The challenges and prospects of small-scale aquaculture in Bhutan

Small-scale aquaculture contributes substantially to human wellbeing with minimal negative socioenvironmental externalities. However, the small-scale aquaculture sector often is under-recognised and insufficiently supported and continues to face numerous challenges that limit its benefits and threaten its long-term sustainability. Recently, the COVID-19 pandemic has compounded the difficulties confronting the sector by severely disrupting supply chain activities. At the same time, the development of sustainable aquacultural technologies such as aquaponics has improved the prospects of the small-scale aquaculture sector. Against the backdrop of intensified challenges and enhanced prospects, a global call has arisen to acknowledge small-scale aquaculture and increase support for its advancement. However, empirical insights regarding the challenges and prospects of small-scale aquaculture to support policy development are limited. Towards addressing this knowledge gap, this thesis aims to highlight the key challenges and prospects facing the small-scale aquaculture sector in Bhutan.
Being predominated by small-scale operations, the aquaculture sector of Bhutan, a developing country, provides a pertinent empirical case for the thesis. Using the Bhutanese case, the thesis achieves its aim through four essays, each with a unique objective of its own. The first essay examines the effect of commercialisation on productivity in small-scale aquaculture production. Data envelopment analysis is used to estimate the productivity of small-scale aquaculture production, which is then regressed on the proportion of fish sold to analyse how output-side commercialisation impacts productivity. In so doing, the essay quantifies the problem of low productivity in small-scale aquaculture and identifies an opportunity to expand aggregate output substantially through operating more productively. The second essay examines the effect of productivity improvement on the likelihood of farmers to exit small-scale aquaculture production. Survey data is used to measure the propensity of 202 Bhutanese farmers to exit aquaculture production, which is subsequently regressed on a slacks-based measure of productivity. In its third essay, the thesis identifies the crucial predictors of the propensity of small-scale aquaculture farmers to adopt aquaponics and discusses their likely implications using abductive reasoning and the extant literature on aquaculture technology adoption. Data from 202 fish farmers are utilised to build a random forests machine learning model, whereby crucial predictors of the stated likelihood of adopting aquaponics are separated from a large set of 55 potential predictors. Subsequently, the likely implications of these predictors are discussed. A three-step procedure of data splitting, model training, and model validation is employed to achieve the essay’s objective. The thesis devotes its fourth and final essay to describing the impact of COVID-19-related policy responses on small-scale aquacultural operations in Bhutan. Data on 353 fish farmers are used to describe how an extensive range of fish farming activities have been impacted and how farmers have responded to altered operating conditions. The essay documents and discusses the government’s support to enable fish production during the pandemic, impact on fish farmers’ food security, and the critical support required to sustain fish production during and after the COVID-19 pandemic.
The findings of this thesis engender crucial insights to support small-scale aquaculture development policies and programs. The first essay suggests that commerce-oriented production can lead to productivity improvement, mainly through the motivation provided by the prospect of earning income through the sale of surplus output. The second essay indicates that improving productivity can reduce the tendency of farmers to exit small-scale aquaculture production, besides enabling aggregate output expansion and input wastage reduction. In this regard, the prospect of income through surplus production substantially enhances farmers’ inclination to continue small-scale aquaculture production, thus reducing the risk of production discontinuation. The third essay argues that highlighting the advantages of aquaponics, improving the quality and accessibility of institutional support, and enhancing farmers’ human capital and ability to market outputs can improve the likelihood of small-scale farmers to adopt aquaponics. Through its final essay, the thesis shows that subsistence-oriented, integrated aquaculture production can shield vulnerable small-scale farmers from the negative economic shocks resulting from COVID-19 as well as preserve their overall wellbeing. This essay also outlines a prospect for small-scale aquaculture farmers to derive economic gains by increasing fish production to cater to an increased demand in the informal market when the formal supply chain is disrupted due to policy restrictions.
Overall, the thesis shows that the Bhutanese aquaculture sector is considerably challenged by low productivity, production discontinuation, resource scarcity and adverse effects from COVID-19 policies. Nevertheless, the thesis highlights that the sector has a significant prospect to enhance its benefits and long-term sustainability. To this end, the thesis argues that policies should emphasise commercial production, productivity improvement, aquaponic production, and input-and-infrastructure-related support provision.