Large Scale Shrimp Farming and Impacts on women
by P. Raja Siregar
A. Historical
In land aquaculture has been practised in Asian countries, namely in Indonesia,China,
India and Thailand for hundreds of years. Shrimps were traditionally cultivated in paddy
fields or in ponds combined with fishes, without significantly altering the mangrove forest.
In land poly-culture created employment through labor intensive. Many fish species, such
as tilapia, milkfish and others was consumed as protein sources for local people and
domestic market. Post larvae shrimp, and the fry of milkfish came into the pond through
tidal flow, and brings nutrient and plankton within for shrimp and fish feed. No input, extra
feed, and chemical component used in this system. In Indonesia traditional shrimp
farming in fresh water ponds (‘tambak’) originated more than 2000 years ago on the North
shore of East Java.
Due to recent increase in market demand, the method has been changed into intensive
and semi-intensive, with much less respect to local ecosystems and people. Policy makers
and international agencies consider the intensive shrimp pond in Equador, Taiwan, and
China as success story. The World Bank, ADB, supported shrimp aquaculture in
Indonesia, Thailand, Philippine, Malaysia and China. In the late of 1980s,Taiwan shrimp
aquaculture collapsed. However, Thailand took the major role in the world shrimp industry
and also expanded to other Asian countries through it‟s private sectors.
Multinational corporations also played similar role as World Bank and ADB in expanding
intensive shrimp industry in Asia. Charoen Pokpand (CP)2, Thailand‟s biggest
transnational corporations, encouraged farmers and government in Indonesia, Malaysia,
India, and China to shift into intensive shrimp monoculture. The CP build a pilot project in
several shrimp pond area in several countries as a display of the success intensive pond
in giving more harvest.
Land Conflict
Most of resistant against shrimp industry related to land taking. Traditional shrimp farmers
in South Sumatera, Sulawesi, Kalimantan, Papua has been showing their resistance for
land converting into big and massive shrimp farming. Thought, indigenous people in some
place (Sulawesi, Kalimantan, and Papua) already aware about the impact of converting
ecosystem to the harmony of nature.
Mangroves have for centuries been used communally by local people. One study mentions
that about 67 products obtained from mangroves were utilised by local communities (e.g.
commercial fish, shrimp, game, timber, honey, fuel, medicine).(De Lange, 2003). Woman
plays the vital role in taking the advantage of mangrove resource, and male work in
common agriculture-kind works. In several region, namely in Papua Island, there is an
indigenous knowledge regulate woman‟s role in mangrove forest. The shift from food
P. Raja Siregar, Campaigner of WALHI (Friends of The Earth- Indonesia) and Coordinator of Coalition of Anti-Debt
Movement. E-mail: radja@walhi.or.id
2
Charoen Pokpand (CP) Group was established by two Chinese brothers in Bangkok in 1921 for trading in sedds and
agricultural products. In the 1960’s, the CP Group expanded their business and started producing animal feed. The CP
group has been involving in the full cycle of production “from the inputs of feed and the farm technology to the
marketing of products overseas. The CP currently the biggest shrimp industry in the Asia, and possibly in the world.
(Kagawa, 2003).
production for local consumption into export-oriented food production therefore leads to a
loss of local protein resources. Industrial shrimp farming take all the access and block
traditional users‟ access to coastal resources.
This de facto public ownership was however never formalised, Indonesian law holds all
forest land to be owned by the state (often under the authority of the Forestry Service).
Coastal communities do not posses formal landownership documents, although they may
in fact have used and cared for that land over a long period. In many cases local people
were more or less forced to leave their lands for the large scale farm. In man cases, a
widow or a single woman, have less chance to depend her land.
Changes in social structures local communities
In general, the more intensive ways of shrimp farming are much less integrated into the
coastal communities where they are situated. The pressure on natural resources in the
surroundings are higher and the more intensive ponds are often owned by outsiders who
live in cities. Also people operating the ponds are often outsiders, e.g. related to
transmigration program from Java Island. Employment opportunities for the local people
are often limited to unskilled and low-paid jobs, such as watchman and harvester). This
often leads to conflicts with the local people. The farmers family who loss the land, will
leave to the cities for low skill job. Woman and children are the most fragile group related
to changing in social structures. Some of the family member, even in the small number,
can end to prostitution, or to be house keeper.
From the owner to be the labor
Higher labor absorption is often cited as the positive aspect of intensive farm development.
