Deconstructing the Chain: A Comprehensive Analysis on the Inefficiencies and Transformation Pathways in Bangladesh’s Seafood Value Chain

This paper gives an in-depth evaluation of the shortcomings and developmental directions in the seafood value chain of Bangladesh, which is an important sector in the economy, employment and food security of the country. Although the sector contributes in excess of 3.65% to GDP, and sustains 18 million livelihoods, it is still confronted by the same issues, such as too much intermediation, poor infrastructure, low-quality control, little technological uptake, and poor market organization. Such inefficiencies reduce producer income, rise consumer prices and make exports uncompetitive and aggravate environmental and social susceptibility. The study compares the best practices of the value chain of Bangladesh to the global standards of Vietnam, Thailand and India through qualitative research which involves interviews with stakeholders and secondary analyses of data. Among the most important recommendations, there are digitalization, modernization of infrastructure, increased quality assurance, producer empowerment (and mostly women), and environmental protection. The above strategies can maximize value addition, enhance sustainability and make Bangladesh a competitive force in the world seafood market.  

Introduction

The Bangladeshi seafood industry remains one of the mainstays of the country’s economy, as food security and livelihoods are heritage sites that range from the heartlands along the rivers to the sprawling coastline. The sector accounts for over 3.65% of the national GDP and more than 25% of gross agricultural products; hence, it becomes the second most valued export commodity after ready-made garments. The country’s configuration is a 714-kilometer-long coastline, and copious inland water bodies have catapulted it to one of top fish-producing countries in the world, with rankings of 3^rd in inland open water capture, 5^th in global aquaculture, and 11th in marine fish production by Mauliet al. (2023). Fish are not just an important source of forex but also a crucial part of the Bangladeshi diet, accounting for about 60% of the total animal protein intake for the population. The industry provides employment for more than 18 million people, including many women engaged in fishing, farming, processing, and trading.

Rapidly growing and playing a central role in the country’s development, the seafood sector in Bangladesh faces various problems related to inefficiency and management. The value chain has features such as being overly long, high cost, and complex, embodied mostly by intermediaries with little physical disposal of the final product. These issues, by themselves, not only lower productivity or diminish the value realized by producers but also affect the ability of this industry to compete on much tougher today’s global markets. Circumspect years are currently experiencing additional threats in this regard, ranging from those caused by the pandemic outbreak and global economic slowdowns to pressing environmental issues such as overexploitation of resources, loss of habitats, and climate change (Uddinet al., 2019).

This study addresses the following research question:

• How can Bangladesh transform its seafood value chain to enhance competitiveness, sustainability, and socioeconomic benefits, drawing on international best practices?

One thing that is clear is that, by all means, it may not want to overlook the importance of these inefficiencies. As world seafood markets continue, with an eye towards sustainability that now receives more attention than ever and traceability and certification, the prospective future of Bangladesh as a competitive player and the well-being of people in millions who depend on this sector will be greatly influenced by how well the country learns to upgrade its seafood value chain. This research paper seeks to provide detailed information about the processes of structure, challenges, and changes that take place in Bangladesh aggregation, which will be done through in-depth analyses, international cases, and the latest data through research journals and industry reports.

Research Objectives

The primary objective of this study is to conduct a thorough examination of the inefficiencies within Bangladesh’s seafood value chain and propose actionable strategies for its transformation. Specifically, this study seeks the following:

1. Map and analyze the structure and organization of Bangladesh’s seafood value chain, identifying key actors, market dynamics, and the flow of products from production to export.

2. Identify and evaluate the main inefficiencies and bottlenecks in the value chain, including excessive intermediation, poor infrastructure, substandard quality control, and underutilization of by-products.

3. Assess the socioeconomic and environmental impacts of these inefficiencies on producers, consumers, and the broader economy.

4. We compare Bangladesh’s seafood value chain with international benchmarks and case studies from countries such as Vietnam, Thailand, and India, highlighting the best practices and lessons learned.

5. Synthesize policy frameworks, technological innovations, and governance models that have proven effective in similar contexts.

6. Develop evidence-based recommendations for value chain modernization, technological adoption, policy reform, and sustainable development.

