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Tipping the Scales – Vietnam
The heart of freshwater catfish country in Vietnam is in Mekong Delta. The Mekong has a history of bitter battles, but a more recent dispute between former enemies dealt a serious blow to the country’s fish farmers. When, in 2003, the United States imposed higher tariffs on Vietnamese catfish imports to protect its own 600 million dollar catfish industry, the Vietnamese decided to fight back.
Economic Change
Vietnam launched the doi moi policy of economic renovation in the 1980s, encouraging free-market enterprises, which has provided impressive results for most of the population. However, poverty still affects some rural areas, where a high proportion of poor people live. The government focused on the fisheries sector as a means of tackling rural poverty. With trade liberalisation, the farming of freshwater river catfish grew increasingly important, catering to an increasing international demand. The amount of catfish exported from Vietnam increased from 5000 tonnes in 1996 to 10,000 tonnes in 2001, with half exported to the United States (US). The fish were popular not just for their cost, but also for their quality and flavour.
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| Catfish at Ho Chi Minh City’s wholesale market. |
In 2003 the total aquaculture output was over a million tonnes, with the Mekong Delta producing nearly 70 per cent of the catch – 740,369 tonnes. The most popular fish is catfish (Pangasius) – the Mekong produces 300,000 tonnes per annum of catfish, over 90 per cent of Vietnam’s total catfish production. The most valuable catfish species are Tra (Pangasius hypophthalmus) and Basa (P. bocourti), which can be raised in river-based cages or earth-constructed ponds. Due to favourable weather conditions the fish can be raised all year round.
Fish Farming
Catfish farming has provided a traditional livelihood for farmers in the Mekong Delta for generations. Not only do the fish provide valuable protein, but they are also an important source of income for many rural households.
Some fish are grown to go directly to market, but others farms are used to grow on the fish until they are slightly larger. Once a year the farmers empty and dry the ponds, and then begin stocking with fingerlings (the younger, smaller fish). There are two stocking periods, February to March and September to October, when the farmers obtain these fingerlings. The local government has established three state-owned fish seed centres to ensure the purity and quality of fingerlings. They normally get a variety (polyculture) of species such as tilapia, grass carp, Colossoma, silver carp and mud carp in February/March, and after three or four months these fish can be graded and harvested, and more fingerlings can be added. Harvesting can be carried out two to three times a year depending on the weather, size of the fish and market prices.
Most farmers used a commercial pelleted fish food, others use morning glory – a cultivated edible aquatic vegetable, but the majority still prefer to make their own feed from a mixture of rice, vegetables and ‘trash’ fish. It takes about 4 kg of feed to produce 1 kg of catfish, depending on the type of feed.
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| Feeding catfish in a pond |
Fish can be affected by diseases, particularly if water quality is poor or if the water becomes polluted. A few herbal remedies can be used, such as bunches of lemongrass tied around the pond or using compounds based on garlic, but generally a lack of knowledge about medicines means that if a serious disease strikes farmers have to harvest all their fish. Oxygenation and limiting the stocking density also help control infection. Some farmers use petrol or electric powered aerators to maintain good water quality in their ponds. Recently closed or recirculation aquatic production systems have been developed which overcome the water problem, but may exclude poorer farmers as they require high initial capital investment costs.
Catfish Business
The most important area for catfish farming is An Giang - in 2003 there were 3178 cages and thousands of ponds covering a total area of 1560 hectares.
The farming activity takes place near the cages or ponds, sometimes even under the houses. All members of the family take part in the daily tasks of rearing the fish, but generally they also employ a couple of labourers to feed and care for the fish. In An Giang approximately 6000-7000 labourers were employed within the catfish farming industry in 2003.
Although catfish farming can provide a good income, there are business risks, the main ones being the high investment costs for cage or pond construction and for purchasing fingerlings. Other risks include poor water quality, pollution, fish diseases and unfavourable weather conditions, such as floods.
Rural families grow the fish for either for their own consumption, or for sale – little processing is done in the home. As the export market has grown, so has the need to construct processing plants. Plant has been developed to clean, fillet, freeze and then package the fish for export. The waste products are sold in the domestic market to provide a low cost food.
Dumping ban
In 2002 the US Catfish Farmers Association petitioned the International Trade Commission stating that fish from Vietnam were sold in the US at less than its production value and this was damaging the US catfish industry. After investigation the ITC ruled in favour of the US catfish industry, and levied tariffs ranging from 37 to 53 per cent on Vietnam’s catfish exporters to stop this ‘dumping‘. |
Rebuilding the Business
The impact of the trade tariffs were felt almost immediately. The price of fish fell dramatically so that in some cases it hardly covering the cost of production. The whole fish marketing chain was affected, including the wealthy entrepreneurs who invested in the processing plants; the farmers who raised the fish; labourers who carried out the day-to-day tasks; and various suppliers and service industries involved along the chain. Thousands of people lost their jobs, some lost their homes and businesses when they could not repay their loans. The environment was adversely affected as businesses could not afford to comply with environmental regulations. A less tangible, but no less important, consequence was the loss of trust in business relationships.
