Production externalities of shrimp aquaculture on paddy farming in coastal Bangladesh
Faculty / School
Faculty of Business Administration (FBA)
Department of Economics
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Agricultural Water Management
Shrimp aquaculture is a fast-growing industry in many parts of the world. The expansion of the industry has raised concerns about its external impacts on the local environment and ecosystems, including agriculture. This study examines changes over time in land use and soil salinity levels using satellite data and soil sample data from Satkhira district in Bangladesh. Moreover, the study measures the impact of shrimp aquaculture on soil salinity in neighboring paddy farms and evaluates how this, in turn, affects paddy farm profits, using farm-level data from 316 paddy plots. Results show that the land covered by shrimp ponds almost doubled in terms of percentage of land area, expanding from 22 % in 1990 to 38 % in 2016. Soil salinity also increased significantly over the same period. Farm-level analysis shows that salinity levels are relatively higher in paddy plots that are closer to shrimp ponds. Each additional 1-meter decrease in the distance between paddy plots and shrimp ponds induces a 0.14 % increase in soil salinity in both Aman (rainfed) and Boro (irrigated) seasons. As salinity is higher in paddy plots closer to shrimp ponds, the same percentage change results in a greater absolute increase in salinity levels in nearby paddy plots relative to plots located farther away. Furthermore, due to the higher salinity levels, paddy profits per hectare are relatively lower in paddy plots closer to shrimp ponds. On average, a 1-meter decrease in the distance between paddy plots and shrimp ponds results in a decrease in paddy profits by USD 0.31 and 0.15 per hectare in the Aman and Boro seasons, respectively. The findings of this study call for policy measures to address the externalities posed by shrimp aquaculture to paddy farmers.
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Morshed, M., Islam, S., Lohano, H. D., & Shyamsundar, P. (2020). Production externalities of shrimp aquaculture on paddy farming in coastal Bangladesh. Agricultural Water Management, 238 Retrieved from https://ir.iba.edu.pk/faculty-research-articles/39