(Patil Pawan G. and M.

Krishnan, 1998, The Kandeleru Shrimp Farming Industry and its

impacts on the rural economy: an empirical analysis, in Ramesh Chand and V.C.Mathur
(Eds.), Agriculture Industry Interface, Advance Publishing Concept, New Delhi – 110
064,pp.156-173)

THE KANDALERU SHRIMP FARMING INDUSTRY AND

ITS IMPACTS ON THE RURAL ECONOMY:
AN EMPIRICAL ANALYSIS#

Pawan G. Patil* and M. Krishnan**

Introduction

The role that brackishwater shrimp aquaculture development has played on India's
economy is substantial. Indian marine exports were the second largest foreign exchange earner
in 1994-95 primarily because of high value shrimp exports to Japan, Europe and the United
States. Shrimp (captured and cultured) constituted 70.2 per cent of the total marine export value
in 1994-95 which slipped slightly to 67.3 per cent in 1995-96 due to fluctuations in export prices.
According to the latest export statistics, farmed shrimp alone generated over Rs.1,500 crore for
the Indian economy in 1995-96 (MPEDA, 1996).

Amidst its economic boom in the coastal areas, shrimp farming is creating concern over its
degradation of he environment (Flaherty and Karnjanakesorn, 1995; APO, 1995; Southgate and
Whitaker, 1992) and its marginalization of local inhabitants from coastal resources (Sebastini et
al., 1994; Bailey, 1988). The markets have yet to incorporate the brackishwater shrimp farming
in India's maritime states. Instead the environmental and social costs associated withrapid growth
and development of environmental and social costs associated with this industry's negative
externalities are often borne by the rural poor, who

__________________________

* This research was conducted with the partial support of the Rajiv Gandhi Foundation, New Delhi,
India while the first author was serving as the 1996-1997 Rajiv Gandhi Foundation Scholar. The
results presented in this paper are preliminary and should be treated as such. The overall paper
is subset of a wider study: A Microeconomic Analysis of the Impacts of Brackishwater Shrimp
Aquaculture on Rural Producers and the Environment in Nellore District, Andhra Pradesh (Patil, P.G.,
London School of Economics, 1997). We would like to thank the staff of BFDA (Nellore) for the
their assistance in our data gathering efforts. The ideas expressed in this paper are our own and
do not necessarily represent the above mentioned institutions. We alone are responsible for any
errors.

* Corresponding author; London School of Economics, Houghton Street, London WC 2A 2AE,

United Kingdom; tel:44-171-837-8888 ext.5921; fax 4-171-713-5158; e-mail:
p.patil@lse.ac.uk

** Local Major Advisor to first author and Senior Scientist ( Economics), Central Institute for
Brackishwater Aquaculture, Chennai – 600 008, India.
rely on natural coastal resources for their livelihood. In the literature, however, these claims
remain anecdotal with little empirical support. In our paper we move beyond the traditional
literature in this subject area by providing empirical support to claims made both in opposition to
and in favour of this industry.

The economic analysis and policy conclusions presented in this paper draw on two types of
data collected from Nellore District. Primary data were collected from 518 brackishwater shrimp
farms located along the Kandaleru creek in Nellore District of Andhra Pradesh. Additionally,
Socio-economic and impact data were collected from surveying local populations in 26 vilages
located along the Kandaleru creek and the Bay of Bengal and adjacent to clusters of shrimp
farms.

Our paper is divided into six section. In section one we present an overview of the
relationship between farm size, ownership status, production technology and output. In section two
we examine the growth and development of the Kandaleru shrimp industry between 1993 and
1997. In section three we analyse the industry's impact on the growth and development of
ancillary industries. In section four we assess shrimp farming's impact on fishing and farming
communities living adjacent to shrimp farm clusters. In section five we offer policy
recommendations toward the sustainable development of this industry. In the final section we
offer three concrete recommendations and some concluding remarks.

