Department of Agricultural, Food, and Resource Economics Feed the Future Innovation Lab for Food Security Policy

This study examines the adoption of (1) P. vannamei and (2) adoption of formulated shrimp feeds, both technologies critical to increasing productivity of shrimp farming in Indonesia. The primary objective was to identify if land-poor or capital-poor farm households were excluded in adopting P. vannamei and/or the adoption of feed. The study used primary data we collected in Indonesia to estimate adoption equations. We found: (1) There is no evidence for farm-scale barriers in the adoption of P. vannamei. (2) The lack of productive assets (pumps for example) is a significant constraint to adoption of P. vannamei and shrimp feed. This may constitute a “low-productivity trap” in aquaculture – with the asset-poor relegated to producing the unproductive P. monodon without external inputs. (3) In the adoption of feed, there is a strong threshold effect at half of a hectare. Micro-farms are a unique subset of the farming population that are oftentimes the most productive in farming a local species, like P. monodon, but are constrained in fully-intensive adoption of novel production systems. There are two implications for policy. First, policies that encourage the development of hatcheries and feed mills in small farmer areas will promote productivity and modernization of small shrimp farming. The second is that constraints to capital assets like pumps limit small farmer adoption of new technologies. Promotion of financial markets that help small farmers to invest in these productive assets will open doors to technological change in small farming areas.

Statement of relevance

This study focuses on adoption of a shrimp species new to small farmers in Indonesia, as well as adoption of feed. Contrary to conventional wisdom we found that small farmers adopted both, without land constraints affecting diffusion, but productive capital constraints hold back small farmers from adoption.