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  1. Characteristics, structure and resources of the sector
    1. Summary
    2. History and general overview
    3. Human resources
    4. Farming systems distribution and characteristics
    5. Cultured species
    6. Practices/systems of culture
  2. Sector performance
    1. Production
    2. Market and trade
    3. Contribution to the economy
  3. Promotion and management of the sector
    1. The institutional framework
    2. The governing regulations
    3. Applied research, education and training
  1. Trends, issues and development
    1. References
      1. Bibliography
      2. Related links
    Characteristics, structure and resources of the sector
    Summary
    Nicaragua started practicing aquaculture in the decade of the 1980s, with rural integrated aquaculture. In the decade of the 1990s, within a new market economy framework and in the light of the thriving of aquaculture all over the world, national and foreign investors initiated shrimp culture on the northwest areas of Nicaragua; where 38 000 ha had previously been identified as suitable for the afore mentioned aquaculture practice.

    Thereafter, shrimp culture has been growing steadily until reaching in 1994, 10 335 ha under production, of which 60 percent correspond to private entrepreneurs with semi-intensive culture systems, and 40 percent to cooperatives, which predominantly produce under extensive culture systems. This total surface area has produced 12 575 million lb of shrimp for exportation with a value of US$28 633 million. Destinations of these exports are 53 percent to the USA and 45 percent to the European Union.

    Culture of tilapia is still incipient; only one farm is using a cage culture intensive system and seven small farms in the central area of the country utilise extensive systems.

    Shrimp culture shows a continuous growth trend, fish farming is undergoing an intensification and expansion process, and several research projects for the diversification of species have been undertaken.

    The Nicaraguan Government has considered aquaculture as a priority for development and a means to diminish poverty and to boost economic growth.
    History and general overview
    Traditionally, Nicaragua’s economy has been based on agriculture and livestock; capture fishery has been the only activity in the Pacific and the Atlantic Oceans. In 1982 the Government lunched an agro-aquaculture program and a reservoir restocking scheme; activity developed during the decade of the 1980s. During those years, culture species cultured were: tilapia (O. niloticus and O. aureus) and jaguar guapote (Cichlasoma managuense); carps were introduced into the country. Nevertheless, towards the end of the decade, the Government decided to cease these programmes and concentrate its efforts in the promotion of shrimp culture which seemed more promising.

    In 1988, the first assessment of Pacific Coast suitable lands for shrimp culture was undertaken with the support of FAO. Results of the survey targeted an area of approximately 39 250 ha, of which 72 percent (28 150 ha) are in the vicinities of the Estero Real near the Gulf of Fonseca; the remaining areas are near the estuaries of Aserradores, Padre Ramos and Río Tamarindo on the Pacific Coast; all of them on the northwest of Nicaragua. In the rest of the Pacific coastline, coastal lands appear to have a lower potential. This information was corroborated by a second survey conducted in 1992 and 1994 with the support of PRADEPESCA.

    During the first half of the decade of the 1980s, some isolated initiatives for shrimp culture in salt pens and in enclosed systems were undertaken, but soon were abandoned due to political instability and technological problems. It was not until 1987 that some cooperatives started operating 100 ha of rustic ponds; thereafter the number of cooperatives involved in aquaculture started to increase. By 1990 a total of some 1 000 ha were under operation, yielding on average 250 lb/ha/year.

    As of 1990, within the framework of a market economy, and encouraged by the thriving expansion of aquaculture all over the world, national and foreign investors focused their interest in shrimp culture, and applied for land concessions which to date total 19 869 ha in Estero Real. Out of this total, 5 115 ha are exploited by cooperatives while 13 538 ha by private companies or individuals.

    In early 1998, 8 299 ha were under production; but in October, after the tropical storm that hit Nicaragua, and particularly after Hurricane Mitch, the useful area was reduced by 25 percent, an equivalent loss of 2 108 ha.

    During 1999 shrimp culture had decreased due to the aftermath of Hurricane Mitch and to the devastating effects of the White Spot Viral Syndrome that spread during that year.

