ssirtd workshop report final version042513...

SUSTAINABLE SHRIMP INDUSTRY ROUNDTABLE MEETING

Surabaya (4 March 2013) and Banyuwangi (6 March 2013)

Meeting Report

Jointly Organized by

Sustainable Fisheries Partnership (SFP)

Indonesian Fishery Product Processing & Marketing Association (AP5I) and

Shrimp Club Indonesia (SCI) – Banyuwangi

www.sustainablefish.org 2

Introduction

Farmed shrimp in Indonesia is one the country’s export products to US, Japan, and Europe. The total export volume of Indonesian shrimp in 2011 was around 150,000 MT, valued at USD 1.2 billion (the US was the largest importing country in 2011, with 70,334 MT, valued at USD 515.5 million). However, the industry is now facing significant challenges. The industry suffered Infectious Mionecrosis Virus (IMNV) outbreaks between 2008 and 2009 and product rejection due to food safety issues. It now faces allegations by the US Department of Commerce (DoC) that the Indonesian shrimp sector is supported by the government in various ways, thus making prices considerably lower in the international market. But many producers continue to go out of business because prices are so low.

The IMNV outbreaks caused a drastic drop in shrimp production in 2009 and production had not recovered in 2010. Shrimp production started to increase during 2011 and 2012, but continued to fluctuate due to a lack of interest from farmers to return to the “high risk” shrimp business and little appetite from lenders to restart the sector. Idle brackish water ponds along the north coast of Java are still far from recovery and lack of capital hinders shrimp producers trying to restart the operation.

East Java Province has great potential for shrimp industry development. The province has a total brackish-‐water farm area of around 57,343 ha sited in key districts such as Gresik, Pasuruan, Sidoarjo, and Banyuwangi. However, due to the lack of interest and financial capital, as well as the continuous depreciation of the infrastructure, the productive area is only 70% of the total area. The availability of infrastructure (processing plants, feed mills, roads, etc.) and human resources means the province has all the resources to produce a large volume of shrimp. Shrimp production in East Java during 2012 experienced a slight increase compared to the previous year, with a total export volume of around 42,300 tonnes (DKP East Java, 2012). The low production ratio compared with total available farmland was due to a massive “idle” farm area and degraded environmental quality. On the other hand, total shrimp production in Banyuwangi reached 9,815 tonnes during 2012 from 1361 ha. This potential can be further developed, considering around 30% farms in Banyuwangi are still not productive.

Development of shrimp production in East Java requires comprehensive solutions to the problems at hand. On the one hand, production can be boosted through revitalizing “idle” farms, thus returning them to an operational status and maximized the area’s potential. On the other hand, production improvement also requires improvement in management practices (BMPs) in the existing farms, as well as improved input quality such as seed, feed, and capital support.


From a marketing point of view, big challenges are ahead in terms of dealing with less synchronized supply and demand, as well as stricter buyer requirements. Factors like hazardous substance residues in shrimp are still an issue for farmers in the country, including the issue of environmental degradation due to shrimp farming. Farm certification required by buyers is also difficult to acquire.

Recognizing both the potential and the challenges, stakeholders in Indonesian shrimp farming will have to recover production while competing with other producing countries to regain its share in the world shrimp market. However this process needs to be assessed comprehensively so that all stakeholders can work together, resolving all constraints for mutual benefit.

Objectives

The overall objectives of the roundtable meetings were to introduce the Sustainable Fisheries Partnership (SFP) and its current “Shrimp AIP” program on farmed shrimp in East Java, where the focus is on zonal management. Furthermore, the roundtable aimed to create a platform where key issues in shrimp farming can be shared with different stakeholders and possible collective actions in resolving the issues are identified. Specific objectives of the meetings included:

1. Introduce SFP’s AIP program on Indonesian shrimp and the zonal approach 2. Understand current perspective of all stakeholders involved in the Indonesian shrimp

industry 3. Assess the interest of the different stakeholders on working together as part of the

zonal approach 4. Determine potential site (zone) as pilot region for the zonal approach.