Kandaleru Shrimp Farm Characteristics

The are approximately 530 brackishwater shrimp farms located along the Kandaleru
creek. Together, they occupy 2, 166 hectares in total area of which 1,675 hectares are water
spread. In 1996 the 2,478 ponds in operation produced, 1,788 metric tons of shrimp. This is an
average of 450 kilograms of shrimp per pond or 620 kilograms of shrimp output per hectare of
water spread area. Similar to other shrimp farming regions throughout India's coastal belt,
Kandaleru shrimp farms vary significantly by size, ownership status and production technology
used. We discuss each characteristic in turn.

Size
On par with the national average, 79 per cent of Kandaleru shrimp farmers produce on
land-holdings of less than five hectares. There are 253 small and marginal farmers operating on
land-holdings less than two hectares in area. This constitutes 49 per cent of all Kandaleru shrimp
farmers. In contrast, 108 farmers on 21 per cent of all Kandaleru farmers
produce on land-holdings greater than five hectares. Of these 108 farmers, 43 or 8 per cent of
all KAA farmers operate on 10 or more hectares of land (Table 1).

Table 1.
1997 Kandaleru Shrimp farms by size of land-holdings in hectares.
________________________________________________________________________
Land-holdings size (hectares)
____________________________________
<1 1-2 2-5 5-10 >10 Total
________________________________________________________________________
No. Shrimp Farms 202 51 156 65 43 518
Share (%) 39 10 30 13 8 100
________________________________________________________________________
Source: KAA Database, 1997.
Ownership status

Of the 518 shrimp farmers in the KAA, 285 farmers or 55 per cent reported that they
own their farms, 81 or 16 per cent reported that they lease their farm land and 152 or 29 per
cent reported that they received their land through a government land transfer scheme for the
purpose of shrimp farming (Table 2.)

Table 2. Ownership status by size of land-holding in hectares

Land-holdings size (hectares)

___________________________________
<1 1-2 2-5 5-10 >10
_______________________________________________________________________
No. of Shrimp farms 202 51 156 65 43
Share (%) 39 10 30 13 8
Farm land owned 50 42 87 59 42
Share (%) 25 82 56 94 98
Farm land leased 0 9 69 6 1
Share (%) 0 18 44 6 2
Farm land transfer 152 0 0 0 0
Share (%) 75 0 0 0 0
_______________________________________________________________________
Source : KAA Database, 1997.

The data reveal that farm ownership status varies with farm size. Ninety-six per cent of
KAA farms operating on five or more hectares and 82 per cent operating on an area between
one and two hectares are owned by the operators. In the case of the smaller farms, the owners
are the individual farmers. In the case of the large fars, 71 per cent are owned by wealthy
farmers and 29 per cent are either corporate entities with publicly owned shares or private
limited companies.

The majority of shrimp farmers who leased land operate on land-holdings between two
and five hectares and are mostly non-natives of Nellore district. Their motivation for coming to
the 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, before the first major shrimp disease outbreak
(Patil, 1997).

All 152 farmers reporting that they received land via a government transfer scheme were
entitled to this classification as members of on 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.

Production technology and output

Generally, we find a strong positive correlation between average output per waterspread
hectare and farm size. The strongly positive and significant Pearson correlation (r=.92; p=0.00)
suggests that as farm size increases, the average output per hectare increases. This relationship is
further illustrated in Table 3.
Table 3. Average shrimp output by farm size in hectares
____________________________________________________________________
land-holdings size (hectares)
_____________________________________
<1 1-2 2-5 5-10 >10
____________________________________________________________________

Avg. Output/ha, kg 330 405 537 821 1,474

___________________________________________________________________

More specifically, however, shrimp yields are determined by the amount and combination
of inputs used or production technology. To discover the relative importance of different inputs on
yield we regressed ten production input explantatory variables. From OLS estimation assuming a
Cobb-Douglas production function, we conclude that the more intensive methods of production
(i.e.greater capital inputs and lower labour inputs per unit area) produce higher pe rhectare
shrimp yields. Additionally, smaller farms under two hectares tend to use higher average labour
inputs per hectare (in terms of the number of man-days) and less capital inputs or less intensive
technology. This general result confirms what others have already proven (APO, 1995). Our
result, however, helps to explain the pattern of growth and development of this industry in Nellore
and some of its impacts in the Kandaleru region. Specifically, we discuss why the share of small
farmers increased and share of large farmers decreased from 1993 to 1997 in the next section.