    However, in 2001 the shrimp aquaculture industry demonstrated that by modifying its productive systems, yields could continue to be satisfactory. That year, the industry made technical and economic adjustments to production systems to thrive in the light of the new conditions. Semi intensive farms which usually stocked an average of 15 to 25 post larvae per square metre lowered drastically their stocking rates to under 10 post larvae per square metre. Additionally, water exchanges which ranged from 10–20 percent daily, were reduced to nil, performing them just when strictly necessary. Some enterprises started the use of air blowers as well as to improve and increase water filtering. All these modifications allowed higher survival rates and increased yields.

    Since then, the surface area under cultivation has continued to increase, although the number of small producers has diminished, with the consequent trend in the concentration of large production areas in a small amount of large producers. Diverse causes have led to this concentration: debts contracted after the hurricane, presence of several devastating diseases requiring more demanding technologies and managerial practices, and low international market prices, are among the most important.

    In 2004, the total production surface area was 10 335 ha, 60 percent (6 204 ha) of which belonged to enterprises and the remaining 40 percent (4 131 ha) to cooperatives. Sixty-eight percent of the productive area is exploited through semi-intensive systems, 17 percent extensively, and 15 percent by artisanal producers.

    Shrimp production has steadily increased every year -except during the year 1998, due to Hurricane Mitch -, rising from 914 000 pounds (415 000 kg) in 1990 to 12 575 000 pounds (5 696 475 kg) in 2004. Shrimp producer cooperatives, which started this activity and held 100 percent of production at the end of the decade of the 1980s, reduced their contribution to 33 percent in 1995, and furthermore to only 5 percent in 2004. 53 percent of all production was exported to the USA and 45 percent to the European Union (Spain, France, Germany, United Kingdom and Belgium).
    Human resources
    According to data of the Central Bank of Nicaragua, in the year 2000 the fisheries sector occupied the 10th place as a source of employment in relation to other economic activities.

    In that same year, CIPA/AdPesca, informed that 41 800 people were involved in fisheries and aquaculture activities, which meant that 250 800 people depended from this economic activity.

    It is estimated that aquaculture employs approximately 23 500 people; 15 000 of them work directly in shrimp farms, 8 000 people are dedicated to the capture of wild post-larvae, and 500 are indirectly involved in aquaculture-related activities.

    Processing plants generate 1 533 direct jobs, of which 993 correspond to the Caribbean Coast and 540 to the Pacific Coast.

    In the year 2002, a better source for calculations became available which allowed a better adjusted evaluation, especially with regards to aquaculture. Results showed that fisheries and aquaculture activities during that year created 30 875 jobs, of which 19 741 worked in fisheries activities, 1 972 in processing plants, 2 216 onboard industrial vessels, 13 553 were artisanal fishermen, including permanent, temporary and subsistence, and 2 000 people were dedicated to related activities, mainly in services. (Fisheries Diagnostic, 2002).
    Farming systems distribution and characteristics
    Shrimp culture activity is developed in the northwestern area of the country, in the District of Chinandega, and to a lesser extent, in the Department of León.

    Freshwater fish farming is distributed in the north-central part of the country, in the Districts of Estelí, Matagalpa, Managua, Masaya, Granada, Jinotega, and Madriz. These are very production units, family-owned. The major production unit is a tilapia cage-culture farm located in the Lake of Nicaragua.

    Cultured species
    The main cultured species is the whiteleg shrimp (Penaeus vannamei), representing 95 percent of total cultured production; the remaining 5 percent corresponds to Penaeus stylirostris. In the case of tilapia, 95 percent is represented by Nile tilapia (Oreochromis niloticus) and the remaining 5 percent by blue tilapia (O. aureus).

    No genetically improved species are being cultured. With regards to shrimp, both cultured species are endemic. When culture of shrimp was initiated, captured wild larvae were used. This trend started to diminish for several reasons, mainly due to disease problems and to the reduction of areas used for aquaculture by cooperatives. Thus, the use of wild larvae has decreased to about 20 percent to 15 percent of all larvae used in production.

