White shrimp has become a key commodity in Vietnamese aquaculture. White shrimp farming does not only enable the participation of smallholders, but also attracts companies and other stakeholders along the value chain. The value generating activities in white shrimp farming have contributed to improved livelihood opportunities of its stakeholders, and the socioeconomic growth of coastal communities in general. However, low accessibility to high value markets, low bargaining power and high dependence are existing issues for farmers, which affect the efficiency of white shrimp farming, as well as the development of the white shrimp value chain.
Based on a qualitative analysis of the white shrimp value chain in Vietnam, the presented research explores the current situation of production and consumption of the white shrimp industry, as well as advantages, disadvantages and development strategies in white shrimp farming. The value chain analysis approaches are theoretically based on the concepts of global production networks and global value chains (e.g. Gerreffi et al., 1994, 2005, 2016; Humphrey and Schmitz, 2001; Dicken, 2015; Coe and Yeung, 2015). Gereffi et al.’s (2005) approach of five types of governance and Humphrey and Schmitz’ (2002) concept of four types of upgrading within the concept of value chain analysis are the backbone of this study. The goal of this study was to provide information on the current status and sustainability issues in white shrimp farming, the differences among marketing channels and response ability of farmers to access each channel. Additionally, the power relationships among actors within the white shrimp value chain and the impact of these relationships on farmers are also outlined. Qualitative research methods were applied by conducting 24 semi-structured interviews. Interviewed stakeholders include white shrimp farmers, suppliers, middlemen, wholesalers, retailers, and relevant representatives of local governments. Further, secondary data was collected through socio-economic reports of government levels and related previous research. Thua Thien Hue province in central Vietnam was selected as the case study area.
The first part of this thesis is an introduction on global food, the importance of aquaculture and the rationale behind conducting research on value chain analysis. Afterwards, the framework of value chain analysis, governance and upgrading dimensions and the agri-food value chain, Vietnamese aquaculture with regard to development processes, distribution and existing issues, as well as the research methodology are outlined before presenting the empirical results, discussion and conclusion. The research results are outlined in four stand-alone research papers (chapters 5-8), which have the following common characteristics: the research focuses on small-scale white shrimp farmers; the theoretical approach of global production networks and global value chains is used for the analysis; governance dimensions are also a theoretical lens used throughout the research; furthermore, informal transactions and informal relationships often coin the white shrimp value chain and are thus integral parts of the empirical work.
The results show that the volume of white shrimp has significantly increased in central Vietnam in both, production and export since 2002. White shrimp farming requires high investments while it can provide comparably high revenue for farmers; normally, farmers can gain profit margins from 4.5 to 10%. However, lack of expertise, low availability of relevant infrastructure, missing access to capital and traditional production routines of farmers are affecting sustainability as well as resilient livelihoods with regard to the quality of white shrimp seed, changing technical knowledge, use of aquatic medicine, water pollution and curing diseases. Furthermore, there is a dependency of farmers on input suppliers because farmers are often debtors of input suppliers, especially of industrial feed suppliers. Meanwhile, the output market of white shrimp is controlled by intermediaries and most of the Vietnamese white shrimp production is traded via these middlemen before being distributed to consumers or processors. Although farmers can access the processing plant to capture a higher share of value, international standards appear as barriers for these kinds of direct business relations. The change from informal relationships to formal relationships is constrained by the gap between the quality requirements of processing plants and the ability of farmers to adapt to those requirements. Thus, selecting intermediaries is currently the easiest solution for farmers for accessing sales markets. This development led to ignoring the regulations on using antibiotics for shrimp production and wastewater treatment among farmers; instead, they solely focused on growing the production and maximizing revenues, which can be considered an attempt of farmers to compensate their disadvantages. Compared to other actors in the white shrimp value chain, farmers have less bargaining power, and little to no possibilities of independent decision-making, which leaves them only able to react instead of act within business relations. The relationships among actors in the chain were established based on personal trust, regular face-to-face interaction and the exchange of tacit information. The typical feature of the relationships is a high degree of informality and that the binding character can be stronger than with a formal contract. Local governments and farmers have implemented various strategies to upgrade the white shrimp value chain. That might result in issuing the regulations in white shrimp farming, establishing cooperative organizations. However, these activities are still limited and the majority of farmers are still facing major issues of access to distribution channels and dependencies on middlemen and suppliers. Hence, the thesis concludes, that in order to be competitive and ecologically sustainable, white shrimp farmers need to change production habits and improve product quality to respond to the requirements of domestic and international markets. The local government needs to continue to support farmers with infrastructure, capital and technology.