Due to diverse regulations between regions and states in Indian, the prospects for growth in aquaculture differ with varying degrees of commercialization and levels of development of infrastructure, consumer demand and inter-state movements. The highly protected crop sector is likely to remain free from restrictions in the future, since exposure of this sector would deprive it of state support. This might favour the growth of alternative sub-sectors, such as aquaculture. Under liberalized conditions, earlier priority accorded to national food self-sufficiency becomes secondary. Once the economy augments its export capability, imports can be arranged as and when they are needed. A shift from crops to livestock and aquaculture is likely, since they are more highly valued. With declining food subsidies for cereals, the consumption of fish and meat products will become the best alternative source of nutrition for the rural poor.
Trends in areas under aquaculture indicate that the sector has been steadily expanding during the post-reform period. However, no significant change has been observed so far in utilization patterns of total cultivable land in favour of crops. This observation suggests that, up till now, increase in the area under aquaculture has come from unutilized cultivable land and water-spread areas. However, further expansions in aquaculture may have an impact on the crop sector to some extent.
Analysis of the area under aquaculture reveals that it has grown; yet it occupies only 16% of total available area. Punjab leads other states in utilizing available water-spread areas with a yield of around 4-5 t/ha. Output from aquaculture production in India increased from 788 000 t in 1987 to 1 768 422 t during 1996; valued at US$ 827 million and US$ 1 980 million respectively. As regards the cost of production of fish, several points need to be noted. First, the cost of producing fish is considerably lower than that for chicken or meat. On the other hand, over the last ten years, the cost of producing fish in commercial fish farms has increased more than five times. Thus, as production per hectare and total production are increasing, so are real costs.
In India, consumers always prefer meat and chicken. However, in recent years, fish consumption has shown a significant increase among the younger generation. For example, higher and middle-income groups show a strong preference for freshwater fishes such as Indian major carps and catfish. Further, fish remains a staple in the diet of the urban and rural poor.
Traditionally, Indian marine exports consisted only of marine and cultured shrimps. They still continue to be important, but over the years, the composition of exports has been changing; some of the freshwater prawns and fish have emerged in the export market. Products from aquaculture, such as freshwater prawns and rohu, have become an important item in the total of marine exports.
India initiated aquaculture development programmes during the 1980s and 1990s. Initially, there were constraints on fish farming, but growth in production of aquatic items was accelerated in some regions such as Andhra Pradesh, Punjab, Haryana and Bihar. Hopes have been raised about higher domestic consumption, inter-state movements and exports, as food preferences change, and the urban population grows.
The composition of species in the market is changing as the increasing preference for rohu, common carps and fresh water prawns illustrates. The impact aquaculture may have on long-term productivity, cropping patterns and nutritional intake on a vulnerable population is an important issue. The study shows that with higher income, consumption of non-cereal foods increases and impacts nutritional intake positively.
Price analysis of carps shows a substantial increase in retail prices during the first half of the decade. Farmers have responded favourably to higher market prices by increasing areas for cultivation, which has resulted in added productivity. However, the price-hike during the second half of the decade is only marginal despite expanded production. Thus, the higher level of production has depressed prices for aquatic products in the absence of well-developed domestic and export markets. It is essential that, along with improved production, market accessibility should also be increased to achieve overall growth. Increased fish production from aquaculture lowers prices, which reduces the supply from common water bodies, and, eventually, also diminishes the profitability of fish farms. Consumers - especially the rural poor - benefit considerably from elastic demand and lower prices, but unless the producer's share in consumer price increases, production becomes uneconomical in the long run.
A few case studies were conducted in order to identify the shifts that are taking place in aquaculture production, marketing and consumption patterns. In states such as Andhra Pradesh, Punjab and Haryana, the growth-potential for production is reaching saturation, as is reflected in lower levels of internal consumption. On the other hand, the northeastern states, West Bengal and Bihar, have higher levels of consumption and report net imports of aquatic products. Similarly, other states such as Karnataka, Kerala and Tamil Nadu have vast untapped resources for expansion with varying consumer preferences for Indian major carps. The main argument in favour of encouraging production is that, so far, the increase in freshwater aquaculture has come mainly from cultivable wasteland. Hence, expansion may not impact food-grain production negatively.
The case studies of Karnataka identify producer and consumer preferences for fish species and traits. There has been a substantial increase in fish consumption by the producer-consumer, which illustrates the impact production has on consumption. Similarly, researchers observed that increased income is reflected in higher consumption of aquatic products in urban areas, indicating a positive income elasticity of demand for fish.
The current level of aquatic products consumed is very low compared to other countries. Cereals are the main source of calorie-intake for a vast majority of the population who cannot afford or do not consume fish, meat and eggs for cultural reasons. Studies show that the demand for fish is expected to rise dramatically and will outpace the current growth-rate of production. The likely consequences of this shortage will be reduced nutritional intake. Further research is needed to assess whether shifting areas for crop production to aquaculture will be profitable and likely to meet domestic and export demands.
The main challenge lies in roughly tripling the level of output of fish production in the country by the year 2020. Exactly how this will be achieved is a large and complex issue. Improvements in infrastructure will definitely encourage farmers to shift to aquaculture. Further, improvements in product quality through genetic enhancement will also help boost production and accessibility to aquatic products.
The common threat to fisheries and aquaculture is encroachment and industrial pollution of the common water bodies. Development of public utility services have undermined the importance of village tanks and rivers as sources of drinking water, which has led to a decline in their collective management. Rivers and other water bodies are increasingly becoming polluted with industrial and sewage waters. Polluted water will eventually pose a threat not only to capture fisheries but also to aquaculture.
Necessary changes in institutional structure, infrastructure and land-leasing policies need to be coordinated to meet challenges in producing products from aquaculture. Changes that are taking place in the production system are affecting small-scale and marginal farmers. As farm and pond sizes increase, smaller-sized fish farms are found to be uneconomical. There is a need to devise mechanisms to protect these small-scale farmers and to strengthen their marketing capacity to enable them to take advantage of new opportunities. The macro-economic policies of the 1990s imposed restrictions on imports and exports of agricultural goods through a policy of canalization and quantitative limits. Canalization has been abandoned, and only a few quantitative restrictions remain on imports of fish and fishery products. The impact of trade liberalizations on domestic prices for aquatic products in the near future will be negligible, since prices for aquacultural imports are well below international levels. Alternatively, there is a strong possibility that exports from India will increase. The aquaculture sector as a whole is relatively unprotected, and business in aquatic products will further benefit from trade liberalizations.