Literature Review

The literature on seafood value chains in developing countries confirms the complexity and diversity of these systems, which most often engage in various stages such as production, aggregation, processing, distribution, and retailing. In Bangladesh, the value chain is especially complex, and many intermediaries exist who capture a disproportionate share of value for themselves; therefore, primary producers end up with low incomes and limited bargaining power. This structure is not confined to Bangladesh; this type of pattern has been seen in other developing countries, where informal market organization, lack of vertical integration, and weak governance increase inefficiency.

This research points out the importance of infrastructure in terms of the efficiency of the value chain. Poor storage, transport, and processing facilities cause a very high percentage of post-harvest losses and poor quality products that cannot access premium export markets. Another emerging trend that has been a challenge is quality control because of the lack of proper assurance mechanisms that affect goods or products by contamination, spoilage, or rejection in international markets. The fact that products including fish waste are underutilized means a waste of economic opportunity because these materials can be processed into value-added products, such as fishmeal, oil, or nutraceuticals.

Comparative analysis revealed that in countries such as Vietnam, Thailand, and India, it was possible to improve the seafood value chain by implementing the following approaches:

• Vertical (upstream-downstream) integration of the supply chain,

• Compliance with international certification standards,

• Investment in infrastructure and

• Public-private partnership.

Among the most important strategies that have made Vietnam the leading global seafood exporter are concentration on export-oriented production, cluster-based development, and digital traceability technology. Thailand’s experience underlines the fact that it is impossible to ensure quality market access without regulatory framework improvement, upgrading human resources and social standards, and product manufacturing system innovation after export prohibition (Uddinet al., 2019). Shrimp farming in India, specifically Andhra Pradesh, and its promotion through the cluster approach, digital platform, and farmers’ empowerment have also been covered.

Researchers have highlighted that digital technologies in seafood value chains can transform businesses. It has been found out that blockchain, IoT, and AI-driven analytics can help improve traceability, decrease information asymmetry, and support small-scale producers (Subramaniamet al., 2023). However, despite the tremendous advantages of using such technology, there are still barriers, especially those relating to limited infrastructure, digital literacy, and regulatory support (Islam & Arzu, 2024). Effective policies and governance are crucial for scaling technological innovations and ensuring equity in value distributions (Hasan & Jahan, 2022).

Recently published news items and industry surveys have pointed out some of the problems still facing the seafood sector in Bangladesh, including a lack of fairness in overfishing, depletion of resources, environmental damage, and workers' poverty (Uddinet al., 2019). The export performance within the sector has been fluctuating, with recent slumps attributed to economic slowdowns at the global scale and compliance issues with international standards (Hasan & Jahan, 2022). Nevertheless, signs of development and modernization are noticeable, such as increasing importance for sustainability, certification, and digital technology turnaround (Islam & Arzu, 2024).

Methodology

This study serves as an example of a qualitative research design with primary and secondary data sources to obtain a full picture of the seafood value chain in Bangladesh. The primary data collection was conducted through in-depth interviews with key players along the value chain, including fishermen, farmers, processors, traders, exporters, and policymakers. The Chattogram region, which is one of the major hubs for production and trade in seafood, has been selected as the focus area for stakeholder engagement, given the strategic location and diversity of actors.

To increase the chances that all value chain sections were represented, a judgmental nonprobability sampling technique was used. In this study, an interview guide was used as a data collection instrument to provide information on the value chain structure, operational challenges, market dynamics, and stakeholders’ views on policies and their possible reforms. Thematic analysis was applied to identify major themes in the data collected, bottlenecks, and areas with improvement opportunities.

Secondary data were collected from government reports, academic literature, industry publications, and other international databases such as the Food and Agriculture Organization (FAO) and World Bank. Mapping value chain techniques were used to develop a graphical representation of how products, information, and values move through time stages. A comparative analysis was conducted to assess where Bangladesh’s value chain stands in comparison with the international best practices, taking cases from Vietnam, Thailand, India, and others into consideration.

To avoid bias that could affect the results, data triangulation was used to check the information from various sources and stakeholder groups. The research also considered current developments and trends that have been expressed in news articles or industry reports over the past two years, offering a peek into real-time sector growth and challenges (Fig. 1).

