Aquaculture intelligence with Hatch Blue ConsultingShrimp farming innovations that combine profitability with environmental stewardship

Drivers to adopt a more sustainable and climate-friendly approach to shrimp farming 

Shrimp farming provides livelihoods for millions in coastal communities across India, Southeast Asia, and Latin America. It supports local economies, creates employment opportunities and plays an important role in food security across many developing regions.

Globally, shrimp is among the highest-value seafood products traded. However, its production has come under increasing scrutiny due to environmental concerns. The average greenhouse gas emissions associated with shrimp farming are around 13 kg CO₂-equivalent per kilogram of shrimp—higher than most seafood and roughly double that of salmon. Contributing factors include energy consumption and land conversion, particularly in mangrove-rich areas.

To address these challenges, the industry is exploring new approaches focused on mangrove restoration, responsible feed sourcing, and the adoption of energy-efficient technologies, including smart aeration systems and renewable energy sources.

This article examines two emerging models of restorative shrimp farming - Climate-Smart Shrimp (CSS) in Indonesia and Ecuador, and Sustainable Aquaculture in Mangrove Ecosystems (SAIME) in India - highlighting practical innovations that seek to align environmental restoration with sustainable shrimp production.

Climate-smart shrimp farming in Indonesia and Ecuador 

Background

Indonesia and Ecuador are among the world’s major shrimp producers. However, both countries face sustainability challenges linked to extensive shrimp farming and mangrove loss. Ecuador has lost more than 50,000 hectares of mangroves since 1969 due to aquaculture expansion. In Indonesia, traditional, low-yield systems dominate the landscape, often operating at stocking densities below one post-larva (PL) per square metre and yielding just 300–500 kg/ha annually. To get to higher yields/income, farmers have historically resorted to expanding their harvesting area and therefore cutting down mangrove areas. 

In response to these challenges, a new approach is being tested that integrates shrimp production intensification with ecological restoration. The Climate-Smart Shrimp (CSS) model, developed by Conservation International (CI) in conjunction with xpertSea in Ecuador and  Konservasi Indonesia and Jala in Indonesia, is being piloted to demonstrate how environmental restoration can be aligned with economically viable production.

The CSS model

The CSS model divides shrimp farms into two designated areas:

• Mangrove restoration zones:  where previously degraded or converted land is rehabilitated to restore biodiversity, enhance carbon sequestration, and improve coastal resilience.
• Intensive farming zones: where shrimp production is modernised using aeration systems, automated feeders, and water quality monitoring technologies to improve yields and reduce disease risk.

In Indonesia, piloting in the Sulawesi region, the  CSS model includes a 3.1-hectare shrimp farm, 3.4 hectares of water treatment, warehouse, office+lab and 3.5 hectares of protected mangroves. According to Aryo Wiryawan, chairman of Jala, transitioning from traditional low-density (0-1 PL/m²) farming to intensive practices (150-200 PL/m²) can significantly boost productivity. The intensive farming zone is subdivided into grow-out ponds (25 percent) and infrastructure, including water treatment, storage,e and offices (25 percent).

In Ecuador, Dane Klinger, head of aquaculture at Conservation International, emphasises that the approach integrates economic incentives with ecological restoration by supporting farmers to modernise production responsibly on smaller land footprints while contributing directly or indirectly to nearby mangrove restoration. This fits in well with the  “technification” that has been occurring in Ecuador, where it typically refers to improving overall farm efficiency and slightly increasing stocking densities, but without reaching the levels of intensification seen in parts of Asia. 

However, Klinger notes substantial initial investments and training are significant barriers, making demonstration farms critical for reducing risks and facilitating adoption.

In Indonesia, logistical challenges such as infrastructure deficits and high-quality PL supply are notable constraints. Remote regions like Sulawesi face logistical hurdles, with long transportation times for PLs affecting survival rates. To mitigate this, the pilot project sources PLs from Bali via air transport, significantly improving stock quality, despite higher costs.

Financing and restoration approach

To enable farm transitions at greater scale, CI and Deliberate Capital are developing the Climate Smart Shrimp Fund, which provides a bundled financial product to Deliberate portfolio companies Jala, Aquarev and others, and which includes smallholder loans and technical assistance. This structure supports both capital improvements and ecosystem restoration, addressing a key barrier for farmers: access to financing tailored to aquaculture modernisation.

