Rising shrimp feed prices leave deepwater aquaculture in Andhra Pradesh

It is 4.30 am and well before dawn, John Raju, an aquafarmer from a village near Palacole in West Godavari district, wakes up to the buzzing of his alarm clock and anxiously peers out of his bedroom window into his backyard. Then he hurriedly heads to his shrimp pond and walks along its banks, the aeration machines making a constant humming sound. They ran all night.

Then he stops on stilts and looks across the pond, spread across a sprawling 10 acres. He sees tens of thousands of prawns in the pond, reminding him of the months of hard work and investment of millions of rupees to get the profits from the business. While there are hopes, fear remains with the rising price of feed, which has become a tough challenge not only for John Raja but also for thousands of farmers across the state’s aquaculture belt in Godavari, Krishna, Bapatla, Prakasam and Nellore districts.

According to farmers, feed manufacturers recently increased the price of Vannamei shrimp feed by ₹ 10 per kg and Black Tiger shrimp feed by ₹ 12 per kg. As a result, the price of a 25kg bag of tiger prawn feed has increased by ₹300 and vannamei feed by ₹250.

“There was a time when I was only worried about the crops falling prey to diseases. But today I worry about the aquifer,” he says anxiously.

What was once considered one of rural India’s greatest achievements has turned on farmers thanks to the build-up of stress, uncertainty and shrinking margins.

The stakes are high

The stakes go far beyond individual farmers. Aquaculture is one of the most significant drivers of the state’s rural economy, directly and indirectly supporting thousands of livelihoods. The sheer scale of the operations underscores why rising feed prices have become a national concern.

According to the government, aquaculture is currently practiced on nearly 2.35 million hectares in Andhra Pradesh. Fish farming occupies about 1.22 lakh hectares while another 1,13,000 hectares is under brackish water aquaculture.

A view of shrimp ponds in the West Godavari district of Andhra Pradesh. | Photo credit: GN Rao

Commercially valuable species such as shrimp and sea bass are grown on almost 1.2 million hectares, with the wealth of a vast network of farmers, workers, hatcheries, feed traders, processors and exporters linked to the sector. For many farmers, the issue is no longer the profitability of a single crop but the sustainability of an industry that has become the cornerstone of coastal Andhra Pradesh’s economy.

Farmers invest significant sums in pond preparation, seeding, aeration systems, labor, electricity, water management, and disease prevention. Among all these expenses, however, the lion’s share is the price of feed. It represents the single largest component of production costs and accounts for 60-70% of total expenses in many shrimp farming operations.

As a result, even a relatively small increase in feed prices can have a disproportionate impact on farm economics, says Bhagawan Raju, aquafarmer and president of the AP State Aqua Farmers Association.

Rising raw material costs vs feed prices

According to officials, the sharp increase in feed prices is mainly due to the escalating costs of key raw materials such as fishmeal, fish oil and soybean meal, which together form the backbone of shrimp feed production.

Fishmeal and fish oil supplies have been affected by lower anchovy catches, climate disruption and fishing restrictions in major producing countries, while soybean meal prices have surged due to supply shortages and strong global demand.

Workers pack prawns harvested from a pond for export near Bhimavaram in Andhra Pradesh. | Photo credit: GN Rao

Officials noted that feed manufacturers also face higher transportation, energy, packaging and import costs, further increasing production costs. Since raw materials account for the majority of feed production costs, this increase has inevitably translated into higher feed prices for farmers. Raw materials make up the vast majority of feed production costs. Fishmeal, fish oil and soymeal alone can determine whether feed companies make a profit or suffer losses.

For farmers, however, these explanations provide little comfort. Farmers say the increase was made without prior consultation with them and at a time when the industry is already grappling with rising production costs and fluctuating international market conditions.

“We are told that fishmeal prices have gone up. Fish oil is expensive. We are told that the cost of soya beans has gone up,” says Venugopal, a farmer. “Maybe that’s all true. But the shrimp buyer isn’t paying us more because the fishmeal has gone up. At the end of the day, it’s the farmer who bears the burden.”

Meanwhile, Bhagwan Raju claims that feed prices have been increased in 2021-22, citing a rise in prices of raw materials such as soya and fishmeal. Later, raw material prices fell, but companies did not reduce feed prices, he recalls.

Farmers question the fodder pricing formula

Duggineni Gopinath, president of the Ongole District Shrimp Farmers’ Association, says shrimp feed companies often cite higher raw material costs during the annual fishing ban to justify increasing feed prices, and says prices of fishmeal and fish oil usually rise immediately after the ban is imposed due to temporary supply constraints, but fall once fishing resumes and stocks return to normal.