Growth and Development

The shrimp farming industry has rapidly grown along the Kandaleru creek since the first
farm began operation 1987. Farmers, encouraged by the possibility of high economic returns,
rapidly entered this rural based industry. Since 1993 the total number of shrimp farms operating
in this region increased from 254 to 530 in the 1996 season and the total farm area almost
doubled from 1,242 hectares to 2,166 hectares.

The Kandaleru shrimp industry suffered a serious setback in 1993-94 when industry-wide
average output dropped from approximately 600 kilograms per hectare to 300 kilograms per
hectare due to crop disease (KAA Database, 1997). Farms of all sizes faced fiancial losses
forcing the less financially secure to exit the industry. Although data on the number of farms that
eixted the industry by size land-holding is unavailable, our data set enables us to analyse the
characteristics of new entrants after 1994. We find that the share of farms using more intensive
technology (i.e.larger farms) dropped while the share of farms using less intensive technology
(i.e.smaller farms) rose.

Table 4 illustrates that since 1993, the share of small and marginal farmers operating on
two or less hectares of land increased; the share of medium scale farmers operating on land-
holdings between two and five hectares stayed relatively constant; while the share of large
private and corporate farmers holding greater or equal to five hectares of land dropped
significantly.
Table 4. Share of Kandaleru shrimp farms by size of landholding

_____________________________________________________________________
Land-holdings size (hectares)
__________________________________
<1 1-2 2-5 5-10 >10
______________________________________________________________________
1993 Share (%) 30 9 31 18 12
1997 Share (%) 39 10 30 13 8
% change in share +9 +1 -1 -5 -4
_______________________________________________________________________
Source : KAA Database, 1997.

This is an important finding for two reasons. First, there have been many attacks on the
shrimp farming industry by activists alleging that it does not benefit the local community and
especially the poor. We found that shrimp farms operating on the smallest land-holdings (less
than one hectare) are owned and operated by inhabitants of local villages. In fact, of the 202
farms less than one hectare in size, 150 of them, or 29 per cent of all KAA shrimp farms are
operated by members of the SC/ST community who are considered the poorest among those
inhabiting the Kandaleru region (BFDA, 1997). Second, 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. We believe this is primarily due to the less capital intensive nature of small farm
production and the local availability of key inputs such as feed and seed which keep variable
costs relatively low.

Ancillary industries

Since the industry's boom in the early 1990s ancillary industries have rapidly developed
as essential support services to the shrimp industry. While Patil (1997) suggests that they have
benefited local shrimp farmers by lowering overall production costs, it is less clear what overall
impact anciallary industries have had on rural inhabitants.

The major ancillary industries developed in Nellore to support the shrimp farm industry
include seed hatcheries, feed mills, processing plants and ice plants. The industry requires two
principal inputs for production, namely, shrimp seed and feed. Processing plants are needed to
sort shrimp by size and package them. Ice is needed for safe storage and transportation of
shrimp from the farm gate to processing plants where they are block frozen for export.

Prior to 1990 most medium and small scale Kandaleru shrimp farmers purchased seed
collected by the region's fisher community. They prepared their own shrimp feed from indigenous
materials. Most corporate farms imported seed and feed from Thailand and Taiwan. In 1992-
93, this balance began to shift as corporate farms began purchasing seed and feed produced
locally by multinationals who built and operated seed hatcheries and feed mills (Table 5). In the
1996 season almost all farmers operating on land areas over two hectares were purchasing feed
and seed locally produced by ancillary industries. Small farmers continued to purchase seed from
local fishers who collected shrimp fry from the near shore of estuaries and made their own feed
from village resources.

