BIOECONOMIC MODELING OF SHRIMP AQUACULTURE STRATEGIES FOR THE MAHAKAM DELTA, INDONESIA

Abstract

Bioeconomic modeling was used to evaluate traditional and extensive shrimp production in the Mahakam Delta and impacts of adopting Better Management Practices (BMP) for semi-intensive and integrated mangrove-shrimp culture. Modeling outcomes indicate that traditional production is not financially viable, failing to generate a positive 10-year Internal Rate of Return (IRR). Such practices persist in the Mahakam Delta as capital costs have been depreciated against past financial returns, input costs are negligible, risks are minimal, opportunity costs are low and options to intensify production have been retained by producers. Returns from BMP-guided semi-intensive culture (20% IRR) are marginally higher compared to extensive culture but entail a 10-fold increase in operating costs and greater risks. Integrated mangrove-shrimp production gives a reasonable IRR (53%) but costs remain high, management demanding and risks uncertain. Risk adverse operators with short-term leases may favor traditional and extensive practices. Sustainable intensification, allied to social capital development and rehabilitation of mangrove ecosystem services and environmental flows, is needed to reconcile multiple demands.