However this argument does not take into account the fact that one household or company
can control at least 40-50 ha of intensive farms, meaning that distribution of assets and
benefits within the community is less equitable in intensive systems than in less intensive
systems. In traditional pond systems, each household ownes and manages approximately
one hectare of pond area. Intensive farms, on the other hand, involve a change in
farmers‟status from pond owners to wage laborers. Women are preferred employees in
shrimp processing factories. However, only an insignificant number of local woman can
participate in the processing factories. Some of them employees as cleaning service and
other low skill and part time works.
Large Scale Farming
The current trend is that the traditional farmers are directed to join as satellite farmers in a
Nucleus Estate Smallholders Scheme (NESS) (see detailed on box NES-Scheme on a
large scale farming). It‟s already took place in South Sumatra, Aceh, Central Sulawesi,
West Nusa Tenggara, East Kalimantan and Maluku. The government neglects its duty to
develop and protect the interest of traditional farmers and maintain the environmental
quality. The policy of large scale pond has limited the chance of traditional farmers to
develop their business. In the history of Indonesian economics, the bank mostly support
the large scale company.
Large scale NEES usually supported by government through transmigration program.
Intensive and semi-intensive farms are built by big industries, and many of them are
foreign investment, in a larger scale than the small farm. The size is from 10,00 to 30,000
hectare for each farm. The opening of a large pond area, was followed by taking over
resident‟s land or a license to take over conservation forest area from the Department of
Forestry. The opening of large scale shrimp farm usually followed by pressure to local
people and push the residents out.
Provided with high technology that are adopted from Taiwan and Thailand, the company
build shrimp farming industries far from residential area in South Sumatra, Lampung,
Central Sulawesi, Aceh and Maluku. At this moment, the three biggest shrimp breeding
company which are operated with NESS model are PT Central Pertiwi Bratasena (PT.
CPB), PT Dipasena Citra Darmaja (PT.DCD) and PT Wahyuni Mandira (PT. WM). PT.
CPB which 31% of its shares are owned by Charoen Pokphand from Thailand, owns an
area of 10, 500 Ha and will add more area as large as 15,000 Ha in the same location. PT.
DCD and PT.WM are owned by Gajah Tunggal Group, located in South Sumatra and
Lampung with an areal of 16.500 Ha and 30,000 Ha ( 6,000 Ha have been operated )
respectively. In the year 1996, PT.CPB exported 17,000 metric ton of shrimp with the
value of US$ 114 million, meanwhile in the same year PT.DCD produced 19, 853 metric
ton, of which 13, 423 metric ton are exported. PT.WM which started operating in the end of
the year 1996, have just started its maximum production stage. Each of these three big
shrimp farming can contribute 20 – 30 % of Indonesian‟s shrimp export. We can say that
almost 70 - 80 % of Indonesian shrimp export are contributed by 3 company (PT.DCD,
PT.WM, PT. CPB).
In industry system of shrimp farming, woman role is not encountered, especially in the big
scale farming. In large-scale shrimp farming only adult and educated man can hope to get
a job. In case of death of inability to work of the smallholder males, women must leave the
farming estate, leaving behind all the assets that they had been paying for by credit
installment.
Debt Trap
Shrimp cultivation is the most high-risk process in shrimp industry, especially after virus
attack in 1993 till today. Though, the small farmers were encourage by government and
influence by industry to continue the grow-out process. According to farmers, one
successful in harvesting will cover 2 times failures. It becomes the motivation of farmers to
move on. It is a “gambling business” since the failure of harvesting cannot be predicted.
Most of small farmers in the past were indebted and did not continue the business
anymore. The current shrimp owner mostly is the local businessman who bought the
ponds from several small indebted farmers.
