Livelihoods&FoodSecurityTrustFund

Myanmar

PrawnValueChainAnalysis
RakhineState,Myanmar

OlivierJOFFRE
MoeAUNG

March2012

Contents
Abbreviations......................................................................................................................................v
Unitsusedandconversiontable:........................................................................................................v
Acknowledgments...............................................................................................................................v
ExecutiveSummary............................................................................................................................vi
1.Introduction....................................................................................................................................9
1.1.Scopeofthemission................................................................................................................9
1.2.Geographyandcontext............................................................................................................9
1.3.PrawnsectorinRakhineState...............................................................................................11
2.Approachandmethodology.........................................................................................................15
3.Prawnfarming...............................................................................................................................16
3.1.Productionsystems................................................................................................................16
3.2.Economicresultsandprofitability.........................................................................................19
3.3.Cashadvance&loansystem..................................................................................................22
3.4.Landaccess............................................................................................................................23
4.Prawnvaluechain.........................................................................................................................25
4.1.Descriptionofthevaluechainandtheflow..........................................................................25
4.2.Postlarvaesupplyandsuppliers...........................................................................................29
4.3.Prawnfarmers,termsandconditionsforexchanges............................................................32
4.4.Collectorsatthevillagelevel,termsandconditionsforexchanges......................................33
4.5.Traders&exporters,smallscale............................................................................................34
4.6.Traders&exporter,largescale..............................................................................................34
4.7.Transportandroutes.............................................................................................................43
4.8.Processingfactories...............................................................................................................46
5.Prices,costsandmarginsalongthemarketingchain...................................................................47
5.1.Pricesalongthemarketingchain...........................................................................................47
5.2.Costsandmarginsalongthemarketchain............................................................................48
6.ScenariosforfutureprawnaquacultureinRakhineState............................................................54
7.Constraints,needsandfutureoptions.........................................................................................57
7.1Productionsystemandpondmaintenance............................................................................57
7.2Accesstoinputsandknowledge.............................................................................................58
7.3.Trading&MarketingChain....................................................................................................59
8.Conclusions...................................................................................................................................61
References........................................................................................................................................62
ii

Appendix1:Activitiesduringthemission.........................................................................................63
Appendix2:Listofmeetingsandpersonmet..................................................................................65
Appendix3:StatisticsofprawnfarminginRakhineState2011.(SourceDoF)...............................69
Appendix4:Mappingandvillageprofilesinthedifferenttownshipsvisited..................................70
PAUKTAW......................................................................................................................................70
MYEBON........................................................................................................................................72
KYAUKPYU.....................................................................................................................................75
Appendix5:InterviewTopiclist........................................................................................................77
Appendix6:PriceandgradingofP.monodoninFebruary2012.....................................................86

iii

ListofFigures
Figure1:RakhineStateandstudyarea
10
Figure2:RecentchangesintheprawnsectorinRakhineState
13
Figure3:Repartitionofthetotalcostforthedifferentfarmtypes
21
Figure4:EstimatedpercentageofthevolumeflowofP.monodonbetweenSittwe,Myebon,Minbya,
Kyaukpyu,BangladeshandYangonin2011.
26
Figure5:SchematicdescriptionoftheprawnvaluechaininRakhineState
28
Figure6:Informalloansystemintheprawnvaluechain.Dashedarrowsrepresentunusualinteractions.
Solidarrowsrepresentcommoninteractionsbetweenactors.
38
Figure7:Exampleofprice(MK/kg)changesalongthemarketingchainfor1kgofgrade4
(2130prawns/450g),fromaproducerinMyebontoatraderinSittweandaprocessingcompanyin
Bangladesh.
47
Figure8:Exampleofprice(MK/kg)changesalongthemarketingchainfor1kgofgrade4
(2130prawns/450g),fromaproducerinKyaukpyuvillages.
48
Figure9:ScenariologicforthefutureofprawnfarminginRakhineState
55
Figure10:ZoningofprawnfarminginPauktawTwonship.Locationofvillagevisited
70
Figure11:ZoningofprawnfarminginMyebontownship.Locationofvillagevisited
72
Figure12:ZoningofprawnfarminginKyaukpyutownship.Locationofvillagevisited
75

ListofTables
Table1:Keyfactsintheprawnsector,RakhineState
Table2:Listofthestakeholdersinterviewedduringthestudy
Table3:Characteristicofthedifferentprawnfarmtypes
Table4:Economicresultsoftheprawnproductionsystems(in000MK)
Table5:Keyfactsaboutprawnproductionsystemsinthestudyarea
Table6:PriceoftheP.monodonpostlarvaeinRakhineState(2012)
Table7:KeyfactsaboutP.monodonpostlarvaeinthestudyarea
Table8:Destinationandspeciestradedinthedifferenttownships
Table9:Differentgradesforprawntrading
Table10:Characteristicsoflargeprawntraderstrader
Table11:Summarytableofpeakproduction,destinationofproduct,demandandprices
forP.monodonandpostlarvaeavailability
Table12:Summaryoftermsofexchangesbetweenstakeholersinthevaluechain
Table13:Durationandtypeoftransportationforthemaintraderoutes
Table14:Transportcostsfordifferentroutes(80kgofheadlessprawns1container)
Table15:Scenario1,Costandbenefitanalysisforeachactorintheprawnmarketchain
Table16:Scenario2,Costandbenefitanalysisforeachactorintheprawnmarketchain
Table17:Scenario3,Costandbenefitanalysisforeachactorintheprawnmarketchain
Table18:Scenario4,Costandbenefitanalysisforeachactorintheprawnmarketchain
Table19:BuyingandsellingpriceofthedifferentP.monodonclassesforlargetradersandexporters
(Sittwe)inFebruary2012.
Table20:BuyingandsellingpriceofthedifferentP.monodonclassesforlargetradersandexporters
(Kyaukpyu)inFebruary2012

12
15
18
19
24
29
32
35
35
37

41
42
43
45
50
51
52
53
86
86

iv

Abbreviations
DoF

DepartmentofFisheries

MK

MyanmarKyat

PL

Penaeusmonodonpostlarvae

PCR

PolymeraseChainReaction

USD

UnitedStatesDollars

Unitsusedandconversiontable:

International

Local(Myanmar)

Weight

Kilogram

1.0

Viss

0.6

Area

Hectare

1.0

Acre

2.47

US$

1.0

MKyat

813

Currency

Acknowledgments
The authors would like to thanks the Department of Fisheries in Myebon, Pauktaw and Kyaukpyu
townshipsaswellasthestateDoF.Farmers,collectors,tradersandexportersarethankedfortheir
time and providing valuable information. Special thanks are due to the LIFT project for
administrativeandlogisticalsupportandtoUThanTunforhiscontributiontothedatacollectionin
thefield.

ExecutiveSummary

In the late 1990s and early 2000s prawn farming (P. monodon) expanded in Rakhine State. Prawn
farmingwasbasedonanextensiveproductionsystem,relyingonwildpostlarvaetrappedinponds.
Thesectorwasdeveloping,withexpansionofthefarmedarea.However,thetechnologyusedinthe
sectordidnotimprove,andafterafewyearsyieldsstartedtodecline.Prawnfarmssufferedfrom
recurrent cyclones, high mortality rates and the high cost of dike maintenance. In 20112012, the
yieldwaslowandinsometownshipsmorethan50%ofprawnpondshadbeenabandoned.
This study investigates the prawn value chain in Rakhine State, focusing on Cyclone Giriaffected
areas.Weinterviewedkeyinformantsintheprawnvaluechainaswellasthedifferentstakeholders
inthesupplyandmarketchaininSittwe,Pauktaw,MyebonandKyuakpyutownships.Weaimedto
understand the value chain, as well as the costs and benefits of the different production systems,
andtohighlightdifficultiesandopportunitiesinthesector.
Productionsystems
Asof2012,extensiveprawnproductionsystemsinthestudyareaarestillwidespread,withalmost
noinputuseandmorethanhalfofpondsrelyingonwildseedstrappedintheponds.Wedistinguish
between different farm types based on farm sizes, with small mediumscale farms (up to 20 ha),
large scale farms (up to 50 ha) and private investors with farms of up to 200 ha. Local farmers in
villages can be considered medium or better off households, since they have access to land in
villageswereonaverage50%ofhouseholdsarelandless.
ThedifferentsystemsfacedhighmortalityratesinMay2011andfarmresultswerenegativeinsome
cases,especiallyforlocalsmallandlargescalefarmers.TheyieldofP.monodonvariedbetween15
to70kg/ha/year.ThepeakproductionseasonstartedfromMaytoAugust,andthelowproduction
seasonwasduringthedryseasonfromDecembertoMarch.
Localfarmersdonothaveaccesstoextensionservicesorinputproviders.Accesstopostlarvaewas
moredifficultinlate2011comparedtopreviousyears,withaloweramountofPLsimportedfrom
Bangladesh.Theactualproductionofthe2operatinggovernmentalhatcheriesinthestudyareais
below5millionPLswhilethedemandisestimatedataround100millionPLs.Farmerscanpurchase
PLs from local catchers and depots, government hatcheries or importers providing PLs reared in
Bangladeshihatcheries.WhenthereisashortageofPLsduringthestockingperiod,farmerscannot
affordtoinvestinPLsduetohighprices.Asaresult,thestockingdensitydropsbelow2.5PL/m2per
yearandmostlocalfarmersrelysolelyonnaturalPLstrappedintheirponds.
Theeconomicdatashowthatmostfarmrelatedinvestmentgoesintodikemaintenanceandwage
labor and that little investment goes into inputs and pond preparation. Farms also rely on other
aquatic resources for their financial sustainability. Other prawns, crabs and fish harvested in the
pond act as a safety net for small and mediumscale famers. However, most farms are in debt,
whichexplainsthehighnumberofabandonedpondsinthestudyarea.

vi

Afarmsfinancialstatusislinkedtothecashadvancesprovidedbytradersandlocalcollectors.This
informalloansystemisacharacteristicoftheentirevaluechainwithtradersandexportersfinancing
lowerlevelsinthevaluechain(collectorsandfarmers).However,withfallingyieldsandcropfailures
recentlyfarmershavenotbeenabletorepaytheircashadvances,whichhasaffectedtheentireloan
systemandcashflowinthevaluechain.

Valuechainandexport
MostP.monodonproductionisexportedtoBangladesh,transitingthroughSittwe.Asmallervolume
isexportedtoYangon.ThedifferenceinvolumeexportedtoBangladeshcomparedtoYangonhas
been exacerbated by international sanctions on Myanmars products. Yangon and local processing
factories in Rakhine cannot compete economically with Bangladesh. For Sittwe, Myebon, Minbya
and Pauktaw producers, export to Bangladesh presents lower transport costs, shorter routes with
less weight lost and higher selling prices. The change in export tax, from 10% to 2% modified the
exportrouteschosenbytraders,with ahighershareoftheexportedP.monodonpassingthrough
thelegalbordergatetoreachBangladesh.
Traders in Kyaukpyu township market about 70% of their production to Yangon, due to lower
transportation costs and higher prices in Yangon compared to Sittwe. Traders in Kyaukpyu do not
have direct access to export and need to export their production through Sittwe, increasing their
tradingcost.
Inalllocations,processingislimitedtothefarm,wherefarmersremovetheheadsoftheprawnsand
marketheadlessprawns.Collectorsandtradersjustsorttheprawnsaccordingtogradeandpackage
them for chilled transport. Only one processing company (freezing and packaging prawns) in
Kyaukpyuoperatesinthestudyarea.
Costandmarginanalysisshowsthatoperatingcosts(transport,labor,spoilageandice)arethemain
costs for traders and collectors. Producers have to pay a high cost for their loans, which reduces
theirprofitevenincaseofsuccessfulyields.Mostoftheprofitmarginiscapturedbyintermediaries,
collectors and traders. Investment in equipment is limited, and there isno investment in vehicles.
Tradersandcollectorsoutsourcetransportation,therebyavoidingalargecapitaloutlayandinformal
fees along trade routes. This practice illustrates the reluctance of market actors to invest in fixed
assets due to uncertainty about future business prospects. At each transaction, the weight loss is
estimated to be 2% to 3% of the value and an estimated 7% of the total value is lost along the
marketchain.

TradersexportingtoBangladeshfacehighcostsforregulatoryfees.Inadditiontoalicensefeeand
wastemanagementfee,tradershavetopayanexporttax,regradingatthesellingpointandagent
fee.However,informalfeeswerenotestimatedandmightrepresentanonnegligibleshareofthe
overallcost.Accordingtotraders,mostoftheirmarginliesintheexchangerateofforeigncurrency
andregradingofproduct.

vii

Termofexchangesandinformalloans
Theloansystemalongthevaluechainreducesfarmersprofitswithcollectorsandtradersofferinga
lowerpriceofabout500to1,500MKperviss(300to900Mkperkg).Asimilarpricedifferencecan
beobservedbetweencollectorsandtradersinthepeakseasonwhensupplyisimportant.Theprice
difference is smaller when supplies are low or when demand increases because of competition
amongtraders.
The terms of exchange between farmers and local collectors also includes unfair weight scaling
practices and a different grading system. Collectors sort the prawns by size and then sell them to
traders accordingtoa gradesystemdifferentfrom the onetheyusewhenpurchasing theprawns
fromproducers.Collectorspayalowpricetofarmersbecausetheypurchaseprawnsthathavenot
beensortedaccordingtograde.Thesecollectorsthensorttheprawnsandthensellthemtotraders
at a higher price. Similar practices were also reported by traders during their transactions with
buyersinBangladesh.
Scenarioandrecommendations
During the study, several drivers affecting the prawn sector were highlighted. We classified the
drivers into two categories, Global drivers related to international markets, prices, export taxes,
exchange rates and international sanctions on Myanmars products; and Local drivers, related to
climate,accesstoinputsandknowledgeandloansystemswithinthevaluechain.
One future (ideal) scenario based on these drivers includes a favorable global environment for
prawnsectordevelopment,withhighdemandforexportsandlowertradebarriersandtaxes.Atthe
locallevel,thisscenariowouldincludeinvestmentinthevaluechaininordertoincreaseaccessto
knowledgeandinputs.Suchinvestmentwouldsupportthedevelopmentofanimprovedextensive
systembasedonhatcheryrearedPLs,withalimitedimpactontheenvironment.
Thisscenariocanbeachievedinthefuturebutrequiresinvestmentandtransferofknowledgetothe
producers.Technicalchangeswillrequirethemodificationoftheproductionsystem,shiftingfroma
traditionalsystemthatdependsonnaturalresourcestoasystembasedonalowstockingdensityof
hatcheryreared PLs. To enable this change, production units have to be smaller and better
maintained,andbothpondandwaterqualityhavetobeimprovedusingfertilizersandlime.
Inthemeantime,thegovernmentshouldencouragetheprivatesectortoinvestinprawnproduction
through hatcheries, nurseries and input suppliers. Knowledge and information systems, both for
technicalandmarketaspects,needtobeimprovedthroughvariousformalandinformalnetworks
suchasthemarketchain.
The prawn sector in Rakhine State has been in decline for a number of years. The sector, based
mostlyontheuseofnaturalresources,needsadeepchangeinordertogrowandbenefitthelocal
population. This change will require a shift in production systems that cannot happen without
externalinvestmentandinvolvementofthelocalstakeholdersinthesector.

viii

1.Introduction
1.1.SCOPEOFTHEMISSION

The scope of the assignment was to analyze the prawn value chain in Rakhine State and highlight
opportunities for future intervention to support the development of brackish water prawn farming in
Giriaffected areas of Rakhine State. The analysis was carried out with an emphasis on taking into
accounttheentirevaluechain,fromproducerstoretailersandexporters.
1.2.GEOGRAPHYANDCONTEXT

RakhineStateislocatedonthewesterncoastofMyanmaralongtheBayofBengal.Itincludesatotalof
17 townships and has 344 miles of coastline. It also includes several islands in the gulf of Bengal and
sharesaborderwithBangladeshtothenorth(Figure1).
In October 2010, the area was hit by Cyclone Giri. Around 26,000 persons were affected, leaving
100,000homeless.ThemostaffectedtownshipswereMyebon,Kyaukpyu,PauktawandMinbya.Itwas
estimatedthat50,000acres(>20,000ha)ofcoastalaquaculturepondsweredamaged.
Rakhine State has a high number of households severely food insecure according to the Vulnerability
AnalysisandMappingUnit(VAM)oftheWorldFoodProgramme(WFP).Itisestimatedthatinthefour
Giriaffected townships, almost 150,000 households are severely food insecure, while more than
350,000 households are moderately food insecure. More than 50% of this population are among the
most vulnerable and rely on nonagricultural wage labor. Other findings from the Food Security
assessmentshowthatthelevelofhouseholddebtishighinthevillages(85%ofhouseholds)andthat
lackofjobopportunitiesisamajorissue.
The area is characterized by a low population density and has highly isolated villages. These factors
resultinlesstradeandlowerbargainingpowerforfarmers.Thevolumeoftradeatthevillagelevelis
low,andvillagersdependontradersandhavehighlevelsofdebt.
The fisheries sector is a key sector in Rakhine State, with 43% of the population (out of a total of 3.2
millioninhabitants)relyingonfisheriesoracombinationofaquaculture/fisheriesandagriculture.
Itisestimatedthatalmost600,000personsareinvolvedincapturefisheriesand/oraquaculture,while
150,000 persons are involved in other stages of the value chain (processing, wholesale, export),
including489tradersregistered.
Thefisherysectorproduces273,043metrictonsoffish,whicharemostlyconsumedlocally(55%),while
17% and 8% are exported to other states within the country and to foreign countries respectively.
AquacultureinMyanmarisadynamicsectorwithanannualgrowthrateabove28%fortheperiod1990
9

2008 (FAO 2010). Prawn farming has a specific value chain, with 90% of the production exported to
Bangladesh. One of the main constraints of prawn farming is the lack of postlarvae (PLs). In 2011, 3
million PLs were produced by the DoFand an estimated 100 million were imported from Bangladesh.
ThosePLswerenotPCRcheckedforviruses(whitespotvirus)andriskcontaminatinglocalprawnswith
thevirus.