    In the case of fishfarming, tilapia was introduced simultaneously to all of Central America towards the end of the decade of the years 1950s. Later, other species were eventually introduced, namely in the 1980’s. At present, two private fingerling producers supply most of the local requirements.
    Practices/systems of culture
    Ninety percent of local fish farmers use small areas with semi intensive systems. Only one farm has adopted the extensive form, while also only one farm adopted the intensive system but utilizing cages.

    At present there are 10 335 ha under shrimp production, of which 1 498 ha are exploited through artisanal methods, 1 775 ha through extensive systems, 7 024 ha under semi intensive systems and 38 ha under intensive systems. From the point of view of ownership, cooperatives operate 4 131 ha (40 percent) of the total production area while private enterprises and individuals 6 204 ha (60 percent).

    Artisanal culture: cultivation is carried out in large ponds whcih generally have only one single floodgate used for both inflow and drainage. No water pumping is used since water is fed by the rising tides. Stocking densities are under 3 organisms per square metre and no feeds nor additives are used.

    Extensive culture: this practice entails better designed ponds, provided with a pump to maintain appropriate water levels. Wild larvae are stocked densities below 10 postlarvae per square metre. Small amounts of feed are used, but only as a supplement.
    Sector performance
    Production
    Actual average production in artisanal shrimp farms is 140 lb/ha/cycle. Though a cycle lasts three months, artisanal producers can only afford to operate one cycle per year.

    Extensive farming systems achieve on average yields of 370 lb/ha/cycle, operating only one cycle per year. The average yield of semi intensive farms in 2004 was 1 671 lb/ha/year, generally operating two cycles per year. The average yield for shrimp farms has increased throughout the years, reaching a 12 percent increase during 2004.

    The graph below shows total aquaculture production in Nicaragua according to FAO statistics:
    Chart 

    Reported aquaculture production in Nicaragua (from 1950)
    (FAO Fishery Statistic)

    Market and trade
    Species produced by aquaculture are imminently for exportation; although a small percentage is locally commercialized, especially when the product does not satisfy export requirements. These species are whiteleg shrimp (Penaeus vannamei), blue shrimp (Penaeus stylirostris), Nile tilapia (Oreochromis niloticus) and blue tilapia (Oreochromis aureus).

    During 2004, 100 percent of tilapia exports was directed to the USA market; 53 percent of farmed shrimp was also exported to the US, while the remaining 47 percent to the European Union (Spain, France, Germany, United Kingdom and Belgium).

    Shrimp exports to the North American market usually consist of frozen shrimp tails packaged in five pound boxes, and these in 40 lb master cartons. For the European market, the usual product is whole (head-on) frozen shrimp in diverse presentations, but mainly packed in two kg packages.

    Nicaraguan per capita seafood consumption has traditionally been, although in recent years it has shown a small increase. In year 2000, per capita average consumption was 3lb/year and by 2002 it had increased to 5.66 lb/yr, mainly attributed to the consumption of whole fish (fresh or frozen) supplied by artisanal fisheries.

    Product distribution is carried out mainly by intermediaries but also by central markets, but fish might also be found in popular markets, supermarkets, fish markets and restaurants.

    The Ministry of Industry and Commerce Promotion (MIFIC), through the General Directorate for Competence and Transparence Transactions, through its Directorate for Technology, Norms and Standards, is the responsible agency for the National Quality System. However, there are no national certifying agencies. In 2003, a consultation and discussion process was launched to establish the Nicaraguan Compulsory Technical Regulations for the certification of organic vegetal and animal production.
    Contribution to the economy
    With regards to shrimp aquaculture, there are 62 shrimp farms that belong to cooperatives; which generally group low income local producers with low formal education and whose technological capabilities do not allow them to attain high production yields. Their shrimp crops are supplied to local processing plants which in turn export their final products. On average, income derived from these exports sustains 13 families, each integrated by some seven members; therefore it is estimated that in this area some 5 642 people live from subsistence shrimp aquaculture.

    In addition, the 81 existing private enterprises hire local personnel for work in their farms, creating jobs in areas where there are no other economic activities. Also, shrimp culture creates indirect jobs all along the production line, including around 3 500 people who work as shrimp larvae collectors, Thus, according to statistical records, shrimp aquaculture provided employment to 22 054 workers during 2002.