Both initiatives offer tailored financing structured as near-commercial loans, facilitating broader scalability with local banks. These loans explicitly require farmer participation in mangrove restoration. Restoration involves ecological and engineering expertise to ensure optimal hydrological conditions, species selection, and large-scale contiguous restoration rather than fragmented patches.

In Ecuador, local fishing associations manage restored mangroves through conservation use agreements, with the support of the Ministry of Environment, Water and Ecological Transition and technical and financial assistance from CI, through a recent $37 million grant from the Green Climate Fund, secured by CI to scale up mangrove restoration and promote sustainable shrimp farming practices..

Financial modelling for CSS

According to modelling, a representative 40-hectare farm using the Climate Smart Shrimp (CSS) approach would require approximately $1.36 million in capital investment, significantly less than the $3.78 million needed for conventional intensification. Annual pre-tax earnings are projected at $366,000 under the CSS model, compared to $97,000 with traditional methods. This performance reflects higher yields from intensified systems and long-term savings from ecosystem services like natural water filtration provided by mangroves.

The financing structure includes:

• Long-term loans (e.g., $574,000 over five years at 12 percent interest)
• Working capital loans (e.g., $547,000 over six months at 8 percent interest)
• Grant-funded technical assistance to support best practices and mangrove restoration

In the example of Indonesia, persuading traditional farmers to allocate 75 percent of their land for infrastructure and mangrove regeneration is proving challenging. Many farmers remain sceptical, prompting Jala to financially support this pilot project as proof of concept.

However,  from the current numbers, the model is compelling:

• Break-even in 2.5–3 years at 35 tonnes/ha
• Higher shrimp survival rates
• Long-term environmental and economic gains

"We think that this model will be the future for Indonesian shrimp farming and possibly for shrimp farming across Asia," Wiryan reflects.

Implementation and scaling

CI has launched pilot projects in Indonesia and Ecuador, with additional geographies under consideration. Pilot farms are supported through co-financing, with public and private sector involvement. 

Scaling the model will depend on further demonstration of profitability, flexibility to include carrying levels of farm intensification, streamlined access to capital, and local stakeholder engagement. A satellite-based farm viability tool, called the Climate Smart Shrimp Tool, which was recently developed with Thinking Machines Data Science Inc., rapidly identifies suitable sites for future implementation.

Sustainable Aquaculture in Mangrove Ecosystem (SAIME) in India 

A different kind of aquaculture 

While countries like Indonesia have leaned into intensive mangrove-integrated aquaculture, SAIME takes a more traditional, low-input path. Developed by the Nature Environment and Wildlife Society (NEWS) in partnership with the Global Nature Fund, Naturland and BEDS, SAIME avoids the use of external feed altogether. Instead, it works with the natural ecosystem - relying on the organic richness of decomposing mangrove leaves and the power of traditional polyculture.

In the initiative, black tiger shrimp are farmed alongside native finfish species such as Chelon parsia, Liza tade, and Mugil cephalus, creating a balanced system that mirrors nature more than it disrupts it.

“We’ve begun implementing this in both the northern and southern Sundarbans,” says Milon Sinha, director of fisheries and animal husbandry at NEWS. “It covers over 30 hectares now, and 42 farmers are already on board. This year, we plan to bring another 45 to 55 hectares under this model.”

How it works

SAIME’s farms don’t follow conventional layouts. They’re designed with climate resilience in mind: strong embankments, islands within ponds, and carefully calibrated pond depth. Two core strategies guide the mangrove integration:

• Strategy 1 plants mangroves along pond embankments, with mangroves occupying around 5–10 percent of the farm’s footprint.
• Strategy 2 creates islands within the pond, where mangroves cover between 10–30 percent of the farm’s footprint,.

“These strategies are complementary, as plantation is done in a situation-specific manner, as per the availability of the land area for the plantation in the respective farms. This is also decided in consultation with the SAIME farmers, as they are not always willing to spare their water bodies for planting mangroves in more than 10 percent of the area.“ Sinha explains.

Instead of farmers buying commercial shrimp feed, the soil is prepared with mustard oil cakes and lime, kickstarting natural plankton blooms—the primary food for fish and shrimp. Water parameters like pH, salinity, nitrite and ammonia are closely monitored throughout the cycle to ensure a healthy aquatic environment.