Figure1:RakhineStateandstudyarea(Source:WorldFoodProgram&MyanmarInformationManagementUnit)

10

1.3.PRAWNSECTORINRAKHINESTATE

ThefisherysectorisofstrategicimportanceforRakhineState,andtheprawnsectorplaysanimportant
role in providing exports to Bangladesh. Prawn farming, mostly Penaeus monodon (also called Giant
prawnsorTigerprawns)startedinearly1992,innorthernRakhineStateandwasgraduallyintroduced
totherestofthestate(Maungtaw,Yathitaung,Pauktaw,MyaukOo,Minbya,Myebon,Kyaukpyu,Yan
Byei,Taungok,ThanDwei,andGwatownships).RakhineStateisthelargestareaofprawnfarminginthe
country,withmorethan330,000personsinvolvedinthesector.
In this region, prawn farms are characterised by large ponds and farmers follow traditional extensive
methods based on selfrecruited species. Other prawn species such as Peaneus indicus, Peaneus
merguiensis and Metapenaeus sp., mud crabs (Scylla serrata) and sea bass (Latescalcarifer) are other
productsharvested.
Thenumberoffarmsincreasedunderthegrowinginfluenceofforeigninvestmentinthestate,mostly
from Bangladesh. After a rapid increase of the prawn farming area from 33,598 ha in 2001 to almost
63,000hain2005,thesectorshowedadeclinein2011,withonly44,425haofprawnfarms(Appendix
3).Pauktawisthemainproductionarea,followedbyotherGiriaffectedtownshipsMyebon,Kyaukpyu
andMinbya1.Thefourtownshipsrepresentabout24,000haofprawnfarming,morethan50%ofthe
farmedareainRakhineState.
Thenationalprawnproductionin2011wasestimatedatmorethan19,000metrictons,ofwhich3,778
tonsareexportedtoBangladeshandThailandof(DoFStatistics,2011).Mostofthese3,778tonscanbe
consideredasexportofP.monodonfromRakhineStatetoBangladesh.In2009,prawnproductionwas
estimatedtocontribute12%ofthenationalprawnproductionand18%ofthevolumeandrevenuefor
exportation2.
In Kyuakpyu township, the prawn farming area declined from 7,000 ha in 2002 to about 1,600 ha in
2011.Similartrendswereobservedinothertownships.AccordingtotheDoF,thedeclineincultivated
areacanbeexplainedbyadecreaseinpondproductivityduetothelackofselfrecruitedspecies,lackof
management techniques and potential disease outbreaks. Prawn farmers also abandoned their ponds
becauseprawnfarmingwasnolongerprofitable,duetothehighcostofdikemaintenance,thehighcost
of PLs on the market and low returns that could not cover the reimbursement of the informal loans
contracted.
One of the main issues in the sector is the decrease in natural postlarvae trapped in the ponds. The
sectorneedshatcheryrearedpostlarvae.TheneedforpostlarvaeforRakhineStateisestimatedtobe

1OtherimportanttownshipsforprawnfarmingareMaungtaw,Ann,RathedaungandPonnagyun.
2
NilarMyintHtoo.TradeLiberalizationandItsImpactonFisherySectorinMyanmar,PhDDissertation,InstituteofEconomics,
Yangon,May2011.

11

100millionPLsperyearaccordingtotheShrimpFarmerAssociation,whilelocalproductionislessthan
10millionperyear.
Prawnfarmersinthetownshipsvisitedwereusuallyatthemiddleorhigherendoftheincomescaleintheirvillages.With
landlesshouseholdsmakingup40%to60%ofsomevillages,prawnfarmersowninglandareconsiderednonpoor.Key
factsontheprawnsectorinRakhineStatearesummarizedinTable1.Table1:Keyfactsintheprawnsector,RakhineState

PrawnSectorinRakhine,Keyfacts
Increaseofprawnfarmed 33,500hain2001to63,000in2005
areainearly2000s
Declinesince2005upto
44,000hain2011
now
Giriaffectedarea
24,000haofprawnfarms,morethan50%ofRakhinefarmingarea
Exportedproduct
P.monodon,exportedtoBangladesh
Constraintsandlimits
LackofaccesstoP.monodonpostlarvaeandlimitedlocal
production(lessthan10%oftheestimateddemand)
Prawnfarmers
Notthemostvulnerablehouseholdsinvillages.
HighleveloflandlesshouseholdsinGiriaffectedarea.
Decliningproduction
Loweryieldof5060%compareto20022005
trends
Decliningstockofwildpostlarvaelowersupplyandhigherprices
onthemarket

1.3.1.Timelineandchanges
TounderstandtheactualtrendsinprawnfarminginRakhineState,wesummarizeinthepresentsection
themaineventsintherecenthistoryofthestatesprawnfarmingsector(Figure2).
19952005/07
Prawnfarmingstartedinthe1990s.Basedonwildseedstrappedinpondsandthenaturalproductivity
of the ecosystem, the production was high until mid2004/05 and then started to decline. During this
firstperiodfrom1995to2005,processingcompanieswereoperatinginSittweandsharedthemarket
withprocessingfactoriesinYangon.Theproductionsystemswerebasedonnaturalrecruitmentofpost
larvae and stockingofhatcheryreared postlarvae wasnotcommon.Prawn farmingexpandedonthe
mangrovearea,ledbothbylocalfarmersandprivateinvestors.Duringthatperiod,fornewlyreclaimed
land,landtenurewasbasedona3yearlandsublease3.
2005/2011
In2007,afterinternationalsanctionsonMyanmarsproducts,purchasepricesdeclinedandprocessing
factories in Sittwe ceased operating. The Yangon market was not profitable anymore because of low
prices, low demand and high transportation costs. The market was then oriented toward export to

Farmersandprivateinvestorsleasedthelandtothelandleaseholderforaperiodof3years.

12

Bangladesh, but only for one product P. monodon. Until the export tax was reduced (10% to 2%) in
September2011,mostexportsflowedthroughinformalroutestoavoidthehighexporttax(10%).
TheP.monodonyieldstartedtodropduetoadeclineinnaturalpostlarvaetrappedinpondsandthe
needforhatcheryrearedpostlarvaeorwildPLscaughtbylocalfishermenincreasedbeginningin2007.
The local hatchery capacity was still very low, and starting in 200809 farmers began using imported
postlarvaefromBangladesh,whichwaslinkedtotheexportoftheadultprawnstoBangladesh.In2011,
11millionPLswereimportedinPauktawtownshipalone.Inlate2011,Bangladeshbannedtheexportof
PLsandstronglyenforcedthelaw.
Duetodecliningproductivityandtobankruptcies,sublandleaseswereshortenedtooneyearinmost
cases,resultinginlowerinvestmentinpondmaintenancebyprawnfarmers.
The succession of cyclones in 2004, 2006 and in 2010 (Giri) affected the farm economy, with prawn
farmers forced to take out loans to repair embankments. These loans put farmers in a less secure
situation,andboundthemtocollectorsandtraders.Inaddition,farmersclaim(especiallyinMyebon)
thatinrecentyears,abnormallyhightideshaveaffectedtheproductionofpondsintherainyseason,
withfloodsspillingoverembankmentsandreducingtheproductionoffarms.Thesefactsinadditionto
repeatedcycloneshaveputfarmersinacycleofdebtsandloans,reducingtheirinvestmentcapacityand
farmareasandaffectingtheentirevaluechain.

Introductionof
shrimpculture

(traditionalsystem)

Expansionofshrimp
cultureonmangroves.
Conversionofricefields

2004:Cyclone
affectsshrimp
ponds.Yieldsdrop

2007:
Cyclone

2009:Importof
hatcheryrearedPLs
fromBangladesh

2011:lowyieldand
highmortalityratein
shrimpponds

Early90s

2000s

2004

20072009

20102011

20022004Peakof
productionof
traditionalsystems

Internationalsanctionson
Myanmarsproducts:dropin
pricesandexportsto
Bangladesh.Localprocessing
factoriesstoptheiractivities

2010:CycloneGiriandmore
shrimppondsareabandoned

Figure2:RecentchangesintheprawnsectorinRakhineState

13

1.3.2.Trends

Trendsinproductionandexportwereassessedthroughdiscussionwithdifferentstakeholders.
Trendsinproduction
All the farmers and DoF representatives described declining production since the mid 2000s, with
estimations varying from 50%60% lower yields. For farmers using the traditional system, the yield in
2002 was about 80 to 100 kg/ha but in 2011 had declined to 30 to 50 kg/ha. The production had
declinedby5to10timescomparedtotheearly2000s.
Accordingtostakeholders,thedropinprawnyieldcouldbeexplainedbyvariousfactors:

DecreaseinrecruitmentofwildPLsofP.monodonandotherspecies;
Lack of investment for pond maintenance (embankments, pond dredging) resulting in shallow
ponds;
Low investment related to high risk of failure with frequent extreme high tides and tropical
stormsoverthelastdecade;
PossibleprawndiseaseandhighmortalityinMay(warmestmonth);
Mangrovedestruction(specificallymentionedinMyebon).

This trend toward lower production was especially pronounced in 2011, which was the year with the
lowest recorded production. In some villages visited, 50% of the ponds were considered unsuccessful
(negative economic results) that year. However, the role of viruses was not as important as expected
with only 10% to 15% of the farms affected by viruses according to the DoF. Local farmers have
describedsymptoms(prawnswithredtailsorswollentails)butnovirushasbeenformallyidentified.
Trendsinexport
Thetrendinexportandthevaluechainisillustratedbyonetraderexplainingthatbefore2005,village
collectors reached their maximum capacity in the peak season and were unable to purchase all the
farmersproduction,whilenowadaysthissituationneverhappens.Before2005,duringthepeakseason,
one trader was employing 45 people (10 in 2011) and trading more than 10 metric tons in the peak
period (less than 2 metric tons in 2011). Another example was given in Myebon, where a trader
estimatedthatthecurrenttradevolumeis30%ofthevolumein2004beforethedeclineinproduction.
Trendsinwildpostlarvaecatch
InSittwe,tenyearsago,PLcatcherscollectedaround100,000PLsperday,whilenowadaysthecatchis
downto5,000to10,000perday.Asaresult,thepriceofPLsinthefirststockingseason(Decemberand
January)ishigher.ThepriceofonePLhasnowreached18to22MK/PLcomparedto7to8MK/PLin
20082009and1Kyat/PLbeforethat.
14

2.Approachandmethodology
Theteamwascomposedoftworesearchersinvaluechainanalysisandaquacultureduringtheperiodof
fieldworkintheareaofRakhineStateaffectedbyCycloneGiri.Wevisited4townshipsalongthecost,
includingSittwe,Pauktaw,MyebonandKyaukpyutounderstand theprawnvaluechain inthiscoastal
region, identify opportunities to improve the value chain, and provide firsthand information for the
designoffutureinterventionsinthesector.
To gain a better understanding of the sector, we completed a series of focus group discussions and
semistructuredinterviewswiththedifferentstakeholdersalongthevaluechain(Appendix2&5).We
covered the full range of producers, from smallholder traditionalextensive systems to improved
extensive systems used by private investors. In addition to field visits in Rakhine State, other
stakeholdersintheprawnvaluechainwhoarelocatedinYangonwerealsointerviewed.
Data was collected from each participant or actor within the chain. These data include the costs of
productionaswellassalepricesatthevariousexchangepointsastheprawnsmovedfromthehatchery
tofarmers,collectors,traders,andultimatelyexportorprocessingcompanies.
Thedatawereusedtodeterminetheaverageofcostsoftransportation;theuseofinputssuchasfeed,
lime,andfertilizer;thecostsofprocessing;and,alllaborthroughoutthechain.
ThelistofstakeholdersmetispresentedinTable2.
Table2:Listofthestakeholdersinterviewedduringthestudy

Stakeholders
Farmers(individualinterviews&groupdiscussions)

Nbr
33

Postlarvaetraders/importers
HatcheriesmanagersandTechnicians
Villagecollectors
Traders

2
2
6
10

Processors
Exporters/transporters
CentralDoF(Yangon)andAssociation
RakhineDoF

1
1
2
4

Location
Sittwe,Myebon,Pauktaw,
Kyaukpyu
Sittwe
SittweandKyaukpyu
Pauktaw,Myebon
Sittwe,Pauktaw,Myebon,
Kyaukpyu
Kyaukpyu
Sittwe

Sittwe,Pauktaw,Myebon,
Kyaukpyu
Sittwe,Myebon

Internationalorganizations&NGOs
4

Sincethedatawasnotderivedfromastatisticallyrepresentativesurveyorfromcontrolledexperiments,
they should be seen as indicative of costs and returns in the sector. We cannot calculate confidence
intervalsandlevelsofsignificanceforthesedata,buttheydosuggestthepotentialforredistributionof
returnsthroughoutthevaluechain.

15

3.Prawnfarming
3.1.PRODUCTIONSYSTEMS

Even if the DoF recognizes 2 main production systems, namely i) the traditional system locally called
Trap and Hold and ii) the improved extensive system, observation in the field shows that the
differences between these systems are not important and that a typology based on the size and the
typeoflandownerismoreaccurate.Stockingdensityislowintheimprovedextensivesystem;noinputs
areusedinthesystem;andtherearenoothermajortechnicaldifferencesbetweenthetwosystems.
The decision to stock PLs depends more on the avaiablility of PLs on the market and the investment
capacityoffarmersthanontechnicalchoices.EvenwhenstockingPLs,farmerswillexchangewaterand
trapwildPLsintheir ponds. Thetechnicaldifferencesbetween thesytems arenotimportantandthe
relianceonwildPLsisstillgreatintheimprovedextensivesystem.Inadditiontothetwosystems,an
alternate riceprawn system is found along the coastal area, in ponds where the elevation allows
drainageofbrackishwaterintherainyseason.
One common characteristic of these prawn farms is that the ponds are large (several hectares) and
shallow,withmorethan80%oftheareabetween30and70cmdeepandtheremainingareamorethan
90cmdeep.Thesepondsarenaturallyfloodedwiththetideduringtherainyseason,butonlypartof
thepondisfloodedandusedtoraiseprawnsinthedryseason.Farmersdonotdrythepondorcatch
predatoryfishesinmostcases.
All the ponds are tidal systems (no pumping), surrounded by embankments, with one or more sluice
gateconnectingthepondtotheriverestuary.Sluicegatesaremadeofwoodandareoperatedsoasto
allowtheexchangeofwaterandrecruitmentofjuvenilesduringhightide.Adultprawnsarecapturedat
the sluice with nets during spring and nip tide (every 14 days), corresponding to the lunar cycle. The
harvest period occurs over 4 to 5 days before and after the full and new moons (spring and nip tide
respectively).Thefullmoonperiodisthemostproductive.P.monodonisthemainproductduetoits
highpriceonthemarket,butotherprawnspecies(P.indicus,P.merguiensisandMetapenaeussp.)are
also harvested and sold at lower prices. In the case of stocking PLs, the growout period to achieve
marketablesizeisbetween3to4months.Processingisdoneonthefarms,wherefarmersremovethe
heads before selling the prawns to collectors or traders. There is no control of predatory fish besides
fishingwithcastnetsandusingbrushparks(aggregatingdevices)intheponds.
Wedistinguishbetweentwomainproductionsystems,prawnmonocultureandalternatericeprawn
systems:

Inprawnmonoculture,theproductionperiodisallyearlong,withthepeakperiodofproduction
usually occurring from April to August. The dry season is used to repair the dikes and
embankments,aswaterlevelsarelowerintheponds.Thepeakperiodsfornaturalrecruitment
of PLs are in November/December and March/April. Investment is limited to wage labor and
16

maintenanceofsluicegatesandembankments.Farmerslimittheirinvestmentduetothehigh
riskofcyclonesandhightides.
Inanalternatericeprawnsystem,riceculturefromJulytoOctoberisfollowedbyprawnculture
inthericefieldsfromNovembertoJune.Farmerscantrapwildseedsinthepondandalsostock
additional PLs in the pond. Usually, only the lower part of the rice field is used for prawn
culture.ThissystemispopularinMinbyatownships,where30%oftheaquaculturefollowsthis
system,andinMyebonandsomevillagesinPauktaw.

Sincethedifferenceintechniqueandinputusageisnotimportant(withnolandpreparation,useoflime
orfertilizerinallcasesandcontinuousexchangeofwater),wedevelopatypologyofproductionsystems
basedonlandholding,with3maingroups:i)smallandmediumscalefarmerswithfarmsfrom5to50
acres(2to20ha);ii)largelocallandownerswithafarmedareabetween50and200acres(20to81ha)
andiii)largeprivateinvestorswithafarmedareaabove200acres(morethan81ha).
3.1.1.Smallandmediumscalelandowners
Thesmallholdersoperatepondsof5acres(2ha)to50acres(20ha),eitherprawnmonocultureorrice
prawnsystems(Table3).Thefarmscanbeentirelyownedbyanindividualorbeacollectiveinvestment
of2to4households.
Thetechnicalmanagementofthepondislimitedbythefarmersinvestmentcapacityandnoinputsare
used(nofertilizerorlime).Insomecase,whenthelandisathigherelevations,farmerscandrythepond
every23years,butwithoutdredgingorsedimentremoval.Stockingwildpostlarvaehappensaccording
toinvestmentcapacity,butataverylowdensity,below1.5PLperm2.Suchlowstockingdensitiesare
partially explained by the high cost of PLs in 2011. Fifty percent of the farms did not stock any PLs in
2011.Theproductivityofthissystemislow,between20and70kgofP.monodonperhectare.Thepeak
harvest is from April to July and another period from October to November in prawn monoculture
systems. Penaeus sp., Metapenaeus sp., mud crabs and fish such as sea bass caught in the pond can
makeupasubstantialpartofthefarmeconomyeveniffarmersaretargetingP.monodonasaspeciesof
highvalue.Pondoperationisbasedonfamilylaboronsmallerfarmsandonetothreesalariedworkers
onthelargestfarms.
The marketing is done through a collector at the village level, and farmers can have access to cash
advancesfromthecollectorinordertoinvestinpondpreparation.
3.1.2.Largescalelandowners
Thesesystemsarecharacterizedbylargefarmsofmorethan20haownedbyvillagebasedlandowners
withseveralownerscombiningtheirinvestmentcapacitytooperatelargeprawnmonocultureponds.
In these farms, the stocking density is between 0.5 and 2.5 PL/m2, with multiple stockings (2 to 10
times). The stocking period varies according to the availability of PLs and the farmers investment
capacity,withafirststockinginJanuaryearlyinthedryseasonandasecondstockinginMay.Mostof
the PLs are wild PLs purchased from an agent or imported from Bangladesh. Forty percent of the
farmers do not stock any PLs. The decision about whether to stock is based on the cost of PLs,
17

availability on the market, knowledge of stocking and the qualiy of available PLs. The productivity of
these ponds is not high and varies between 15 and 50 kg per ha (P.monodon), with the peak harvest
periodfromApriltoAugustduringthespringtide.
Thesefarmsareoperatedby2to4salariedworkers,paid20,000to30,000MKpermonth(plusmeals).
Theworkerscanharvestandmarketbyproducts(crabsandfish),butalltypesofprawnsaremarketed
bythepondowners.Marketingisdonethroughvillagecollectorsorlargertraders.Somelargefarmsare
notfullyoperationalduetotheownerslackofinvestmentcapacityandthedeclineofprawnyieldsover
thepastfewyears.
3.1.3.Largescaleprivateinvestors
Thesefarmsarearound200ha,onlandthatwasreclaimedinthelate1990sandearly2000s.Thelandis
leased by private investors who invest in land clearing, embankments and sluice gates. Investors
purchasehatcheryrearedPLsproducedlocally.Also,importedPLswerepopularin2009and2010due
to their low cost and availability. PLs can be stocked in nurseries where predatory fishes have been
cleared.Thestockingdensityislow,from0.5to3PL/m2andtheaverageyieldperhectarewasestimated
between 11 to 200 kg per ha4. However, this range is based on a small sample size with extreme
examples, including a successful and an unsuccessful farm. Production is directly marketed to traders
but also exported to Bangladesh during the peak season, when the volume harvested is sufficiently
large.These farmsareoperatedby 8to20 salariedworkers.In additiontotheirsalaries,workerscan
harvestcrabs,fishandotherprawnspeciesinthepond.
Comparedto2002/2003,theyieldhasdeclinedby50%.Since20082009,farmershavehadtoprocess
theprawns(removetheheads)andtransportthematerial.Before,processingcompaniespurchasedthe
prawnsdirectlyfromthefarmandcoveredthetransportationcosts.
Table3:Characteristicofthedifferentprawnfarmtypes

Farmsize(ha)
Productionsystem
Watermanagementsystem
Stockingdensity(PL/m2)
Originofthepostlarvae

Laborforce(person/ha)
Averageyield(kg/ha)(2011)
P.monodon
Averageyield(kg/ha)(2011)
Otherprawns
LocationSpecificity

SmallMediumScale
0.5to20
Riceprawn
Prawnmonoculture
SluicegateTidal
0(50%ofthefarms)
<1.5PL/m2
Naturalrecruitment
WildPLs&Imported

Largescalelandowner
2050
Prawnmonoculture

PrivateInvestor
50215
Prawnmonoculture

SluicegateTidal
0(40%ofthefarms)
0.52.5PL/m2
Naturalrecruitment
WildPLs&Imported

SluicegateTidal
0.23.5PL/m2

0.45
2070

0.1
1550

Naturalrecruitment
WildPLs,Imported&
LocalHatchery
0.1
66

20100

1570

(notestimated)

Alltownships

Alltownships

Pauktaw;Sittwe

Yieldvariationisgreatduetolowsamplesizeanddifferencesin2011results,betweenasuccessfulfarmstockingPLsata
2
2
stockingdensityabove2.5PLperm andanunsuccessfulfarmwithasystembasedonlowerstockingdensity(<1PLperm .

