Local Business: Crab Bank

Local Business: Crab Bank

First of all, I feel so excited to share an example of our class discussion – local economy. Like I have mentioned in the first time we met that I came from Thailand, the case that I am about to discuss was actually a project that I had hands-on experience with.

Fishery was an important economic activity for Thailand’s domestic and export markets. Most of the export products are shrimps, fishes, shellfishes, etc. In the year 2005, it appeared that crabs which had been one of the significant fishery items were getting lower in terms of quantity caught and qualified size. The fact was that many fishermen were selling crabs that were ready to spawn. To remedy the problem, local communities whose livelihoods relied on the crab industry joined together with governmental organizations and experts and came up with a sustainable development plan called “Crab Bank.”

A crab bank is a group of holding nets that float on top of the water. When female crabs carrying eggs are trapped in the net, they are then separated from the rest of the catch and deposited in the “crab bank” until their young are born. An adult female crab can carry more than one million eggs.

When the baby crabs are born they are released back to the sea. The crab fishermen then return to collect the adult crabs they deposited and are able to harvest without jeopardizing the next generation.

Crab Bank project started with around 10 small and local fishermen. Now the members are more than 200. In addition, this project increases crab fisherman income and help environmental sustainability with the concept of enhancing crab resources to ensure long-term utilization and creating environmental awareness.

The principle of Crab Bank is to allow mother crabs that were caught by fisherman to lay their eggs in the provided cages considered as crab bank before harvesting. The revenue from gained from selling the crab of the bank shall be used for project activities: purchase of equipments and maintenance, family education, and other loans and revolving funds.

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The bank is managed by a leader who came from votes. The leader/bank buys female crabs from fishermen and rears crab in cages for 2 weeks to release eggs. Within the 2 weeks, crabs can lay eggs (approximately 600 eggs per crab) and be fatten. After that, the bank will sell crabs at the better price to the market; profit goes to membership fund.

After almost 8 years, it is proved that crab bank can increase catches and encourage community activities and membership. Membership fund has been increasing in a progressing rate for other family activities and benefits – community micro finance concept. Fishermen have higher price negotiation power for large volume catches. And, most importantly, fishermen, local communities, schools, etc. have environmental awareness and sustainability.

Please see the video link: https://www.youtube.com/watch?v=W1hSRYAXEvE

References

http://www.fisheries.go.th/fpo-prachuap/index.php?Itemid=161&id=7&option=com_content&view=article

http://www.matichon.co.th/news_detail.php?newsid=1308471929&grpid=no&catid&subcatid

http://www.oknation.net/blog/print.php?id=58755

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6 thoughts on “Local Business: Crab Bank

  1. kipreybitz November 1, 2012 at 5:55 PM Reply

    The concept sounds like a great way to strengthen a weakening sector of the economy. The crab example almost completely mirrors the San Francisco case which makes me wonder what other methods of technology and regulation are being used in order to enforce compliance. In the examples we have seen with microfinance and the Agua Dulce, we have seen that local cultures in emerging markets hold enough sway in order to influence the overall outcome of either loan repayment or commoner status respectively. I would be curious to see if the local community is the driver of compliance, if there are other bodies at work driving compliance, or if more compliance is needed in order for the crab bank to succeed.

  2. jmenkketemp November 1, 2012 at 10:23 PM Reply

    This reminds me of the Main Lobster Council project for Lobster sustainability. The Lobster Seed Fund purchases eggs extruded from Females so they can be later released back into the ocean. In addition, the female lobsters caught with eggs are marked as “good breeders” and off limits from harvesting for life. While the motivation for doing this is not weak sector of the economy, it demonstrates sustaining innovation in fishing that strengthen’s the long term success of local fishing communities.

  3. tlhill2012 November 1, 2012 at 11:28 PM Reply

    Worawan – great example, What was your involvement?

    I share the interest of the others in the details. How did this start? How was it funded? How is it governed? Is there a key figure or two at the heart of things (are we back to the great man or woman school of entrepreneurship, or is there a guiding group as in Agua Dulce?)? The more we can understand about this – and other examples – the more we can learn about both management generally and social entrepreneurship in particular.

    Thinking ahead to a forthcoming class, how does the crab bank measure success?

  4. worawanw November 2, 2012 at 2:02 AM Reply

    Thank you for all the comments! They really add-up my understanding. After reading your comments, I searched “crab bank” in Google and found that there are crab bank projects in many places around the world! The philosophy or initiative idea is quite similar more or less: environment sustainability, micro-finance, local community participation, etc. Honestly, I’m so surprised… in a good way.

    To give you more ideas about the crab bank project particularly in Thailand, it was originally initiated by Government Saving Bank (GSB). GSB, one of many semi-governmental organizations – i.e. government has 51% share, realized that giving loans to small fishermen for their fishing was not the right way to create sustainability in this industry. Those local fishermen did not understand (or did not care) how to manage their wealth. In order to be rich, they had to catch more crabs because, for them, more crabs is more money. This situation was so harmful for crabs population and environment. As a result, GSB decided to establish a management structure for the locals by the locals. Then, GSB cooperating with NGOs and local government authorities launched the project.

    At the beginning, GSB gave a loan to a selected community which had internally elected their leader. The leader’s role is to buy crabs, to nurse them to lay eggs, and to sell those crabs. Profits from those activities are retained for members benefits – the idea of micro-finance that we learned last class applied here. Members were thought how to manage and control their income including saving.

    The key success factor of the project was that education and social awareness had been planted in the communities. For me, the project had already succeeded since communities realized the importance of sustainability development. Increase in the fund or individual wealth are just by-products.

    I will be more than glad to discuss about this in our class.

  5. liudiwang November 2, 2012 at 2:39 AM Reply

    Here is another article discusses about the crab bank.
    http://corin-asia.org/assets/2009_Number_16.pdf

    In this reading, the Locally-initiated Fund (LIF) is the mechanism that s being managed by the CFi and Commune Council based on a legal structure and established regulation and by-laws to ensure the stability and sustainability of the activity. The process of crab bank establishment is similar but in this case, the local government offices and local authorities are involved. Communication and support by government offices to communities became more open.

  6. worawanw November 12, 2012 at 11:29 AM Reply

    Dear georgekaytub83309, Thank you for your comment even though I think you did not mean to post it here as a comment to my example. However, the concept of commons is one of the first step to attack if one wants to initiate a local business. From the same article, The Ecologist, my first feeling while reading it was ashamed. The writer described Bangkok in 1994 so precisely; and, nowadays Bangkok is still the same – mostly. The reason why I mention that the concept of commons is essential because, from my experience, people in the community, either rich or poor, do not realize and recognize that those commons are their property. They consider those as public properties where anyone can exploit and it is the (local) government’s role to maintain and improve.

    When the sense of ownership is not established, there is no hope to preserve those commons sustainably. Therefore, there is a room for those who want to exploit the commons to seek for benefit selfishly like the examples given from the article.

    So, thanks again for you comment. The fundamental issue for local business might actually be how to educate people to have the sense of ownership to their commons not to teach them to start doing business by ignoring social responsibility.

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