For the Kandaleru region, ancillary industries have provided employment opportunities for
both skilled and unskilled workers. We estimate that the 33 seed hatcheries employ
approximately 1650 workers; the 14 feed mills employ approximately 840 workers; the eight
processing plants employ approximately 400 workers in total. While it is clear that their are
strong direct and indirect employment opportunities associated with the development of ancillary
industries it is less clear as to whether these supporting industries and the shrimp farms themselves
are an overall assets to the village economy.

Table 5. Growth of ancillary industries in Nellore district

______________________________________________________________

Ancillary Total Units Total capacity

industries ____________________________________
(Annual)
1990-91 1992-93 1994-95 1996-97
______________________________________________________________

Seed hatcheries 0 4 30 33
2380 million
pieces
Feed mills 0 13 14 14 78000 mt
Processing plants 0 3 6 8 24000 mt
Ice plants 8 14 22 24 285 mt
_______________________________________________________________
Source : BFDA, Nellore

Village Impacts

A pre-tested survey identified the major impacts of the brackishwater shrimp aquaculture
industry on the welfare of village located adjacent to shrimp farming clusters in Nellore District.
Many of the questions adopted for the survey were raised recently by NGOs and other
concerned organisations in Indian and international forums. The overarching concerns stem from
alleged negative impacts of the rapidly expanding brackiswater shrimp aquaculture industry on
rural communities. In total, 26 villages were surveyed and asked six principal questions regarding
aquaculture development

. Are you experiencing salinity problems with drinking water

in your village wells?

. Has aquaculture development hindered your access to the

creek or beach?

. Has aquaculture development led to enemployment/under-

employment problems for you or your family?

. Has aquaculture development led to health problems for

you or your family? to animal populations in the village?

. Has aquaculture development hindered fuelwood and/or fodder collection?

The survey results indicate that for the entire sample of 26 vilalges, 19 villages or 73 per
cent identified agricultural land salinity and blocked access to the cree/beach as a problem in
their village; 17 or 66 per cent of the villages reported that well water salinity was a problem in
their village; 14 villages or 54 per cent identified unemployment as a problem; ten villages or
38 per cent reported fodder and fuelwood collection as a problem; and nine villages or 35 per
cent identified health problems as a result of aquaculture development as a problem.

Aggregated data for all 26 villages, however presents a distroted picture of the
problems faced by specific occupation based villages. Table 6 shows that 94 per cent of those
villages comprising fishers identified access to the beach as a problem whereas only 33 per cent
of farming based villages identified access as a problem. Similarly, unemployment and health
problems, affect a majority of the fishing community, 76 and 53 per cent, respectively, but only
one of the farming villages. Approximately 89 per cent of farming communities identified fodder
and fuelwood collection as a problem whereas only 12 per cent of the fishing communities did so.
Well water salinity, however remained a problem for both 66 per cent of fishing and farming
village communities.

Each of the above-mentioned problems have an associated impact on the economic

activity taking place within the village community. Overall increases in the amount of time
required to carry out a particular economic activity ultimately reduces the overall productivity of
the community. In the case of blocked access to the beach or creek, fishers require a longer in
faring communities women are required to spend a longer proportion of their day searching for
cooking fuel and fodder to feed their animals. Both farming and fishing communities have
experienced salinity problems

Table 6. Problems identified by coastal farming and fishing communities located adjacent to
shrimp in the Kandarelu creek region, Nellore district, Andhra Pradesh
____________________________________________________________________________
Well Access Agri.land Un/under Poor Fodder &
water to beach salinity employment health fuelwood
___________________________________________________________________________

Fishing 65% 94% 65% 76% 53% 12%

villages
(N=16) (11) (16) (11) (13) (9) (2)

Farming 66% 33% 89% 11% 0% 89%

Villages (6) (3) (8) (1) (0) (8)
(N=9)

All
Villages 65% 73% 73% 54% 35% 38%
(N=26) (17) (19) (19) (14) (9) (10)
_____________________________________________________________________________
Source : Patil (1997); Number of villages in parentheses.

with their drinking water supply. In some cases, women are required to walk up to two kilometres
to fetch potable water from the nearest uncontaminated well.

