It’s 4.30 in the morning and long before dawn, John Raju, a water farmer from a village near Palakole in West Godavari district, is woken up by the alarm ringing and curiously peeks from his bedroom window into his backyard. He then quickly walks out to his shrimp pond and walks along its embankment, with the aerator machines making a constant whirring sound. They have been running all night.
Then he stops at a bank and looks at the pond spread over 10 acres. In the pond, he sees thousands of prawns, reminding him of months of hard work and investment of lakhs of rupees to get profits from the business. Although there are hopes, the fear remains over the rising price of feed, which has become a tough challenge not only for John Raju but for thousands of farmers in the state’s aquaculture sector in Godavari, Krishna, Bapatla, Prakasam and Nellore districts.
According to farmers, feed manufacturers have recently increased the price of vannamei shrimp feed by ₹10 per kg and black tiger shrimp feed by ₹12 per kg. As a result, the price of a 25 kg bag of tiger prawn feed has increased by ₹300 and that of vannamei feed by ₹250.
“There was a time when I was only worried about the produce falling victim to diseases. But today I worry about the aqua feed,” he says wistfully.
What was once considered one of the biggest success stories of rural India is turning a corner for farmers due to stress, uncertainty and shrinking margins.
the stakes are high
The stakes extend far beyond individual farmers. Aquaculture has been one of the most important drivers of the state’s rural economy, directly and indirectly supporting millions of livelihoods. The sheer scale of the operation highlights why rising feed prices have emerged as a statewide concern.
According to the government, at present aquaculture is being done in about 2.35 lakh hectares in Andhra Pradesh. The area under fish farming is about 1.22 lakh hectares, while another 1.13 lakh hectares of land is under brackish water aquaculture.
A view of prawn farming ponds in West Godavari district of Andhra Pradesh. | Photo Courtesy: GN Rao
Commercially valuable species like shrimp and sea bass are farmed in about 1.2 lakh hectares, with the fortunes of a vast network of farmers, labourers, hatcheries, feed dealers, processors and exporters linked to the sector. For many farmers, the concern is no longer about the profitability of any one crop, but about the sustainability of the industry that has become the cornerstone of Andhra Pradesh’s coastal economy.
Farmers invest substantial sums in pond preparation, seed storage, aeration systems, labour, electricity, water management and disease prevention. However, of all these expenses, feed prices take a major share. It represents the largest component of production costs, accounting for 60–70% of total expenses in many shrimp farming operations.
As a result, even relatively small increases in feed prices can have a disproportionate impact on farm economics, says Bhagwan Raju, an aqua farmer and president of the AP State Aqua Farmers Association.
Rising Raw Material Costs vs. Feed Prices
According to officials, the sharp rise in feed prices is mainly driven by rising costs of key raw materials such as fish meal, fish oil and soybean meal, which together form the backbone of shrimp feed production.
Fish meal and fish oil supplies have been hit by low anchovy catches, climate-related disruptions and fishing restrictions in major producing countries, while soybean meal prices have risen due to supply constraints and strong global demand.
Workers packing prawns harvested from a pond for export near Bhimavaram, Andhra Pradesh. | Photo Courtesy: GN Rao
Feed manufacturers also face higher transportation, energy, packaging and import costs, further increasing production expenses, officials said. Since raw materials account for a large portion of feed manufacturing costs, these increases inevitably translate into higher feed prices for farmers. The overwhelming majority of feed manufacturing costs are raw materials. Fish meal, fish oil and soybean meal alone can determine whether a feed company makes a profit or incurs a loss.
However, for farmers these clarifications provide little comfort. Farmers allege that the hike was implemented without prior consultation with them and at a time when the industry is already struggling with rising production costs and fluctuating international market conditions.
“We are told that prices of fish meal have increased. We are told that fish oil is expensive. We are told that the cost of soybean has increased,” says farmer Venugopal. “Maybe all this is true. But the shrimp buyer does not pay us much because fish meal has become expensive. At the end of the day, it is the farmer who bears the burden.”
Meanwhile, Bhagwan Raju argues that the feed prices were increased in the year 2021-22 citing increase in prices of raw materials like soya and fish meal. He recalls that later the prices of raw materials came down, but the companies did not reduce the prices of fodder.
Farmers raise questions on fodder pricing formula
Duggineni Gopinath, president of the Ongole District Prawn Farmers Association, alleges that prawn feed companies often justify feed price increases by citing higher costs of raw materials during the annual fishing ban, arguing that prices of fish meal and fish oil generally rise soon after the ban is imposed due to temporary supply constraints, but decline when fishing resumes and supplies normalize.