Location

Producers’ and processors’ logistical issues, scheduling conflicts, and a concurrent international seafood event (Boston Seafood Show) resulted in the roundtable being split into two sessions in order to accommodate as many stakeholders as possible. The meeting with mostly processors was held on 4 March 2013 in Surabaya, while the meeting with mainly producers, policy makers, and NGOs was held two days later on 6 March 2013 in Banyuwangi. In this way, views of the two major players of the industry (producers and processors) were shared.


Organizers

The Sustainable Shrimp Industry roundtable was organized by the Sustainable Fisheries Partnership (SFP) with support from the Department of Fisheries – Banyuwangi, the Indonesian Fishery Product Processing & Marketing Association (AP5I), and Shrimp Club Indonesia (SCI) – Banyuwangi. Key people involved in the preparation and implementation of the meetings include:

• Mr. Pamudi, SFP Shrimp AIP Coordinator • Mr. Johan Suryadarma, Vice President, AP5I • Mr. Pitoyo, Chairman, SCI – Banyuwangi • Dr. Ernesto J. Morales, SFP Aquaculture Technical Director • Mr. Anton Immink, SFP Global Aquaculture Director

Moderator/Facilitator

Pamudi (SFP)

Translator and Secretary

Pamudi (SFP) was the main translator for both round table meeting. However, Dessy Anggraeni (SFP) and Ita Sualia (Wetlands International) also helped in the translation and keeping notes during the discussion in Surabaya and Banyuwangi, respectively.

Presenters

The two roundtable meetings were implemented through a combination of presentations and plenary discussions in order to encourage the maximum exchange of information among the different stakeholders. During the discussion, the facilitator provided some guiding questions in order to ensure that the discussion stayed focused. However, the guiding questions did not limit the discussions, rather they ensures that central issues were addressed. The topics presented during the two roundtable meetings were:

No Presenter Institution/Agency Topics March 4 – Surabaya meeting 1. Anton Immink Sustainable Fisheries

Partnership Aquaculture Improvement, Thinking Outside the Farm


March 6 – Banyuwangi meeting 2 Suryono Dept. of Fisheries –

Banyuwangi Shrimp Farm Revitalization Program in Banyuwangi

3 Agus Setiadi Shrimp Club Indonesia – Banyuwangi

Status and Challenges of Shrimp Farming in Banyuwangi

4 Anton Immink Sustainable Fisheries Partnership

Aquaculture Improvement, Thinking Outside the Farm

5 Candhika Yusuf WWF Indonesia RSCIP Program in Indonesia 6 Ita Sualia Wetlands International Global Environmental Standard for

Sustainable Shrimp Farming

Participants

The invited participants were limited to those that are active in the shrimp industry in East Java and that are farming in the area where SFP’s buyer partners are sourcing. This was done in order to get the full support from the buyer partners as well as the processors. Prior to the meeting, the participants were oriented about the current sustainability issues in the shrimp industry to prepare the participants for the sustainability discussions. As mentioned earlier, two sessions were held at two different locations – the processors and Regional (East Java) Fisheries Department met in Surabaya, where most of the processing plants and their respective offices are located; and the producers, policy makers (Banyuwangi District), and NGOs met in Banyuwangi, where most of the producers are located.

Processors were invited through the support of Indonesian Fishery Product Processing & Marketing Association (AP5I) as well as the buyer engagement team of SFP, while producers and SCI members were invited through the support of SCI – Banyuwangi and through personal connection with the SFP Indonesian Shrimp Coordinator. The pie chart below shows the distribution of participants based on the sector they represent.

Participants representing the government were invited as they are directly or partly involved in the development of the aquaculture sector in the region. Attendees included representatives from the aquaculture, environment, and planning departments.

The number of producers attending this meeting was notably very small (13% or 4 farmers), especially as they are part of the shrimp club association in Banyuwangi. The association decided to send their representative instead of asking several farmers to attend the meeting. SFP will follow up to ensure that the producer representative will convey the meeting discussions to the association members.


Summary of the participants from the two roundtable meetings.

