Privatisation of the TGCH Lagoon bed encouraged shrimp farmers to adopt intensive production methods. In the
absence of well-defined property rights to lagoon water, farmers over-intensified as they were able to externalise the
costs of their water pollution. In addition, the process of privatisation was not well regulated and natural waterways
were blocked by earthen walls and fine-mesh nets. This aggravated the pollution problem and shrimps became
increasingly prone to disease as the water quality deteriorated.
Well-established relational contracts between shrimp farmers and wholesalers collapsed because the yield losses
were widespread and farmers were unable to fulfil their supply contracts. Switching to more disease-resistant
aquaculture species comes at the expense of lower profits and may provide only temporary relief from the
water pollution problem. Considering the large number of poor households that depend on the Lagoon for a living, it
is essential that levels of water pollution be reduced and managed.