According to Gopinath, feed manufacturers generally procure and store fish meal, fish oil and soybean meal when market prices are relatively low. They claim that despite this, companies continue to base feed price revisions on the higher prices prevailing during the period of fishing ban. He says the government should adopt a more transparent mechanism to determine the cost of raw materials.
Farmer unions are demanding greater scrutiny of feed pricing, saying rising input costs are reducing profitability in Andhra Pradesh’s aquaculture sector.
Fisheries Commissioner Rama Shankar Naik says the state government has formed a technical committee to examine the issues.
The committee is expected to assess the concerns raised by both farmers and feed manufacturers before submitting its recommendations. Based on the findings, the government will facilitate discussions between industry representatives and farmer associations to build consensus on feed pricing and address concerns affecting the aquaculture sector.
Small and medium farmers are facing problems
The concern is particularly acute among small and medium-scale farmers. Many farmers like Chidapotu Koteswara Rao of Tanguttur are heavily dependent on borrowed capital. Before harvest begins, they often take loans from banks, private financiers or relatives. Some people mortgage their land and some people mortgage their gold jewellery. Their calculations are based on carefully estimated expenses and expected returns.
“When feed prices rise unexpectedly, those calculations can quickly unravel. A crop that initially seemed profitable may suddenly become marginal. Marginal profits can turn into losses,” says Koteswara Rao.
He believes that under current market conditions, Vannamei farmers can only recover their investment when the shrimp reach around 60 count. Farmers harvesting shrimp between 100 and 70 counts are reportedly incurring a loss of ₹30-₹40 per kilogram. In shrimp farming, “count” refers to the number of shrimp required to produce 1 kilogram. Lower counts mean bigger shrimp and generally better prices.
The situation is similar for black tiger shrimp farmers. Production costs can generally only be recovered when the shrimp reach around 40 count. Any crop size reduced significantly reduces profitability.
However, recent feed price increases have shifted the break-even point even higher. Farmers estimate that Vannamei shrimp will now need to be grown to about 40 counts just to cover costs. Yet only a small portion of farms are able to consistently achieve such high yields. Industry leaders claim that about 90% of vannamei production is harvested between 100 and 50 count, meaning most farmers may struggle to remain profitable under the revised feed pricing structure.
The challenge for black tiger shrimp is equally serious. Farmers estimate they will now need to harvest about 30 counts of shrimp, which is only a fraction of total production.
The industry also faces volatile export demand, global competition and unpredictable weather. Many farmers depend on loans, which increases financial pressure on them. As farmers gather across Andhra Pradesh, discussions now revolve less around production and more around cost.
“That’s why shrimp farmers keep a close eye on both the count and the market price before deciding when to harvest. In Andhra Pradesh’s aquaculture industry, daily conversations among farmers often revolve around questions such as “What’s the 30-count price today? or ‘Has the crop reached the 40 count yet?’ Because headcount directly determines profitability,” says Gopinath.
Demand for government intervention increases
Farmers argue that the companies have increased feed prices without the approval of the Andhra Pradesh State Aquaculture Development Authority. Later, with the intervention of the Chief Minister, the companies agreed to reduce the prices, but went back on their assurance by cutting only ₹2 per kg. With these prices, farmers will not break even if they go for a 60-count crop.
Farmers say the Andhra Pradesh government needs to intervene and investigate the circumstances surrounding the feed price hike. He argues that feed prices should not be seen simply as a business matter between companies and farmers, but as an issue with wider implications for rural employment, exports and economic growth.
According to officials and farmer unions, any continued decline in shrimp farming could trigger a chain reaction across the region. Lower production will affect hatcheries, seed suppliers, feed dealers, cold storage, ice plants, transport operators, processing units, exporters and many supporting businesses dependent on aquaculture.
Cold storage facilities, which handle large quantities of harvested shrimp prior to processing and export, may see a sharp decline in their usage. Workers in ice plants, truck operators, harvesting laborers and peeling sheds, and processing factories may also face loss of income and employment opportunities.
Leading seafood producing state
This may also affect export earnings. Andhra Pradesh is one of the leading seafood producing states of India, and shrimp is one of the country’s most valuable seafood exporters. A prolonged downturn in farming could impact export commitments, reduce foreign exchange earnings and weaken the state’s contribution to national seafood exports.
Farmer unions estimate that if rising costs continue to outstrip farm-gate prices, up to 80% of farmers could reduce stocking or exit aquaculture, putting the livelihoods of about two million people at risk.
At present, farmers are demanding immediate relief by rolling back the latest price hike. But the bigger debate revolves around the long-term sustainability of the industry that has transformed coastal Andhra Pradesh over the past two decades. Whether policymakers step in or let market forces take over could determine the future trajectory of one of the state’s most important export-oriented sectors.