No Institution/Agency No. of Participants

Remarks

1 Regional Fisheries Department

1 Aquaculture department

2 District Fisheries Department

2 Aquaculture department

3 District Environmental Protection Agency

2 Environmental mitigation department

4 District Planning and Development Agency

1 Natural resource department

5 SCI officials 3 6 Processor Association 1 AP5I 7 Processors 14 Indu Manis, Atina, Madsumaya, ICS, STP, CP,

BMI, Sekar Bumi, GMCP, Indokom 8 WWF Indonesia 1 Aquaculture division 9 Wetlands Intl Indonesia

Program 1 Mangrove capital project

10 Suppliers 1 CP 11 ASEAN Market Project 2 12 Farmer representative 1 SWK

Total Attendees 30

Processors 50%

Producers 13%

Government agencies 20%

NGOs 7%

International Orgs 7% Suppliers

3%

Distribution of Participants


The Meeting Process

Both meetings were moderated by SFP with Mr. Pamudi as the facilitator. In both meetings, Anton Immink presented an introduction to SFP and its program with particular focus on the Aquaculture division. The presentation highlighted the limitations of individual farm certification and its weakness in addressing the cumulative impact of aquaculture; hence, acknowledging the value of a zonal approach in ensuring the sustainability in the region.

The meeting in Surabaya (mainly with processors, and translated into Bahasa for the participants) had only one presentation in which Anton Immink introduced the SFP AIP program in Indonesia, particularly in Banyuwangi. As it was only a half-‐day meeting, it opened with remarks from Vice President of AP5I Johan Suryadarma, followed by the presentation about the SFP AIP Zonal Approach, and continued with feedback from processors. Mr. Johan highlighted the importance of working closely with all stakeholders to adapt for trends of buyer requirements and international standard certifications. Following Anton Immink’s presentation, lots of questions, comments, and suggestions were given to support the implementation of the zonal aquaculture approach

Anton Immink presenting the concept of zonal management


The meeting with producers (Banyuwangi), policy makers, and NGOs had several presentations on various issues relating to the sustainable shrimp industry. The government (Fisheries Department) introduced its revitalization program to be implemented in Banyuwangi in 2013, including details on locations and total area to be rehabilitated, while the farmer association (SCI) provided information on the status and challenges of the shrimp industry in Banyuwangi, including efforts needed to recover shrimp production in the district. Following SFP’s introduction to

the aquaculture zonal approach, two NGOs (WWF and Wetlands) introduced their activities in Banyuwangi and detailed presentations on environmental issues particularly regarding the green belt zone (mangrove areas). Prior to the discussions, the participants were given two key questions, i.e., how to implement the aquaculture zonal approach and which issues need to be resolved.

Participants actively participated during the discussion

Provincial Dept. of Fisheries representative actively participating during the discussion


Discussions

Discussion topics in both meetings are described below. The meeting with seafood processors only discussed processing, marketing, and trade issues. However, discussions with producers, government agencies, and NGOs in Banyuwangi focused on larger issues including policy and legal issues, production, social and environmental issues, and disease management.

Policy and Legal Issues

The aquaculture zonal approach is similar to MMAF’s “minapolitan” program, which focuses on zoning, integrity, and synergy, and has grown to an industrial scale. The government expects that the minapolitan program could be developed in all districts and would require system-‐wide support (locations, master plan, etc.). The next key sector for development is the fisheries, as indicated in GoI Law No. 18/2012.

Currently, the total potential area for shrimp farming in Banyuwangi still follows the 1985 Decree of the Head of District of Banyuwangi. No scientific assessments were carried out for the determination of the potential area. Newly released District Regulation No. 8/2012 was basically following the existing potential areas (1,782 ha).

In order to allay concerns about sectoral competition among agencies/institutions, the Banyuwangi district government has established a working group for recovery of the shrimp industry. The group is composed of several key agencies including the District Planning and Development Agency (Bappeda), Land Registration Agency (BPN), Fisheries Department (DKP), Public Works Office (PU), Environmental Protection Agency (BLH), and Bina Marga. The working group was established to assist the central government in revitalizing shrimp farm infrastructure (canals) to be constructed in 2013.

