Aquaculture farmer organizations and cluster management: concepts and experiences

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Market access through developing links with processors and buyers
One of the cooperative’s main business strategies is to access output markets through 
negotiating the bulk sale of shrimp to processors and buyers using a contract farming 
approach. An example of this is the cooperative’s partnership with an EU buyer and 
a local processing plant in Chumphon Province since early 2008. This EU buyer had 
been exploring the possibility of sourcing shrimp from small-scale farmers and, after 
discussions with NACA, approached the cooperative along with a local processor. 
A partnership between the cooperative, the processor and the buyer was made, and 
since then the processor and a NACA field coordinator have worked closely with 
the cooperative to identify members who are willing and able to meet the food safety, 
environmental and social standards of the EU buyer and produce high-quality shrimp 
in return for a premium price of THB 20 per kilogram more (approximately 15 percent 
higher) than the market price. In late 2008 and early 2009, 88 tonnes of shrimp 
produced by the cooperative were contracted and purchased by this processor, based 
on the requirements set by the EU buyer. The cooperative, with support from NACA, 
has helped farmers to meet the buyer’s standards on sustainable farming practices as 
well as other standards which have involved strict record-keeping (e.g. recording the lot 
number of each feeding bag used), environmental monitoring, and collection of labour 
and land title data. To date, 17 cooperative members are involved in this partnership, 
and it is hoped this number will increase. 
Based on this partnership, the Fairtrade Foundation has become interested in 
developing a Fairtrade-certified shrimp product and has conducted assessments in 
partnership with the cooperative and the actors in this particular market chain.