Fig. 1. Methodological flowchart.

Findings and Analysis

Structure and Organization of the Value Chain

Contrary to the situation in Bangladesh, the value chain in which the seafood sector is composed is multi-segmented, with a linkage of activities such as production (fishing and aquaculture), gathering and aggregating, processing, distribution, export, retail, and consumption. This chain displays informality as one of its key features, with a large number of intermediaries operating between primary producers on one end and end markets on the other. The main players are fishermen and farmers, local agents and middlemen, processors (often small-scale and technologically under-equipped), exporters, wholesalers, retailers, and consumers (Fig. 2).

Fig. 2. The multilayered sea food value chain in Bangladesh.

The significance of this sector was noted in terms of GDP, employment, and food security. There was a total fish production of 4.76 million Metric Tons in the year 2021–2022, and aquaculture contributed to 58% of that output (Islam & Arzu, 2024). The industry supports over 18 million people’s lives including 1.4 million women, and provides around 60% of the total animal protein intake for the population. The earnings from fish and seafood export were USD 601.59 million in the year 2021–2022, though it decreased to USD 422.28 million in the year 2022–2023 as a consequence of global economic headwinds (Hasan & Jahan, 2022).

Key Inefficiencies and Bottlenecks

Value chain efficiency is incapacitated by a plethora of interrelated inefficiencies that hinder its performance and competitive positioning.

1. Excessive Intermediation: Domination by middlemen causes long and costly value chains, which will see primary producers getting just a small share of the final market price. This structure perpetuates poverty among fishing communities and reduces quality incentives.

2. Inadequate Infrastructure: Storage, transport, and processing facilities are in a deplorable state, which leads to high post-harvest losses of 8% to-20% in some segments. The current infrastructural setup does not allow for maintaining the freshness and quality of products, let alone meeting international standards, especially for export markets.

3. Substandard Quality Control: Poor quality assurance mechanisms in divergent points of the value chain cause losses through contamination, spoilage, and rejection in export markets. The absence of reliable traceability systems also makes it difficult to comply with international food safety and certification requirements.

4. By products Low Utilization: Valuable by-products, such as fish waste, are often discarded instead of being upgraded into value-added products. This indicates a missed chance for economic diversification and environmental sustainability.

5. Fragmented market organization: Markets are not well coordinated, which is evident from the low level of vertical integration and weak linkages between actors. This fragmentation reduces efficiency, innovation, and ability to respond to market needs.

6. Limited Technological Adoption: The sector has a lower rate of adoption of modern technology, such as digital platforms used in traceability, logistics, and market access. This, in turn, reduces productivity, transparency, and adaptability to emerging consumer preferences.

Socioeconomic and Environmental Impacts

Defects in the value chain trigger a broad spectrum of socioeconomic and environmental issues. The drop in income among producers, especially small-scale fishers and women, contributes to perennial poverty and vulnerability. High consumer prices, owing to poor distribution systems and many layers of middlemen among other factors, restrict the affordability of seafood for the local population. Employment in this sector is often marked by low wages, insecurity, and a lack of social protection; women also face additional barriers to advancement (Uddinet al., 2019).

Environmentally, overfishing, habitat destruction, and pollution threaten the sustainability of continental and marine fisheries. Depletion of important species, such as tiger prawns and Indian salmon, has also been observed in some regions with increasing competition faced by artisanal fishers from commercial fleets. Outbreaks of diseases such as white spot disease in shrimp continue to cause great financial losses, in addition to undermining sector resilience (Uddinet al., 2019).

Recent Developments and Real-Time Analysis

Over the last two years, the seafood industry in Bangladesh has faced various issues and prospects. The spread of COVID-19 disrupts the supply chain, reduces export demand, and worsens challenges among producers. Nonetheless, the sector has started to recover as shrimp exports jumped by 39% in volume from 2021 to 2022. Recently, authorities have come up with measures for tighter regulations on illegal, unreported, and unregulated (IUU) fishing, which are coming into force, and there is also much more on sustainability, certification, and digitalization (Uddinet al., 2019).