Fishers' productivity and general well being are also affected by health related problems
caused by shrimp farm effluent discharge from jetties into the near shore area where they fish. In
addition, they complain that their nets get cut by the effluent discharge pipes that extend up to
50 metres into the sea. Salinity of agricultural land is a problem faced by farming communities
and some fishing communities that rely on the productivity of small vegetable plots for private
own consumption.

Factors contributing to village responses

In the preceding section we broadly examined the nature and extent of problems faced
by both fishing and farming communities. Now we examine the severity of each problem
identified by each village and offer possible explanations by correlating different farm
characteristics with village responses and identifying any relationships of statistical significance
(see Tables 7 and 8).

We sorted our data set by occupation to see if any significant correlation exist for fishing
and farming communities independently of each other. Table 9 presents the sign of only
significant correlation between shrimp farm characteristics and rank ordered village impacts for
each occupation based village.

Results
Well Water Salinity: WWSALIN is positively correlated with FARMDST suggesting that
villages located further away from shrimp farm clusters experience fewer drinking water
problems. In fishing villages FARMSZ, WSA, TPONDS and TCORP are positively correlated with
WWSALIN suggesting that villages adjacent to more corporate farms or larger shrimp farming
clusters suffer less from well water salinity. WE believe this counter-intuitive result holds primarily
because sea-based fishing villages are supplied clean drinking water from adjacent corporate
shrimp farms as part of a government compensation scheme. In farming villages there is a high
degree of negative correlation between shrimp clusters with high output levels and poor drinking
water (r=-0.95; p=0.00).

Blocked Access: ACCESS is negatively correlated with FARMDST suggesting that villages
located further away from shrimp farm clusters experience greater problems with access to the
sea or creek. This result is particularly significant for fishing communities (r=0.54; p=0.02) due to
their dependence on the sea for earning a living.

Table 7. Definitions of farm characteristics and village impacts (Mean/Standard Deviation)

_________________________________________________________________
FARMSZ : Size of shrimp farming cluster in hectares (268/197)
WSA : Size of shrimp farming cluster's waterspread area in
hectares (180/156)
FARMDST : distance in kilometres from shrimp farm cluster to the adjacent village (1.02/0.4)
SEADST : distance in kilometres from shrmp farm cluster to the Bay of Bengal (8/12.7)
TPONDS : the number of ponds in a shrimp cluster (216/178)
TOUTPT : total output of shrimp cluster in metric tonnes (152/139)
TCORP : total corporate and private limited companies in each shrimp farming cluster
(2.8/3.2)
TINDIVID : total number of non-corporate shrimp farming cluster (23.8/26.7)
TOWN : total number of farms producing on land owned by operator in each cluster
(11.3/18.6)
TLEASE : total number of farms producing on leased land in each cluster (2.3/5.9)
TTRANS : total number of farms producing on government transferred land in each cluster
(9/25.2)
OCCUP : occupation of village; O denoted farming village; I denotes fishing village
WWSALIN : villages reporting well water salinity problems ranked by its overall impact on
team
ACCESS : villages reporting blocked access to the beach or creek ranked by its overall
impact on them
AGSALIN : villages reporting salinity of agricultural land ranked by its overall impact on
them
UNENEMPL : villages reporting unemployment or underemployment ranked by its overall
impact on them
HEALTH : villages reporting problems with health ranked by its overall impact on them
FODFUEL : villages reporting problems with fodder and fuelwood collection ranked by its
overall impact*
_______________________________________________________________
* The method of ranking a particular problem vis-a vis other impacts is explained in note 7 given
at end of this article.

