Day 7 29th November From Harvest ……. Chains to processors

– Conventional Value chain from Harvest to Processing Plant

After a shrimp has been caught in a trap and taken out by the farmer early in the morning, there are a number of different routes for how they make their way to the processing plant.
In the conventional value chain the farmer can sell the shrimp to a:
1. Local Purchaser who is waiting somewhere on the street in the local village. The shrimp is weighed and then the farmer and purchaser bargain about the price. The purchaser normally gets 2 % in commission. The shrimp are then kept in a bag or bucket with water, until taken in the afternoon to a depot.
2. ” A Foria”, who is some kind of middleman that waits in the local market for the shrimp or collects it directly from the farm. The shrimp gets sorted and inspected on the floor before the farmer and Foria bargain about the price. The shrimp then stays in a bag without ice until it is taken to a depot at lunch time or in the afternoon.
3. “A Set”, which is some kind of a small store in the shrimp market, with a desk in front of it. First the shrimp is weighed, then it is displayed on the desk and the price is negotiated. As soon as it is sold, the weight and price is documented and the shrimp is stored in a box with ice. The owner of the ‘Set’ gets a commission of 2-3%. From here the shrimp is then taken to a Depot. Normally the farmers are paid the negotiated price, but sometimes farmers take out loans with the ‘Set’ for the preparation of their pond for example, and in this case the farmer receives a lower price for the shrimp so as to pay back the loan. Note in this case the “Set” is acting as a small scale micro-lender with the farmers current and future shrimp production being the security for the small scale loans or credit.
4. Sub-depot, which is a small room somewhere in the village, where farmers can bring the shrimp. Here they are weighed and then they bargain about the price, once agreed they write it down and then keep the shrimp in a small water pool sometimnes overnight before then transporting to the Depot .

Foria Bargaining

Via all four routes, the shrimp finds its way to a depot; a single room with some boxes and ice, where they are weighed and stored in ice.
The shrimp stays there until a truck picks it up and brings it to a processing plant. (This can be be once a day or every other day or even after 3 days) The depot staff get a commission per kilo. The payment for the shrimp, which is fixed by the processing plant, is sometimes paid directly and sometimes partly, and the money can take some time to flow back up through the value-chain system, from the processing plant to the depot, to the salesmen and from there to the farmer. It can take between 15 days and 3 months before the farmer is paid.

The advantages and disadvantages of both systems are obvious: while the organic system I mentioned in earlier on in my blog is less flexible than the conventional, it provides more security for the farmer in terms of the fixed price and how fast they get their income, without the need for bargaining or auctioning. The organic system also provides traceability. Moreover, the quality of the shrimp is higher and there is an advantage in animal welfare, because it is laways transported with ice and is directly processed, whereas the conventional shrimp has to follow a longer and more diverse supply chain often through a number of people making traceability impossible and making it difficult to control the cold chain, if there is one in place.

Photo © Loni Hensler