Even in the face of these positive trends, it is still possible to encounter difficulties that have always been there. Overfishing, resource depletion, and environmental degradation are problems that will remain in the sector’s future. Value chain inefficiencies, poor infrastructure, and compliance with international standards do not allow firms to reach full export potential and hinder market diversification. The sector’s export performance remains erratic, with recent reductions caused by slow-downs in the global economy and non-tariff barriers in main markets (Hasan & Jahan, 2022).

International Comparison

Comparing the country with other top seafood exporters may shed light on how this can be achieved and help identify possible paths at the same time.

1. Vietnam: The seafood industry in Vietnam has experienced spectacular export growth and has been achieved through vertical integration, adoption of international certification standards, investment in infrastructure, and public-private partnerships. The country’s focus on cluster development, digitization of value chains, and compliance with food safety requirements has helped it obtain entry into top markets and improve value sharing for producers (Hopkinset al., 2024).

2. Thailand: Of all the emerging market countries, Thailand is a good example of how new regulatory frameworks, social and labor upgrading, and process innovation are prerequisites for regaining markets after export embargos. It is clear that the government’s proactive position in ensuring compliance with standards and in upgrading industries has been among the factors that determined the recovery and competitiveness of the sector.

3. India: India’s shrimp sector in Andhra Pradesh has experienced the positive effects of clusters, digital platforms, and agricultural extension for farmers (Hopkinset al., 2024). Cluster development for export-oriented units, investment in cold chain logistics, and training programs for best practices have also played crucial roles in pushing India forward, which is now the leading exporter of frozen shrimp in the world.

These international experiences make us realize the importance of many things- of vertical integration above all others, such as digital traceability, certification, and public-private collaboration–for upgrading seafood value chains and enhancing global competitiveness.

Recommendations

Recommendations that are given below, based on the findings and international best practices, are aimed at modernizing and optimizing the Bangladesh seafood value chain:

1. Implement a Centralized IT-driven Distribution System: Set up a centralized digital platform for marketing, logistics, and traceability that will be the point of contact for buyers and sellers, thus reducing the democratizing the role of intermediaries as well as increasing transparency and efficiency in business operations.

2. Modernization of Infrastructure: To increase investment in modern cold storage, transport, and processing facilities is the top priority with the objective of reducing postharvest losses, maintaining product quality, and meeting international standards.

3. Promote Improved Engagement with the Producers Directly: By using cooperatives, contract farming, or digital platforms, it is possible to create direct engagement between fishers and processors/exporters; thus, intermediaries can be bypassed, and better prices for products can be obtained.

4. Strengthen Quality Control and Certification: Steps up quality assurance and certification systems to better suit international standards and enhance export prospects. Help smallholders and processors receive internationally recognized certifications (e.g., ASC, BAP, MSC) and implement digital traceability systems through support.

5. Strengthen Fisher Folk and Local Women: Training, technology tools support, and organizational capacity should be provided to boost the bargaining power and productivity of locally based fishers with a strong focus on gender inclusiveness and equitable benefit-sharing.

6. Foster Policy and Technological Innovation: Promote policy innovations and the use of new technologies such as blockchain, IoT, and AI analytics in the value chain so that it may be modernized for better governance and maximum economic and social value creation.

7. Promote Value Addition and Byproduct Utilization: The value chain should be developed to add value to byproducts while making them fishmeal, oil, or nutraceuticals to enhance income generation and reduce negative environmental impact.

8. Strengthen Environmental and Social Safeguards: Improve fishery management using science-based approaches, enforce labor standards, and assist in the development of community-based resource management for sustainability and resilience.

9. Enhance Market Diversification and Branding: Be it by finding new export markets and products, promoting export-oriented local production, investing in country branding initiatives, or mobilizing international certification schemes that facilitate consumer trust while reducing dependency on customary buyers—all shall effectively enhance market diversification.

10. Establish Procedures for Monitoring and Giving Feedback: Set up mechanisms that will enable gathering of data, looking through it, and feeding it back to assess how well interventions are doing and supporting making changes as required.