Environmental and socio-economic outcomes

As the demand for mangrove saplings grows, a local response has taken root. Women from surrounding communities now manage a nursery that cultivates 18 mangrove species. Their efforts are helping to supply restoration work while also creating steady livelihood options and contributing to long-term climate resilience.

The project is shaped by broad collaboration. Civil society organisations, government bodies, research institutes, and farmers are working together through dedicated groups focused on aquaculture practices, mangrove rehabilitation and livelihoods. This structure helps the model remain adaptable, inclusive and responsive to policy needs

This model thrives on robust multi-stakeholder collaboration. The involvement of various actors—including academic institutions, government bodies, civil society organisations, domain experts, and local communities—is essential in shaping an aquaculture system that is both climate-resilient and biodiversity-friendly.

The financial upside of mangrove integration

"The results after two years of implementation are promising. We’ve observed a 70 percent increase in net profits, driven primarily by reduced feed costs (as no exogenous feed is used) and lower landscaping costs, due to the integration of mangroves. Additionally, mangrove integration has reduced erosion along dikes and significantly decreased shrimp mortality, particularly from white spot syndrome virus (WSSV), further boosting profitability. Overall, the approach is ecologically sustainable, reducing input costs and improving fish survival rates, which contributes to greater economic sustainability for farmers,"  explains Shinha. 

The establishment of community-owned value chains, by forming appropriate community institutions provisioned under the government fisheries department,  further enhances profitability by cutting out intermediary costs, which is especially important for small-scale farmers. With the support of government-backed institutions and access to credit, the farmers can invest in more sustainable practices, increase productivity, and strengthen the entire aquaculture value chain.

Challenges

Despite its success, scaling up SAIME in the Sundarbans presents policy challenges, ranging from legal to technical. 

One key concern is the need for selective mangrove pruning within farms, which currently faces restrictions under the existing Forest Act. Additionally, issues surrounding land title rights and legal provisions for converting land use to accommodate mangrove-integrated aquaculture must be addressed to fully enable the model’s expansion.

Another  significant issue is the inadequate supply of hatchery-bred specific pathogen-free (SFP) shrimp and mullet seeds, which limits farm productivity. Additionally, high investment costs for farm development and the mortality of shrimp from WSSV outbreaks are barriers to growth, so better disease management practices - including improved biosecurity measures, regular health monitoring, and the development of more resilient shrimp strains - are essential to mitigate such outbreaks, 

There is also a knowledge gap relating to the nutritional role of mangrove leaf litter in semi-closed culture systems, which needs to be closed to reap the full potential of the model.

Natural disasters pose additional risks to aquaculture operations, requiring stronger resilience strategies. Finally, the consistent engagement of stakeholders, particularly government departments, is essential to bridge policy gaps and ensure the model’s inclusivity and support.

Future outlook 

Both CSS and SAIME represent distinct but complementary approaches to sustainable shrimp farming. CSS emphasises responsible intensification with strong technical and financial support, making it suitable for small- and medium-scale commercial farms. SAIME emphasises community-driven, nature-based aquaculture, offering a replicable model for ecologically sensitive regions.

Key challenges across models include:

• High upfront investment for infrastructure and training.
• Disease management (eg WSSV).
• Infrastructure and supply chain gaps, particularly in remote areas.

With support from AI-based site selection tools, CI has identified over 4.4 million hectares globally with potential for CSSF replication. SAIME has mapped 18,000 hectares in the Sundarbans for ecosystem-based aquaculture.

Scaling both models will require coordinated stakeholder engagement, investment in capacity building, and enabling policy environments. Government support is essential to address legal ambiguities around land use and mangrove conservation while improving hatchery and input supply systems. In parallel, consistent farmer training, access to affordable credit, and market integration mechanisms must be strengthened.

Both models also demonstrate that sustainability does not require a one-size-fits-all approach. SAIME’s low-input, traditional system and CSS’s semi-intensive design are context-specific adaptations that reflect local ecological, economic, and infrastructural realities. Their shared focus on environmental regeneration, economic viability, and community resilience positions them as scalable solutions to some of aquaculture’s most pressing challenges.

Ultimately, these models highlight the potential for aquaculture to contribute meaningfully to sustainable coastal development. When implemented with careful attention to local context, appropriate financing, and inclusive planning, shrimp farming can support both environmental restoration and economic opportunity—key pillars of a more resilient and regenerative blue economy.