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Investing in small-scale aquaculture: the triple bottom line

Environmental Outcomes Analysis of Aquaculture Improvement Projects
Project leader
Michael Phillips
1 Nov 2011
31 Oct 2012

Global opportunities in aquaculture

In 2008 over 90% of global aquaculture production was in developing countries with the industry often dominated by small and medium scale enterprises. This growing demand for aquaculture products presents opportunities for improving the incomes and livelihoods of rural households across the aquaculture value chain – from fish fry production and nursing through to fish production, trading, marketing and services. However, small, commercially oriented aquaculture enterprises in developing countries face various challenges in adopting a more market-driven and business-oriented approach that would enable them to improve their livelihoods. Collective approaches, such as cooperatives, offer one opportunity, but generally the capacity of small aquaculture enterprises and supporting organizations needs improvement, and investment is required to deliver impact at a larger scale.
At face value, small-scale aquaculture enterprises are not always an attractive option for potential investors. An understanding of the business case and models for investment in such enterprises is necessary, as is understanding of social, economic and environmental outcomes (the ‘Triple Bottom Line’) from investment in small aquaculture businesses. In 2010 WorldFish, through funding provided by the Sustainable Aquaculture Fund (SAF), conducted an initial study of investment strategies for small-scale aquaculture improvement projects. Research found that a combination of organizational strengthening, improving access to technology, establishing market connections and connecting to financial assistance can generate significant social and economic benefits to rural smallholders involved in small-scale aquaculture production. In one example, investment in organizational and technical assistance to shrimp farmers in India, apparently led to an increase of US$8.9million in farm revenues over a five year period.
The economic and social outcomes of investment in aquaculture projects in developing countries are encouraging. The question remains however if whether positive outcomes from investment can also be achieved in terms of the environment (e.g. through reduced energy costs or improved feed use).

Evaluating aquaculture improvement projects

With information already available on economic and social outcomes of investment, the current project builds on the initial SAF project to better understand the environmental outcomes from investment in small aquaculture enterprises. In this project, methods for analyzing environmental impacts will be established to be followed by assessments of environmental outcomes of existing projects in Indonesia, India, and Bangladesh. Data collected both through reviews of secondary sources as well as direct field surveys will be used to prepare a report on the social, economic and environmental outcomes of investments in small-scale aquaculture enterprise and improvement projects. This greater understanding and analysis to the triple bottom line will inform, attract and benefit potential investors and small scale aquaculture enterprises, and develop a better foundation for encouraging private investment into the growth of aquaculture among the small and medium aquaculture enterprises that make up the bulk of producers in developing countries.