According to Gopinath, feed manufacturers typically procure and stockpile fishmeal, fish oil and soybean meal when market prices are relatively low. Despite what they claim, the companies continue to base feed price revisions on the higher prices prevailing during the no-fishing period. According to him, the government should adopt a more transparent mechanism for determining the cost of raw materials.

Farmers’ associations have been demanding greater control over feed prices, saying rising input costs are eroding profitability in Andhra Pradesh’s aquaculture sector.

Fisheries Commissioner Rama Shankar Naik says the state government has formed a technical committee to look into these issues.

The committee is expected to consider concerns raised by both farmers and feed manufacturers before making its recommendations. Based on the findings, the government will facilitate discussions between industry representatives and farmer associations to reach consensus on feed prices and address concerns affecting the aquaculture sector.

Small and medium-sized farmers feel the pinch

Anxiety is particularly acute among small and medium-sized farmers. Many farmers like Chidapotu Koteswara Rao of Tangutur depend heavily on borrowed capital. They often take out loans from banks, private financiers or relatives before the harvest even begins. Some pawn a mortgage, others pawn gold ornaments. Their calculations are based on carefully projected expenses and expected returns.

“When feed prices rise unexpectedly, these calculations can quickly go awry. A crop that initially seemed profitable can suddenly become marginal. A modest profit can turn into a loss,” says Koteswara Rao.

He believes that under the current market conditions, Vannamei farmers can recoup their investment only when the prawns reach around 60. Farmers who harvest prawns between 100 and 70 counts reportedly lose ₹30-40 per kg. In shrimp farming, “count” refers to the number of shrimp needed to produce 1 kilogram. Lower numbers mean bigger shrimp and generally better prices.

The situation is similar for Black Tiger shrimp farmers. Production costs can usually be recouped only when the shrimp reach about 40 pieces. Any harvest of smaller sizes significantly reduces profitability.

However, the recent increase in feed prices has pushed the break-even point even further. Farmers estimate that almost 40 Vannamei shrimp would now have to be farmed just to cover costs. However, only a small proportion of farms consistently achieve such large harvests. Industry leaders say nearly 90% of Vannamei production is harvested between 100 and 50 counts, meaning the vast majority of farmers may struggle to remain profitable under the revised feed price structure.

For Black Tiger shrimp, the challenge is just as serious. Farmers estimate that they would now need to reach around 30 shrimp numbers to break even, a size achieved by only a fraction of total production.

The industry also faces volatile export demand, global competition and unpredictable weather. Many farmers rely on loans, adding to financial pressure. As farmers gather in Andhra Pradesh, the debate is now less about production and more about cost.

“That’s why shrimp farmers keep a close watch on both the count and the market price before deciding when to harvest. In Andhra Pradesh’s aquaculture industry, daily conversations between farmers often revolve around questions like ‘What’s the price for 30 counts today?’ or ‘Has the crop reached 40 yet?’ because the number directly determines profitability,” says Gopinath.

There is a growing demand for government intervention

The farmers argue that the companies have increased the feed prices without the approval of the Andhra Pradesh State Aquaculture Development Authority. Later, with the Chief Minister’s intervention, the companies agreed to cut prices, but went back on their assurance and cut only ₹2 per kg. With these prices, farmers would not get relief even if they went for a harvest of 60 units.

Farmers say the Andhra Pradesh government needs to step in and look into the circumstances surrounding the increase in fodder prices. They argue that feed prices should not only be seen as a business issue between companies and farmers, but as an issue with wider implications for rural employment, exports and economic growth.

According to officials and farmers’ associations, any sustained decline in shrimp farming could trigger a chain reaction across the sector. Reduced production would affect hatcheries, seed suppliers, feed traders, cold stores, ice houses, transporters, processing units, exporters and a number of associated businesses dependent on aquaculture.

Cold storage facilities that handle large volumes of harvested shrimp prior to processing and export could see a sharp drop in utilization. Ice factories, truck operators, harvest workers, and shelling and processing plant workers may also face reduced income and job opportunities.

A leading seafood producing state

The impact could also extend to export earnings. Andhra Pradesh is one of India’s leading seafood producing states and shrimp remains one of the country’s most valuable marine exports. A long-term slowdown in cultivation could affect export commitments, reduce foreign exchange earnings and weaken the state’s contribution to domestic seafood exports.

Farmers’ associations estimate that up to 80% of growers may scale back or abandon aquaculture if rising costs continue to outpace farm output prices, threatening the livelihoods of nearly two million people.

For now, farmers are looking for immediate relief through the withdrawal of the latest price hike. But the bigger debate revolves around the long-term sustainability of the industry that has transformed coastal Andhra Pradesh over the past two decades. Whether policymakers step in or allow market forces to prevail may determine the future trajectory of one of the state’s most important export-oriented sectors.