Unemployment and Underemployment: Villages located further from the Bay of Bengal face
fewer employment problems than those located closer to it. Negatively correlated FARMSZ (r=-
0.42; p=0.05) and WSA (r=-0.37; p=0.08) with UNENEMPL suggest that villages adjacent to
large farming clusters with large water spread areas experience significant unemployment or
underemployment problems. Additionally, villages adjacent to a greater number of corporate
shrimp farms are affected by underemployment. This result is most likely because local corporate
farms are no longer employing local labour to collected seed and make feed because of the
consistent availability of these inputs from ancillary industries.

Table 8. Matrix of correlation coefficients between farm characteristics and village impacts as
ranked by all 26 villages surveyed in the Kandaleru region
_____________________________________________________________________________
Variables WWWSALIN ACCESS AGSALIN UNENEMPL HEALTH FODFUEL
(N=26)
____________________________________________________________________________
FARMSZ 0.26 0.22 -0.22 -0.42* -0.29 0.31
WSA 0.28 0.10 -0.32 -0.37** -0.17 0.21
FARMDST 0.37** -0.36** 0.16 -0.07 -0.16 0.02
SEADST -0.04 0.27 -0.25 -0.47 0.54* -0..71*
TPONDS 0.27 0.14 -0.31 -0.29 -0.08 0.06
TOUTPT -0.31 0.32 -0.35 0.38 NC -0.15
TCORP 0.31 0.10 -0.31 -0.36** -0.12 0.13
TINDIVID 0.07 0.18 -0.08 0.21 0.40* +0.55*
TFARMS 0.11 0.19 -0.11 0.16 0.37* -0.52*
TOWN 0.21 0.10 -0.40 0.49* 0.42** 0.51*
TLEASE -0.06 0.09 -0.26 0.34 0.29 -0.41
TTRANS -0.08 0.14 0.29 0.09 0.27 -0.35
___________________________________________________________________________
*Denotes significant at 95 per cent level; ** Denotes significant at 90 per cent level; Sample
Size=26 villages; NC indicates not calculated.
Note: A negative coefficient indicates that this impact is more distressful (i.e.it was ranked lower)
for villages adjacent to shrimp farms with a larger or higher farm characteristic.
Table 9. Matrix of Significant correlation between farm characteristics and village impacts;
ranked by both fishing and farming villages and analysed independently

Variables WWSALIN ACCESS AGSALIN UNENEMPL HEALTH FODFUEL

FARMSZ Fishing +** Farming (-*) Farming (-*) Fishing (+**)

WSA Fishing+** Farming (-*) Farming (-*) Farming

(+**)
FARMDST Fishing(-*)

SEADST

TPONDS Fishing (+**) Farming(-*) Farming(-*)

TOUTPT Farming (-*)

TCROP Fishing(+**) Farming(-*) Fishing (-*) Farming (-*)

TINDIVID Fishing (-*)

TFARMS Fishing (-*)

TOWN Fishing(+*) Fishing (-*)

TLEASE

TTRANS Fishing (-*)

*Denotes significant at 95 per cent leve; ** Denotes significant at 90 per cent level; Sign of
coefficient and significance level for farming villages in parentheses. Fishing Villages (N=9);
Farming Villages (N=17).

Note: A negative coefficient indicates that this impact is more distressful for villages adjacent to
shrimp farms with a larger or higher farm characteristic.

Health: HEALTHdecreases significantly with SEADST which implies that villages located further
from the sea experience fewer health-related problems. Highly significant negative correlation
between FARMSZ, WSA, TPONDS, TCORP and HEALTH suggest that those farming villages
adjacent to larger farm clusters face greater health problems. This problem is specific to fishing
communities due to exposure to contaminated effluent discharged into their fishing areas as
explained earlier.

Fodder and Fuelwood: FODFUEL and SEADST, TINDIVID, TFARMS and TOWN are all negatively
correlated and significant at the 95 per cent level. This implies that villages located further from
the sea or adjacent to shrimp clusters with fewer farms or adjacent to farms individually owned
experience greater problems with fodder and fuelwood collection. We know from an earlier
result that 89 per cent of the surveyed farming communities identified fodder and fuelwood
collection as a problem due to the development of brackishwater shrimp aquaculture
development.