18


3.2.ECONOMICRESULTSANDPROFITABILITY

Table4,summarizestheeconomicresultsofthedifferentproductionsystemsfoundinthestudyarea.
Datainthetableindicatetheaveragecost,revenueandnetincomeforeachfarmtype.However,these
resultsareindicativeonly,duetothesamplesize.

Table4:Economicresultsoftheprawnproductionsystems(in000MK).Standarddeviationispresentedinparentheses.

n
OperatingCostperha
Postlarvae
Labor
Inputs
Transportation

FixedCostperha
Taxes
Informalcosts
Dikemaintenance
Equipmentdepreciation

Totalcost(farmaverage)
Totalcostperha

RevenuefromP.monodonperha
Netincomeperyearandperha

Netincomeperyearandperha
(includingotheraquatic
organisms)

Small
medium
scale
11

38
69
0
0

1
0.5
83
4

1,896
196(127)

239(143)
38(121)

78(134)

LargeScale
landowner

PrivateInvestor

53
48
0
3

1
0.5
93
3

5,275
200(92)

236(134)
52(113)

71(104)

91
69
0
47

6
1
83
14

45,866
307(174)

706(733)
399(574)

399(571)

Resultsarebasedonestimatedproductionduringthepeakandlowseasonandbasedontheaverage
price of the main prawn size harvested. In addition, the cost of informal fees and loans and interest
ratesweredifficulttoestimate,aswellaslandleasefees.Operatingcostsincludethecostofpostlarvae

19

(in case of stocking), labor costs (seasonal and permanent workers, excluding meal costs), the cost of
otherinputs(fertilizerorlime)andtransportationcosts.
Fixedcostsincludetaxes.Farmerspay300MKperacretotheDoFannually,alandtaxof100MKper
acre and additional informal taxes. In addition to the prawn farming tax, large farmers employing
permanentworkershavetopayataxof500MKperemployeeperyear.Prawnfarmershavetopaythe
InternalRevenueTax,whichvariesforeachfarm(between3,000and7,000MKforsmallandmedium
scalefarmers).However,wedidnottakeintoaccounttheInternalRevenueTax,sinceitwasextremely
variableaccordingtofarmsanddatawasnotalwaysaccessible.
Fixed costs include also the average yearly expense for dikes and sluice gate maintenance and the
depreciation of other equipment (baskets, shelter). Net income per year and per hectare includes a
calculationbasedoni)P.monodononlyandii)P.monodonwithotheraquaticorganismsharvestedin
thepond.
Resultspresentedarebasedonthe2011season,whichwasseverelyaffectedbyhighmortalityinMay.
Therefore,mostoftheeconomicresultsarerelatively lowand are highlyvariable foreach farmtype,
withaveryhighstandarddeviation.
SmallandmediumlandownershaveaveryloweconomicreturnfromP.monodonduetolowyields.
Their operational costs are high, due to labor costs and the high cost of postlarvae, with a unit price
between8and15MK(Figure3).Theamountoflaborperhectareishighcomparedtootherfarmtypes
andthelaborcostrepresentsabout35%ofthetotalcost.Equipmentandmaintenanceofdikesisthe
most significant cost, accounting for more than 40% of the total. Maintenance of the sluice gates
represents70%ofthatcost,duetothehighpriceofthewoodandtheneedforyearlymaintenance.In
recentyears,themaintenanceofsluicegateshasbeenlimitedbytheinvestmentcapacityoffarmers.
Accordingtofarmers,themaintenanceofdikesandsluicegatesvariedfrom40,000to125,000MKper
ha. The cost also depends greatly on the length of the dike adjacent to the river and the number of
sluice gates. The number of abnormal tides and cyclones increased the maintenance cost for all farm
types.
Withinoursample,66%ofthefarmspresentedpositiveeconomicresultsand40%ofthefarmssuffered
from severe mortality of P. monodon with yields below 30 kg per ha. On those farms, other prawns,
crabs and fish harvested can be crucial for the farm economy. Other aquatic animals harvested can
representupto80%oftherevenueprovidedbyP.monodon,particularlyinMyebonorKyaukpyuwhere
Metapenaeussp.yieldwashigh.Morethan50%ofthefarmswereindebttolocalcollectorsormoney
lenders,withamountsvaryingfrom0.2to12millionMK.
Largescalelandownerfarmsareoperatedbyseverallandownerscombiningtheirinvestmentcapacity
toincreasethecultivatedarea.Thestockingdensityonsuchfarmsishigherthanonsmallholderfarms,
withahighercostpersurfaceunit.Theirlaborcostislowercomparedtosmallholdersduetoalower
number of employees per hectare and a lower salary paid to laborers compared to private investor
farms.Transportationcostsarehigherwhenmarketingofprawnsisdoneindifferentvillagesorinthe
20

township center. However, the total cost per hectare is similar to smaller farms and these largescale
farms differ mostly by their size, with their total cost being 3.5 times higher because of the size
difference.Otherprawnspeciesharvestedcanrepresent30%to90%oftherevenuefromP.monodon.
Withinoursample,30%ofthefarmswereaffectedbyseverelossin2011and50%ofthefarmswere
noteconomicallysustainablebasedonlyonP.monodonculture.Farmerswereindebtfor3to12million
MK.

RepartitionoftheTotalcostforsmalland
mediumscalefarmers

RepartitionoftheTotalcostforLarge
landowners

Depreciation
1%

Depreciation
3%
Postlarvae
13%

Post
larvae
26%

Dike
maintenance

62%

Dike
maintenance
46%

Labor
21%

Labor
24%

Transportation

Taxes 0%
1%

Transportation
2%

Taxes
1%

RepartitionoftheTotalcostforPrivate
investor
Depreciation
5%

Dike
maintenance
27%

Postlarvae
29%

Taxes
2%

Labor
22%

Transportation

15%

Figure3:Repartitionofthetotalcostforthedifferentfarmtypes

21

Privateinvestorsoperatinglargefarmsreceivethebesteconomicresultscomparedtootherfarmtypes.
However,theseresultsarebasedonaverysmallsample(3)includingrelativelysuccessfulfarms(2)and
areonlyindicative.Onefarmwassuccessfulwithhigherinvestmentinpondmanagementandstocking
density, while other farms presented lower financial results. These large, private farms have higher
operating costs with higher stocking densities and labor costs, counting for 29% and 22% of the total
costrespectively.Thecostfordikemaintenancevariesgreatlyaccordingtotheequipmentused(wage
labororbulldozers),from40,000MK/hatomorethan135,000MK/haandrepresented27%ofthetotal
costonaverage.Comparedtootherfarmtypes,thetransportationcosttotradersintownisestimated
to be 15% of their total cost. Farm revenue from P. monodon is important for private investors
comparedtootherfarmsduetohigherproductionperhectare(upto200kg/ha),butaccordingtoour
sample,variabilityisgreatandlossescanbesubstantialgiventhelargerareacultivated.Ofthe3farms
visited, 1 presented negative economic results with reduced investment and reduced farmed area
comparedtothepreviousyears,while2otherfarmsweresuccessfulandshowedhigherinvestmentin
landpreparation,dikemaintenanceandhigherstockingdensities.

Theeconomicresultsrelatedtotheseextensivesystemsshowthatmostoftheirinvestmentisfordike
maintenance and wage labor and that little investment is for inputs and pond preparation. The farms
alsorelyonotheraquaticresourcesfortheirfinancialsustainability.Otherprawns,crabsandfishactas
a safety net for small and mediumscale famers. However, most for these farms are highly in debt,
whichexplainsthehighnumberofabandonedpondsinthestudyarea.
Mostfarmersfocustheirinvestmentondikemaintenance,sincethedikesandsluicegatesaredamaged
by high tides and storms. The financial capacity of the farms is limited and farmers lack the ability to
investinstockingPLsorinadditionalinputstoimprovethepondandwaterquality.Tomaintainthedike
system,farmersareforcedtocontractloansfromlocalcollectors.

3.3.CASHADVANCE&LOANSYSTEM

Farmers do not have access to formal loans from the Myanmar Livestock and Fisheries Development
Bankandareforcedtouseinformalcredit.Inpractice,thebankdoesnotacceptprawnfarmlandtitles
or land lease contracts as collateral. Prawn farmers have to take out informal loans from the private
sector.Tradersandcollectorsarethemainloanproviderstoprawnfarmers.Loansvaryfrom0.2to12
million MK (for small and mediumscale land holders), without interest. The loans are provided to
farmersinexchangeforlowersalepricesandfortheobligationtoselltheprawnharvesttothecollector
or trader. The terms of the loans are based on the growout period, ranging from 4 to 6 months. In
prawn monoculture systems, cash advances can happen several times per year, with partial or total

22

reimbursementbeforeeachadditionaladvance.Atthevillagelevel,farmerscantakeoutasecondloan
fromcollectorswhencropsfail.
Farmerscanaccumulatedebtstocollectors,buttheyalsoneedloansfromlocalmoneylenders(3%with
gold collateral or 10% without collateral) or they need to accept new shareholders to cover the
investmentneededforcrops.Toillustratetheamountofmoneyowedbyprawnfarmers,inonevillage
in Myebon, all prawn farmers are in debt (between 1 and 12 million) and obliged to pay up to 2%
interestpermonth.
Largertradersalsoprovideloansoradvancepaymentstoprivateinvestors.Inthesecases,theloanscan
beover100millionMK.Inthesecases,thereisnoyearlyreimbursement,butfarmersmustagreetosell
theirfullyieldtotheloanprovider.

3.4.LANDACCESS

Land tenure was not investigated during this study. However, it seems to be an important factor for
investment in prawn pond maintenance and operation. Small holders and villagebased farmers have
the use of their rights, but land tenure is more complex for private investors operating large farms.
Theselargeprawnfarmswereestablishedonreclaimedmangrovelandduringtheprawnexpansionand
inmostcasestherearenolandtitles.
Land tenure is not secure and investors lease5 the land for short periods of 1 to 3 years. Therefore,
farmersinvestingintheselandleasescannotinvestinimprovingembankmentsordikesduetotheshort
periodoftheleases.AccordingtothepresidentofthePrawnFarmerAssociationinSittwe,thissituation
affects 90% of the ponds in the northern part of Rakhine State, including northern Rakhine State but
alsotheSittweandPauktawareas.Insouthernareas,theproportionofleasedlandislowerandmore
localvillagersareinvolvedinprawnfarming.

Leasevariesfrom5,000MKto50,000MKperacreandperyear.

23


MaincharacteristicsofproductionsystemsaresummarizedinTable5.
Table5:Keyfactsaboutprawnproductionsystemsinthestudyarea

Prawnproductionsystems,Keyfacts
Production
3maintypesofprawnfarmsdifferentiatedbytheirsize:i)smallmedium
systems
sized(<20ha);ii)largelandowners(2050ha)andiii)privateinvestors(50
215ha)
Similartechniquesused,withlowinputsandstockingdensity
HighrelianceonwildPLstrappedintheponds
ApriltoAugustisthepeakproductionseason
Economicresults
Highcostoflaboraswellasdikeandsluicegatemaintenanceforsmalland
mediumscalefarms
Lowerlabourcostforlargerscalefarmsduetoalowerratioofpeopleper
hectare
Highproductioncostforprivateinvestorsduetohigherinvestmentin
equipment,inputsandadditionaltransportationcosts
Otheraquaticorganismsharvestedinponds(prawns,crabs,fish)can
representmorethan50%oftherevenueforsmallandmediumscale
farmers
Loans&debts
Mostoftheprawnfarmersareindebttotradersandcollectorsand/or
moneylenders:
Prawnfarmersdonothaveaccesstoformalloans
Prawnfarmerstakecashadvancesfromcollectorsandtradersto
financetheiroperationalcost,sometimeswitha2%interestrate
Prawnfarmersaccumulatedebtsandneedtotakeoutloansfrom
moneylenderswithinterest(3%)

24

4.Prawnvaluechain

4.1.DESCRIPTIONOFTHEVALUECHAINANDTHEFLOW

IntheP.monodonvaluechain,themainproducttradedandexportedisheadlesschilledprawns.Asmall
percentage of the production is still processed in Kyaukpyu. The production areas are in Myebon,
Mienbia, Pauktaw and Kyaukpyu. However, all production transits through either Sittwe, Minbya or
Kyaukpyu.Mostoftheproduction(around90%)isdestinedforBangladeshandYangon(Figure4).
The peak export season takes place from May to August during the rainy season. The dry season is
characterizedbyalowerexportvolume,andduringthatperiodpricesarehigher.Also,townshipscloser
toBangladesh(Sittwe,Pauktaw,Minbya)haveacomparativeadvantagewhenexportingtoBangladesh.
ExporttoBangladeshtakesdifferentroutes:seaorriverandroadviaMaungtaw.SittweandMaungtaw
aretheofficialbordergates.
The prawn value chain in Rakhine State is characterized by the following actors, who are classified by
theirgeographiclocation:ruralorurban(Figure5).

4.1.1.RuralStakeholders
Producers: small and mediumscale landowners, large landowners and private investors (see
section3).
Collectors:locatedinvillages,theyprovidecashadvancestofarmers.Theyarelinkedtolarger
tradersintownsandofferapricelowerthanthatoftheurbanmarket.Theyinsomecasesretail
PLsatthevillagelevel.
Wild prawn PL collectors: are found mostly in villages on the coast in Sittwe and Pauktaw6,
where villagers collect prawns during the spawning season and sell them to wild postlarvae
depotsinthevillages.
Wild prawn PL depots are located in villages along the coast where prawn postlarvae are
abundant(Sittwe,Pauktaw);somehouseholdscollectthepostlarvaeandstorethemforafew
days(23)tosellthemtoagentsordirectlytofarmers.
WildprawnagentspurchasePLsfromwildprawndepotsandretailthematthevillagelevelto
farmers.
DoFHatcheries(2actuallyinoperationinthestudyarea,3intotalinRakhineState).

InMyebon,collectorsarenotpresentduetothelackofamarketandthedifficultyofsortingthedifferentspeciesofpost
larvaeshrimp.

25

90
90
10

30

10

ToYangon

70

Figure4:EstimatedpercentageofthevolumeflowofP.monodonbetweenSittwe,Myebon,Minbya,Kyaukpyu,Bangladesh
andYangonin2011,basedonkeyinformantinterviews.ValuerepresentsthepercentageofthevolumesenttoSittwe,
Bangladesh(Maungtawbordergate)orYangonforeachtownship.Redarrowsrepresentexportoutsideofthestateand
blackarrowsinterstateflows.

26

4.1.2.Urbanstakeholders:
Traders&exportersoperatesmallscaleenterprises.InSwitte,thereareatotalof45traders,of
differentsizes,withlessthan10tradersthatregularlyexporttoBangladesh.Fourarelocatedin
Myebon, trading with Sittwe or Minbya. Eighty traders operate in Kyaukpyu, but only 10
collectors from Kyaukpyu transport to Yangon or Sittwe depending on the market situation.
Tradersaggregatetheproductionfromdifferentfarmersandcollectorsatthevillagelevel.They
eitherexportdirectlytoYangonortoBangladeshorselltolargertradersinSittweforexport.
Export license holders. Two companies in Sittwe hold a license for exporting prawns to
Bangladesh.Allothertradershavetousethesetwolicensesforexporting.Thesetradersactas
transporters (service providers), charging a transport fee for each box shipped to Bangladesh.
Thetransportersalsotradeandexportprawnsfortheirowncompanies.
PL importers and agents import the PLs from Bangladesh using the exporters means of
transportation and sell the PLs to agents and farmers directly. The importers have a direct
connectionwithagentsand/orhatcheriesinCoxBazaarinBangladesh.

27

PLCatcher

PLImporter

Hatchery

PLAgent

PLAgent

Producer

MultipleActors

Collector

ServiceProviders

Trader

Transporter

Agent
BorderAgent

Processing
Company

Processing
Companyor
Agent

Figure5:SchematicdescriptionoftheprawnvaluechaininRakhineState

28


4.2.POSTLARVAESUPPLYANDSUPPLIERS

AccordingtotheDoF,100millionofPLsperyearareneeded,whiletheproductionfromhatcheriesin
RakhineStateisestimatedat6to10millionPLs,coveringlessthan10%ofthedemand.
PLs stocked in production ponds are purchased from 3 main sources, with different prices and
availabilityonthemarket(Table6):

HatcheryrearedPLsinRakhine;
PLscollectedinriverestuariesandoncoastlines;
ImportedhatcheryrearedPLsfromBangladesh.

Table6:PriceoftheP.monodonpostlarvaeinRakhineState(2012)

P.monodonpostlarvaeprice
HatcheryDoF(Myanmar)
WildPLs

Kyatperpiece
47
718(upto22)

ImportedPLs

37(upto14)

Availability
NovembertoMarch
PeakinSeptemberto
November&MarchtoMay
NovembertoJanuary(2010)

4.2.1.HatcheriesinRakhineState
In 2011, there were 3 operating hatcheries in Rakhine State operated by the DoF: 1 in Sittwe, 1 in
Kyaukpyu and 1 in Maug Taw townships. Another one, located in Pauktaw, was damaged by Cyclone
Giri. Each of these production units can generate about 2 million PLs per year. In Rakhine State
hatcheries,aPCRcheckforvirusesispossibleonhatchedPLsinYangon,butitiscostlyandbroodstock
cannotbetested.
In2012,thehatcheryinSittwehadatargetproductionof5millionPLsperyear,withnewinvestment
allowing production in December, which coincides with the peak demand (see Box 1). The Kyaukpyu
hatchery is actually producing PLs for producers located in other townships, since the demand in
Kyaukpyuislow.Only1.5millionPLswereproducedin2011,whileaproductionof5to10millionPLs
could be reached. The capacity of the hatchery is underutilized due to marketing constraints. The
hatchery can produce PLs only if there is an order from buyers. The transport cost from Kyaukpyu
increasesthepriceto9MKperPLandbuyersarewaryoftheriskscausedbytransport.

29


AccordingtotheDoFthemainreasonsforthelownumberofprivatesectorhatcheriesare:

Highproductioncostduetothecostofelectricpower(diesel)andconcurrenceofimportedand
wildPLs;
Lackofdiseasecontrolequipment;
Lackofknowledgeandcompetenttechnicians.

Thegovernmentwantedtodevelopprivateinvestmentforhatcheriesbuthasbeenunsuccessfulsince
thesemiprivatehatcheryinPauktawstoppedafterCycloneGiri.Asimilarattemptbyprivateinvestors
tohirefacilitiesandstaffwasmadeinMaungtawintheearly2000swithoutsuccess.
Suchinitiativesrequireabasicinvestmentofabout20millionMKandadditionaloperationalcostsof6
to7millionMK,forasimilarannualnetrevenue.However,investorsacknowledgethatmaintenanceis
difficult due to problematic access to equipment and inputs7. Because of Cyclone Giri and the
concurrenceofimportedPLsfromBangladesh,thehatcheryinPauktawstoppedoperating.

