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Expanding Aquaculture Production for Indonesia's Poor Fish Farmers

INDONESIA - Asian Development Bank will help boost the incomes of 14,000 poor fish farmers in Indonesia through a loan of US$33.3 million to enhance aquaculture production and productivity in select provinces.

The Project will support a Government program to promote community-managed freshwater, brackishwater, and marine aquaculture development among poor communities of the country.

It will be carried out in five districts of four provinces: Langkat in North Sumatra, Ogan Omering Ilir in South Sumatra, Karawang and Sumedang in West Java, and Buton in Southeast Sulawesi.

Aquaculture plays an increasingly significant role in Indonesia’s economy, employing about 2.5 million people, providing an important source of nutrition and generating valuable foreign exchange earnings and domestic revenues.

However, poor fish farming systems and lack of good quality fish and shrimp seed, along with growing environmental degradation and pollution, are holding back the sector. Other problems include lack of access to credit for smaller fish farmers, absence of marketing infrastructure, and user conflicts in open water areas.

The project, officially known as Sustainable Aquaculture Development Project, will focus on small-scale and low-cost systems that are economically sound and environmentally friendly, and that can easily be replicated by larger entrepreneurs and organizations.

It will include pioneering new schemes to help organized fish farmer groups in establishing microenterprises and marketing their products, assisted by community based and nongovernment organizations. Key public aquaculture facilities will be rehabilitated along with associated access roads.

The project will also help the Directorate General of Aquaculture (DGA) and participating district governments to formulate policies and regulations for aquaculture development and environmental management.

“Besides the increase in aquaculture production, incomes and jobs, the project is expected to generate more general benefits,” says M. Jamilur Rahman, an ADB Principal Project Specialist. “These include a cleaner environment and better health and nutrition among rural populations from overall expansion of the food supply, given that fish is a staple in Indonesia.”

The total project cost is $44.5 million, of which ADB’s contribution accounts for almost 75%. The loan is from ADB’s concessional Asian Development Fund, carrying a 32-year term, including a grace period of eight years. Interest is charged at 1% per annum during the grace period and 1.5% per annum for the rest of the term.

Other contributors to the project are the national and district governments ($8.46 million) and beneficiaries ($2.76 million).

The DGA of the Ministry of Marine Affairs and Fisheries is the executing agency for the project, which is due for completion around the end of 2013.

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