In terms of the legal status of shrimp farms in Banyuwangi, most farms are registered either in village registration books or in the land registration office. The government is now offering small-‐scale farmers who may have only simple records/notes/letters from the village the opportunity to apply for free land registration to get certified by BPN.

Production Issues

Most small-‐scale farmers have difficulties operating their farms due to high expenses. When the conditions of ponds and canals are poor, and the system cannot be used for farming. Reconstructing ponds and canals, including setting up water intake systems, can be expensive. However it was revealed in the meeting that farmers could now use their pond certificates as collateral for bank purposes.


In relation to traceability, small-‐scale farmers are not accustomed to keeping records on many aspects of the business. Therefore, they need technical assistance to learn how to comply with standards (national and/or international).

Social and Environmental Issues

Small-‐scale farmers require continuous support and education in farming systems, (e.g., stocking schedules, density, management practices, etc.) in order to comply with standards. Therefore, SCI recommended that farmers form records management groups.

Regarding former mangrove areas, Banyuwangi has records of farm history in village administration books covering land use for the last 30 years, which can be useful for certification purposes.

EIA (Environmental Impact Assessment) is still mandatory for farms greater than 50 hectares. However, since farm sizes vary, it is difficult to control cumulative impacts. Moreover, the costs for EIA are highly expensive (around USD 30,000). However, environmental monitoring has been carried out by the Environmental Protection Agency and SCI every 6 months through water samplings. Reports from these monitoring activities are stored and available at SCI.

Disease Management

CP believed that the zonal approach is the answer to manage disease outbreaks, especially with the recent threat of Early Mortality Syndrome (EMS). CP has a lot of experience in developing a cluster called Kampung Vaname. CP has developed a closed-‐system management approach as well as coordinated stocking schedules, density monitoring, SOP implementation, and cost sharing for water sterilization. Zoning management implementation has proven highly useful to cope with disease risk mitigation and for an emergency response system. Zonal approach planning and implementation needs strong support from stakeholders in the zone to encourage formal and informal collective mutual agreements.

Processing, Marketing and Trade Issues

Most processors raised their concerns on scarcity of raw materials (shrimp), fluctuation of international shrimp prices, weak bargaining positions with the farmers, and low appreciation from the markets for certified shrimp. They believe that production costs for producing shrimp in Indonesia are higher compared to other countries.

Processors believe that zonal approach is a good solution but will prove difficult to achieve. They believe that, as with their experience in the organic shrimp project, prices of seafood from a specific/certified safe seafood zone can increase. However a rewards and punishments system needs to be implemented. The organic shrimp project has experienced difficulties since


farmers have varying priorities (stocking schedules, density, frequency, etc.). However, processors could put some effort into educating farmers as long as markets have linkages (and prices!).

Processors also questioned the price difference between wild-‐caught shrimp and cultured shrimp. Higher prices of wild-‐caught shrimp have led to increased destructive fishing and less competitive prices for cultured shrimp. Processors believed some processing steps (soaking) have caused perceived reduced quality in shrimp. Other processors raised the importance of mitigating risks in shrimp farming.

Recommendations

RTM participants recommended some follow-‐up actions including:

• BMP cluster (pilot project) for smallholder farmers • Detailed design for aquaculture zonal approach • Carrying capacity studies, types of species, and market linkage

By the end of the meeting, participants agreed to form a working group comprising government agencies like the Fisheries Department (DKP), Environmental Protection Agency (BLH), Planning and Development Agency (Bappeda), SCI – Banyuwangi, RSCIP Consortium, Input Supplier and the Processor.

Follow-‐Up Actions

Some follow-‐up actions are required to move the AIP forward:

• Communicate officially with heads of the institutions/agencies about the idea of a working group and ask their support to nominate focal points for the institution/agency

• Work with farmer groups in Muncar to effectively disseminate the information on the AIP zonal approach

o Echo the output of the RTM with potential member of the AIP in Muncar o Assess the interest of the producers in joining the AIP “frontliners” o Develop workplan specifically in Muncar AIP zone with proper involvement

among key players.

ssirtd workshop report final version042513...

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