Box1:DoFHatcheryinSittwe
The hatchery has been in operation since 1999 and produced 2.63 million PLs in 2011. The target
production is 5 million PLs in 2012, since an improved heating system allows production in winter
(December).
The demand for PLs starts in October/November after the rice harvest in townships and villages that
followariceprawnproductionsystem.ThehatcherycannotproducePLsbeforeNovemberduetolack
ofbroodstockandbadweatherconditions.Accesstobroodstockisstilleasybutthecatchhasdeclined
by50%sinceearly2000.TheproductionusuallystopsinApril,whenwildPLsareabundant.
The operating cost is about 45 million MK to produce 1.86 million PLs. The main cost is the artemia8
representingmorethan2millionMKanddieselwhichrepresents1to1.5millionMK.
The demand for PLs is high and according to the hatchery manager, they could produce and sell 10
millionPLs,becausePLsfromthewildarenotavailableallthetimeandPLsimportedfromBangladesh
areoflowerquality.In20011,thehatcheryhad30regularclients(fromMinbya,MyebonandPauktaw)
andmostofthefarmersorderedthePLsinadvance.

Thesameprivateinvestorestimatedthatproducing20millionPLswouldrequireaninvestmentof40to50millionMKfora
newfacilityandaccesstogoodqualityinputsandequipment.
8
Artemianauplii(larvae)areusedtofeedP.monodonlarvae.

30

4.2.2.WildPLcatchersanddepots
InMyanmar thereisnoenforcedban oncatchingwildPLs.Sincethedemandishigh,thisactivityhas
becomepopularissomecoastalareasofRakhineState,especiallyinSittweandPauktawtownships.

TherearetwomainpeakseasonsforwildPLs,fromSeptembertoNovemberandlaterfromMarchto
May.However,thecatchhasbeendecliningsince2005/2007andfromSeptembertoNovember2011
thenumberofPLscaughtbylocalfishermenwaslow.
Local villagers are catching PLs on the sea shore everyday using push nets or seine nets and they sell
their production to a village depot. In the peak season, these depots trade an average of 80,000 to
100,000 PLs per day. They can store the PLs for a maximum of 23 days in plastic tanks without any
oxygensupply,justbychangingthewaterfrequently.Themaximumcapacityofthedepotvisitedwas
about180,000PLs.

Thedepotvisitedworkedwithamaximumof100catchers.Thedepotprovidesthenet(20,000MK)to
thePLcatcherwhorepaysthecostofthenetoverthecourseoftheseason.Thebuyingpriceis2.5to3
MKperPLandthesalepriceis4to5MKperPLinthepeakseasonandreaches18to22MKperPLin
thelowseason(DecembertoFebruary2012).ThedepotssellthePLstofarmersandagentswhoprovide
advancepayment.

Accordingtothedepotowner,thenumberofPLcatchersislowerthanbeforesincetheactivityisless
profitableandpoorvillagersprefertobeinvolvedinwagelaboractivities.

4.2.3.PLimporters&agents
The DoF estimates that around 20 million PLs are imported per year. The lower production cost in
Bangladesh makes them very attractive on the Myanmar market, especially during the peak demand
period,whenthesupplyfromhatcheriesandwildPLsisinsufficient.
Three different qualities of PLs are available in Bangladesh (3 MK/PL; 2 MK/PL and 0.5 MK/PL).
Accordingtoimporters,anagentinBangladeshchecksthequalityofthePLs(byPCR).Thetransportcost
isestimatedat0.6MKperPL,usingatransportertomovethePLsbetweenBangladeshandMyanmar.
Oneimportercouldimport14MillionPLsinayearandsold60%to3to4agents.Therestofthevolume
ispurchaseddirectlyatthelandingsitebyfarmerswhoorderPLsinadvance.Later,agentsretailthePLs
tofarmersatahigherprice(upto14MK/PL).AgentscanstorethePLsinnurseriesforafewdaysand
sellsmallquantitiestofarmersincludingfarmdelivery.
Inlate2011,theBangladeshigovernmentbannedtheexportofPLsandthevolumeimportedhasnow
been reduced to a minimum, which explains the high price of wild PLs in February 2012 (up to 22
MK/PL)andthedifficultiesfacedbyfarmerswhowanttopurchasePLsforthelatestcrop.

31

In addition to importing PLs from Bangladesh, Myanmar also exports brood stock to Bangladesh to
supplyhatcheries.
Main characteristics of the P. Monodon postlarvae market and accessibility by producers are
summarizedinTable7.
Table7:KeyfactsaboutP.monodonpostlarvaeinthestudyarea

Market
Localhatchery

WildPLs
ImportedPLs

Highdemand(100millionPLs)andlowavailability,resultinginhigherprices
Highproductioncostandlowtechnicalcapacity
Limitedlocalproductioncapacity,coveringlessthan10%ofthedemand
Nomarketaccesstolocalsmallscalefarmers
Decliningcatch
Highpriceinlowseason(dryseasonDecembertoMarch)
Widelyusedin20092011,butnotaccessibleonthemarketanymorein
2012
Lowproductioncostandlowmarketprice
Noqualitycontrolandpotentialinfectionbyviruses.

4.3.PRAWNFARMERS,TERMSANDCONDITIONSFOREXCHANGES

Prawnfarmerscaneitherselltheirproductiontocollectorsatthevillageordirectlytotradersinurban
centers(Sittwe,MyebonorMinbya),accordingtotheirlocationandvolumeofproduction.Largeprivate
investors operating more than 200 ha can export their production, adding it to other shipments to
Bangladesh.Thisrequireshighvolumeandhappensonlyduringthepeakharvestseason.
Small and mediumscale farmers in villages sell their production to local collectors (see section 3.3).
Farmersareusuallyboundtoalocalcollectorthroughcashadvancesprovidedatthebeginningofthe
season to finance embankment and sluice gate maintenance, but they do not have to provide any
collateral. The cash advance is usually without interest, though in some case, when the amount
advancedislarge,2%interestpermonthisapplied.Collectorsfixthebuyingprice,usually500to1,500
MKpervissbelowthemarket(or300to900MKperkg).Also,collectorswerereportedtousedifferent
weightscaleunits,withanestimatelossof5to10%accordingtofarmers.Inaddition,inremotevillages
collectorsemployadifferentgradingsystem,usinginchesinsteadoftheusualgradesapplied.Collectors
sorttheprawnsbysizeandsellthemtotradersusingthecommonlyusedgrades(numberofpiecesper
450g,Appendix6).
Somefamersprefertotakealoanfromalocalmoneylenderwitha3%interestrateinsteadofthecash
advance from the collector. In some cases, the collectors charge the future post harvest loss to the
farmer,with3%oftheweightaddedbutnotpaidbythebuyer.
32

For largescale farmers in contract with traders, the cash advance can be substantial but without
interest. In this case, the traders fix the buying price but no different weight scale system or grading
systemwasreported.

4.4.COLLECTORSATTHEVILLAGELEVEL,TERMSANDCONDITIONSFOREXCHANGES

Collectorsoperatingatthevillagelevelareusuallyprawnfarmersornativefromthevillage.Morethan
one collector usually operates in each village. There are multiple layers of collectors, with a main
collectorcoveringseveralvillageswithdifferentsubcollectors.Villagecollectorstradebetween500kg
to 5 tons during the peak season. The necessary equipment consists of little more than 6 to 10
containers,weightscalesandfewseasonalhiredlaborersduringthepeakperiodofproduction.
Wherecommunicationispoor,informationsparse,andtransportationinadequate,theseintermediaries
performavitalrolegettingprawnsfromdispersedlocationstothenexttradingpoint.Thesemarketing
agentstypicallyoperatethroughlending.Theyobtainfundsfromamarketingagenthigherupthevalue
chain,orfromsomeotherfinancialsource,andlendmoneytothosebelowtheminthechain.
Acollectoratthevillagelevelentersintoacontractwithfarmersandfishermen.Thecontract,whichis
informal, includes an advance payment or loan from 0.2 to 2 million MK to finance farmers or
fishermens crops. The investment of the collector can be up to 50 million MK per year, with cash
advancestoasmanyas30farmers.Termsofexchangewithfarmersaredescribedaboveinsection4.3.
Collectorspurchaseprawnsfromfarmersinmixedgrades(atalowpurchaseprice)andsorttheminto
grades before selling them to traders. In some extreme cases, the margin between the buying and
sellingpricewasmorethan2,000MKperviss(1,250MKperkg)accordingtofarmers.
Small collectors are mostly bound to larger collectors or traders in urban centers, as these collectors
providethemwithcashadvances.However,withdecliningyields,collectorsarenowtakingmorerisks
whentheyprovidecashadvances.Severalcaseswherefarmerswereonlypartiallyabletorepaytheir
cashadvanceswereobserved,withonly30%to50%ofthecashadvancereimbursedonaverage.Ina
fewcases,villagecollectorstookoutloansofabout30millionMKperseasonfromlocalmoneylenders.
These loans came with an interest rate of 5 to 10% per month for an average period of 5 months,
corresponding to the duration for a prawn crop. The collectors required these loans to reimburse the
cashadvancestheyreceivedfromtradersandtofinancetheoperationsoffarmers.

33

4.5.TRADERS&EXPORTERS,SMALLSCALE

SmallscaletraderstradeP.monodonandotherseafoodproducts.Thevolumeoftradeisestimatedto
belessthan10metrictonsperyearofP.monodon(for2011)andsomeofthesetradersdonottradeP.
monodonyearround,butonlyinthepeakseasonfromApril/MaytoAugust/September.Theirsupplyis
providedbyfarmers(largescale)orcollectorsdirectlyincontractwiththem.Thetraderprovidescash
advancestofinancethecrop.Onetradercanworkdirectlywitharound80to90farmers.
SmallscaletradersinSittweorPauktawselltheirproductiontolargertradersinthedryseasonwhen
the prices are low in Bangladesh and when the volume of trade is not sufficient to export9. From
Pauktaw,Myebon,andMinbya,themainrouteforprawnexportsintherainyseasonistoBangladesh,
viaSittweandMaungtaw.TheexportersjoinothershipmentstoBangladeshmanagedbytransporters
holding export licenses. In addition to the transport costs and export taxes, the traders must pay the
transporterfortheuseoftheexportlicense(8,000MKpercontaineror100MKperkg).However,this
additionalservicechargeisvariableaccordingtotheexchangerate.Itmayhappenthatthetransporter
doesnotrequireanyservicecharge.
At the border gate in Maungtaw, an agent is in charge of the trade with the Bangladeshi buyers,
resulting in an additional cost of 5,000 MK per box or 62 MK per kg. The agent fixes the price before
shipment.Ifthepricegoesdownduringshipment,thetraderwillsellatthecurrentprice,showingthe
lowbargainingpowerofthetrader.Traderscangetcashadvancesfromtheagentattheborderifthe
agentfixestheprice(lowerthanthemarketprice)beforethetransaction.Thispracticeisnotcommon
amongtraders.

4.6.TRADERS&EXPORTER,LARGESCALE

4.6.1.Characteristics
Largescaletradersoperateallyearround.Theirmainactivity,tradingP.monodon,occursmainlyfrom
April to October during spring and nip tides. They also trade other prawn species for the domestic
marketandfishes.Tradersdonotprocess10theproducts;theypurchasetheheadlessprawns.Sorting
eachpurchasebygrade,cleaning,weighingandpackagingchilledheadlessprawns11incoolerboxesare
their main activities. Traders in each township use different trade routes and trade different volumes
(Table8).

Sellingtolargerlocaltradersismoreprofitableforsmallscaletraderssincetheycannotpurchaseenoughvolumetolowerthe
transportationcosttosellineitherBangladeshorYangon.
10
Inthisreportprocessingisdefinedascleaning,freezingandpackagingfortheexportmarket,notjustsortingandchilling.
11
Allvolumesandweightsareexpressedforheadlessshrimp.

34


Table8:Destinationandspeciestradedinthedifferenttownships(source:keyinformantsandtraderinterviews)

Collectorsand
smallscale
traders
TraderExporter
Species

Destination
ofP.monodon
Destinationof
otherprawns
OriginofP.
monodon
a

Sittwe
45a

Pauktaw
60b

Myebon
200b

Kyaukpyu
70a

10
P.monodon
Metapeneaussp.
(P.merguiensis)
(P.indicus)
Fish
Bangladesh(90%)
Yangon(10%)

20
P.monodon
Metapeneaussp.
(P.merguiensis)
(P.indicus)
Fish
Sittweand
Bangladesh

10
P.monodon
Metapeneaussp.
P.merguiensis
(P.indicus)
Fish
Yangon(70%);
Sittwe(30%)

Yangon(100%)

Yangon(100%)

4
P.monodon
Metapeneaussp.
(P.merguiensis)
(P.indicus)
Fish
Sittwe,Minbya,
Kyaukpyuor
Yangon
Yangon(100%)

>75%Aquaculture

>80%Aquaculture

>90%Aquaculture

60%Aquaculture
40%Capture

Yangon(100%)

:includesonlysmallscaletradersbasedintowns
:includesbothvillagecollectorsandsmallscaletraders

InSittwe,mostoftheP.monodonisexportedtoBangladeshduetotheproximityoftheborder.There
aretwoexportlicenseholders.OnlyinKyaukpyuisthepercentageofcapturefisheriesmoreimportant.
Otherwise,mostoftheproductioncomesfromextensiveaquacultureponds.Severalprawnspeciesare
traded,butonlyP.monodonisexported.Otherspeciesaretradedforthedomesticmarket.
Thereare6maingradesforP.monodontrading,basedonheadlessprawnweight(Table9andAppendix
6).Agradeisgenerallydeterminedbyspecies,andthesizeandappearanceoftheprawnthemarket
priceisdeterminedbythesefactors.

Table9:Differentgradesforprawntrading

Grade
Grade0
Grade1
Grade2
Grade3
Grade4
Grade5

Characteristics
Lessthan8prawnsper450gr
812prawnsper450gr
1315prawnsper450gr
1620prawnsper450gr
2130prawnsper450gr
3150prawnsper450gr

35

InSittwe,MyebonandPauktaw,morethan50%ofthevolumeisofgrade3and4intherainyseason
(peakseason),whilegrades1and2representlessthan30%.Inthedryseason,thevolumeofgrade4
and 5 prawns is more important, with grade 5 prawns dominating the market (more than 50% of the
volume)insomecases.
Incontrast,inKyaukpyugrade1and2prawnsdominatethemarket,accountingformorethan50%of
thevolumetraded.Thisdifferencemightbeduetomarketrequirements.Kyaukpyutradesmostlywith
Yangon processing factories, which seek the largest sized prawns for the export market, while the
Bangladeshimarketislessdemanding.
4.6.2.Operations
Sorting,weightingandpackagingtheproducthappeninawarehouseoftenlocatedwithinthetraders
house. Material is limited, with only cool boxes or containers used for transport, weight scales and
basketstosorttheprawns,andanicecrushingmachine.Theprawnsarenotprocessed,butpackagedin
the boxes with ice for transport. In Myebon, some traders also operate a smallscale ice processing
factorytoreducethecostoficeandavoidanyshortageinthepeakseason.
Prawnsarereceivedalreadyprocessed(headless)sothattheycanbekeptwithoutspoilageforalonger
period. Traders employ permanent workers and additional seasonal workers during the peak period.
Most of the workers for sorting the prawns are women. Their monthly salaries vary from 25,000 to
50,000MKaccordingtotheirlocationandtheirskillsandresponsibilities.
4.6.3.Volumeandseason
The peak season for trading P. monodon varies slightly between townships. In Sittwe, Myebon and
Pauktaw, June to August is the main season, while in Kyaukpyu the season extends to September or
October.ThedryseasonfromDecembertoMarchisconsideredthelowseasonforprawntradingand
thevolumetradeatthistimeisestimatedtobe4to5timeslower.Capturefisheryproductionisalso
moreimportantatthattimeoftheyear,especiallyinKyaukpyu.
Thepeakoftradingfollowsthelunarcyclewithahighvolumeoftradeduringthespringtide(fullmoon)
and a lower volume during the nip tide. The supply follows a very regular and predictable cycle and
traders have to deal with a large volume of highly perishable material over a few days. The main
characteristicsofthetradersvisitedaresummarizedinTable10.
Otherprawnspecies,probablyP.merguiensisandP.indicus(locallycalledwhite)orMetapenaeussp.
(pink)representanonnegligiblevolume.Thevolumeofwhiteprawnstradedisonaverage50%to
75% lower than P. monodon, while pink prawn trade is similar to that of P. monodon in terms of
volume. However, the selling price of white and pink prawns is 1,500 to 2,500 MK per viss.The other
prawnspeciesarenotexportedtoBangladeshatanytimeoftheyearandalltheproductionissentto
Yangon.However,thedemandcanbeverylow(1,500MKperviss)inthepeakseason(ApriltoAugust)
andthepricescandrop.Producersandtradersarenottargetingtheseotherspecies.

36

Table10:Characteristicsoflargeprawntraderstrader(n=9)

TradersCharacteristics
Volumetradepertide(visspertide)
EstimatedvolumeofP.monodontradeper
year(metrictons)
Numberofpermanentworker(person)
Maximumstoragecapacity(metrictons)
Durationofstorage(days)
Postharvestloss
Numberofcollectors&farmersincontract

Range
1,0006,000
1248
8to21
2to8tons
2to4days
1%to3%
20to100collectors
10to100farmers

ThevolumespresentedinTable10arebasedon2011results,whichwereconsideredtobethelowest
overtheprevious10yearsbyallthetradersinterviewed.Thedropintradevolumewasestimatedtobe
40%to60%bytraders.
4.6.4.Qualityandpostharvestloss
The main criterion that determines the grade and price of prawns is their size. After storage and
transport, the main criterion is the quality of the shell. A soft shell prawn, due to poor storage and
transportconditions,willbedowngraded.Theweightlostandspoilageisconsideredtobe1%to3%of
thevolume.Theseproductsaredowngradedby10%to15%oftheprice.
The loss incurred because of transport is negligible in the case of direct processing in Kyaukpyu, but
higherinthecaseofexportbyboatandroadtoBangladesh(throughMaungTaw)orYangon,withthe
differentdistancesresultinginalossestimatedat3%fromKyaukpyuand10%fromSittwe.
4.6.5.Supplyandcashadvances
Traders are dependent on their collectors and farmers for the supply of P. monodon. Since transport
costsarehigh,aminimumvolumepershipmentisnecessary12.Inorderfortraderstoensurearegular
supplyofprawns,theyprovideloanstocollectorsandfarmers(Figure6).
The collectors and farmers involved in the loan scheme must sell their prawns exclusively to their
creditors.Thenumberofcollectorsandfarmerswhohaveloanswithtradersvarieswidely,depending
ontheinvestmentcapacityofthetrader.However,inallcases,thisnumberisnowdecreasingdueto
lack of investment capacity and a low reimbursement rate, sometimes lower than 50% (some traders
reportedhavingaslittleas30%oftheirloanreimbursed).

12

Forexample,anindividualtraderwillshipaminimumof20boxestoBangladesh(1.6metrictons)andthetotalshipmentwill
groupdifferenttradersforatotalof200boxes(16metrictons).

37

Agents

Moneylenders

Traders

20to100collectors

10to100farmers
0.1to20millionMK

Moneylenders

Collectors
Smalltraders

Upto90farmers
Upto12millionMK

Upto30farmers
0.2to2millionMK

Collectors

Moneylenders
Farmers

Figure6:Informalloansystemintheprawnvaluechain.Dashedarrowsrepresentunusualinteractions.Solidarrows
representcommoninteractionsbetweenactors.

