A system dynamics analysis of boom and bust in the shrimp aquaculture industry

Driven by growing international demand for shrimp and stagnating catches of wild shrimp, the shrimp aquaculture industry has grown remarkably over the past two decades. Initial hopes that farmed shrimp could provide an environmentally benign alternative to over‐exploited wild stocks have, however, proven disappointing. Although global growth has been steady, the industry has experienced dramatic production crashes at national and sub‐national scales associated with severe environmental damage. From a systems perspective, the industry is prone to exceed and consume its environmental carrying capacity, resulting in boom and bust patterns of development. In this paper we describe a dynamic commodity system model built to examine boom and bust in the shrimp aquaculture industry. Experiments with the model suggest that a policy that taxes the industry and rebates proceeds to licensed producers may help shift the system toward sustainability.