Coping up with the Risks and Increasing Sustainability: Strategies for Small-scale Shrimp Farming in Indonesia

Abstract

Small-scale shrimp farmers have contributed significantly in increasing shrimp production in Indonesia. However, they face various risks that resulted to high fluctuation in their income. Risk management strategies in shrimp farming are needed to cope with inherent risks in order to enhance sustainability of shrimp farming. This study analyzed the sources of risks, ex-ante risk management and ex-post risk coping strategies in small-scale shrimp farms in Indonesia. A field survey of 166 shrimp farmers was conducted in the North and South coastal zones of East Java. Results revealed that the top three sources of risks that influenced in shrimp farming were shrimp price volatility, high mortality due to diseases, and increasing formulated feed price. Requesting for government technical assistance was the common formal on farm risk management strategy used by the shrimp farmers. Sharecropping was the main ex-ante strategy to mitigate risk. Small-scale shrimp farmers tended to avail of informal loans that resulted to loss of savings. They also used family labor as informal ex-post strategy to reduce expenses. They used social assistance from the government as formal ex-post risk coping strategies.