Commercialization and upgrading in the aquaculture value chain in Zambia

After decades of government and donor-run programs that sustained extensive aquaculture systems, Zambia has experienced market-led capital investments that have facilitated significant growth in production. The emerging commercial sector is characterized by investments in intensive cage and pond-based aquaculture of mostly non-native tilapia species, which today makes up the bulk of annual production. To better understand this transformation we used a Global Value Chain (GVC) analysis to examine evidence of upgrading trajectories and various forms of coordination that govern the chain. A quantitative survey of smallholder farmers in Northern Province (n = 223) was designed to surface insights on the productivity of small-scale farmers and evaluate their position of strength within the chain. The survey reveals the extensive nature of rural, small-scale fish farming and suggests that farmers produce mostly for subsistence purposes and in isolation from the commercializing value chain. We also provide data from 22 key informant interviews with lead firms and stakeholders in the aquaculture sector to provide insights on upgrading and the forms of coordination between nodes and firms. Our findings show that upgrading in value chains is taking place in all its forms, i.e. through investments in high value products, improvements in operations that produce more efficiently, adopting upstream or downstream chain functions, and utilizing competencies from different chains into aquaculture-related operations. Much of this is possible because of increasing vertical integration of operations and tighter contractual relationships between firms and nodes. The value chain and markets in Zambia are thus dichotomized, where on one side there is an extensive smallholder sector, supported by government-run services, and little access to inputs and markets; and on the other side, a burgeoning commercial sector with a few pioneering lead firms who have shaped the commercial value chain and who dominate total production. Finally, we combined various government statistics to reveal the growing fish supply per capita rate between 2004 and 2014. We also provide data on fish imports to locate the Zambian aquaculture value chain in the larger global picture and present some insights into what many key informants in the industry feel is an increasing obstacle facing the sector. Analyzing upgrading and coordination trends is critical in understanding the emerging aquaculture value chains in sub-Saharan Africa.