Trade-offs between economic and environmental efficiencies in shrimp farming: implications for sustainable agricultural restructuring in the Vietnamese Mekong Delta

In recent years, the Vietnamese government has dedicated considerable planning and resources toward agricultural restructuring. These far-reaching efforts include promotion of intensive shrimp farming in the Mekong Delta to encourage the sustainable development of rural livelihoods. However, while intensive shrimp production may improve economic wellbeing, the current production practices raise concerns about the impacts on the local environment. The current study examines the economic and environmental efficiencies associated with the two primary species of farmed shrimp in four coastal provinces of the Mekong Delta. The study employs the material balance principle as a framework which considers the inputs to production and the outputs which may be undesirable. Using the efficiency estimates, we measure and investigate the trade-offs between the economic and environmental efficiencies for the shrimp farming in the Vietnamese Mekong Delta. The results suggest that the shrimp farming produces a significant nutrient surplus for either species. The analysis also suggests that achieving cost efficiency and environmental efficiency would help the shrimp farmers to reduce the undesirable outputs and that the movement from the cost efficiency to the environmental efficiency could result in a reduction of both production costs and nutrients. Based on these results, we offer policy recommendations for economically feasible and environmentally friendly shrimp farming. The material balance approach provides a useful lens through which to investigate agricultural production.