According to one trader, the maximum acceptable loss on a cash advance is 40%. The informal loan
systemcanbeseenasapyramidalstructurewithtradersandagentsatthetop,providingcashadvances
tocollectorsandfarmersonthelowertiers.
38

The loans or cash advances provided are between 0.1 and 20 million MK. In exchange, the collectors
agreetoselltheirprawnsatafixedpricetothetrader.Thecashadvanceisusuallyprovidedduringthe
dry season and reimbursed during the rainy season when most of the volume is traded. There is no
interest on this cash advance, according to traders. One trader explained that if a collector sells to
anothertrader,hewillchargethatcollector2%interestonhiscashadvance.Asmallpercentageofthe
repaymentismadeduringeachtransactionaccordingtothetraders.Thecollectorhastheopportunity
toselltoanotherlargetraderbutnotoften.Ifcollectorsdonotselloftenenoughtheproducttotrader
theyareincontractwith,thecontractisbrokenandthecollectorhastoreimbursehisloan.Forevery
tide(orharvestperiod)thecollectorshavetoselltheirprawnsatleastonceortwicetothetraderto
whomtheyareindebt.
Fortraders,cashadvancestoensurethesupplyoftheirproductionarebecomingincreasinglyimportant
every year. According to traders in Kyaukpyu, cash advances provide 70% of the trade volume and
without this cash advance, collectors would sell to other traders. Some traders in Sittwe or Myebon
explainedthattheyadjusttheirpriceaccordingtothemarketinsteadoffixingalowerprice.Theydoso
to ensure collectors supply a certain volume because traders require a minimum volume to export
(estimatedtobe20boxes).
However, with the drop in production in recent years, the reimbursement rate has declined and cash
advancesareaccumulating.Onetraderhasinvestedmorethan50millionMKincashadvancesoverthe
past3years,andhasnowaytorecoverthisinvestmentandmighthavetoscaledownhisoperations.
This problem was exacerbated by Cyclone Giri, with farmers requiring extra loans to repair their
embankmentsandsluicegatesafterthecyclone.Withdecliningyields,farmerscannotrepaytheirloans
andprefertoabandontheponds.Accordingtotraders,thesystemwasfunctioningwelluntilthearea
was hit by cyclones. When the yield was high and stable, farmers were able to reimburse their loans
everyyearbeforereceivingnewcashadvances.

4.6.6.Termsofexchangeswithbuyers:trustandlinkages
ThesellingpriceinYangonandBangladeshdeterminesthedestinationoftheprawnharvest.Iftheprice
differencebetweenprocessingfactoriesinBangladeshandYangonisgreaterthan1,5002,000MKper
viss (in favor of Bangladesh), the trader will sell to Bangladesh. Also, traders prefer to sell largesized
prawns(grade0)toYangonsincethisgradeisdoesnotexistinBangladesh.
ExportingtoBangladeshorsellingtoYangonrequiresanotherintermediaryinmostcases,withagents
based atthebordergate orinYangon.Theseagentstake acommissionbasedonthevolume(500to
1,000 MK per viss). Some large traders have one employee negotiating the trade with the processing
companyeitherinYangonorBangladesh.
However,tradingwithBangladeshwasreportedtobemoredifficultthanwithYangonbecauseoflower
bargainingpower.Whendemandislow,buyersinBangladeshregradeandcontroltheentireshipment
39

ratherthanjustasample,whichisthepracticeofYangonprocessingcompanies.Theregradingofthe
volumeresultsinapostharvestvaluelossestimatedat2%to10%bytraders.Tradersalsoclaimedthat
Bangladeshi agents and processing companies used unfair practices such as using analogical weight
scales, while transactions with Yangon were more transparent and digital weight scales were used.
ThereisalackoftrustbetweenexportersandBangladeshibuyers.TheYangonmarketisseenasamore
trustedandreliablemarket.
Traders can ask for cash advances from agents in Bangladesh (up to 10 million MK, without interest).
Theymayrequestsuchadvancesduringthepeakseason,inJulyAugust,tosecurethecashflowtopay
the collectors. Otherwise traders prefer not to receive cash advances from importers in Bangladesh,
sincethepricesfortheirprawnyieldarethenfixedinadvancebytheagents.
One advantage to trading with Bangladesh is the payment schedule, which is faster in Bangladesh (4
days1week)comparedtoYangon(morethan2weeks).Therefore,traderssellingtheirproductionto
Yangonprefertouseanagentwhowillpayimmediatelyafterthetransactionratherthansellingitto
thecompanydirectly.Eveniftheagentchargesafeeof100MKperviss,theabsenceofadelayinthe
transactionisanimportantfactortoensurecashflowandcashavailability,especiallyduringthepeak
season.
ThechoicetoexporttoBangladeshalsodependsontheexchangerate.Alargepartoftheexporters
and traders profit depends on the exchange rate between MK and USD or Bangladeshi Taka. The
exchangerateisimportanttoboththetradersandtransporters.Onetraderalsoexplainedthatalarge
partoftheirprofitcomesfromsortingtheprawnsbygradebetweenpurchasingthemandsellingthem.
Informationabouttheseasonalityof productionandtradingroutesaswellasthetermsofexchanges
betweenstakeholderswithinthevaluechainaresummarizedintheTables11and12.

40


Table11:Summarytableofpeakproduction,destinationofproduct,demandandpricesforP.monodonandpostlarvae
availability

PeakproductioninRakhine
Highprices&demandin
Bangladesh
Highprices&demandin
Yangon
ProductioninSittwe,Pauktaw
andMyebon

ProductioninKyaukpyu

WildPLsavailability
(peakperiod)
PLsavailabilityfromlocal
hatcheries
ImportedPLs

Jan

Feb

Mar

Apr

May

Jun

July

Aug

Sept

Oct

Nov

Dec

P.monodon exportedtoBangladeshviaSittweb
MoreP.
More P.monodon
monodon
OtherprawnssoldtoYangon
soldtoYangona
soldto
Yangona
MoreP.monodon soldto
MoreP.monodon exported
MoreP.monodon soldto
Yangonsellinggrade1
toBangladeshviaSittweif
Yangonsellinggrade1mostly
mostly
pricesarehigh
Otherprawnspeciessoldto
Yangon
Otherprawnspeciessoldto Otherprawnspeciessoldto
Yangon
Yangon

a:differenceofmarketpricebetweenYangonandBangladeshlowerthan1,500MKperviss
b:differenceofmarketpricebetweenYangonandBangladeshhigherthan1,500MKperviss(infavorofBangladesh)

41

Table12:Summaryoftermsofexchangesbetweenstakeholersinthevaluechain

Collector

Small&
largescale
trader

Exporter

Agent

Farmer
Cashadvance(0.2to2million
Mk);fixedpriceslowerthan
marketprices(500to1,500Mk
perviss)andinterestrate(2%)
Unfairweightingpractices
Lowbargainingpowerfor
farmers
Cashadvanceandfixedprices
lowerthanmarketprices
Lowbargainingpowerfor
farmers
Gradingsystemdifferentthan
marketinKyaukpyu
Interactdirectlyonlywith
privateinvestorfarmtype.
Exporterprovidestheexport
licensewithaservicefee(100
MKperkgexported)and
transportstheproducttoan
agentinBangladesh

Collector

Small&largescaleTrader

Cashadvance(0.1 20million
MK)withoutinterestbut
collectorshavetoselltothe
sametradersfromwhomthey
receivedanadvance
Gradingsystemdifferentthan
marketinKyaukpyu
Exporterprovides theexport
licensewithaservicefee(100
MKperkgexported)and
transportstheproducttoan
agentinBangladesh

Exporterprovidesthe export
licensewithaservicefee(100
MKperkgexported)and
transporttheproducttoan
agentinBangladesh

Agentnegotiatestransaction
withtheprocessingcompany.
Agentchargesservicefee
relativetothevolumeoftrade
(around62MKperkg)
Agentcanprovidecash
advancetotraders(10million
MK)

42

4.7.TRANSPORTANDROUTES

ThemaincharacteristicsofthedifferentroutesarepresentedinTable13.Sittweisthehubforallthe
prawnsexportedtoBangladesh,whilethosecollectedinKyaukpyuaremostlysenttoYangon.
Tradersdonotownanytransportequipment,butpayserviceproviderstotransporttheirproductionto
BangladeshorYangon.
Table13:Durationandtypeoftransportationforthemaintraderoutes

Destination
ToYangonfrom:
Sittwe
Kyaukpyu

ToBangladesh
ViaMaungtaw
BySea
Informal

ToSittwefrom:
Myebon
Pauktaw
Kyaukpyu

Duration

60hours
40hours

2days
<15hours
812hours

45hours
23hours
34hours

Typeoftransportation

Bytruckroad.Mostlyindryseason
Bytruckroad

Byboatandtruck
ByBoat
Byboat

Byboat
Byboat
Byboat(speedboat)

4.7.1.ExportingtoYangon
TransporttoYangonfromSittwehappensmostlyinthedryseasonwhenpricesarehighinYangonand
the demand is lower in Bangladesh. In the dry season, the price difference between Bangladesh and
Yangonisloweraccordingtotraders,withsimilarpricesorapricedifferencelowerthan1,000to1,500
MKperviss(infavorofBangladesh)andtheYangonmarketcanappeartobeamoreprofitablemarket,
withfairerpracticesandhigherbargainingpowerfortraders.Inaddition,poorroadconditions,lossdue
to road hazards (landslides) and delays in transportation limit transportation of yields from Sittwe to
Yangon in the rainy season. The postharvest loss is high; up to 5% to 10% of the volume has to be
downgraded. The postharvest loss during the dry season also higher because of the low supply and
increased storageperiod(2to3days) neededtoreachthecriticalvolumetotransporttothecapital.
FromMyebon,itispossibletosendtheproductiontoYangon,viaSittweorTaungaut.
From Kyaukpyu, transport to Yangon takes less than 2 days (40 hours) since the road has been
rehabilitated.FortradersinKyaukpyu,thechoiceofYangonisduetothemarketstructure.Residentsdo
nothavedirectaccesstoprocessingcompaniesinBangladesh.ShipmentshavetotransitviaSittweto
reachBangladesh,withadditionalfeesforthedifferentintermediaries(transportersandagents).
43


4.7.2.ExporttoBangladesh
Intherainyseason,atthepeakofprawnproduction,tradersshiptheirproductiontoBangladeshdueto
higherpricescomparedtoYangon.AllproductionshippedtoBangladeshtransitsthroughSittwe.
ExporttoBangladeshcanbedoneby3routes:

FormalandlegalroutebyboatuntilBouthidaungandroadtothebordergate(Maungtaw).This
routerequiresmoreeffortand moretime, loading andunloadingthe shipmentfrom boatsto
trucksandtimewastedatthebordergateforadministrativeformalities;
Formal and legal route by boat directly to Bangladesh with a stop at the export border check
nearSittwe.Thisrouteisfasterthanthepreviousoneandlesscostlyintermsoflabor;
Informalroute,byboatfromSittwedirectlytoBangladesh.

ExporttoBangladeshisdoneviaatransporterholdinganexportlicenseprovidedbythegovernment
ofMyanmar.InSittwe,2companiescanexportproductstoBangladesh.
Thetransporterorganizesthetransporttothebordergateandchargesatransportfeeinadditiontoa
service charge, which includes the export tax. The transporter regroups shipments from different
traders(5to10)toreducethetransportcost.Insomecases,thetransportercanarrangetoregroup
theproductionofseverallargescalefarmers.OneshipmentfromSittwetoBangladeshisaminimumof
200boxes(16metrictons)andasingletraderwillshipaminimumof20boxes(1.6metrictons).
At the border or in Bangladesh, the traders either finalize transactions directly with the processing
companys agent or with a free agent. The agent will be paid according to the trade volume. A few
tradershavetheirownagentbasedatthebordertosupervisethetransactionandtheweighingofthe
shipment.

4.7.3.Choiceoftransportroutes
InKyaukpyu,before2009,90%ofthevolumewassenttoSittweduetoabetterexchangerate(USD)
and higher profit. Traders redirected their shipments to Yangon due to better prices and better
transportation. In the rainy season, when the price difference is significant and Bangladesh is a more
profitabledestination,tradersshiptheirproductiontoBangladesh.
ForexporttoBangladesh,whichrepresentsmorethan90%ofthemarketforSittwetraders,thechoice
ofrouteschangedrecently(September2011)duetothereductionoftheexporttaxfrom10%to2%.
According to one trader, the informal route represented around 80% of the trade volume, while now
80% of the volume is going through the legal route, due to the tax reduction. Underweighing at the
bordergatetoreducetheexporttaxwasalsoreportedasacommonpractice.However,thisestimation
was obtained in the dry season, when the trade volumes are low. In addition, the choice of route to
44

Bangladesh, via boat or boat and truck, depends on the weather. The informal route requires good
weatherconditions.
Thedecisiontoexportorselllocallyandthechoiceofroutealsodependsontheexchangeratebetween
currenciesandthevalueoftheexportearnings.Whenthevalueofthoseexportearningsishigh,the
exportlicenseholderwillnotchargeanyadditionalcost,butwillbewillingtoexportandgainforeign
currencythathasahighvalueonthedomesticmarket.

4.7.4.Transportcosts
Transportcostsincludethecostoftransportationandtheformalandinformalfeesrequiredforaboxof
50viss(80kg).ThedifferentcostsaresummarizedinTable14.
Table14:Transportcostsfordifferentroutes(80kgofheadlessprawns1container)

Transportation*
Ice
ExportTax(2%)
TradeTax

TotalMK/kg
TotalMK/box

Bangladesh
(Sea)

10,000to15,000
3,000to5,000
8,000

262to350
21,000to28,000

Bangladesh
(informal)

10,000to15,000
3,000to5,000

162to250
13,000to20,000

Yangon
(fromSittwe)

20,000to25,000
5,000to7,000

9,900**

436to524
34,900to41,900

Yangon
(fromKyaukpyu)

12,000to13,000
3,000

9,900**

311to323
24,900to25,900

*theservicefeeofthetransporter,whichvariesaccordingtotheexchangerateandcanbenullinsomecases.
**tradetaxis198Mk/viss,whichisataxtotransportP.monodonoutsideRakhineState.

Exporting through Maungtaw costs an additional 10,000 MK per box due to higher labor costs for
loading and unloading the boat and truck. Transportation from Myebon costs an additional 10,000 to
15,000 per box and from Pauktaw 11,000 MK per box via public transportation (including the cost of
returning the boxes). Shipping production from Kyaukpyu to Sittwe costs an additional 7,000 per box.
ExportingtoYangonfromMyebon(viaSittweorTaungaut)costsbetween30,000to40,000MKperbox.

ExportingtoYangonviaSittweisnotcosteffective,withmostofthecostduetodistance.Transportto
Yangon via Kyaukpyu is comparable to the export cost to Bangladesh via the formal route. Export to
Bangladeshvariesgreatly accordingtotheroute,formalor informal,witha differenceof about8,000
MK per box. However, the cost of transport to Bangladesh was difficult to estimate since it varies
accordingtotheservicefeeappliedbythetransporter,whichcanbeashighas8,500MKperboxornull
dependingontheexchangerate.
Inaddition,theexporttaxcanbereducedinthecaseoftheformalroute,sinceunderreportingofthe
volumeexportedisacommonpractice.Thisarrangementleadstoinformaltaxesattheborder,which
45

wedidnotestimate,aswellasotherinformalcostsalongthetransportationroutes,whichcanalsobe
significant.However,informaltaxesalongtherouteareincludedinthetransportationcostandcovered
bythetransporter.
InformalroutestoBangladeshseemlesscostly,buttheirpricedoesnotincludetheinformalfeesthat
mightberequired(coveredbythetransporter),andnowthattheexporttaxhasbeenreducedtheprice
differenceisnotasimportantasitwasbefore.
Asimilartransportcostisapplicabletootherprawnspecies.Alltheproductionis senttoYangonand
there is no export of Metapenaeus sp. and Penaeus indicus to Bangladesh. The only difference in the
transportcostforspeciesotherthanP.monodonisalowertradetax(totransportoutsideofRakhine
State):50MKpervissand100MKpervissforpinkandwhiteprawnsrespectively.
4.8.PROCESSINGFACTORIES

Ofthethree processingfactorieslocatedinSittwe,nonewereoperating atfullcapacity in2011.Only

onethisyearwasoperating,anditwasproducinganegligiblevolume.Withinthestudyarea,theonly
processingfactorystillactiveislocatedinKyaukpyu.
The Asia Golden Prawn Co. Ltd. in Kyaukpyu is a branch of a larger company based in Yangon. They
targethighvalueproductionsuchasgrade0andgrade1P.monodonforexport.P.monodonrepresents
morethan50%ofthevolumeprocessed.OtherspeciesareP.merguiensisandMetapenaeussp.
The collected material is sorted, cleaned, frozen, packaged (1.8 2 kg boxes) and stored before being
senttoYangonforexport.ThecompanypurchasesprawnsdirectlyfromtradersinKyaukpyubutdoes
not provide any cash advances. According to the companys manager, the buying price difference
betweenKyaukpyuandYangonisonly500MKperviss.However,thepricesarenotthatattractiveto
local traders since the company buys prawns following a grading system similar to the one used by
traders (inches). Thus, traders cannot increase their profits by resorting the prawns after purchasing
themfromfarmersorfisherscomparedtosellingtheprawnstheYangonprocessingfactories.
ThefactoryoperatesfromApriltoNovember,butoverthelast4years,thevolumehasdecreaseddue
to competition from Bangladesh, and unfavorable climatic conditions including cyclones, and low
productionvolumes.Thevolumeprocessedeachyeardecreasedfrom500metrictonsin2008to302
metrictonsin2009and284metrictonsin20102011,a40%decreaseofthetradevolumeover3years.
For2012,tothecompanyprojectsthatitwillprocess200metrictons.

46

5.Prices,costsandmarginsalongthemarketingchain

5.1.PRICESALONGTHEMARKETINGCHAIN

Itishardtoestimateeachincrementintheproductionschangingvaluealongthevaluechain.Figure7
presents an example of this change in value for 1 kg of prawns traded from Myebon to Bangladesh.
However,thesepricechangesaresubjecttolargefluctuationsduetotheexchangerate,informalrules
betweenactors,andlocalandinternationalmarketprice.

Producer

Collector

Collector2

Trader

Processing
Factory

Value
(MK/kg)
ValueAdded
(MK/kg)

6,800

7,000

200
Sorting+
transport

7,500

500
Sorting+
transport

8,500

1,000
Sorting+
grading+export

Figure7:Exampleofprice(MK/kg)changesalongthemarketingchainfor1kgofgrade4(2130prawns/450g),froma
producerinMyebontoatraderinSittweandaprocessingcompanyinBangladesh.

During the year, the price varies from 2,000 to 3,500 MK per viss for the same grade. The margin
between the buying and selling price for the trader also varies according to the market demand and
transportationcost,butcanbeestimatedat500to1,000MKperviss.
The margin is optimized with sorting and regrading between buying and selling transactions,
downgrading the product during purchase and upgrading the product for the next transaction. In

47

addition, traders in Kyaukpyu buy the prawns using size classes (3 different classes) and resort them
accordingtothecommonlyusedgrades(Figure8andAppendix6).

Producer

Collector

Trader

Processing
Factory

Value
(MK/kg)
ValueAdded
(MK/kg)

6,875

7,500

625
Sorting+
transport

8,750

1,250
Sorting+
gradingand
transport

Figure8:Exampleofprice(MK/kg)changesalongthemarketingchainfor1kgofgrade4(2130prawns/450g),froma
producerinKyaukpyuvillagetoatraderinKyaukpyutownshipandaprocessingcompanyinYangoninFebruary2012.
Gradesarebasedoninchesfortheproducersandthecollectorsandbasedonweightforthetransactionbetweentraderand
processingcompany.