The debt trap can even be bigger under the Nucleus Estate Smallholders Scheme (NESS)
concept. Under this system, commercial firms take the loans (mostly in US dollars) and
use parts of the loans to extend credit packages to shrimp-pond smallholders who are part
of the NES-scheme. The companies provide all inputs (e.g. fry, feed and medicine) and
determine the costs the farmers have to pay for them. They also determine the prices paid
to the farmers for the shrimp they harvest. The risks and costs of intensive shrimp farming
through the NESS project are therefore borne by the smallholders, while the benefits
mostly go to the companies. In many cases this arrangement has led to a serious debt
situation of the farmers. Often the earnings are too small to enable them to pay of their
loans. Despite good harvests, debts often continue to mount. There are also complaints
about the system of payment reductions for inputs from the company, and the generally
unjust and non-transparent manner in which the companies are managing the credit and
repayment systems. An illustrative case regarding such problem is the NESS project of PT
Dipasena Citra Darmaja (PT DCD) in Lampung, which is the largest integrated shrimp
farm in Southeast Asia, involving more than 9.000 shrimp farmers. At the beginning of the
arrangement every farmer received a furnished house and two shrimp ponds for a credit of
135 mln rupiahs. Based on PT DCD‟s assumptions of future production amounts, the
farmers were expected to be able to pay back the loans after about 8 years. After 10 years
it however showed that the assumptions were untrue. The debts of the farmers had
increased significantly to average 407 mln rupiah per farmer, because the production costs
had been much higher than the price the farmers received from the shrimps. Both the
production costs and the prices for the yield were however set by PT DCD (the company
also sets the prices for inputs). The situation further deteriorated when the rupiah declined
against the dollar. The farmers knew nothing about this situation because PT DCD terms
and conditions and the developments were never communicated in a transparent manner.
Conclusion
This modern and large scale shrimp farming create a major socio-economic problems to
the local people. There is often a strong relationship between such problems and the
intensity of the farming system. Land conflicts, exploitation of the poor by large
corporations, and changes in social structures of local communities also play a role in
other industrial sectors and in other developing countries in general. The local people can
not fully play the important role on the shrimp industry. A few of them can participate as
low skill workers, and the others have to find new job, and migrate to city.
In conclusion, the change from traditional to industrial shrimp farming that is rapidly taking
place might in the short term benefit the government and the large-scale shrimp investors
due to foreign currency generation, but the environmental and social costs associated with
the industry by far outstrip the benefits. Local communities are particularly marginalised
and exploited and local social structures are threatened by growing tensions and conflicts.
( P. Raja Siregar, Campaigner of WALHI (Friends of The Earth- Indonesia). Also as
Coordinator of Coalition of Anti-Debt Movement. Email; radja@walhi.or.id)
Box:
NES Scheme on a large scale farming
Teoretically, NESS indicated by an agreement between a farmer as primary producer with
company as harvest collector. By using this relationship, the company doesn‟t have to cultivate the
product. Then the company doesn‟t have to own a piece of land and receive benefit of market
access. The company also doesn‟t have to deal the risk of harvesting failure.
Applying NESS concept on large scale shrimp farming completely similar with „contract farming‟‟.
The farmer was attached by a contract to work on the farming in order to finish their debt.
Loan Agreement
Prior to joining the scheme as a Plasma (a smallholder), a farmer has initially to sign an agreement
namely a loan agreement (credit agreement) under partnership arrangement. The credit
agreement sets forth that the Plasma farmer shall apply for credit to a certain Bank through the
company to purchase some pieces of ponds and a house as already made available by the
company. The ponds, the house and other pond means constitute a collateral to the Bank.
Agreement letter says that the farmer will own the pond, house and other pond means constiturte
in after pay off his credit. It said need 7-8 years work. The credit process is simply not so different
with other form of credit (credit for motorcycle, car).
Process of Credit Settlement
The credit agreement sets forth that Plasma farmer shall pay the credit installment soon after
shrimp harvest season. In practice as occurs in a big scale pond, the company neither purchases
the harvest of the farmer nor remits the harvest sales. The company collects the harvest and
records the harvest value with price calculation as set by the company but never gives the money
in cash. The credit installment of the farmer is unilaterally done by the Company to the Bank.
A credit installment is a certain amount of money which is set aside from the sales of production of
a Plasma for the payment of installment of credit principal including its interest in accordance with
the amount of credit which is already received at the time of the signing of the credit agreement by
the Plasma Farmer.
In an integrated and closed pond, the Plasma farmer is consistently absorbing each product which
is offered by the company. A significant profit is acquired from the sale of shrimp fry, feed, fish
medicine which is purchased by the plasma farmer in a credit scheme.
Since the plasma farmer is not in possession of cash money, after harvest season the plasma
farmer receives again a number of production means as well as living costs to further continue his
shrimp cultivation activities. The whole production means and living costs are calculated as
operational credit. This means that the Plasma farmer has to borrow money of his own from the
company with interest charges. A variety of credit calculation including its interest as well as the
non-transparency of the company in explaining the specifications have made the calculation
complex. After working for several years, the Plasma farmer has never been aware whether or not
his credit is already settled or how much credit has been paid for.