    The generation of employment by freshwater fish farming is not yet properly scored in national statistics, since this activity is not as relevant; only about 200 people are formally employed and are active in this area.

    In north-western Nicaragua where shrimp culture is most developed, population growth is noticeable and a slight improvement in their livelihood may be perceived; this is namely attributed to the increasing generation of jobs in a region with otherwise no other economic alternatives.

    Fish consumption by the local population derives from artisanal capture fisheries activities that shrimp farm workers also practice. Farmed shrimp is not part of their staple diet.
    Promotion and management of the sector
    The institutional framework
    In 1980, the Nicaraguan Fisheries Institute (INPESCA) was created, as an autonomous state entity. It is commissioned as the regulatory body for the fisheries industry and is authorised to constitute enterprises, associations and productive cooperatives.

    Decree Nº 356 of 1988, created the Nicaraguan Fisheries Corporation as the formal and legal successor of the Nicaraguan Fisheries Institute (INPESCA).

    In February 1993, Decree Nº 16-93, transferred the attributions of the former Nicaraguan Fisheries Corporation to the Directorate for Fisheries Promotion and Development of the Ministry of Economy and Development (MEDE) and to the Fisheries and Aquaculture National Service of the Institute of Natural Resources (IRENA). The MEDE is the institution responsible granting concessions of zones for the exploitation and cultivation of aquatic species.

    Finally, in 1993, Law 290 (Law of Governance, Competencies and Procedures of the Executive Power), reforms the responsibilities and competencies of Decree 16-93 and assigns them to the National Fisheries and Aquaculture Administration (AdPesca). This same Law confers responsibilities to the Ministry of Promotion, Industry and Commerce (MIFIC) to administer the use and exploitation of natural state resources, through the implementation of a regime of licences and concessions; whilst the General Directorate of Natural Resources (Regulations of Law 290) is responsible for handling the corresponding applications. All concessions, licences and other rights to access natural resources under state dominion are bestowed by Ministerial Agreement authorized by the Minister of Promotion, Industry and Commerce (MIFIC).

    According to Law Nº 290 of June 1998, the Ministry of Promotion, Industry and Commerce (MIFIC) is the national ruling agency for fisheries activities, through the Directorate of its National Fishing and Aquaculture Administration (AdPesca). The latter is responsible for executing the attributions and functions that laws on the rational exploitation of the fisheries resources and aquaculture confer the MIFIC. Its responsibility covers all the national territory, including the National Fishing Zone.
    The governing regulations
    Access to land
    Law 217, The General Law for Environment and Natural Resources, establishes that the State is the primary owner of the sea, river and lake shores as well as of salty lands (Art. 72).

    Ministerial Agreement 14-99 of MIFIC establishes that the procedure to acquire rights for access to national land and water for aquaculture activities is through an Aquaculture Concession, which shall last for 20 years. Concessions are granted by a Ministerial Agreement, in which the following is stated: name of the holder, term of its duration, surface area, geographical references of the plot expressed in UTM coordinates, description of the culture system to be developed, as well as all duties and rights acquired through the concession, as ruled by the law.

    Subsequently, in Ministerial Agreement Nº 030-2001 of MIFIC, the administrative procedures for the granting of aquaculture concessions are defined. This Agreement states that holders that desire to transfer an Aquaculture Concession, should previously obtain a written authorization from the General Directorate of Natural Resources (DGRN), which shall be included in the Public Scripture of Cession. It is also established that cession of rights will only be recognised if they occurred prior to the date that Agreement 30-2001 went into effect.

    Furthermore, it establishes all obligations that concessionaries must fulfil, and states the obligations to be paid as concession rights will be of US$30/ha/year.

    Aquatic health regulations are competence of the Ministry of Agriculture, Husbandry and Forestry (MAGFOR) through the Directorate of Animal Health.

