Odisha's coastline has 418,000 hectares of brackish water, providing fertile ground for aquaculture. Uptake of shrimp and prawn farming in the region has grown as traditional agriculture has become increasingly difficult due to saltwater intrusion and recurring cyclones.

Since 2014, however, the state has been demolishing such farms for encroaching on mangrove areas and environmental regulations. These ecosystems are ecologically significant as natural shock absorbers against coastal storms, tsunamis, and cyclones, and provide ecosystem services including shoreline stabilisation, hazard protection, and habitat for diverse species.

Farmers argue that the demolitions threaten their livelihoods, especially since agricultural land in the region has become largely infertile. Shrimp farming, they say, has helped reduce seasonal distress migration, and many fear that demolishing the farms without offering alternative livelihoods will trigger large-scale displacement instead.

Farmers also contend that not all shrimp farms cause environmental harm. Many do not operate within the National Park's 10-km Eco-Sensitive Zone, treat wastewater before release, and have contributed land toward mangrove conservation. They further argue that they are being penalised due to unclear land classification, poor demarcation between forest and private land, lack of prior notice before demolition, and bureaucratic delays in the licensing and renewal process under Coastal Aquaculture Authority regulations.

The Forest Department maintains that chemicals from shrimp farms seep into the surrounding mangrove forests, damaging ecosystems that protect the coastline from climate impacts and natural disasters. The State Fisheries Department, in partnership with the Odisha Space Applications Centre, has developed a Coastal Aquaculture Information System to identify and verify sites suitable for prawn farming while protecting forest areas and eco-sensitive zones. Forest Department officials say clear guidelines govern land identification and permitted activities in eco-sensitive zones, that farms are identified against these criteria, and that notice is issued before any demolition - with scope for compensation where violations are disputed, or a genuine grievance is raised.

Some villagers also allege that effluent from the shrimp farms is destroying what fertile agricultural land remains, and that embankments built for the farms have altered the flow of the Patsala river, obstructing tidal water from reaching the sea and increasing soil salinity in the area. Since the 1990s, operators described locally as "shrimp mafias" have illegally converted large tracts of mangrove forest and agricultural land into prawn farms, contributing to shrinking forest cover.

In 1995, the Supreme Court prohibited intensive and semi-intensive shrimp aquaculture in ecologically sensitive coastal areas and directed the closure of farms operating in violation of CRZ Notification, 1991. The judgment subsequently led to the enactment of the Coastal Aquaculture Authority Act, 2005, which established a regulatory framework for coastal aquaculture and required registration of shrimp farms.

In 2017, the Ministry of Environment, Forest and Climate Change declared 192 villages surrounding Bhitarkanika as Eco-sensitive Zones to regulate developmental activities around the national park. Aquaculture is prohibited within these protected areas under the CRZ Notification and the Coastal Aquaculture Authority Act.

The Orissa High Court has repeatedly directed the state government to remove illegal shrimp enclosures in ecologically sensitive areas. In 2019, while taking suo motu cognisance of Supreme Court directions on wetland conservation, the Court ordered the state to initiate the removal of illegal shrimp farms around Bhitarkanika and Chilika Lake. In 2021, the Odisha High Court again acknowledged the widespread presence of illegal shrimp enclosures in Bhitarkanika and Chilika and instructed district authorities to accelerate their removal.

According to a statement tabled in the Rajya Sabha in December 2024, Odisha had demolished 4,321 illegal shrimp gheries covering approximately 15,738 hectares around Chilika Lake and the Bhitarkanika Wildlife Sanctuary.

Shrimp farmers challenged these demolition drives through multiple public interest litigations, arguing that they were farming on private land without causing any environmental harm and that aquaculture constituted their sole means of livelihood. However, in 2024, the Orissa High Court declined to entertain intervention petitions seeking to halt the demolitions.

During the Forest Department's most recent demolition drive in July 2026, locals protested and halted the drive, citing decades of dependence on shrimp farming for their livelihood. The operation targeted illegal shrimp enclosures across roughly 113 hectares of encroached forest land, but was suspended after hundreds of villagers - including women and children - gathered at the site and blocked forest personnel from proceeding despite a police presence.

Previously, in March 2026, Forest Department officials were injured due to protests by shrimp farmers during a demolition drive, which too had to be halted temporarily.

Officials maintain that the farms violate the CRZ Notification as well as Supreme Court and High Court directives, and that any shrimp farm operating without Coastal Aquaculture Authority (CAA) registration is liable for demolition. The department plans large-scale mangrove regeneration on the reclaimed land immediately after the drive, to prevent fresh encroachment - noting the areas are well suited to restoration given the regular inflow of tidal water.