A Unit Study of Externality of Shrimp Farming on Provisioning Services (Paddy Farming)

Externality; the term can define as a positive or negative impact from either production or consumption of goods or services. Services provided by particular location have very specific dependency on spatial characteristics of that region. A region’s distinct characteristics make it ecologically unique from other such regions. Ecosystem services offered by these regions thus differ according to these unique ecological features. In this particular study, artificially imposed expansion of coastal shrimp farming towards the inland and its impact over paddy cultivation have been addressed.  Optimization of the extent of this manipulative coastal expansion has been supported by little modification of a previously described model.  Here the investment prediction for both shrimp and paddy farming has been investigated by calculating net present value (NPV). Shrimp farming has very specific externality on local ecosystem services. In this particular case, some contradictory results are presented and with respect to positive or negative externality; but the externality are strong. NPV results indicate that there is no long-term profitability in case of shrimp farming. Hence, an overall externality of shrimp farming has been described in context of this study.