SWOT analysis of shrimp farming in Indonesia

Jan 1, 2016
5 min read

The consumption of fishery commodity especially shrimp at the international and national level is considered by most farmers and fishermen as a potential market. It is then used as an excuse to push the improvement of shrimp industry. Based on the data of the Ministry of Marine Affairs and Fisheries Republic of Indonesia, in the year of 2003, the export volume of Indonesian shrimps in the global market reached an amount of 139,450 tons, valuing at US$ 887.13 million per year. In the year 2004, the export volume increased to 143,550 tons, valuing at US$ 1,086 billion per year. While in 2006, it has been estimated to increase up to 300,000 tons per year. In fact, by 2009, the government has targeted the export volume of domestic shrimps to break the 540,000 tons-per year level. So far, Indonesian shrimps have been exported to Japan, European Union and the United States. These countries are known to be the world’s major consumers of seafood, especially those originating from Indonesia.

Based on the SWOT analysis, in the marketing environment, the shrimp production in Indonesia have Five Opportunity :

The export market is wide open. The majority of Indonesia shrimp commodity are exported to Japan, European union countries and United States. The others market for Indonesian shrimp are Hong Kong and Singapore.
Shrimp demand for consumption is increasing over the time. this is linear with the increasing of world population.
The increasing of global Gross National Income and Purchase Power Parities, that makes global society today looking for a better source of nutrients. This is a great advantage for shrimp products, because shrimp products are low-fat and a good source for protein and omega-3 fatty acids.
Shrimp farming is profitable. especially for export market and added value product. This profitable industry can attract other people to involved in this sector.
Indonesian government policy that encourages the increasing export in shrimp. Currently, the Indonesian government is promoting the ponds revitalization program to be reusable, and build many new ponds and facilities to support the optimization of the shrimp production

While the threats that facing the shrimp industry in Indonesia are :

Diseases in shrimp aquaculture. currently diseases that caused by both bacteria and viruses has become a major constraint in the shrimp production. the diseases can cause the harvest failure up to 90% of total production, and even the EMS (Early Mortality Syndrome) disease and some viral diseases such as Taura Syndrome viruses, Baculoviruses, and White spot viral disease can cause total failure in the shrimp production.
Indonesian shrimp industry may face severe competition from other countries, such as China, Thailand, India, and Vietnam. The Total shrimp production in the last decades has increased dramatically. from 2.63 million tonnes in 1990 to 5.329 million tonnes in 2003. and China had the highest share (36.5%) of world shrimp production in 2003.
Increase in the feed prices, feed in the shrimp production has contributed nearly 60% of the total cost production. For Hatchery, most of the shrimp farmers rely on live food, such as : Artemia, Rotifer and Algae which have a high prices, and for grow out ponds, generally they rely on commercial pellets which also have a high prices.
Trade barrier and highly quality requirement for some countries like in European Market. The quality requirements in terms of antibiotic residues, heavy metal residue and nutrient composition of shrimp become the greatest threat to the export sustainability of Indonesia shrimp products.

To cope with the changing environment, the strengths of shrimp production in Indonesia supported by the fact that :

Indonesia has a big resources in marine and brackishwater for shrimp culture. In aquaculture the total of shrimp ponds farming are 1,224,076 ha, spreading in almost all provinces in Indonesia. This area are only 20% of the total areas that potential for shrimp farming. Currently 64,21% of the total potential ponds area still available to be developed as shrimp ponds
Geographically, Indonesia has a strategic position in exporting shrimp.
Indonesia has a big Human resources in shrimp aquaculture. Generally, shrimp farming require human resources to support the production process. Indonesia has 210 million of people and 6.1 million of them are involved in shrimp production. This number of workers are also supported by the shrimp researchers that always trying to find a breakthrough in improving the quality and quantity of shrimp product.
Appropriate climate and environment for shrimp culture. Indonesia has a good water quality conditions to support the production of two major shrimp commodities, ie White shrimp (L. vannamei) and Black tiger shrimp (L. monodon).

The weakness in shrimp production include :

Implementation of Best Management Practices (BMPs). most of the shrimp farmers still run the production based on experience without going to apply the existing standard that described in BMPs. This is become the major reason why the Indonesian shrimp product was rejected by shrimp importing country.
Small asset to expand and increase the production, Most of the shrimp farmer in Indonesia are doing their farming traditionally because the lack of access to the finance or credit. Currently, shrimp farming is still considered as the business that full of risk. Therefore, many donors are reluctant to release their financial in order to increase the number of pond area and shrimp production.
Small production due to the limited technology, especially for small scale and medium farmers.
The limitation number of shrimp larvae for grow out production. this is because the number of hatcheries that produce the larvae is not proportional to the number of grow out farms. This problem can be overcome by promoting the backyard hatchery program, so that there will be a lot of centers that can produce the shrimp larvae.

Based on the SWOT analysis presented above, I identified one key attention point for strategy development of Indonesian shrimp product, ie Weak implementation of Best Management Practices (BMPs) in shrimp industry. In the farm level, Best Management Practices (BMPs) give emphasis to the Biosecurity application to reduce the risk of infection from pathogenic microorganisms (bacteria and viruses), as well as guidance for the shrimp larvae production, such as Best feeding management, Best rearing management, Best environmental management, Best fish diseases management and Best processing technique management. If the procedures that exist in these BMPs implemented by the shrimp farmers and working together with the government, then the expected loss due to the early mortality of shrimp or the rejection of shrimp product due to the excess concentration of antibiotic residues and the use of feed as the biggest cost in the shrimp production can be reduced. if all these factors successfully reduced, This means that the total production of Indonesian shrimp and the total income for the shrimp farmers can be Increased.

Reference

Central Bureau of Statistics, 2003, Statistical Yearbook of Indonesia 2002, Jakarta: Central Bureau of Statistics