VOLUNTARY MANAGEMENT IN THAI SHRIMP FARMING

The implementation of the voluntary adoption of the Code of Conduct (CoC) to promote environmental responsibility and sustainable development of Thai shrimp industry is examined. Farmers' perceived benefits, risks and uncertainties associated with the adoption and their perceived extra fixed cost are found to be the critical conditions to the success of the program. Improvement of farmers' perceptions through increased information and knowledge, development of supportive policies and mechanisms (i.e., a “Group CoC” system, insurance program, a combination of environmental policy approaches) and strengthening farmers organizations, as well as establishing networks among and between the players throughout the market chain are suggested to enhance the adoption and implementation of the scheme.     

IF THAI SHRIMP FARMING WERE TAXED,HOW MUCH SHOULD IT BE?

A dynamic-constraint optimization model that incorporates the accumulated nutrient load from farm discharges to the sea is applied to derive an optimal corrective tax for Thai shrimp farming. The model internalizes the environmental costs of the cumulated stock of nutrients discharged, mangrove conversion and abandoned farms. It suggests imposing a tax on the stock externality that is equal to the increasing shadow cost of the stock of nutrient accumulated before damage occurs. However, the simulation results show very small shadow costs at the beginning of the paths and indicate that the nutrient load has a negligible impact on the Andaman Sea but a significant effect on the Gulf of Thailand. A socially efficient level of production for Thailand would be around 70–80% of private optimal production. The tax ensures a higher net gain from trade. On the other hand, its effect on net social welfare is ambiguous.