With such different types of practices, margins are difficult to estimate and remain opaque. Similar
constraintsapplytothemarginsestimatedbyexporterstoBangladesh,whichinsomecasesarebased
only on a favorable exchange rate. The following section investigates the margins along the market
chain,takingintoaccountthedifferentcosts.

5.2.COSTSANDMARGINSALONGTHEMARKETCHAIN

Theintentofthissectionistoanalyzethecostsandprofitmarginsofprawnproducts.Analysisisbased
on different scenarios for a marketable box (80 kg) of 2130 fresh prawns/450 g (Grade 4, the most
common grade in the study area) produced by a smallscale farmer (10 ha) and one scenario with a
farmerbasedinKyaukpyuproducingaboxofgrade1P.monodon(812pieces/450g).
Scenario1:asuccessfulsmallscalefarmerinMyebon(50kgperha)sellinghisproductat10,000MKper
visswith2collectorsandatraderalongthemarketingchain(Table15);
Scenario2:anunsuccesfullfarm,withalowyield(20kgperha)andasellingpriceof11,200MKperviss,
butwithonlyonecollectoralongthemarketingchain.(Table16);

48

Scenario3:asuccesfullfarmer(yieldof50kgperha)withaloanof2millionMKovera5monthperiod
(interestrateof2%)andasellingpriceof11,200MKperviss(Table17);
Scenario4:Averagefarmer(yieldof20kgperha)ofgrade1P.monodonsoldwithaloanof2millionMK
overa5monthperiod(interestrateof2%)andsellingat19,000MKperviss.Thefinaldestinationofthe
productionisYangon(Table18);
In scenarios 1, 2 and 3, the prawns are produced in Myebon and sold to a village collector who sells
themtoasecondcollectorinscenario1orwithonly1collectorinscenarios2and3.Thesecondlocal
collectorsellsthemtoatraderinSittwe,andtheyarelaterexportedtoBangladesh.Onlyscenario4is
basedonaproductionsiteinKyaukpyuinthelowseason(dryseason).TheproductionissoldtoYangon.
Costsincurredbythevariousprawnmarketactorstostore,aggregate,andloadtheprawnsontoatruck
at the landing port and transport them to processing factories in Bangladesh are referred to here as
tradecosts.Thefeespaidbyeachactoratthelandingsite,storagefacilities,andtransportrouteare
presentedasregulatoryfees.
Costs have been divided into two major categories operating costs (transport, ice, labor, and
spoilage/weightloss),anddepreciationofequipment.Thelaterincludesthedepreciationinlongterm
assetsforatleastayear,suchasstorageboxesandotherequipmentandmaterialthatisnecessaryto
operateaprawnbusiness.However,warehouseandlandassetswerenottakenintoaccountbecauseof
the difficulty of estimating those costs and collecting the data. Traders and collectors do no invest in
trucksorboatsforthetransportationoftheirproducts,keepingtheircapitalcoststoaminimum.Inthe
caseofloanscontractedbyfarmers,weaddacapitalcostaccountingfortheinterestrate.
Operating costs (transport, ice, labor, and spoilage) represent the greatest proportion of total costs
(70%to81%)alongthemarketchain.Transportcostsforlocalcollectorsarehighduetotheabsenceof
economiesofscale(largevolumetransported)andtheuseofpublictransportinmostcases.
Spoilageandweightlossreferstothereductioninprawnamount/weightfromthepointofpurchaseto
the point of sale. Due to the approximately 3 to 4 transactions that occur from the origin with the
producer to the processing company (e.g. grading the prawns in the first transaction and loading and
unloadingat eachtransaction) andtopooricingoftheprawns, weight loss and spoilageoccursalong
thetraderoute.Pooricingispartiallyduetoregulatoryfeesthatarecalculatedbasedonthenumberof
boxestransported.Therefore,tradersprefertooverloadtheirboxeswithprawns(80kgpercontainer
onaverageinsteadof6070kgrecommended)andreducetheweightfromice.Ateachtransaction,the
weight loss is estimated at 2% to 3% of the value and an estimated 7% of the value is lost along the
market chain. However, in some cases the local collector already charges the producer for the post
harvestloss,with3%ofthetotalweightaddedduringthetransaction.Thisvolumeaddedisnotpaidby
the collector and is considered a future postharvest loss. When traders move their production to
YangonviaKyaukpyu,theoperating,labor,andtransportcostsaresimilar,butthereislessspoilage(3%,
intotal).
49


Table15:Scenario1,Costandbenefitanalysisforeachactorintheprawnmarketchain(1containerof80kg
Grade4:2030prawns/450g)inMKpercontainer.

Farmers

Village
Collector

VillageCollector Trader/Exporter
2

Buyingpriceorproduction
cost
Sellingprice

300,000

500,000

560,000

624,000

500,000

560,000

624,000

720,000

Grossrevenue

200,000

60,000

64,000

96,000

3,000

21,100

29,240

66,600

Tradecost

Transportcost

5,000

10,000

12,500

Laborcost

2,000

4,000

20,000

Ice

3,000

3,500

4,000

Spoilage

5,600

6,240

21,600

Depreciationof
equipment

5,500

5,500

8,500

500

750

13,658

197,000

38,400

34,010

15,742

69

13

12

Regulatoryfees
Profitmargin
%ofshareprofit
a

3,000

:farmerscanpurchaseiceoritcanbeprovidedbythecollectortheyarecontractedtoworkwith.

Depreciation of equipment is limited (less than 30% of the cost) due to the absence of large
investments in transport vehicles. Traders and collectors outsource transport, thereby avoiding large
capitaloutlaysandinformalfeesalongtraderoutes.Basedonthefieldinterviews,marketactorsmaybe
reluctant to invest in fixed assets such as vehicles because of uncertainties about future business
prospects.

Regulatoryfeesarelimitedforsmallscalecollectors.Thistypeofcostbecomesimportant(17%ofthe
total cost) for traders exporting to Bangladesh. It includes license fees, waste management fees13,
export taxes (2%), regrading at the selling point and agent fees (100 MK per viss) to negotiate the
transaction.Informalfeesthatarepaidalongtheroadorattheborderhavenotbeenestimated.
P. monodon exported to Bangladesh prior to September 2011 was subject to a 10% tax on the value
exported.Thistaxwasreducedto2%andallowsahighernumberofformaltransactions.
MarketingP.monodontoYangonviaKyaukpyuinvolvesasimilarregulatoryfee.Itrepresent19%ofthe
totalcost,comparedto17%whentheprawnsareexportedtoBangladesh.Thedifferenceisduetothe
tradecosttoexportP.monodonoutsideRakhineState(198MKperviss).

13

ThelicensefeepaidtotheDoFis620MKpermetrictontraded.Thewastemanagementfeeinurbancentersisvariable,
from30,000to70,000MKperyear.

50


Inscenario3and4,farmershaveanadditionalCapitalcostduetointerestontheirloansatarateof2%
permonthfora5monthperiod.Thecapitalcostiscalculatedbasedona10hafarmthatrequiresacash
advanceof2millionMK.Inbothcasesthecapitalcostrepresentsasignificantpercentageofthetotal
cost, with 24% and 80% in scenario C and D, respectively. The capital cost does not include the
reimbursementoftheloan,butonlythereimbursementoftheinterest,whichshowshowimportantthe
loanburdencanbeforthefarmeconomy.

Table16:Scenario2,Costandbenefitanalysisforeachactorintheprawnmarketchain(1containerof80kg
Grade4:2030prawns/450g)inMKpercontainer.

Farmers

Buyingpriceorproductioncost
Sellingprice
Grossrevenue
Tradecost

Trader/Exporter

784,000
560,000

VillageCollector
/Smalltrader
560,000
624,000

224,000

64,000

96,000

3,000

29,240

66,600

624,000
720,000

Transportcost

10,000

12,500

Laborcost

4,000

20,000

Ice

3,000

3,500

4,000

Spoilage

6,240

21,600

Depreciationof
equipment

5,500

8,500

750

13,658

227,000

34,010

15,742

68

32

Regulatoryfees
Profitmargin
%ofshareprofit

Profitsalongthemarketchainarehighestforfarmerswhentheyieldisover30kg/haandwhenthereis
an absence of loans, which is not the most common scenario found in Rakhine State. Even when the
productionishigh,withforexampleayieldof50kgperhainScenario3,theshareoftheprofitislower
forfarmersduetointerestpayments,andeconomicsustainabilityofthefarmisdifficulttoreach.Inthe
scenarios we have described, we did not investigate the impact of price fluctuations and used the
averagesellingpriceforgrade4prawnsatthefarmgateinscenario1,2and3.OnlyinScenario4didwe
useadiffferentsituation,withfarmersinKyaukyutargetinggrade1prawns,whichhaveahigherselling
price.Inthiscase,theproductioncostperboxishigherthaninscenario1and3,duetoloweryield,and
theprofitmarginisnegativeforthefarmerduetoloanreimbursement.

51


Table17:Scenario3,Costandbenefitanalysisforeachactorintheprawnmarketchain(1containerof80kg
Grade4:2030prawns/450g)inMKpercontainer.

Farmers

BuyingpriceorProductioncost
Sellingprice
Grossrevenue
Tradecost

Trader/Exporter

392,000
524,960

Village
Collector
/Smalltrader
524,960
624,000

132,960

99,040

96,000

3,000

29,240

66,600

624,000
720,000

Transportcost

10,000

12,500

Laborcost

4,000

20,000

Ice

3,000

3,500

4,000

Spoilage

6,240

21,600

Depreciationof
equipment

5,500

8,500

750

13,658

Capitalcost(loansinterestrate)

32,000

Profitmargin

65,960

69,050

15,742

44

46

10

Regulatoryfees

%ofshareprofit

Theshareofprofitishigherfortheproducersifthenumberofintermediariesissmallerandproducers
selldirectlytolargercollectors.Theshareoftheprofitishighforintermediaries,withahighsharefor
localcollectorsatthevillagelevelandforsmallscaletraders.Theshareoftheprofitisalwayshighfor
the local intermediary between the producer and the trader exporting to Bangladesh or Yangon.
However,inourscenarios,collectorsdonotpayanyinterestontheloansreceivedfromtraders.Also,
theprofitof thetrader, inthecaseof exporttoBangladesh,doesnot includetheprofit madeonthe
exchangerateofforeigncurrency.Theshareoftheprofitmightbehigherforthetraderifthisvariableis
takenintoaccount.

52

Table18:Scenario4,Costandbenefitanalysisforeachactorintheprawnmarketchain(1containerof80kg
Grade1:812prawns/450g)inMKpercontainersenttoYangon.

Farmers

Trader/Exporter

784,000
880,000

Village
Collector
/Smalltrader
880,000
1,000,000

BuyingpriceorProductioncost
Sellingprice
Grossrevenue

96,000

120,000

120,000

Tradecost

3,000

33,000

66,400

1,000,000
1,120,000

Transportcost

10,000

12,500

Laborcost

4,000

20,000

Ice

3,000

3,500

3,000

Spoilage

10,000

22,400

Depreciationof
equipment

5,500

8,500

750

15,558

Capitalcost(loansinterestrate)

80,000

Profitmargin

67,000

86,250

38,042

69

31

Regulatoryfee

%ofshareprofit

Followingthisanalysisoftheprawnsectorlookingatthedifferentactors,costsandmarginsalongthe
valuechain,wedevelopaseriesofscenariosbasedonthemaindriversofthesector.

53

6.ScenariosforfutureprawnaquacultureinRakhineState

Prawnfarmingisinfluencedbydriversthatcanbeclassifiedaslocalorglobal.
Localdriversinclude:
Environmentaldrivers(extremeclimateeventssuchascyclonesandhightides);
Value chain characteristics, including access to knowledge and information, inputs and P.
monodonpostlarvae;
Financiallinksandinteractionbetweenactorsofthevaluechain.

Globaldriversinclude:
InternationalsanctionsonexportsfromMyanmar;
InternationalP.monodonmarketprices;
Exchangerates;
Localandnationalpoliticalsituation.

From these drivers we can create four possible scenarios, depicted in Figure 9. The horizontal axis
represents the Global Drivers in two directions. In the positive direction, there are no international
sanctions, exchange rates are more profitable for exporters, international prices and demand for P.
monodon are high and the national situation is stable enough for stakeholders to invest in the value
chain. The opposite direction represents a situation where international demand is low, international
sanctionareenforcedandinvestorsareunwillingtoinvest.
TheverticalaxisrepresentstheLocalDrivers,withpositivedriverswhentheaccesstoknowledgeand
inputs is improved, extreme climatic events occur less frequently, and the bargaining power between
actors within the market chain is higher. Negative drivers represent a situation where the supply of
inputs and the value chain do not improve and prawn farming is heavily affected by climatic events
(cyclones,hightides).

54

LocalDrivers

GlobalDrivers
GlobalDrivers+

LocalDrivers

Figure9:ScenariologicforthefutureofprawnfarminginRakhineState

FromtheScenarioLogic,4mainscenarioscanbedescribed:
ScenarioA
In this scenario, the international sanctions are lifted and more prawns can be exported via Yangon.
Actorswithinthevaluechaininvestinequipmentandinputs.AccesstoinputsandPLsisimprovedwith
local retailers, private hatcheries and a network of nurseries providing PLs to farmers. Production
systems move toward greater intensification, based on hatcheryreared PLs stocked in smaller
productionunitsandusinginputssuchaslimeandfertilizersforpondandwatermanagement.Mostof
theproductionisnowprocessedinYangon.
ThisscenarioalsoincludestheimpactoftheSpecialEconomicZoneinKyaukpyuandtheincentivesof
thegovernmentforseafoodprocessingcompaniestodeveloptheiractivity.Kyaukpyuwillbecomeone
exportpointforprawns,withprocessingclosetotheproductionareaandreducedtransportcosts.

55

ScenarioB
Inthisscenario,theGlobalDriversarepositive,buttherearenochangesinthevaluechain.Farmersdo
nothaveaccesstoinputsorPLsandproductionsystemsremainextensive,basedonwildPLstrappedin
ponds. Farmers are still affected by climatic events and high tides and have poorly maintained dikes.
Evenifthereishighdemandfromtradersandprocessingcompanies,theinvestmentcapacityoffarmers
islowandproductivityremainslow.

ScenarioC
TheGlobalDriversarenegative,withhightaxrates,noprofitableexchangeratesandlowpricesforP.
monodonon on the international market. Demand for prawns is low and the value chain does not
improve, with continued poor access to inputs and knowledge. Production continues to decline, with
moreabandonpondsandbankruptciesalongthemarketchain.

ScenarioD
In scenario D, Global drivers are also negative, with demand lowered by high taxes and low prices.
However,thesectorisreadyforchange,withpositivelocaldrivers.FarmershaveaccesstoinputsandP.
monodon postlarvae (imported and local) and farmers have better access to information and
knowledge. However, the total production in Rakhine State does not grow significantly and the
productionisexportedtoBangladesh.

TheactualsituationisclosetoScenarioB.,whereproducersandtradersdonotwanttoinvestintheir
pondsduetothelowprofitability.Farmerswithoutsufficientinvestmentcapacityreducethecultivated
areaorabandontheirponds.TomaketheScenarioAhappen,severalchangesneedtooccur.

56

7.Constraints,needsandfutureoptions

Thevaluechainanalysishashighlightedsomefactorsthataccountforthedecliningproductioninareas
affectedbyCycloneGiri.Inthissection,weattempttosummarizethedifferentdifficultiesencountered
by the prawn sector in the region, focusing on the producerlevel, and provide some options for the
future.

7.1PRODUCTIONSYSTEMANDPONDMAINTENANCE

Prawn production systems are extensive, located in large scale ponds, owned by one or more
households.Thereisnoincentivetoimprovesystemsduetoclimatichazardsandabnormaltidesinthe
rainy season. When these threats materialize, the dikes are too shallow and the prawns can migrate
from one pond to another or even escape from the ponds, similar to when strong erosion causes
damagetotheembankments.Therefore,evenlargefarmerswithsufficientinvestmentcapacitydonot
wanttoinvest,astheyareafraidoflosingtheirinvestmentduetoextremeclimaticeventssuchasthose
in recent years. The DoF estimates that 60% of the ponds have damaged embankments. Lack of
investmentcapacityexplainstheincreasingnumberofabandonedponds.Inaddition,privateinvestors
withshorttermsublandleasesdonotwanttoinvestinpondmaintenance.
Theproductionsystemrequiresregularexchangeofwatertotrapwildpostlarvaeintheponds.Thus,
farmersarereluctanttoinvestinfertilizersorinputstoimprovewaterquality.
Aftermorethan10yearsofexploitation,somepondshavesiltedupandtheaveragedepthisshallow
(around30cm)withsomedeeperareas.Thereisnoinvestmentinpondmaintenanceotherthanforthe
dikesandsluicegates.Withlargeproductionunitsofseveralhectares,maintenanceofpondsincreases
thecostoffarming.
Diversificationbasedonotherprawnproductsisprobablynotanoption,sincetherearenohatcheries
forpinkandwhiteprawnsandthelowmarketpricesofthesespecieswillnotsupportdemandfrom
theproducersforhatcheryrearedPLs.

PotentialOptions
Anyproductionsystemsdevelopedshouldrequirelimitedinvestmentandskills.Theinputsusedshould
bekepttoaminimum,withfertilizersandlime.Pondsneedtobemaintainedeveryyear,includingdry
periodsandremovalofsedimentsandaccumulatedorganicmatter.Farmedareashavetobereducedor
57

production units (independent ponds) have to be limited. Actual large production units need to be
dividedintosmallerunitsof2to3hectaresforeasierwaterandinputmanagement.
Inthissystem,waterexchangeswillbelimitedandtheharvestwillbedoneafter3to4monthsatone
time, providing farmers with a production volume that is easier to trade. With a system based on
hatcheryrearedPLs,thenumberofsluicegatesperpondcanbereducedtoone.Allocationoffinancial
resourcescanbedirectedtowardsinputsandpondmanagement.
Over the long term, ponds can be protected from erosion by planting mangroves outside of the
embankments.

7.2ACCESSTOINPUTSANDKNOWLEDGE

Postlarvaearenotavailablewhendemandishigh.ThecapacitytoproducePLsinRakhineStateislow
and the sector relies on illegal imports from Bangladesh and wild PLs. Overfishing of the juveniles by
localcatchers,butalsointensivefishingalongthecoastbytrawlerscapturingbroodstock,contributeto
reducetheavailabilityofwildPLs.
AccesstoPLsisnoteasy.Thereisnovaluechainforthisproduct,withlimitedproductionathatcheries
andatotallackofnurseries.Governmenthatcheriesbasetheirproductiononspecificordersandnoton
overallmarketdemand.Asimilarlackofmarketlinkagesandaccessisfoundforothertypesofinputs
forpondmanagement.
Access to knowledge is limited for farmers in remote areas. For example, stocking techniques are
rudimentaryandarenotcombinedwiththeeradicationofpredatoryfishes.
PotentialOptions
The production systems has to be developed toward improved extensive systems, with stocking of
hatcheryreared PLs, proper eradication of predatory fish before stocking, use of nurseries and pond
preparationforbetterwaterquality.
For example, if in the next 5 years 25% to 50% of the ponds are using hatcheryreared postlarvae
produced locally in private hatcheries, the demand for PLs for the four townships would be
approximately 120 to 240 million PLs (based on a single crop stocked at 2 PLs/m2), representing an
increase of 24 to 48 times of the actual production at present. Realistically such a target cannot be
achievedwithoutsignificantinvestmentsbythegovernmentandprivatesector.
More than the development of local hatcheries, the marketing systems and links between input
providers and producers have to be developed and strengthened. Government hatcheries can play a
role in supporting the sectors development by providing PLs to farmers. However, their managerial
58

operations need to be oriented toward a more commercial approach, with marketing and linkages to
farmersandlocalcollectors.Privateinvestmentinhatcheriesshouldbepromoted.
InordertoensurethequalityofPLsatthestatelevel,investmentinPCRforcheckingbroodstockand
PLqualityshouldbeconsidered.
TofacilitateaccesstoPLs,anetworkofmicronurseriescanbedevelopedatthetownshipandvillage
levels.ThisnetworkwouldprovidefarmerswithdirectaccesstoPLsandstrengthenthelinksbetween
hatcheriesandproducers.
Similarly,farmersaccesstomarketinformationandtechnicalknowledgehastobeimproved.Thiscan
bedonethroughdemonstrationfarms,butalsoapproachessuchasfarmersfieldschoolsshouldbe
considered in a second phase. The network of traderscollectorsfarmers can be used to transfer
technicalknowledge.