Policies Toward Sustainable Development

Sustainable shrimp farming practices require minimal disruptions to the surrounding

ecosystem and coexistence with rural communities that have historical ties to the land and waters.
Efforts to accomodate the Indian brackishwater shrimp aquaculture industry within its coastal zone
regulatory policy framework have been difficult. Both regional and national pro-aquaculture
lobbying groups claim that regulatory agencies have catered primarily to traditional constituency
groups such as local inhabitants and the environmentalists acting on their behalf.

In December 1996, the Supreme Court of India passed a landmark judgment banning all
shrimp aquaculture operating within 500 metres of the high tide line. This was a decisive win for
environmental activists. This order in effect bans over 95 per cent of all brackishwater shrimp
farms from operating in India. However, in March 1997 the Indian Parliament passed the
Aquaculture Authority Bill, 1997 which exempted shrimp farms from the Supreme Court Decision.
The stay was a direct result of a co-ordinated regional and national effort by big business houses
in India engaged in the shrimp industry. The general flip-flop between the Supreme Court and
Parliament is bound to continue due the significant loop holes in coastal zone management (CZM)
policy and the relative lack of objective analysis concerning this issue.

We believe that this problem is due to an intrinsic problem within the system--that the
existing institutions placed in charge of coastal zone management have not been designed to
evaluate and identify appropriate solutions to problems arising from brackishwater shrimp
aquaculture development. A review of national, state and regional policy development illustrates
that: (1) aquaculture policy models and economic policy information have played minor roles in
policy decision-making; (2) The lack of economic analysis is due to the generally weak role of
economics within the coastal zone management process, the complexity of environmental and
economic relationship and the real lack of relevant qualitative and quantitative data. This
fundamental problem is what we call the field-policy gap.

The field-policy gap

An information gap exists between socio-economic and environmental problems occuring in

local areas and effective policy making. The gap between the rural environment and policy
formulation and implementation exiss due to a lack of comprehensive qualitative understanding of
ground level relities and a lack of quantitative data to objectively examine a variety of
hypotheses regarding industry-community interactions (illustrated in Fig.1)

The field-policy gap can be bridged by: First, acquiring an understanding of the nature of
the problem at the level of the village community. A qualitative understanding of coastal issues
stem from discussions with local government and non-government officials operating in the areas
in question. Second, quantitative analysis requires methodologically sound data collection and
rigorous socio-economic analysis. Third, a shared vision of the nature of the problem and possible
solutions can be achieved through participatory discussions with local communities and local
government operating in the region. This approach could lead to informed policy-making.
Concluding Remarks
A variety of rapid changes are taking place in the rural economy that are affecting the
traditional livelihood of historical inhabitants both adversely and beneficially. A delicate balance
is needed between promoting the development of an industry that generates large capital inflows
to the national economy and industrial growth in rural areas and punishing this sector for its
associated negative externalities. Our analysis pinpoints relationships between shrimp farm
characteristics and village welfare. Based on our results we can suggest three conrete
recommendations.

1. Require a minimum distance between shrimp farms and

coastal village
2. Provide clear access through farms to the creek or sea
3. Monitor contamination levels and treat farm effluent before discharge

More detailed analysis is needed before any comprehensive recommendations can be

given to ensure the sustainable development of the shrimp farming industry in the Kandaleru
region with regard to its coexistence with rural inhabitants.