    Environmental legislation
    The General Law of Environment and Natural Resources, Law 217, establishes that a special permit issued by Ministry of the Environment and Natural Resources (MARENA) is required for the sustainable use of mangroves and other vegetation in inlets, coves and coastal zones. The Regulation of Law 217, determines that all subjects, individuals (persons or entities), public or private, interested in developing productive activities that may imply an intervention in mangrove and wetland ecosystems and its associated resources, must previously request a special permit from MARENA and must submit the outline of the Project and the proposed mitigating or research actions to be executed.

    Lastly, MARENA has dictated Ministerial Resolution 26-2002, Administrative Procedures and Requirements for the Issuance of Special Permits for the Use of Mangroves, Wetlands and Associated Resources. This Resolution applies to all individuals (persons or entities), national or foreign that require to exert any type of activity in mangroves, wetlands or associated environments, as long as it is not included in the taxation list of Article Five of Decree 45-94, Regulations for Permits and Environmental Impact Assessment.

    Environmental Impact Assessment
    The Law of Environment and Natural Resources, approved in 1996, states in one of its articles that shrimp farms require that prior to their construction an Environmental Impact Study Assessment must be submitted to the Ministry of the Environment for its approval. Also, Regulation 45-94, “Regulations for Permits and Assessment of Environmental Impact”, determines in Article 5 the obligatory requirement for an Environmental Impact Assessment Study for all shrimp farms.

    The Basic Law for Regulation and Control of Plaguicides, Toxic Substances and Similar Substances regulates and controls the use of substances in the environment.


    Fishing Legislation
    Until 2004, aquaculture was regulated by the Law of Natural Resources of 1968 and Ministerial Decrees issued during the last decade.

    On 2 June 2004 the National Congress sanctioned the first Law of Fisheries and Aquaculture which was published on 27 December of that same year. The Regulations for this law were published on 25 February 2005.

    Fiscal Incentives
    The shrimp farming industry, as a productive activity oriented to exportations, is subject to a series of legal instruments which determine the fiscal incentives to which shrimp farmers may accede.

    In general terms, shrimp producers have the following rights:
    • Exoneration of taxes and rights that weigh over required imports for production such as machinery, spare parts, raw materials, semi-elaborated articles, inputs and packaging materials, and recipients or containers for products to be exported.
    • Exoneration of the General Sales Tax on acquisition of national raw materials and basic inputs required for the production of exportable goods.
    • Access to foreign currencies resulting from exports, to be used for purchase of new imported raw materials through the mechanisms established by the Central Bank.
    • Tax reimbursement up to 1.5 percent of exports on FOB values.
    • Exoneration and reimbursement of the Specific Consumption Tax (IEC) relative to fuels equivalent to US$0.07 per exported pound.

    Municipal Taxation Plan
    The Municipal Taxation Plan, Decree Nº 445 of 1989, establishes the payment of a fee for a license, equivalent to 1 percent of invested capital and not levied by other municipal taxes, for the commissioning of a new activity, business, or establishment (Art. 6). New buildings and restorations of older constructions and facilities must pay a tax fee equivalent to one percent of their cost, prior to their execution (Art. 20).

    This law, also establishes that every individual (person or entity), who either holds continuous or sporadic activity in sales of goods, is subject of a two percent municipal tax, over gross sales income (Art. 11). This tax is paid to the Municipality where the sale has taken place (Art. 14).

    Law Nº 257, Law of Tributary and Commercial Justice, decreed in June 1997, establishes a decrease on the rate or general percentage on municipal income taxes, equal to two percent, according to the following timetable:
    • From 1 January 1989: 1.5 percent
    • From 1 January 2000: 1.0 percent

    Moreover, Law 257 states that as of 1 January 1998, this tax should be paid in the Municipality where the physical transaction on goods and services takes place and not where the invoice is issued.

