Leaving an imprint: Rebuilding the shrimp sector in Aceh, Indonesia


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In my 12 years at the International Finance Corporation (IFC), I've been involved with a lot of different projects. Many of them were successful, some were not. But none of them were as satisfying as the Aceh Shrimp Project, which closed last month. If you've ever hit a bull's eye when playing darts, imagine that feeling multiplied by 100. That's what this project felt like.

Aceh is an autonomous province on the northern tip of Sumatra, in Indonesia, with a population of 4.2 million. It has a colorful history of resistance: they gave the Dutch colonists major headaches, and fought against the Indonesian government for three decades. In December 2004 the Tsunami struck, leaving 165,000 people dead or missing in the space of 30 minutes. This led to the biggest reconstruction effort in history, including IFC's work to build up the private sector, funded by AusAID (pdf) through its Australia-Indonesia Partnership for Reconstruction and Development (AIPRD).

Shrimp is a key sector in Aceh, a livelihood for 100,000 people. In the 1990s, Aceh's shrimp sector was slammed by white spot disease, which devastated shrimp harvests.{C} White spot disease spreads through contaminated water, and the primitive canal systems used by Aceh's shrimp farmers spread the disease everywhere. Shrimp mortality rates grew to over 90 percent. The conflict made trade more difficult, and the Tsunami destroyed thousands of hectares of ponds. Shrimp processors stopped providing the farmers with credit for inputs.  It looked like the end of shrimp farming in Aceh. With such high risks, many farmers switched to white fish, which generates a much smaller income, but one which farmers can count on.

IFC was one of many organizations which tackled this problem after the Tsunami. Our project was designed by Richard Banks, a consultant from Poseidon Aquatic Resource Management Ltd., and executed by a shrimp expert, Arun Padiyar, in cooperation with the Network of Aquaculture Centres in Asia-Pacific (NACA).  We also employed around 20 people as on-site field facilitators.
To my amazement, the various organizations involved in the sector coordinated effectively together. Some focused on hatcheries, others focused in specific regions. IFC's project focused on shrimp-producing villages in Bireuen district, teaching farmers how to manage disease through better pond management practices. In January 2007, we kicked off the project with Shrimp Day, when we brought 40 farmers to Banda Aceh for intensive training. After that, we worked with the farmers in their villages. Farmers learned how to manage water flow to control disease, how to use disease-free shrimp seed, and how to test shrimp for disease throughout the growing cycle. Pond management was a critical part of the program. We had our farmers remove decades of smelly, toxic sludge from their ponds, manage acidity and maintain minimum water depth. We also introduced the idea of growing seaweed and milkfish as part of a triple culture program, thereby reducing the risk to farmers. This also created a better environment for the shrimp.  

Because we were working with only a small number of farmers, program success meant demonstrating conclusively that better management practices lead to better yields. Our predictions proved correct. Disease was significantly reduced, farmer income increased by 64 percent in spite of a 12 percent drop in shrimp prices, and pesticide use dropped to zero.

Our initial success snowballed. After every harvest, new farmers asked to join our program. We expanded our program to include nearly 400 farmers. We also worked with other organizations, mainly the Indonesian Government Research Centre, Food and Agriculture Organization of the United Nations, Australian Centre for International Agriculture Research, Asian Development Bank and World Wildlife Fund to develop a shrimp manual and video. This effort included a radio program and a Shrimp Van, which traveled from village to village showing the video to farmers. We played to a packed audience in many villages, including over 5,700 women.

But for me, the real sign of success was that nearly 5,000 non-participating farmers copied our practices. And those are just the farmers we know about. A farmer will not adopt a practice by choice unless it benefits him, so this says quite a lot about our approach.

