Economics of Sustainable Intensification of Aquaculture: Evidence from Shrimp Farms in Vietnam and Thailand

There is growing interest in sustainable intensification of aquaculture production. Yet little economic analysis has been done on farm‐level effects of the economic sustainability of production intensification. Data from 83 shrimp farms (43 in Vietnam and 40 in Thailand) were used to identify (through principal component and cluster analyses) 13 clusters of management practices that reflected various scales of production intensity that ranged from 0–1999 kg/ha/crop to 10,000 kg/ha/crop and above, for both Penaeus monodon and Litopenaeus vannamei in Vietnam and Thailand. The clusters identified reflected sets of management practices that resulted in differing yields despite similarities in stocking densities among some clusters. The enterprise budget analysis developed showed that the more intensively managed clusters outperformed the less intensively managed clusters in economic terms. More intensively managed farm clusters had lower costs per metric ton of shrimp produced and were more profitable. The greater yields of shrimp produced per hectare of land and water resources in more intensively managed shrimp farms spread annual fixed costs across a greater volume of shrimp produced and reduced the cost per metric ton of shrimp. Costs per metric ton of shrimp produced decreased from the lowest to the highest intensity level (from US$10,245 at lowest intensity to US$3484 at highest for P. monodon and from US$24,301 to US$5387 for L. vannamei in Vietnam and from US$8184 at the lowest intensity level to US$3817 at the highest intensity level per metric ton for L. vannamei in Thailand). Costs of pond amendments used in shrimp production were particularly high in Vietnam and largely unwarranted, whereas fixed costs associated with the value of land, production facilities, equipment, and labor were sufficiently high in Thailand so that net returns were negative in the long run. Nevertheless, economic losses in Thailand were less at greater levels of intensification. The study demonstrated a clear value proposition for shrimp farmers to use natural resources (such as land) and other inputs in an efficient manner and supports findings from corresponding research on farm‐level natural resource use efficiency. Additional research that incorporates economic analysis into on‐farm studies of sustainable intensification of aquaculture is needed to provide ongoing guidance related to sustainable management practices for aquaculture.