Partnership Agreement
The Plasma farmer is also offered a Partnership Agreement which contents are mostly
provisions/regulations which have to be complied with. The contents of the agreement are among
others concerning rules of order for the Plasma farmer in running the pond as well as regulations
on the behavior, exit and entry permits from and to the location including its sanctions.
The agreement also sets forth that the company is entitled to expel the Plasma farmer from the
farming if and when he/she is considered violating the set provisions. This Inti-Plasma partnership
agreement is the one which also constitutes a problem as being protested by the Plasma farmers.
The Plasma farmer is no longer considered as a partner, but as a labor only.
Generally a big scale pond is situated in an isolated and closed location from the outside world.
The plasma farmer is restricted in his/her social activities either within the pond area or in relation
to the outside world. Only a few days in one year the Plasma farmer gets exit permit from the
location or annual leave. The Plasma Farmer has to undergo some procedural stages in getting
the permit from the management. It frequently occurs that the Plasma farmer is belated to attend in
case of calamity or death of his/her relatives outside the pond location due to the above procedural
process. Sanctions are also imposed to plasma farmer who is too late to return. The partnership
agreement mostly regulates on what and how the Plasma farmer to act properly. It is crystal clear
that the partnership agreement is in the first place not based on equal level positions.
Land conflict and status of farming possession
What is practically applied in shrimp pond on large scale basis in Indonesia is that the company
can evict the incipient farmers( Plasma) on certain reasons. The company then recredit the shrimp
pond which has been left by such Plasma. In the context of a credit agreement, the pond that
becomes collateral has to be a deal between the Plasma farmer who receives the credit and the
Bank which gives the credit. The company only acts as a credit guarantor between the Plasma
farmer and the Bank. It proves that there is no standard terms of reference regarding the
institutional and relationship mechanism of Main- Plasma farmers within the credit context.
Regarding social impacts, shrimp farming has generated severe tensions and conflicts between
local people and outside workers, within communities, and between local people and
investors/companies. One of the main reasons for conflict has been land grabbing and stealing.
Supported by government agencies and police, company forced the local people to give up their
land with inappropriate compensation or even with no compensation at all.
One of the unique characteristics of shrimp farming in Indonesia is the application of the 'Inti-
Plasma' or NESS (Nucleus Estate Smallholders Scheme). A company converts large tracts of land
(often mangroves or other wetland ecosystems) into shrimp ponds and then sets up agreements
with smallholders, who buy all the input for farming one or a few ponds from the company and then
sell the harvest to the company. Theoretically, the smallholders are expected to pay back their debt
to the company within 7-8 years and to become independent owners of the pond and a small
home. In reality, all the conditions and prices are set by the company, the accounts are kept by the
company and the smallholders get trapped into a vicious cycle of poverty and debt. Even the social
lives of the smallholders become totally controlled by the company: they can leave the 'shrimp
estate' only for a few days per year and only for certain reasons approved by the company, they
are penalised if they are late to return. When a shrimp harvest fails all the burden falls on the
smallholders, who sinks into even deeper debt. Smallholders live in state of total dependency of
unfair and shady company practices and in condition of semi-slavery.
The application of the NESS model to large-scale shrimp farming has caused severe social conflict
and human right violations. A geographical concentration of shrimp farming conflict is in South
Sumatra. Three of the largest shrimp farming operations are located in adjacent areas in Sumatera
(Wahyuni Mandira in South Sumatera, Dipasena and Bratasena in Lampung). All of them are
facing strong protest by local people due to land rights issues and human rights violation.
Wahyuni Mandira Co. now possesses 30,500ha and is planning to expand to 170,000ha. Prior to
its operations in 1997, part of the land belonged to the local people and the other was a
conservation area. 2,200 farmers were forced to give up their land for very small compensation as
the Provincial Government claimed that the land was government asset and the local people didn't
have land rights. Only 10% of them were invited to become smallholder farmers and the others
were asked to migrate. More than one thousand resisted and stayed on in neighbouring land and
in mangrove areas.
The NESS system is also very biased against women. In large-scale shrimp farming only adult and
educated man can hope to get a job. In case of death of inability to work of the smallholder males,
women must leave the farming estate, leaving behind all the assets that they had been paying for
by credit instalment.