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| Catfish sales were encouraged in the domestic market. |
However, the impact also spurred on those involved to tackle this problem. It stimulated farmers and processors to work together more effectively and to seek new market opportunities, for example, the An Giang Farmers Association brought fish farmers together to negotiate prices with processors. Campaigns were initiated to promote catfish for the domestic market – this campaign was assisted by an outbreak of avian flu which affected poultry sales at this time. Opportunities were taken to promote fish at international fairs and exhibitions, resulting in a significant diversification in these markets.
Some fish farmers turned from their traditional varieties and moved into the more lucrative organic market. Growing this way is more risky – the investment costs are higher and fish stock cannot be given antibiotics so are more likely to die if they become ill. However, the price for organically farmed fish is more stable and can provide a better profit – for example, traditionally farmed catfish have a market price of 9-10,000 Dong/kilo (32-35p/kilo) but organic catfish get a price of 18,000 Dong/kilo (65p/kilo).
Other catfish products were developed, such as dried fish, canned fish, and fish oil, and other uses were explored – for example, the fat could be used for soap.
Some farmers diversified into other aquaculture species, raising a polyculture of fish such as silver barb, red snapper, carp and tilapia. This is integrated with livestock rearing (pigs, poultry, cattle), using their organic waste to fertilise the ponds, and utilising the pond dykes as areas in which to grow fruit and vegetables. Extra income can be obtained by rotating these crops, so that in the warm summer months banana, guava, orange, papaya, morning glory, water mimosa and medicinal plants are grown; and in the winter months vegetables such as onion, kohlrabi, water cress and cabbage are grown, and water spinach is grown all year round.
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| Tilapia being grown in cages. |
Due to these measures by late 2003 and into 2004, the prices of Tra and Basa fish had completely recovered their pre-tariff levels.
Future Aspirations
The UK Department for International Development, DFID, has an aquaculture programme which has been assessing the economic role of catfish and other aquatic resources in Vietnam. Diversification has allowed people whose business was suffering to stay in fish farming and continue to make a profit.
Having learnt from their experiences, the farmers are more aware of how unpredictable markets can be, and have sought to diversify to protect their livelihoods. Support networks have been established or strengthened, giving the partners more collective bargaining power and access to information.
Adding value through packaging, presentation and certification has become increasingly important. More fish are being exported to the European Union and Japan, so processors had to gain knowledge of food regulations and technical requirements and where necessary invest in modern equipment, to ensure that they conformed to these international standards.
So, although the tariffs caused severe difficulties, lessons have been learnt by those in the catfish trade. Now they are more aware of market conditions, and through their efforts they should see an upturn in their fortunes.
Acknowledgement
Hands On would like to thank DFID’s Aquaculture and Fish Genetics Research Programme, although the views expressed are not necessarily those of DFID.
Further Information
Aquaculture and Fish Genetics Research Programme (AFGRP)
Institute of Aquaculture
University of Stirling
Scotland FK9 4LA
UK
Tel: +44 (0)1786 467900
Fax: +44 (0)1786 451462
E-mail: afgrp@stir.ac.uk
Website: http://www.dfid.stir.ac.uk/Afgrp/
Periurban Aquatic Production Systems in South-East Asia (PAPUSSA)
PAPUSSA is a collaborative research project between European and Asian partners seeking to better understand the importance and nature of aquatic food production that occurs in and around some of the major cities of Southeast Asia.
Website: http://www.papussa.org
To find out more information about individual partners go to:
Website: http://www.papussa.org/partners.html
References
Issues related to sustainable farming of catfish (Pangasius spp.) in Vietnam. Le Xuan Sinh and Nguyen Thanh Phuong
Implications of Liberalization of Fish Trade for Developing Countries - a case study of Vietnam. Nguyen Thang Tung, Nguyen Van Thanh and Michael Phillips, 2004. http://www.nri.org/projects/fishtrade/
The importance of pangasius farming in the Mekong Delta, Vietnam. Giorgia Monti, Mags Crumlish and Ms T T Dung
http://www.aquaculture.stir.ac.uk/AquaNews/
32P18_20.pdf
Urban aquatic production. Urban Agriculture Magazine, No 14, Jul 2005 http://www.ruaf.org/node/529
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