In general, there are two channels of distribution from farm to factories. Bigger farms have close relationships with factories and deliver shrimp directly to the factory. In many other cases, particularly smaller farms and in the case of extensive or semi-intensive production systems, shrimp are bought by agents and middlemen. They buy shrimp and resell them either to other agents or to the factory. Where farms are geographically isolated, supply chains can get long and complicated with shrimp changing ownership several times before reaching the factory.
Transport farm – factory
The mode of transport is very diverse and depends on the geographic situation. In the geographically isolated areas such as the coastal mangrove forests in the southern Ca Mau province, transport is only possible by boat. Whereas areas that are located closer to the factories and where accordant infrastructure exists, transport is done by smaller trucks. Sometimes, one supply chain can combine different modes of transport, where traders collect shrimp by boat from individual farms and sell it to a collecting station, from where collected harvests are brought to a nearby factory by truck.
In general, shrimp are stored in insulated styrofoam boxes and cooled with ice throughout the transportation.
Middlemen and agents
Middlemen play a crucial role in the shrimp sector. They influence value chains in many different ways. When smaller farms are geographically isolated, farmers necessarily depend on middlemen. These middelmen provide inputs such as PL, purchase their harvests to bring them to factories, or purchase shrimp and resell them to other middlemen closer to factories. Furthermore, since many smaller farms only harvest small quantities of shrimp at a time, factories rely on middlemen to collect shrimp from different farms and bring them to the factory.
The fact that not all middlemen have the same role within value chains has led to a distinction between middlemen that operate at the primary production level who are located in shrimp farming areas, and a second level middlemen that are involved in financial transactions who are located in central locations such as towns. While the former are closer to farmers, the latter have strong relationships with processing companies. Some are even employed by processing companies or operate a collecting station on their behalf.
It is important to note that middlemen at the primary level often provide inputs such as seed, feed and ice for chilling of harvested shrimp to individual households and therefore have a strong influence on farming operations of smallholders. This is particularly the case in very isolated areas where individual farmers would have to spend more money on travel costs to buy inputs or sell harvested products, than they would when buying from or selling to middlemen at inferior conditions.
Due to their position, middlemen are very different from other actors in shrimp value chains; They are not exposed to harvest losses such as farmers or subjected to market fluctuations such as factories. Surveys show that middlemen often make large profits in a short period of time without undergoing any risk. Furthermore, middlemen are not monitored by anyone and often engage in irresponsible practices such as the injection of agar into shrimp in order to increase product weight and earn more money this way.