    Other regulations
    Shrimp culture is subject to the Technical Sanitary Norm for Imports and Movements of Aquatic Organisms within the national territory. This regulation establishes the guidelines for the importation of live larvae, shrimp feeds for the cultivation of shrimp; as well as the Alert System to be implemented in case of disease spreads such as the White Spot Viral Syndrome, the Taura Syndrome and the Yellow Head Syndrome. It also provides a list of veterinary products whose uses are either banned or restricted in Nicaragua.
    Applied research, education and training
    When aquaculture started to develop in Nicaragua, there were no aquaculture-related formal or informal training and education centres or institutions. As the industry started to develop, national universities made efforts to offer professional education and training to students and trainees on related areas as well as to producers and cooperative members. On this basis the Central American University (UCA), the Agronomic University of Nicaragua (UNA), the Ave María University, the National Autonomous University of Leon, and the University of Bluffields (BICU), all have educational programs that include subjects and/or courses related to aquaculture.

    Notably, the Central American University (UCA) operates the Research Centre for Aquatic Ecosystems (CIDEA) whose team of professionals has been dedicated to training, technological transference and research for the last ten years. This Centre maintains close coordination with the shrimp and fish farming industries. Industrial groups actively support research, applied practices and provide financial resources for education and training.

    Furthermore, this Centre has specialised laboratories on pathology (microbiology, molecular diagnosis, histology), water quality (physico-chemical and microbiological), plankton (phytoplankton and zooplankton), bromatology and a geographical information system –GIS- unit where geo-referenced monitoring of water quality, shrimp farms, use of lands, mangrove, etc. records have been kept for over five years.

    The CIDEA, through an inter-institutional agreement (ADPESCA/UCA-CIDEA) also operates a research farm. The farm is located in Puerto Morazán and has over 75 ha of water surface. This farm has a local Training Centre where regular seminar programmes take place, targeted for cooperative members and students from all national universities. It is equipped with dormitories, refractory, and other administrative facilities.

    CIDEA has also an experimental farm for tilapia fingerling production located in Mateare, Department of Managua, where an experimental freshwater fish farm is being constructed. Additionally, CIDEA operates a training centre in San Carlos in southern Nicaragua in support of fisheries.
    Trends, issues and development
    The development of shrimp culture created great expectations at the beginning of the 1990s; however, in 1998, due to Hurricane Mitch, many small producers and shrimp production cooperative groups were severely affected by the damage of their facilities and infrastructure, as well as by the loss of all their production. This natural disaster ruined completely some producers, many of whom became indebted and have not yet been able to stabilize financially. The following year, the White Spot Viral Syndrome appeared causing considerable losses and weakening even further the financial situation of shrimp producers. In later years, the fall of world shrimp prices has caused that small producers and cooperative groups abandon this activity altogether, while only the larger and financially stronger enterprises that possess more infrastructure and technology, have had the opportunity to consolidate.

    Finally, production strategies and methods have evolved throughout time, with a trend towards the intensification of culture practices, nil water exchanges, and ultimately, the use of nurseries or pre-growth ponds.
    References
    Bibliography
    Adpesca.2004 . Ministerio de Industria, Fomento y Comercio. Anuario Pesquero y Acuícola de Nicaragua.
    Adpesca/MIFIC. 2002 . Ficha Técnica Pesquera.
    Cato, James, Otwell, Steven, Saborio, Agnes. 2003 . Nicaragua's Shrimp Subsector: Developing a Production Capacity and Export market during rapidily changing worl wide safety and quality regulations.
    CIDEA, UCA. 2002 . Monitoreo del Estero Real. Nicaragua.
    Estadísticas Banco Central de Nicaragua. 2003 . Indicadores Económicos.
    Ministerio Agrícola Forestal. 2003 . Agricultura Orgánica de Nicaragua.
    Ministerio de Industria, Fomento y Comercio. 2004 . Curso de entrenamiento para evaluadores de Certificación de Productos. Oficina Nacional de Acreditación.
    Ministerio de Industria, Fomento y Comercio. Base de datos de la Dirección de Recursos Naturales.
    Ministerio del Ambiente y Recursos Naturales. 2001 . Impacto de Cambios Climáticos en Nicaragua.
    Ministerio del Ambiente. 2003 . Estado del Ambiente en Nicaragua.
    Saborío, A. 2001 . Situación de la camarinocultura en Nicaragua.
    Saborío, A. 2002 . Situación de la camarinocultura en Nicaragua.
    Saborío, A. 2003 . La Acuicultura en Nicaragua.
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