7.3.TRADING&MARKETINGCHAIN

Withinthestudyarea,marketchainactorsarelinkedbytermsofexchangebasedoncashadvancesand
debts.Mostproducersaredependentonhigherlevelactorsinthemarketchainforinvestmentsintheir
productionsystems.Thelevelofdebtishighandexplainswhymanypondshavebeenabandonedand
whybankruptcieshaveoccurred.Theinformalcreditsystemcreatestoomanydependencieswithinthe
prawnmarketchainandisdetrimentaltotheevolutionofthesector.
Farmers in remote areas do not have access to information (selling price, grading systems) and are
bound to the local collectors who purchase their products. Their bargaining power is low. With
traditional systems and harvests on the day of spring and nip tide, small and mediumscale farmers
havetomarketsmallnumbersofprawns.Thus,theycannotmarkettheirprawnproductiondirectlyto
tradersbecausetransportcostsforsuchsmallvolumesaretoohigh.
Traders make limited investments in equipment. Most of their investment capacity is now directed
towardcashadvancestoensureaccesstoproductsforexport.However,withyieldsdecliningrecently
and the impact of cyclones, traders have found it difficult to recover their cash advances, which has
limitedtheircapacitytoinvestinthevaluechain.
Export volume, prices and trade routes are strongly influence by global drivers such as international
sanctions on Myanmars products (with an additional tax of +13%) and lower exchange rates for the
USD14. This situation favors exports to Bangladesh, which has become the main trade route for high
valuefisheryandaquacultureproductssuchasP.monodon.

14

In20092010,theexchangeratewasaround1,200MKfor1USD,whiletheactualratewas800MKfor1USD.

59

Anunreliablesupplyofprawnscanhurtthefinancialhealthoftraders,depots,andwholesalers,astheir
tradingpartnersdemandareliablesupplyofprawnproducts.

Traders, collectors, and farmers have resolved this supply challenge by creating a relationship of
economicinterdependencetradersandcollectorsloanmoneytofarmerswithahighriskofpartialor
nonrepayment of the loan, and farmers are required to supply prawns exclusively to these
moneylenders. The moneylenders reduce their financial risk by purchasing prawn products from their
farmers at a reduced price. The system benefits the moneylenders as they become the pricemakers,
whilethefarmersbecomethepricetakers.However,therecentdeclineofP.monodonfarmingshows
that some collectors and small traders now have more bargaining power in their dealings with large
traders. The later are now adjusting their price so that it is closer to the market price to ensure their
supplyofP.monodon.
PotentialOptions
The marketing chain can be improved for farmers if they are not linked to buyers through cash
advances.Freeingtheminthiswaywouldincreasefarmersbargainingpower.However,accesstocredit
islimitedandmicrocreditorSavingsGroupsforprawnfarmersarenotviableoptionsbecauseofthe
highriskinvolvedinprawnproduction.
Collectivemarketingcanimprovefarmersbargainingpowerbyallowingthemtocompletetransactions
directlywithmajorcollectorsortradersintown.Collectivemarketingcanhelpsmallandmediumscale
farmerstoachieveasufficientvolumeofprawnstotrade.
To develop a more open market, it is necessary to prevent farmers and collectors from becoming
dependent on traders through cash advances and loans. Due to the lower supply of prawns, the
bargaining power of farmers and collectors is higher. This trend should be supported via the
development of an auction market, where farmers and traders could market their products at higher
prices. This could be tested at the township level, but will require the adherence of the different
stakeholdersinthemarketchain.Developingsuchamarketmightbeeasierinproductionareascloseto
townships where traders have large collection points. This would also reduce transport costs for
producers.Suchasystemwouldprovideahighershareoftheprofitstoproducers.
Changes in the national political situation and the lifting of international sanctions might improve the
bargaining power of local traders with Bangladeshi processing companies. The local marketing chain
mightbenefitfromchangestothesectorandflowofproducts.Inaddition,theliftingofinternational
sanctionwillallowahighertradevolumeofP.monodontobelabeledasaMyanmarproductinsteadof
beingmarketedasproductofBangladeshsimplybecauseprocessingwasdoneinBangladesh.

60

8.Conclusions

TheprawnvaluechainanalysishasshownthattheprawnsectorinRakhineStateisnowdeclining,with
lower yields, a high level of indebtedness of producers, and a large number of abandoned ponds in
certain areas. Our analysis shows that since its development in the 1990s the sector has not evolved
towardintensificationandremainsdependentonthenaturalenvironment.
Production systems have not changed because of a lack of knowledge and low access to inputs. The
studyshowsthattheentiresectoriscurrentlyabuyersmarket,withcollectorsandtraderscontrolling
the market and fixing prices. Traders and collectors at the lower end of the market are financing the
productionthroughloanstofarmers.
Thesystemwassustainablewhileexportpricesandproductionyieldswerehigh.Duetothedamageto
production ponds by cyclones, increasing maintenance costs, international sanctions on Myanmars
exports, and lower market prices, the financing system that sustained the prawn production sector
ceasedtobesustainable.TheresultwasthesteadydeclineseenintheareafarmedinRakhineState.
In order to increase the opportunities and benefits from trade, there is an urgent need to raise
productivity and improve production methods. Additionally, efforts need to be made to reduce
indebtednesslowerdownthevaluechainandtofreeupproducerstosellinlocalmarketswithoutbeing
tied to lenders. Traders and collectors perform an important function injecting informal credit into a
systemthatfacessubstantialcreditconstraintsatlowerlevelsofthechain.
SustainableprawnsectordevelopmentispossibleinRakhineState,giventheabsenceofsoilconstraints
orwaterqualityissues.Toimprovetheproductionsystem,thegovernmentandprivatesectorneedto
makesubstantialinvestmentstoallowfarmersaccesstoknowledgeandinputs,withimprovedaccessto
quality postlarvae being the most pressing objective. Terms of trade and exchange need to be
improved so that farmers can capture most of the benefits of prawn farming and be able to invest in
theirownproductionsystems.

61

References

FAO.2011.DraftreportonthepoliticaleconomyoftheFisheriesinRakhineState.79pp.
FAO.2003.Myanmaraquacultureandinlandfisheries.RAPPublication2003/18.68pp.
FAO.2010.StateofFisheriesandAquaculture.244pp.

62

Appendix1:Activitiesduringthemission

S/N

Date

BriefDescriptionofActivity

Location

10Feb JourneyfromPhnomPenhtoBangkok.Visacollection
forMyanmar

Bangkok

11Feb ArrivalinYangon.MeetingwithNationalConsultant
andLIFTprojectmanager

Yangon

12Feb JourneytoRakhineState(Sittwetown).Visitmarketand
prawnexporter

Sittwe

13Feb Visitprawnexporters(2)/StateDoFandmarket

Sittwe

14Feb Visitprawnfarmandprawnhatchery(DoF).Visit1
villageofwildprawncatcheranddepot

Sittwe

15Feb VisitPauktawDoF,visitoneprawnfarmingsiteandone
village.Interviewwithprawnfarmersand1exporter

Pauktaw

16Feb VisitPauktawvillage.Groupdiscussionwithprawn
farmers.Interviewwithsmallholderprawnfarmers,
visitthepond.Interviewwithprawncollector

Pauktaw

17Feb Interviewwith1farmer;1trader/exporter,visitto
UNDPandSavetheChildren.Discussionabout
livelihoodinthetownshipsandtheiractivity.Interview
with1holderofexportlicense

Sittwe

18Feb JourneytoMyebon.InterviewwithDoFinMyebonand
1prawntrader

Myebon

10

19Feb Visit2villagesinMyebon,groupsdiscussionwith
prawnfarmersandinterviewofcollectors(2)and
meetingwithDRC

Myebon

11

20Feb Visit2villagesinMyebon.Groupdiscussionwithprawn
farmersandinterviewofcollectors(2).

Myebon

63

12

21Feb Visit1villageinMyebon.Interview2farmers.Visit1
traderinMyebontown.

Myebon

13

22Feb JourneyfromMyebontoKyaukpyu.MeetingwithDoF

Kyaukpyu

14

23Feb Interviewtraders(3);processingfactory(1)and
hatchery(1)

Kyaukpyu

15

24Feb Visit2prawnfarmsin2differentvillagesinGiri
affectedarea

Kyaukpyu

16

25Feb FlighttoYangonandmeetingwithDoF

Yangon

17

26Feb DataAnalysis

Yangon

18

27Feb MeetingwiththeShrimpFarmingAssociation.Meeting
withFisheriesExpertofSolidaritsInternational

Yangon

19

28Feb Dataanalysisandreportwriting

Yangon

20

29Feb Dataanalysisandreportwriting

Yangon

21
22

1Mar Dataanalysisandreportwritingandmeetingwith
PrawnandFisheriesexprtoftheFAODesignMission
2Mar Dataanalysisandreportwriting

23

3Mar JourneybacktoPhnomPenh

Yangon
Yangon

64

Appendix2:Listofmeetingsandpersonmet

Name
1 UWinZawmanager
(UTheinKhin)
Wholesaler/exporter
2 USoeMyine
StateOfficer,
DoF,Rakhine
3 UMaungHla
Asst:StaffOfficer,
DoF,Rakhine
4 ULinLinmanager
(UKyawZanHla)
Wholesaler/exporter
5 UAungNaingOo
LiaisonOfficer
CAREMyanmar
6 UKyawSoeMoe
PrawnFarmers
7 USawThein
PrawnFarmers
8 DawThanThanAye
OfficerInCharge
Hatchery,DoF
9 UShweKyawAung
Technician
Hatchery,DoF
10 DawAyeThan
(UKanGyiAung)
Frycollectors
12 USitAyePaing
FryImporter
13 UAungKyawTun
TownshipOfficer
DoF,Pauktaw
14 UThaSein
PrawnFarmer
15 USanKyawPhyu
PrawnFarmer
16 UTheinTun
Shwenaadi

DateofMeeting

Contact
098500993

Meetingplace
SittweTownship

Remark

098502998

SittweTownship

13/2/2012

04323701

SittweTownship

13/2/2012

098502127

SittweTownship

13/2/2012

098501858 YeChanPyin
0949245493 Village
SittweTownship

14/2/2012

098520250

YeChanPyin
Village
SittweTownship

14/2/2012

PinLePyinVillage
SittweTownship

14/2/2012

095680687

SittweTownship

14/2/2012

098523282

PauktawTownship

15/2/2012

YwaChaungGyi
Village
PauktawTownship

15/2/2012

098501815 PauktawTownship
0949640248

15/2/2012

12/2/2012
13/2/2012

65

17
18
19

20
21
22

24

25

26

27

28

29
30

FisheryWholesaler/
farmers
UThanWinMaung
Collector/farmers
UYeBawThan
PrawnFarmers
UKhinMaungWin
UTheinNyuing
USanNyunt
UNoneSein
UPhoKhin
UTheinNu
UHlaSeinMaung
PrawnFarmer
USeinTunHla
Collector/exporter
DawNawNawHtoo
TownshipManager
UNDP,Pauktaw
UPhlipMyaThein
TownshipManager
SavetheChildren
DawNwwetNwetWin
RegionalOfficer
SavetheChildren
UAungNaingWin
Exportlicensedholder
Exporter
USanAungKyaw
TownshipOfficer
DoF
USawLwin
UThanTun
Collector/exporter
DawSoeTinOo
Villagecollector
PrawnFarmers

ThitPokeVillage
PauktawTownship
0949640935 ThitPokeVillage
PauktawTownship

ThitPokeVillage
PauktawTownship

098500998

SittweTownship

095009596

SittweTownship

16/2/2012
16/2/2012 Village
Administrator
16/2/2012 FGDwithPrawn
Farmers

17/2/2012 Extensiveplus
withmachine
17/2/2012

0949281292 SittweTownship

17/2/2012

SittweTownship

17/2/2012 Workingat
Pauktaw
Township

04323558

SittweTownship

MyebonTownship

17/2/2012 Chairman
StateShrimp
Association
18/2/2012

098510230
0949662010
01704199

MyebonTownship

31 UMaungNiShwe

PrawnFarmer/collector
32 PrawnFarmers

33 UThanTun(Manager)
Collector/frydistributor
34 DRC

Thinganetvillage
MyebonTownship
Thinganetvillage
MyebonTownship
Ahlegyunvillage
MyebonTownship
Ahlegyunvillage
MyebonTownship
Ahlegyunvillage
MyebonTownship
MyebonTownship

18/2/2012 Oneofthe
licensedholding
company,Sittwe
19/2/2012
19/2/2012 FGD
19/2/2012 Village
Administrator
19/2/2012 FGD
19/2/2012
19/2/2012
66

35 PrawnFarmers
36 PrawnFarmers
37 UAungNaingTun
Collector

SayMyitSwevillage
Myebontownship

KyeeGaungTaung
Myebontownship
0949331489 KyeeGaungTaung
Myebontownship

38 UAungTheinTun
39
40
41
42
43

44

45

C/o
WetGaungVillage
0949662008 Myebontownship
UMaungTinAye

WetGaungVillage
Prawnfarmer
Myebontownship
UHlaMaungTha

WetGaungVillage
Prawnfarmer
Myebontownship
UTinHtay(TTTtrading) 098524089 MyebonTownship
Collector/exporter
UWaikzaTun
0949662034 MyebonTownship
Farmer/Collector
UTunTin
04346186
Kyaukphyu
DistrictOfficer,DOF
Township
Kyaukphyu
UTinMaungShwe
098524073 Kyaukphyu
TownshipOfficer
Township
DoF,Kyaukphyu
UAungSanMyint
098510086 Kyaukphyu
Collector/Trader
Township

46 UAungThanZaw
Collector/Trader
47 UHlaMyintAung
Collector/Trader
48 UAungKyawLin
Collector/Trader
49 UZawAung
Manager
AsiaGoldenPrawnCo.
Ltd.,
50 UKhinMaungYee
Officerincharge
Hatchery,DoF
51 UMaungBa
Officer,DoF
Kyaukphyu
52 UBaShin
Prawnfarmer

20/2/2012 FGD
20/2/2012 FGD
20/2/2012 Investjustafter
Giribyrequest
ofrelative
21/2/2012 Village
Administrator
21/2/2012 Prawn/rice
21/2/2012 Prawn/rice
21/2/2012
21/2/2012 Moveto
Myebon2010
22/2/2012

22/2/2012

Kyaukphyu
Township
098510080 Kyaukphyu
Township
0949650579 Kyaukphyu
Township
04346212
Kyaukphyu
098510108 Township

22/2/2012 Chairman
DistrictPrawn
Association
23/2/2012 Solddirectto
Yangon/Sittwe
23/2/2012 Solddirectto
Yangon/Sittwe
23/2/2012 Solddirectto
Yangon/Sittwe
23/2/2012 Processing
factory

23/2/2012

098510056

Kyaukphyu
Township

0949650604 Kyaukphyu
Township

24/2/2012 Responsiblefor
prawnsector

24/2/2012 Mediumsize
farmer

Minganvillage
Kyaukphyu

67

53 UsanShweWin
Prawnfarmer
54 UHlaWin
Dy.DG(Rtd),DOF
55 DawWaiWaiLin
Solidarits
International
56 USoeTun
MyanmarShrimp
Association

095025572

Wadaungvillage
Kyaukphyu
Yangon

24/2/2012 Largescale
farmer
25/2/2012 Technician

0949341323 Yangon

26/2/2012 Technician

095015251
01683651

27/2/2012

Yangon

68

Appendix3:StatisticsofprawnfarminginRakhineState2011.(SourceDoF)

Township

Area(acre)
Extensive Extensiveplus*
Sittwe
Sittwe
1023
3866
Ponnagyun

5370
2110
MraukU

207
Minbya

1354.
4552
Myebon

11012
2862
Pauktaw

24546
7106
Rathedaung

8674

Maungdaw
Maungdaw
8243
7109

Kyaukpyu
Kyaukpyu
7690
355
Munaung

578
Ramree

1222
90
Ann

10538

Thandwe
Thandwe
205
373
Toungup

589
Gwa

30
20

Total

72,609
37,120
*accordingtoDoF,ExtensivePlusisaproductionsysteminclduignastockingdensityaround2PL/m2
andadditionalfeeding.

District

69

Appendix4:Mappingandvillageprofilesinthedifferenttownshipsvisited

PAUKTAW

AlternateRiceShrimp
System

Shrimpfarming

HiglyGiriAffectedArea.
Noshrimpfarming
Fishingcommunities

Figure10:ZoningofprawnfarminginPauktawTwonship.Locationofvillagevisited

70


Pauktawtownshipcanbedividedinto3mainagroecologicalzones.

The southern part with hills, where farmers cannot raise prawns and where the population
reliesonfishing;
The northern area with higher ground and longer freshwater period where farmers follows a
riceprawnalternatesystem;
The southern part, where traditional and improved extensive prawn monoculture is the main
system.

In Pauktaw township, more than 1,000 farmers raise prawns in ponds of 2 to 12 ha, while only 200
farmersdoitonlargerponds.ThelandownersinthelattercaseareusuallylocatedinPauktaworSittwe
town with employees managing the pond. In villages, large landowners (2 to 4) combine their
investmentcapacitytooperatepondslargerthan40ha.
ThitPokevillage,PauktawTownship
Thevillageisconsideredaprawnfarmingvillage,with50pondsoperatedby150farmersforatotalof
400households.Lessthan40%ofthehouseholdsfarmprawns;therestofthehouseholdscultivaterice
orengageinfishing.Landownersinvestmentjointlytooperateponds,usually2to4landowners,
relativesorfriends,whocombinetheireffortandlandtoraiseprawnsinlargeunitsof20to50ha.
Prawnfarmingstarted15yearsagoandthetechniquehasnotchanged.Stockingpostlarvaestartedin
themid2000,duetodeclineprawnyields.Around10%ofthefarmershaveadoubleloancontracted
totheprawncollectorand1%ofthefarmersarebankruptandhadtoselltheirpropertyaccordingto
othervillagers.

