Productivity Analysis of Coastal Andhra Shrimp Industry

Commercial shrimp aquaculture was introduced in coastal Andhra in the mid-1980s. Initially, high profits from shrimp farming and increasing coastal land prices pushed shrimp farmers towards more intensive operation that proved to be detrimental to the sustainability of the industry. Against this background, the present study examines the production characteristics and efficiency of resource use in coastal Andhra shrimp farming. Both parametric stochastic production frontier and nonparametric data envelopment analysis techniques were employed to estimate the farm-level technical, allocative and economic efficiencies for extensive and semi-intensive shrimp farms. The results reveal that under both the systems, on an average, optimum levels of feed and seed were lower than their actual levels. The efficiency estimates indicate that there is substantial potential for improving the level of shrimp production using existing inputs and available technology in both the systems. These results not only highlight the production structure of shrimp farming in coastal Andhra, but also have implications for the sustainability of the industry.