Protecting small-scale farmers: a reality within a globalised economy?

Aquaculture is the fastest growing food producing sector in the world, and over 80 percent of global aquatic produce originates from Asia. Between 70 and 80 percent of Asian farmers are estimated to be small-scale farmers. Aquaculture products are now recognised as truly globally traded commodities. In the coming decades, aquaculture is expected to bridge the global aquatic food supply and demand gap created by stagnant capture fisheries production, in order to feed the continuously growing human population.

The past few decades have shown a clear growth in overall global food production; however, the per capita gross national product (GNP) increased only in the OECD countries and to a lesser extent in Eastern Europe and Asia. While the numbers of people in poverty have declined in East and South Asia, global poverty has certainly not been reduced, and eradicating poverty and hunger still remains the most challenging and fundamental global humanitarian task. Aquaculture has the potential to play an important role in contributing to this daunting task through provision of food for the poor, as a source of livelihood for the many producers and people involved along the aquaculture value chain, and as a source of wider economic growth, stimulating growth in other sectors through production and consumption linkages.

The positive impacts of globalisation include worldwide marketing of goods and services; increased economies of scale; and corporate governance of the industrial food production sectors taking advantage of inexpensive labour, capital and technology. There is, however, good evidence that while industrial and corporate sectors continue to benefit from globalisation, small-scale producers are slowly pushed out of business due to competition.

The combined effects of trade liberalisation and globalisation have increased economic differentiation among communities and households. In addition, state withdrawal from agricultural marketing has contributed to a highly uncertain environment in which input and output prices are determined by the market, often favouring large-scale producers who are better equipped to manage price variability and/or absorb price shocks, and gain through efficiencies of scale in commodity production.

It is clear that increasing globalisation and the resultant trade liberalisation of aquaculture products is leading towards the marginalisation and exclusion of individual small-scale producers. They face major challenges to remain competitive and able to participate in modern value chains, globally. The situation is particularly serious in Asia, due to the large numbers of people involved, but the trend affects farmers across the aquaculture-producing regions. This is partly due to integration of production-distribution chains and coordinated exchange between aquaculture farmers, processors and retailers, and is evident in the higher-value internationally traded export species such as shrimp, although is now also affecting low-value species such as catfish and tilapia.

Small-scale producers also face challenges related to changing preferences of consumers for safer, healthier, better quality food produced in environmentally sustainable and ethical ways. This has resulted in increased demand for food safety and environmental standards, or “niche” products that have special characteristics based on their quality, farming practice and origin. These characteristics are strongly linked to how products are being produced rather than to the end product itself, thus, putting greater emphasis on traceability. Growing customer awareness has also led to the development of several aquaculture certification schemes, making it no longer enough for aquaculture farmers to pay attention solely to efficient production. These increased demands for meeting food safety standards, traceability, certification and other non-tariff requirements are driving risks and costs down the market chain to the farmer, favouring medium- to large-scale, capital intensive operations that can afford such extra costs and excluding small-scale farmers who have limited resources and capacity to meet these requirements.

There is a need for changing the management of both large- and small-scale producers to remain competitive. Large-scale farmers have a much higher adaptive capacity to benefit from such trends than do small-scale farmers. Small-scale aquaculture farmers are not only exposed to increasing market risks, but also face enormous constraints in accessing markets and services and integrating into modern supply chains. In many cases, they are ill-equipped to benefit fully from the new market environment and knowledge because of lack of public and private policy and services to support investment and change, resulting in potentially significant social risks for many rural producers.

Despite these challenges, the aquaculture sector is growing; small-scale aquaculture remains highly innovative and contributes significantly to global aquaculture production, although increasingly less so in many export products. There are many opportunities to improve management and governance, thus increasing social and economic benefits to small-scale farmers. One such opportunity lies in promoting collective action among small-scale producers to create efficiencies of scale, and orienting investment and support empowerment of farmers in self-help groups, clusters or societies.

Recent experiences show that application of better management practices (BMPs) through establishment of farm clusters and farmer societies are effective in improving aquaculture governance and management in the small-scale farming sector. This enables farmers to work together, improve production, and develop sufficient economies of scale and knowledge to participate in modern market chains and to reduce vulnerability. Such governance and management approaches improve the economic performance of the sector and strengthen producers’ ability to participate in decision-making and self-regulation. Once such approaches are established and strengthened, a competitive small-scale farming sector will become a reality.


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Global Conference on Aquaculture 2010

The conference was organised by FAO, the Thai Department of Fisheries and NACA and held in the Mövenpick Resort and Spa, Phuket, Thailand, 22-25 September. The conference was the third in a series of aquaculture development conferences, following on from the Conference on Aquaculture in the Third Millennium held in Bangkok 2000, and the FAO Technical Conference on Aquaculture, held in Kyoto 1976.