Aquaculture, growth and poverty alleviation in Bangladesh

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Does a “Blue Revolution” help the poor? Evidence from Bangladesh

First published: 19 December 2018

Citations: 2

[The copyright line for this article was changed on 25 January 2019 after original online publication.]

Abstract

The rapid growth in aquaculture production, globally and in Bangladesh is well documented. Over 2000–2010, per capita production of aquaculture grew 76%, while the consumer price of fish declined 45%. Previous studies have suggested pro‐poor effects of aquaculture based on fish production and consumption patterns. This study attempts to quantify the contribution of aquaculture to income growth and poverty reduction in Bangladesh, using household survey data and a microsimulation approach based on an expanded version of Deaton's concept of net benefit ratio. We estimate that aquaculture's contribution to income growth between 2000 and 2010 was 2.1%, including both price and quantity effects. This income growth was translated into poverty reduction of 1.7 percentage points. Although these estimates seem small, they represent almost 10% of the overall poverty reduction in Bangladesh during the first decade of the 21st century. Put differently, of the 18 million Bengalis who escaped poverty during 2000–2010, about 1.8 million of them managed to do so because of the rapid growth in aquaculture, which contributed to rural income while making fish more accessible to consumers.

1. Introduction

Aquaculture is one of the world's fastest growing food‐producing sectors, and its share in global fish consumption by humans is projected to grow to more than 60% by 2030 (Food and Agriculture Organization [FAO], 2014). This growth is remarkable given that the sector was almost nonexistent in the 1950s and its share in total fish production remained below 20% until the early 1990s. The underlying implications of this trend are considered so significant that they are now commonly termed a “blue revolution,” and there are good reasons for that. Aquaculture holds the promise of meeting most of the world's fish demand without ruining the environment (Economist, 2003; Sachs, 2007); it also will be able to help reduce poverty while improving food security and nutritional well‐being (Ahmed and Lorica, 2002; Belton et al., 2012; Toufique and Belton, 2014).

Aquaculture is particularly important for the developing countries of Asia, where fish provides more than 60% of animal source protein (FAO, 2005). Asian countries increased their aquaculture production from 10.8 million tons in 1990 to 58.9 million tons in 2012, with developing countries accounting for about 86% of the total production. While China has led the way in this growth, some other countries in Asia have also experienced impressive growth in aquaculture since the 1990s (FAO, 2016). For example, farmed fish production in Bangladesh increased from about 240,000 tons in 1992/1993 to 1.86 million tons in 2012/2013, with growth in fish availability far exceeding growth in cereal availability during the Green Revolution.1 Until the mid 1990s, aquaculture had been the smallest of the three main fisheries sub‐sectors—marine, inland capture, and aquaculture—in the country, representing only 16% of total fish production. According to recent estimates, aquaculture is now the largest subsector, accounting for 56% of total fish production.2 This growth and structural change have contributed to increasing fish availability, reducing the real price of fish, and generating employment, with important implications for poverty reduction and nutritional well‐being.3

Thus, there has been increasing interest in the poverty and income distribution implications of aquaculture growth in Bangladesh.4 However, empirical studies have only recently begun to emerge. Even though earlier literature provides important insights, there remain significant gaps in terms of both conceptual understanding and empirical methodologies.5 Conceptually, the aquaculture–poverty linkage literature closely resembles the agricultural growth linkage literature, in that, most studies hypothesize aquaculture to have both direct and indirect benefits on poverty. However, there are ambiguities regarding the definition and quantification of these direct and indirect benefits. Existing literature also has important methodological weaknesses, as almost all available studies are based on nonrepresentative samples. As a result, although these studies provide important insights into selected issues, no generalizable conclusions can be drawn from them. Perhaps the most important gap is that none of the available studies answer the basic question: To what extent has aquaculture growth contributed to poverty reduction?

This article attempts to fill these gaps in the literature. It uses partial‐equilibrium, microsimulation methods to analyze the impacts of aquaculture growth on income distribution and poverty in Bangladesh using an expanded version of Deaton's (1989) model and several rounds of nationally representative household survey data. The rest of the article is organized as follows: The next section presents the key trends in aquaculture production, consumptions, and prices in Bangladesh. Section 3 provides an overview of the concepts and previous research. Section 4 describes the data and methods used in the article. The results of the welfare impacts of real price decline and productivity growth are presented in Section 5. The article concludes with a summary and implications.

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