This research was motivated by the weak enforcement of the conditions of the policy on contracting mangrove forest management out to households. Under this policy, households are assigned stewardship of mangrove forests and are allowed to convert part of the forest into other uses, mostly shrimp farming. Because of weak enforcement, households actually convert more than the allowable level of 40 percent in order to seek higher profits. A survey was conducted among 278 shrimp farms from the eight communes in the south of Vietnam. Using production and profit functions, our analysis shows that mangrove density has no impact on shrimp farming but mangrove coverage affects productivity and profitability of shrimp farming at the optimal mangrove coverage of approximately 60 percent. Particularly, we found that too high mangrove coverage will result in lower output level and profit. However, coverage levels less than 60–70 percent have small impacts, which implies that farmers should not convert more than 30–40 percent. This implies that maintaining the level of mangrove coverage at 60 percent does not only comply with policy, but also brings about the highest level of output and profit for shrimp farmers.
Mangrove and Shrimp Farming Profitability in the Mekong River Delta, Vietnam