Total investment in aquaculture industry in crore rupees
Seafood exports
increased consistently over the years in volume and value. In fact, quantitatively it has
replaced the shrimp.
Trend in exports
Decadal growth rates for the period 1950-51 are presented in Table 19. Since 1951, India’s
seafood export has registered an annual growth of 6.57 percent in quantity and 18.17 percent
in value, despite substantial variation in growth rates over different decades. During the
1950s, growth in quantity of seafood exported was 0.29 percent, while the value of exports
increased at a rate of 5.72 percent. During the 1960s and 1970s, the quantity as well again as
value witnessed substantial growth. But it decelerated in the 1980s and accelerated in recent
years.
Product-wise growth rates in India’s seafood exports in recent years are given in Table
20. Maximum growth occurred in case of fresh/ frozen fish (21.22 percent increase in
quantity and 28.39 percent in value). Export of frozen cuttle fish/ fillets also registered
substantial growth. It may be recalled that in recent years, the share of fresh/frozen fish and
frozen cuttle/fillets has been rising continuously, while that of shrimp has been on a
downward trend. This is a matter of concern because shrimp is a high value product and has
been a priority export item. The reason perhaps could be because of heavy inventories in
destination countries and competition from other shrimp exporting countries.
Direction of exports
Japan constitutes the major market for India seafood. It accounts for about 45 percent of total
seafood exports of India (Table 21). The USA with a share of about 10-15 percent was the
second largest market for Indian seafood till recently. Now the United Arab Emirates is
emerging as a new and growing market for Indian seafood. Its off-take has ranged from 5-10
percent in the recent years.
Competition from other seafood and shrimp exporting countries has been consistent over
time. While India had a market share of more than 15 percent of the shrimp import market of
Japan, it had only 5-10 percent of the market of USA, over the last twenty years. Thailand
and Ecuador appear to have the major market share of shrimp imports into USA in recent
years and Indonesia for the Japanese market (MPEDA statistics).
Ministry of Commerce governs seafood trade. Production assistance and start up subsidies,
market research and development are its forte. The move to set up an independent
corporation to govern the maintenance of sanitation, hygiene, and upgrading of facilities at
the harbors with representation of all the stakeholders will go a long way in improving the
acceptability of Indian seafood in the international markets. India attracted $ 4.50 billion in
foreign direct investments (FDI) in year 2000 (Srinivasan, 2001). Aquaculture offers
enormous scope for foreign direct investments. The World Investment Report (2001) (quoted
in Srinivasan, 2001) asserts “simply opening an economy is no longer enough”. There is a
need to develop attractive configurations of location advantages” by capitalizing on the
synergy of endowments of factors of production.
Coastal aquaculture therefore offers great scope for enhancing income and employment
in India. Given the right policy prescriptions and environment, this sector can make a much
larger contribution to India’s GDP and its export earnings.
Acknowledgements
A significant part of this paper is based on the Indian Council of Agricultural Research -
Agricultural Produce (ICAR-AP) Cess Fund Sponsored project, “An economic evaluation of
brackishwater aquaculture systems in India, (1998-2001) of the CIBA, Chennai and NCAP,
New Delhi. The authors are thankful to the ICAR for funding and to Dr K. Gopakumar,
Deputy Director General (Fisheries), ICAR, New Delhi for encouragement during the course
of this work.
References
Report, Central Institute of Brackishwater Aquaculture, Chennai and National Center for
Agricultural Economics and Policy Research, New Delhi, p 130.
Krishnan, M. & Birthal, P.S. (2002) WTO and seafood exports: performance, potential and
policy, Indian Journal of Agricultural Marketing, XV Annual Conference, Mumbai,
February (in press).
Mahajan, R.K., Rao, A.V. & Gandhi, D. (1986) Rice production in India during 1970s,
Agricultural Situation in India, XXV (2), 302-306.
Parthasarathy, G. & Nirmala, K.A. (2000) Economic and environmental issues of
brackishwater aquaculture. In: Aquaculture Development in India (eds M. Krishnan &
P.S. Birthal), pp 32-51. Workshop Proceedings 7, National Center for Agricultural
Economics and Policy Research, New Delhi – 110 012.
Patil, P.G. (1997) Construction of the social impact index for assessing shrimp farm impacts
on coastal inhabitants. Unpublished Ph.D. thesis, November 7, 1997, London School of
Economics.
Patil, P.G. & Krishnan, M. (1998a) The Kandaleru shrimp farming industry and its impacts
on the rural economy: an empirical analysis. In: Agriculture Industry Interface (eds R.
Chand & V.C. Mathur), pp 156-173. Advance Publishing Concept (APCON), II/298,
Press Colony, Maya Puri, New Delhi – 110 064.
Patil, P.G. & Krishnan, M. (1998b) The social impacts of shrimp farming in Nellore district,
India, Aquaculture Asia, III (1), 3-5.
Ravisankar, T., Krishnan, M. & Mahalakshmi, P. (2000) Dimensions of land tenure rights
and sustainable resource management in coastal aquaculture farms, Proceedings of
National Seminar and Exhibition on Sustainable Fisheries and Aquaculture for
Nutritional Security, National Academy of Agricultural Sciences, Indian Council of
Agricultural Research, Madurai Kamaraj University and Aquaculture Foundation of
India, November 29 – December 2, 2000, Chennai, India
Ravisankar, T., Krishnan, M. & Mahalakshmi, P. (2001) Decision support for responsible
aquaculture development abstracts, National Seminar and Exhibition on Sustainable
Fisheries and Aquaculture for Nutritional Security, Chennai. No. 29, December, pp 66-67.
Roy S. (2000) Get agriculture back in fashion, The Economic Times, November 15, p 8.
Selvam, S. & Ramasamy, C. (2000), Socio-economic and environmental impacts of shrimp
farming. In: Aquaculture Development in India (eds M. Krishnan and Pratap S. Birthal),
pp 52-58. Workshop Proceedings 7, National Center for Agricultural Economics and
Policy Research, New Delhi – 110 012.
Sharma, K.L., (1977) Measurement of the effect of area, yield and prices in the increase of
value of crop output in India, Agricultural Situation in India, 32 (6), 349-351.
Singh, R. & Lal, K. (1990) Contribution of fisheries, livestock and agriculture to gross
domestic product, Agricultural Situation in India, XVI (8), 405-407.
Srinivasan, G. (2001) India luckless in the FDI game, The Hindu Business Line, September
19, 2001, p 13.
Upare, M.A. (2000) Role of financial institutions in development of aquaculture. In:
Aquaculture Development and Policy: Problems and Prospects (eds M. Krishnan & P.S.
Birthal), pp 130- 139. Workshop Proceedings 7, National Center for Agricultural
Economics and Policy Research, New Delhi – 110 012.
Venkitaramanan, S. (2001), State of agriculture, The Hindu Business Line, July 16, p 11.