There were other good signs. USAID pinched off a wad of cash to improve canal systems in our district, a critical local infrastructure need that will have a major demonstration effect. GtZ copied the idea of growing seaweed in ponds. The Aceh Department of Ocean and Fisheries enthusiastically endorsed our model. The Project was recognized by an independent AIPRD evaluation as the best of our projects in Aceh, and scored as highly efficient, effective and sustainable, with a recommendation to continue for a further year since the activities were being replicated. It satisfied many of the Millennium Development Goals criteria that the World Bank and other donors subscribe to.

Unfortunately, IFC pulled the plug a year early because it did not fit its new advisory services strategy, which emphasizes work with processors and IFC investment clients. Fortunately, however, the Food and Agriculture Organization was happy to pick up the ball. They hired our field facilitators and snapped up our best staff. Even more telling, a local Acehnese shrimp processor decided to replicate our work in different parts of Aceh, using some of our field facilitators. So it looks like the work we started will continue.
My two years in Aceh were among the happiest in my life. I'm very proud of our accomplishments there. But nothing makes me more proud than this project. Many years from now, IFC will be remembered for its work there. We left a lasting imprint.


David Lawrence

Communications Consultant

Join the Conversation

January 27, 2009

Mr. Lawrence - It's excellent to hear that the stars really aligned for you on this. I might be a free market ideologue but am also cognizant of its limitations in post conflict areas. That said, I wonder if you've ever considered if similar successes could be achieved through the private sector - e.g. the development of a wholesale buyer that cooperated with some farms that offered a more stable market, or even a feed/supplier that sold products and services that improved yields - and thus had an incentive in the success of its clients who would ultimately buy more of their products/services.


David Lawrence
January 27, 2009

Clement: many thanks for your comment. You raise an excellent point. In Aceh, shrimp buyers once provided farmers with credit for inputs, which was paid back at harvest. With the onset of disease, supply became uncertain and the buyers became reluctant to continue this practice. The conflict made processing in Aceh too risky. By showing that disease can be managed, supply becomes more stable. Buyers may be willing to work with farmers to lock in supply, and ultimately, processors might set up shop in Aceh itself. The fact that one processor wants to use this model with its suppliers shows that the demonstration-type development projects can attract the private sector to carry the work forward. Even in post-disaster, post-conflict environments, a healthy private sector is necessary for long-term sustainability. Donor-funded development projects are not a long-term solution.

January 28, 2009

Though I can understand the feeling of satisfaction at the apparent success thus far of the described rebuilding of the shrimp farm industry in Aceh after the tsunami destroyed the previous shrimp farms, I think we need to look at this same region in the years to come because I see a major fault in the system developing if what Mr. Lawrence is saying comes to fruition- namely a lack of limit to the numbers of new farms encroaching in the region. Success does not necessarily breed success in the shrimp farm industry, especially if the industry grows beyond the carrying capacity of its surrounding environment. Even though the improvements mentioned are notable, without limiting the number of shrimp ventures and controlling the siting there srill are serious problems inherent there. Reconstruction of the Aceh region needs to ensure a multiple use of and access to the region's resources for the local communities. Without proper limits on the total area allowed for shrimp farming, it can be assumed that the industry will cave in upon itself because the systems of production are still by and large open throughput. Try as you may, the shrimp farm industry cannot perform the miracle of limitless production without burdening those other sectors that must support this still unsustainable industry. Do not be fooled by increasing numbers of shrimp farms, as eventually those great numbers will lead to a huge ecological footprint and a bigger failure.

David Lawrence
January 29, 2009

Alfredo raises some good points, namely that shrimp farming can have serious environmental impacts (negative ones) if not properly managed. Clearing out mangroves for new ponds is one of them. Use of pesticides is another. He is quite right in pointing out the dangers of expanding the numbers of farms. This is definitely something the Ministry of Fisheries of Aceh will have to monitor. Fortunately, at present there is no need to expand the number of ponds. There is a need to improve existing ones, and to manage them in environmentally sound ways. That is one reason we taught farmers to avoid use of pesticides. IFC, and all development agencies working in the sector, follow sound environmental guidelines.