Faces of Globalization: Organic shrimp

By ELIZA BARCLAY, UPI Correspondent  |  June 11, 2004 at 5:15 PM
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When Javier Barragan looks out over the shrimp hatchery his company Biocentinela operates on Ecuador's Peninsula de Santa Elena, his view not only encompasses the site of production of 30 million shrimp larvae per month, but also a distinct but invisible feedback process that is enriching the local ecosystem. The hatchery -- as well as Biocentinela's four farms where the shrimp mature -- is one of only eight organic shrimp aquaculture operations in the world and is intimately designed and monitored to minimize the impact on the fragile coastal ecosystem it inhabits.

From 1989 until 1999, Biocentinela was a typical, small producer apart of one of Ecuador's largest industries. But when a disastrous bout of white spot syndrome swept along the country's coast and systematically destroyed the stocks of farm after farm, Barragan was forced to reconsider Biocentinela's place in the global shrimp industry: should the company struggle alongside its counterparts to regain competitiveness or should it strike out on a different path to success through the potentially lucrative marketing angle of organics?

"The industry was badly damaged by the white spot disease and almost all of the working capital was gone, but meanwhile the organic movement was underway in Europe and it was promising," Barragan said.

Barragan and his manager Katia Santistevan decided in 2000 that they would try to fill the niche market for organic shrimp not only because of the market's potential, but also because they were keenly aware of the destructive effects conventional aquaculture practices had on the environment.

One of Ecuadorian shrimp farming's most potent environmental stigmas is the deforestation of mangroves. Mangrove trees offer significant and unique habitat to birds, mammals, crustaceans, and fish populations and contribute to improved water quality by filtering and absorbing pollutants and protecting shorelines from erosion.

Barragan and Santistevan were also sensitive to the effects of the antibiotics used to fight the virus had had on marine ecology as well as conventional shrimp farming's reliance on chemicals and fertilizers. All of these factors, they concluded, were destroying the natural balance of the coastal ecosystem, and they did not want to be apart of this process.

Out of this realization, Biocentinela developed the organic production system in place today, where the company is committed to protecting nature, reforesting the mangroves, avoiding the use of chemicals and synthetic fertilizers, using natural nutrients, and conserving energy.

Just as they had produced shrimp for export before the onslaught of white spot virus, Biocentinela knew its largest and most profitable consumer base would be in countries like the United Kingdom, Germany, and the United States.

Since 1998, organic food sales across Europe have doubled. Consumers in Italy, Spain, Germany, the United Kingdom and France spent a total of $9.6 billion on organic food. In Germany alone, the organic market has reached $3.8 billion, more than France and the United Kingdom combined.

"Today an ever increasing number of Germans are looking to avoid additives and are taking an interest in 'natural' products with traceable ingredients," said Michelle Strutton, senior consumer analyst at Mintel, a firm that carried out research on the organic market in Europe.

As Barragan and Santistevan quickly learned, in order to be able to sell their shrimp as organic on the European market at the higher prices organic seafood could command - 35 to 40 percent more than conventional shrimp -- they would first need to earn the trust of a European institution and gain certification to give their product accountability.

Naturland e.V. is a non-profit association of organic farmers based in Germany that had been operating standards for organic aquaculture since 1996 and had begun to work in developing nations to develop organic aquaculture as a viable economic alternative. All Naturland operators (farms and processing plants) are inspected according to Naturland standards at least once a year.

In 2002, Naturland certified Biocentinela and the company soon found itself at the receiving end of much high praise for its commitment to the environment.

"Our company fits very well into the European market because we are a model that they can appreciate," said Barragan. "Because the quality of our shrimp is so high, we now have very good personal relationships and a very big advantage over our conventional competitors in Ecuador."

Biocentinela has been working with Deutche See, a German distributor that has launched a line of organic seafood, including Irish salmon and mussels and Ecuadorian and Peruvian shrimp. Biocentinela is also selling to a Swiss and a British distributor, who in turn sells to France.

Though Biocentinela has been successful in getting its organic operation off the ground, the company still faces significant challenges in finding investment to both expand and maintain the extra costs associated with the training and paperwork required with certification.

Early in the organic conversion process, Barragan began looking for investment from unconventional sources; no loans or credit were available from Ecuadorian banks for the shrimp industry. Biocentinela began courting the Nature Conservancy's EcoEnterprises Fund, one of a handful of funds that provides capital to environmentally and socially responsible businesses in the developing world.

The EcoEnterprises Fund includes a $6.5 million investment fund through which it offers venture capital to profitable businesses involved in sustainable agriculture (including organic, apiculture and aquaculture), non-timber forest products, sustainable forestry and ecotourism. In April 2004, EcoEnterprises Fund announced it would provide Biocentinela with $250,000.

According to Tammy Newmark, president of the EcoEnterprises Fund, Biocentinela earned the backing of her fund because it is putting forth a different way of doing business.

"Enterprises like Biocentinela are apart of the small and medium-sized business sector where the most dynamic economic growth and opportunities come from," Newmark said. "They are a green business and the market for their products is international, but they have trouble accessing resources in their own country."

Though shrimp recently passed tuna as the number one seafood consumed in the United States, Biocentinela, along with other foreign organic seafood producers, face a mountain of bureaucracy in attempting to enter the U.S. market while receiving proper recognition for their organic production practices. The U.S. Department of Agriculture currently operates the National Organic Standards, but foreign countries are only beginning to gain acceptance from USDA in their own certification and standards.

Though it may be several years before Biocentinela can break in to the United States, Santistevan feels that globalization, even with its discontents, is a benefit for the company.

"You now have the European and American consumer more aware of what to eat," said Santistevan. "In this way we really benefit from the global market even though for us production is not a piece of cake."

Most important for Biocentinela, however, is that their organic production practices are helping to guarantee the long-term viability of the natural resources they rely on.

"Organic doesn't give you money every day, but it gives you the option to stay in business," Santistevan said.

Faces of Globalization -- The above piece by UPI correspondent Eliza Barclay is part 13 of a half-year series by United Press International which focuses each week on the human face of globalization in locales ranging from India to the heartland of the United States. The series looks at the complex array of social and economic issues facing workers, managers, students and others, who have been affected by the growing worldwide investment, trade and technological interconnections that have come to be known as globalization.

Series edited by T.K. Maloy, UPI Deputy Business Editor. (tmaloy@upi.com)

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