71

MYEBON

Riceshrimp
area

Tradingrouteto
Minbia,Pauktaw;
Sittwe

Areawithonly
1shrimpcrop
peryear

Tradingrouteto
Yangon

Tradingrouteto
Kyaukpyu

Figure11:ZoningofprawnfarminginMyebontownship.Locationofvillagevisited

72

Prawn culture in Myebon is characterized by extensive systems based on natural PLs trapped in the
pond.Around10%ofthepondsarestockedwithPLsinadditiontonaturalrecruitment.Around35%of
thefarmscannotraiseprawnsallyearlongbecausetheyarelocatedonhighground(southeasternpart)
and/or because they have enough fresh water in the rainy season tocultivate rice. Part of Myebon is
located next to an estuary and the fresh water influence is more important than in other townships.
Whenheavyrainfalloccurs,thewaterisloadedwithsedimentandthesalinitylevelcandropquickly.
In Myebon township, prawn farming was developed in rice farming areas. Rice fields were converted
intoalternatericeprawnorprawnmonoculturefields.Thesechangescreatedbrackishwaterintrusion
intoricefieldandarethesourceofsomelocalconflicts.
AccordingtotheDoF,around25%to30%ofthefarmsarelargerthan50acres(20ha),45%between50
and 10 acres (4 to 20 ha), while 25% are smallholders with prawn farms smaller than 4 ha. The
townshiphasdifferenttraderoutesandfarmerscantradetheirproductstoKyaukpyu,SittweorMinbya
andpurchasetheirPLsfromPauktaworKyaukpyu.
AfterCycloneGiri50%ofthepondsweredamaged.Since2004,3cycloneshavehitthetownship,with
severe damage to pond embankmentseach time. In addition, around 40% of the ponds suffered from
lossesintherecentyearsduetodiseaseoutbreaks(butnoproof)andpollutionfromupstreamwater,
withrunoffwaterloadedwithsediments.Inresponse,farmershavereducedthefarmingareadueto
limited investment capacity. The township counts 200 collectors and 4 main traders. Prawn farms
marketnotonlyP.Monodon,butalsoP.indicusandMetapaneaussp.,whichrepresent20%to40%of
thevalueofthetraditionalextensiveponds.InMyebontherearefewercollectorsofwildPLscompared
toPauktaworSittweandaccesstoPLsismainlythroughcollectorsandtraders,thesamepeoplewho
arebuyingtheadultprawns..Inremoteareas,insoutheasternpartofMyebon,farmersstillpracticean
extensive system without stocking. In this area the yield is not too low but farmers have
difficultyaccessingPLsforstocking.Also,famershavelimitedinvestmentcapacityandcannotaffordPLs.

ThinganetandAhlegyunvillages,Myebontownship
Thinganetvillageconsistsof157households,ofwhichonly12raiseprawns(80%followingtherice
prawnsystem).53householdsfromneighboringvillagescultivateprawnsonvillageterritory.Inthose
villagesaround50%ofthehouseholdsarelandlessanddowagelaboronriceandprawnfarmsasthe
mainlivelihoodactivity.Mostofthepondsarepaddyfieldsconvertedintoprawnpondsinthelate90s
orearly2000s.Cohabitationofprawnpondsandricefieldscreatessomeconflictwithsalinewater
intrusionintoricefieldsorconflictforaccesstofreshwaterforriceirrigationthroughtheprawnponds.
Prawnyieldshavedeclinedsince20052007,andnowstockingofPLsisnecessary.In2011,most
farmersprawncropsfailedandtheywereforcedtoaccumulateloansfromlocalprawncollectors.Only
3to5householdssoldtheirlandtolargelandownersduetocropfailures.

73

SaymytSweandKyeeGaundaungvillages,Myebontownship
Inbothvillagesthedominantfarmingsystemisriceprawn.Onlylowlandandmangrovesreclaimedin
the2000sareusedforprawnmonoculture.Theprawnculturesystemisatraditionalextensivesystem
withoutadditionalstockingofPLs.Riceprawnfarmersrepresent30%ofthehouseholdsinSaymitSwee
and12%inKyeeGaundaung,withlandholdingsfrom2to20acresinSaymitSweeand20to100acresin
KyeeGaundaung.Theproportionofprawnfarmerswithlandholdingfrom30to100acresislower,less
than10%ineachvillage.Prawnfarmersarelocalvillagers.Largepondsreclaimedonmangroveareas
startedin20022004.Nowtheentiremangrovehasbeenconvertedintoprawnponds.Ricefarmers
startedtoraiseprawnsintheirpaddyfieldsinthedryseasonafterembankmentsweredamaged.In
villages,accordingtotheDoF,somepondshavebeenabandonedduetolackofinvestmentcapacity
followingseveralfailures.

WetGaungVillage,Myebontownship
Thevillageconsistsof600households,ofwhich100followthealternatericeprawnsystem.Inthis
village,thericeprawnsystemwasintroducedrecently(2007)followingdamagetothesaltwater
intrusionprotectionsystem(embankments).Farmersmostlyusetraditionalsystemsbasedonlyon
seedstrappedinthepond.Thecultivatedareaisfrom6acresto50acres.Therearenolargeoutside
investorscultivatingprawnsinthevillage.Thereisoneprawncollectorinthevillage,butfarmerscan
alsotradedirectlyinMyebonduetotheshortdistance(2030mindrive).Inthisvillagetheyieldhas
decreasedby50%to70%since2007andfarmershavebeenaffectedbyhightidesfloodingtheponds
andembankmentsalmosteveryyear.

74


KYAUKPYU

Shrimppondsaffectedby
highmortalityrate

RiceProductionArea

ShrimpmonocultureArea
AbandonedPonds

Figure12:ZoningofprawnfarminginKyaukpyutownship.Locationofvillagevisited

Only one part of Kyaukpyu is producing prawns. Compared to Myebon and Pauktaw, the area is less
influencedbyfreshwaterintherainyseasonandthesalinityisnevertoolowaccordingtoDoFstaff.All
the ponds follow traditional systems, based on wild PLs trapped in the pond. The prawn ponds were
75

reclaimedstartinginthelate90sonmangroveareasanddesignatedwastelandformorethan70%of
thearea(5,200haofthe73,000haofprawnfarming).Therestoftheprawnfarmsweredevelopedon
convertedriceland.Seventypercentofthefarmsarebetween20and30acresandtheremaining30%
between30and50acres.Theaverageyieldisnowunder16.6kgperacre(41kgperha).
Forthelast5yearsandespeciallyafterCycloneGiri,theprawnpondshavebeenabandonedbyfarmers
due to declining prawn yields and lack of investment capacity. Sixtysix percent of the ponds were
abandonedin2011compareto2002,andanupdatedestimategivesafigurecloserto80%.Betteroff
farmerswhocouldraisethedikesconvertedtheirprawnpondsbackintoricefields.Mostoftheprawn
pondsareoperatedbyseveralshareholders,mostofwhomarefromthesamevillage.Thereareonly
fewprivateinvestorsfromurbancenterswhohaveinvestedinprawnponds.

76

Appendix5:InterviewTopiclist

FGDwithfarmersatthevillagelevel
Marketing

Canyoumapthevaluechain?
Whatareyourrelationswiththedifferentactorsofthevaluechain?Includingotherfarmers?

Foreachofthestakeholdersinvolved,ask:
Whereandtowhomyousellyourproducts?
Whatisthelevelofformality?Informal/verbalarrangement/formalwrittencontract
Whenandhowarethepricesareset?
Istherecontractororalarrangement?
Whatistheleveloftrust?Howmuchdoyoutrusttheseindividuals?:
o distrust/notrust/alittletrust/sometrust/fulltrust

Howlonghavethoselinkagesexisted?Howhavetheyevolved?Howlonghasthetrading
relationshiplasted?

Rulesandregulations
Doyoupayanyfeesassociatedwithyourbusiness?
Formalfees:
Licenses
Transportpermits
Landtaxes
Informalfees?

Prawnpricesandquality
Areyouawareofthequalitygradingstandardsforprawns?
Whatarethemostimportantqualitiesformarketingprawns?
Describethedifferentclasses

Pricingevolution:Prawns
Priceindryseason(/kg)
Priceinrainyseason(/kg)
quality
PrawnNo.1
PrawnNo.2
PrawnNo.3

Others

77


Whydoesthepriceatwhichyousellprawnstothetrader/wholesalerfluctuate(change)duringthe
courseoftheyear?

Changeintransportcosts

decreasethesameincrease
Qualityofprawnchange

decreasethesameincrease
Changeindemand(suchasmoredemandbyconsumersatdifferenttimesoftheyear)

decreasethesameincrease
Changeinsupply(suchasgreaterprawnproductionatdifferenttimesoftheyear)

decreasethesameincrease
Otherreasons(pleasespecify)

decreasethesameincrease
Whatpostharvestactivitiesareyoudoingonprawns?Describeandquantifytheaddedvalue
Howmuchoftheharvestislostandcannotbesold?
o Why?
o Whatpercentageislost?
o Dobuyersrejectprawnbecauseofpostharvestproblems?
o Havebuyersofferedlowerpricesduetopostharvestproblems?
Diversification
Whatelsedoyouharvestfromthepond?Howisitimportantforyourhouseholdsintermsof:
Foodsecurity?(rankas:Veryimportant/important/notreallyimportant)
HHincome?(rankas:Veryimportant/important/notreallyimportant)

Trend&perspectives

Whatisthetrendforprawnproductionoverthepastfiveyears?
Areyouasaprawnfarmerprovidingmoreorlessprawns?

Aretheremoreorlesstradersintheprawnbusiness?
Istheprawnpricehigherorlower?

Whatdoyouthinkaboutthefutureofprawnfarminginyourvillage?
Whatisthenextstepandevolutionandwhy?
Whatarethemainconstraintsinthefuture(technical,economic,market,accesstoinputsetc.)
Whataretheopportunitiesforfarmers?
Whatarethemainreasonsforfailureandbankruptcy?
Doyoureceiveanysupportfromthegovernment?

78

Producers

Township:
Villagename

FarmersName:

A Generalinformation

Functioninthefarm(manger,worker,farmer)
Howmanyyearsinthevillage?
Howmanyyearscultivatingprawns?

B Farmsizeandfarmingsystem
Farmarea:

Farmedarea:

Productionsystem:
Pondshapeanddepth:

Accesstowater(type/direct/indirect):
Howmanycropsperyear?Allyearlongoronlypartoftheyear?Othercultureonthefarm?

B1Inputs
Stockingpostlarvae(prawns)orotheraquaticanimal:
Ifyes,wherearetheyboughtfrom?
Atwhatprice?Paycashorloan/payafterharvest?
Wheredidtheycomefrom?
Isitalwaysavailableorcansomeshortagehappen?
Howcanthequalitybeassessed?
Whatinputisusedinthepond?
Fertilizers(howmanykg/bagsandwhatprice/wheredoyoubuyandeasyavailability/access?)
Lime(howmanykg/bagsandwhatprice/wheredoyoubuyandeasyavailability/access?)
Feed(howmanykg/bagsandwhatprice/wheredoyoubuyandeasyavailability/access?)
Howmanypeopleareworkingonthefarm?
Permanentworkers:howmanymonthsperyearandwhatsalary?Wheredotheycomefrom?
Wagelabor:howmanydaysperyearorcrop,forwhatparticularpurposeandwhatsalary?
Wheredotheycomefrom?

Whattypeofequipmentisneededonthefarm?
Landpreparation&ponddesign?Andhowmuchdoesitcost?
Harvestingtechniqueandequipment?Andhowmuchdoesitcost?
Processing/packaging?Andhowmuchdoesitcost?
Ice?Howmuchandwhatprice?
Pumpingmachine?Forwhatandhowmuchdoesitcost?
Fuelconsumptionperyearorpercrop?
Transportationequipment?Andhowmuchdoesitcost?
Sluicegate(concrete)?
MotorPump?
79

B2Outputs

Whendoyouharvest?
Whatdoyouharvest,onlyprawnsorotheraquaticanimals?
Intherecentyearshowmuchdidyouproduceonyourfarm?Ifharvesteverymonth(ortwicea
month)askthedetails.
Nov
Dec
Jan
Feb
Mar Apr
May Jun
Jul
Aug
Sep
Oct

Kgprawn
harvested

Pricesold

(Unit)

Other
product
harvested
Howmuchoftheharvestislostandcannotbesold?
o Why?
o Whatpercentageislost?
o Doesbuyerrejectprawnsbecauseofpostharvestproblems?
o Havebuyersofferedlowerpricesduetopostharvestproblems
Virus
Howmanytimesayeardoyouhavediseaseoutbreaks?
Howmuchofyourharvestdoyoulose?
Whatdoyoudotopreventthat?
Whatdoyoudotocurethat?

CAccesstoloans
Whatarethemainsourcestofinanceyourbusiness?
Selffinancing
Borrowingfromtraders
Borrowingformfinancingstructure(Bank/microfinance)
Relatives/friends
Other(specify)
Foreach,asktheamount,therelative%ofthecropitrepresents,interestrateandtermsofrepayment
(numberofdays)

80

DMarketing
Wheretowhomyousellyourproducts?
Whatisthelevelofformality?Informal/verbalarrangement/formalwrittencontract
Whenandhowarethepricesset?
Istherecontractororalarrangement?
Whatistheleveloftrust?Howmuchdoyoutrusttheseindividuals?:
o distrust/notrust/alittletrust/sometrust/fulltrust

Howlonghavethoselinkagesexisted?Howhavetheyevolved?Howlonghasthetrading
relationshiplasted?

D Rulesandregulation
Doyoupayanyfeesassociatedwithyourbusiness?
Formalfees:
Licenses
Transportpermits
Landtaxes
Informalfees?

81

PrawnTraders/ProcessorsandExporters

Township:
Villagename:

ManagerName:

Generalinformation

MainOccupation:
Howmanyyearsinthevillage?
Howmanyyearstradingprawns?
Numberofworkers(permanent)
Numberofworker(seasonal)

Buying
Whoandwheredoyoubuyprawnsfrom?
Dryseason
Producers:NbrKg/seasonAveragebuyingpricedistance
TradersVillage:NbrKg/seasonAveragebuyingpricedistance
Largertraders:NbrKg/seasonAveragebuyingpricedistance
%ofeachgradeofprawn(estimation)

RainySeason
Producers:NbrKg/seasonAveragebuyingpricedistance
TradersVillage:NbrKg/seasonAveragebuyingpricedistance
Largertraders:NbrKg/seasonAveragebuyingpricedistance

Whatdoyoudoafterpurchasingprawns?
Sellfresh
Packaged
Processed(describe)
Others
IfNoPostHarvestActivitiesDone,WhyNot?

Selling
Whoandwheredoyousellprawnsto?
Dryseason
TradersVillage:NbrKg/seasonAveragesellingpricedistance
Traders/depotintown:NbrKg/seasonAveragesellingpricedistance
Wholesalerintown:NbrKg/seasonAveragesellingpricedistance
82

RainySeason

Retailerintown:NbrKg/seasonAveragesellingpricedistance
Processorintown:NbrKg/seasonAveragesellingpricedistance
ExporterProcessorintown:NbrKg/seasonAveragesellingpricedistance
ExportOutsideprovinceNbrKg/seasonAveragesellingpricedistance

TradersVillage:NbrKg/seasonAveragesellingpricedistance
Traders/depotintown:NbrKg/seasonAveragesellingpricedistance
Wholesalerintown:NbrKg/seasonAveragesellingpricedistance
Retailerintown:NbrKg/seasonAveragesellingpricedistance
Processorintown:NbrKg/seasonAveragesellingpricedistance
ExporterProcessorintown:NbrKg/seasonAveragesellingpricedistance
ExportOutsideprovinceNbrKg/seasonAveragesellingpricedistance

ForExportersOnly(YangonorBGD)
Wheredoyouexportandwhoarethebuyers?
Whatdoyouexport?Whattypeofproducts?
Whydoyouchoosetoexporttothatdestination(price/facilities)?
Whataretheconstraintsforexport?
Howarethepricessetforexport?

Whataretheformalfees?
Borderfees
Transportationfees

Doyoupayinformalfees?

Postharvest
Didpostharvestproblemscauselossofqualityorprawndestruction?

Whatcausedpostharvestlosses?
Havebuyersrejectedprawnbecauseofpostharvestproblems?
Percentageoftotalprawnvaluelostbecauseofpostharvestlosses?
Percentageoftotalprawnvolumelostbecauseofpostharvestlosses?

Doyoustoreprawns?

Whatisyouraveragestorageperiodforprawns?
Whatwastheaveragequantityofprawnsstored?
Doyouhavealimitedstoragecapacity?Andwhy?
83

Whatproportionofprawnproductswasspoiledduringstorage?(%)
Whatkindoftransportationdoyouuseforprawns?

EconomicAspects
Operatingcost
Gasolinecostperseason
Laborcostperseason
Iceperseason
Packagingperseason

Doyoupayanyfeeassociatedwithbusiness?
Formalfee:
License
Transportpermit
Informalfee?

Loanarrangement

Doyouofferloanstoproducers/othertradersaspartofyourprawnbusiness?
Ifyespleasespecify:
Nbrofproducers/othertraderswhoyouhavelentcash
LoansrangefromXXXXtoXXXperproducer
LoansrangefromXXXXtoXXXpertrader
Doyouchargeinterestandhowmuch?
Doproducers/othertraderswhoborrowmoneyselltoyouexclusively?Andatwhatprice(current
market/lowermarketprice)?
Howmanyproducers/othertraderswhoborrowmoneyrunawaywithloans?

Borrowing
Whatarethemainsourcesforfinancingyourbusiness?
Selffinancing
Borrowingfromtraders
Borrowingformfinancingstructures(Bank/microfinance)
Relatives/friends
Other(specify)

84

Trendofprawnproductionandprices
Whatisthetrendforprawnproductionoverthepastfiveyears?

Areproducersprovidingmoreorlessprawns?

Aretheremoreorlesstradersintheprawnbusiness?
Istheprawnsellingpricehigherorlower?

Whydoesthepricethatyouoffertosellers(producers/smallertraders)fluctuate(change)during
thecourseoftheyear?

Changeintransportcosts

Qualityofprawnchange

Changeindemand(suchasmoredemandbyconsumersatdifferenttimesoftheyear)
Changeinsupply(suchasgreaterprawnproductionatdifferenttimesoftheyear)
Otherreason(pleasespecify)

Whydoesthepriceatwhichyousellprawnstothebuyersfluctuate(change)duringthecourseofthe
year?

Changeintransportcosts

Qualityofprawnschange

Changeindemand(suchasmoredemandbyconsumersatdifferenttimesoftheyear)
Changeinsupply(suchasgreaterprawnproductionatdifferenttimesoftheyear)
Other(pleasespecify)

ConstraintsandOpportunities

Whicharethebiggestconstraints/challengesyoufaceinrunningyourbusiness?
Howdoyouovercomethem?
Whatarethemainreasonsforfailureandbankruptcy?
Inthenext2yearsdoyouplanto:
Maintaincurrentbusiness/Reduceactivity/Expand
Explainwhy
Whattypeofchangeswouldyouliketoseeinyourprawnbusinessinthefuture?
Whataretheopportunities?

85

Appendix6:PriceandgradingofP.monodoninFebruary2012

Table19:BuyingandsellingpriceofthedifferentP.monodonclassesforlargetradersandexporters(Sittwe)inFebruary
2012.Averagelowandhighpriceforeachclass

Grade(headless)
Grade1812pieces.Per450g
Grade21315pieces.Per450g
Grade31620pieces.Per450g
Grade42130pieces.Per450g
Grade5>31pieces.Per450g

BuyingPrice(MK/viss)
20,50022,500
17,50019,500
14,50016,500
11,50013,500
7,5009,500

Sellingprice(MK/viss)
23,00023,500
20,00020,500
17,00017,500
13,00014,500
10,00010,500

Table20:BuyingandsellingpriceofthedifferentP.monodonclassesforlargetradersandexporters(Kyaukpyu)inFebruary
2012.Averagelowandhighpriceforeachclass.Buyinggradesareininchesandsellinggradesarebasedonweight.Grades
areusedwhensortingtheproduct.

Grade(headless)
4inchesper450g

BuyingPrice(MK/viss)
20,00022,000

3inchesper450g

12,00014,000

<3inchesper450g

7,0009,000

Sellingprice(MK/viss)
23,000grade0
22,000grade1
18,000grade2
15,000grade3
14,000grade4
12,000grade5

86