Conclusion

At the dawn of the 21^st century, the seafood industry in Bangladesh is facing a great challenge. The industry displayed impressive growth in terms of production, employment, and export earnings, yet issues pertaining to value chain inefficiencies may affect its long-term sustainability and competitiveness. The dominance of middlemen, low-level infrastructure, poor quality control measures, and low-level technology adoption are among the many factors that cause a loss of value, reduced producer income, underutilized resources, and hindering progress. These challenges are aggravated by environmental stressors, socio-economic vulnerabilities, and evolving global market requirements for sustainable, traceable, and certified products.

Thus, lessons learned in countries such as Vietnam, Thailand, and India show that quite specific value chain upgrades, such as increased vertical integration or better digital traceability in supply chains, improved certification schemes, and public-private collaboration, can still transform seafood sector harvesting operations and unleash export potential for value-added seafood products. In Bangladesh, the future route is a comprehensive approach that amalgamates infrastructural development, technical modernization, policy overhauls, and inclusive governance. Consequently, it is necessary to ensure that local fishermen and women are empowered while engaging in value addition, as it is also necessary to strengthen the environment and social safeguards.

To handle these issues and exploit the opportunities that come up, there is a need for concerted efforts by the government, industry, and society. Bangladesh can upgrade its fishery value chain, learn from the best practices globally by making effective use of technological advancements and guaranteeing higher value creation for producers as well as sustainable, inclusive growth both for the sector and nation at large.

Limitations of the Study

This research is prone to a number of serious limitations that are worth taking into account when discussing its results. First, a small sample size was used in the research with the number of in-depth interviews being 20 and this limits the possibility to generalize research findings to the whole seafood industry in Bangladesh. Although the qualitative method offers detailed and deep insights, it has no statistical strength or representativeness that huge quantitative research has, and therefore the results are more contextual and possibly biased. Also, the geographical interest of the study is mainly restricted to the region of Chattagram, which may not reflect the entire spectrum of the geographic variation and industry-wide variations across the nation. The lack of data and lack of resources also restrict the scope of the analysis and its quality, since not all information about the marine value chain was available and updated in time. The use of purposive sampling and self-reported data of the stakeholders presents the likelihood of selection and recall bias, which may compromise the objectivity and reliability of the findings. Lastly, the overall deficiency in the current academic literature on the Bangladesh seafood value chain does not allow benchmarking the results or further development of the existing theoretical frameworks, which may restrict the generalizability of study findings.

Future of the Study

The current study provides an in-depth look at the inefficiencies and ways of transformation as far as the value chain of seafood is concerned in Bangladesh. Nevertheless, there are a number of areas that require further analysis to support future continuous improvement and policymaking.

1. Increase the Number of Samples and Perform Quantitative Studies: In the future, it is recommended that a wider range of samples be used to conduct the surveys or even do case studies to verify the findings and observe how interventions into value chains influence performance.

2. Inquire into the Effects of Climate Change: Since the sector is gradually coming under the influence of climate disease-related issues such as floods, cyclones, and disease outbreaks, it is expedient in future studies to investigate the impact of climate change on seafood production, value chain resilience, and adaptation strategies.

3. Assess Policy Interventions and Governance Models: Comparative studies comparing the efficiency of diverse policy frameworks, governance models, and institutional arrangements can provide a sense of what needs to be done to scale successful interventions.

4. Evaluate the Efficiency of Technology Advances: Over time, studies that follow the usage and results of digital technologies, such as blockchain and IoT, can show what is done best and help direct investment decisions.

5. Promote Data Sharing as well as Collaboration: Platforms are set up for data collection, sharing, and collaboration among stakeholders, which can support evidence-based decision-making and continuous improvement within the value chain system.

6. Comparative Studies with Other Countries to be Conducted: By comparing Bangladesh’s seafood value chain with what is practiced internationally, it may be possible to find areas for further innovation and value addition.

If these research gaps are addressed and culture of continuous learning and adaptation is promoted, then Bangladesh can transform its seafood sector into a leading one that is not only stable but also has the competitive edge globally in the time to come.

Conflict of Interest

The authors declare that they do not have any conflict of interest.