Notes

1. The Kandaleru creek and surrounding region was chosen as the study site for this research for
primarily three reasons. First, the Kandaleru creek is unqiue in that it does not play host to any
industry other than to shrimp farming. The Kandaleru creek is, therefore, a model brackish
water body from which insights can be made regarding the impacts of brackish water shrimp
aquaculture on the environment and on local populations inhabiting its banks. Second, a
variety of secondary data exist for this region because of its close proximity to the district
capital, Nellore. Third, because of its close proximity to a local port (Krishnapattanam) and to
a major rail lik to Madras, shrimp are easily transported for export. Therefore, shrimp farming
in the region boomed in a relatively shorty period of time.
2. According to the newly formed Kandaleru Aquafarmers' Association (KAA) registry, there are
518 registered members and no more than 530 farms in total along the Kandaleru creek.
Cross sectional data were collected for 518 of the 530 shrimp farms operating along the
Kandaleru creek, Nellore District, Andhra Pradesh. Data collected include each farmers' total
land-holding, total waterspread area, total number of shrimp ponds, average yield during the
bumper harvest of 1996 and during the disease year harvest of 1994, ownership status, and
location (name proximity of the nearest village).
3. Variable include: farm size in hectares, number of ponds per farm, number of times shrimp are
fed per day, number of aerators used, number of grow out days, average percentage of
water exchanged per day, seed stocking density per hectare of waterspread area, number of
years in operations, feed in kilograms per hectare of waterspred area, labour inputs per
hectare of waterspread area. Model estimation and results are presented in Patil (1997) and
available upon request.
4. In India the Supreme Court recently banned all shrimp farms using non-traditional methods of
production (i.e. intensive production). The majority of Kandaleru shrimp farmers produce with
non-traditional methods of production and, therefore, fear exposure. Due to their sensitivity to
sharing production data via a farmal questionnaire, we personally interviewed 83 creek-
based farmers of the 518 in the KAA to obtain a representative sample size.
5. We draw this conclusion based on the significant positive correlation between farm size and
amount of overall capital inputs used in production. This amount of overall capital inputs used
per hectare defines the "intensity" of production and thus the production technology. Higher
 capital inputs indicates more intensive production; no capital inputs define traditional
production.
6. Data on employment levels was collected by interviewing managers of different ancillary units
in Nellore, the capital of Nellore District, Please refer to Patil (1997) for a more detailed
analysis of the growth of ancillary industries and their impact on employment levels.
7. Approximately 40 adult males and females were interviewed to have a representative sample
size. Each villager was asked to answer each question by answering "yest" or "No". Secondly,
they were asked to rank the problem) to 6 (least severe problem). Patil (1997b) provides a
detailed discussion on the survey methodology used to collect these data, the data set's
strengths and its weaknesses.
8. Shrimp farm effluent is known to be contaminated from excessive biological and chemical
inputs used in production.
9. Kandaleru region shrimp farms aer mapped to the specific village they cluster around. Each
survey response in coded by the shrimp farm's proximity to the nearest identified village. Each
farm is further characterized by its distance from the Bay of Bengal. Thus, ten creek-based
shrimp farming localities or "clusters" are identified by local shrimp producers. Similarly, each
sea-based farm is linked to the nearest identified village. In most cases, sea-based shrimp
farms cover a much larger land an water spread area than the Kandaleru based shrimp farms
and are, therefore, adjacent to multiple villages. This distance mapping technique enables us
to identify the exact location of each farm by the village adjacent to it. Thus we are able to
assess the impact of a shrimp farm cluster on its adjacent village.
10.FARMSZ, WSA and TCORP were found to be positively and significantly correlated at the 99
per cent level.
11. This became apparent during the March 1997 Parliamentary debate on aquaculture.
12. This becomes apparent from examination of the December 1996 Supreme Court Decision on
Aquaculture and the three major reports on impacts of brackishwater shrimp aquaculture used
to reach its decision. The most often cited report in the decision, the 1995 NEERI Report was
critiqued by internationally renown scientists and experts in brackishwater shrimp aquaculture.
In virtually every critique, the NEERI report is condemned as a scientifically unsound study with
methodological inconsistencies, unsound economic analysis and conclusions drawn from little or
no evidence at all (Patil, 1997). NEERI is a national environment and engineering firm located
in Nagpur, India. NEERI was assigned by the Supreme Court to investigate allegations raised
by environmentalists that shrimp farming caused severe social and environmental problems in
rural coastal areas.

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