EVERY day a procession of tankers and dredging boats ply the shipping channel between Lamma and Hong Kong, lumbering past the mouth of Sok Kwu Wan whose English name, Picnic Bay, has increasingly become a footnote in history. Where colonials once took their picnic hampers to spend leisurely afternoons on Lamma Island's unspoilt coastline, there is now little to keep the bay's reputation as a beautiful retreat alive. Not only has the northern headland been gouged into an ugly profile behind barges and silos advertising the Far East Cement company, the bay's small fish-farming community faces the uncertainty of a major sand-dredging operation less than three kilometres away in East Lamma Channel. As many as 300 families who depend on Lamma's mariculture zones of Sok Kwu Wan and Lo Tik Wan, to the north, fear the final ignominy for this once-pristine area will be the loss of their fish and livelihoods to clouds of muddy water stirred up by the dredging. They are, as the Agriculture and Fisheries Department (AFD) candidly admits, not alone in their fears. Already fish farmers of Tung Chung on Lantau Island have been forced to close down and the picturesque bay is now busy with barges and a sand dredger. Other fish-farmers and fishermen have either been compensated or are registering for compensation in growing numbers as what amounts to the biggest dredging operation in history makes itself felt across the length and breadth of Hong Kong waters. About 30 large dredgers, including half of the world's biggest, are taking marine sand from the bottom of the sea at the staggering rate of about 80 million cubic metres this year, for use in reclamation works which are equally unrivalled in their scale. Though the fish-farmers of Picnic Bay are naturally anxious to know the local effects of dredging in the channel - where about 15 million cubic metres are to be sucked from the sea floor - questions about the overall impact of dredging around Hong Kong have drawn a worrying silence. When asked about the effects of such a massive dredging programme on the marine environment, acting senior aquaculture fisheries officer, Keith Wilson, says he does not know: ''Let's wait for the studies to come up with that answer.'' In response to concerns from the AFD, the Environmental Protection Department, fishing groups and environmental groups, the Government set up a working group this year to look into the cumulative environmental effects of dredging. It is a move green groups regard as regrettably tardy - another example of starting work on a project without first understanding its full environmental implications, they say. The working group, chaired by the Civil Engineering Department (which is convinced effects of dredging will be local), has commissioned an environmental consultancy to survey 60 to 70 submarine sites to gauge the effects of dredging on life on the seabed. The World Wide Fund for Nature and Friends of the Earth say the study should have been done several years ago when plans for the airport-related projects were finalised and authorities became aware of the dramatic increase in dredging these projects would require. The fund's Hong Kong marine conservation officer, Joanna Ruxton, an experienced scuba-diver, says her own observations on the sea floor show that the damage to corals has been extensive near some dredging sites. She says spectacular corals near the Nine Pins group of islands, to the east of Clearwater Bay, have already disappeared beneath a shroud of mud stirred up by the big dredgers working to the west of the islands. ''I don't think any of them predicted just how extensive the damage would be,'' Miss Ruxton said. ''You can't deny that the Government is sitting up and taking notice of environmental factors . . . but everything is too late.'' Chief geotechnical engineer with the Civil Engineering Department (CED) Dr Dick Martin does not attempt to disguise the fact that dredging ''destroys'' the sea floor being dredged, but is confident concerns about widespread effects will be allayed. Waving copies of two environmental impact assessments (EIAs) - of all the dredging sites in Hong Kong waters, only two merited full EIAs - Dr Martin cites conclusions that environmental damage will be limited and site recovery quick, at least two to three years. The EIA for Mirs Bay, off eastern New Territories, led to the CED abandoning dredging work there. The conclusions drawn by the other, for the East Lamma Channel, have yet to be tested. The CED and AFD also cite the findings of a dredging trial conducted off Tung Lung Chau to show that the ''plumes'' of dirty water generated by dredgers do not necessarily impact on nearby mariculture zones. The Hong Kong Inshore Fishermen's Association (HKIFA) remains unconvinced and regards the huge increase in dredging activities as an unmitigated disaster for the 3,000 to 4,000 families for whom the well-being of the inshore marine ecosystem is their future. HKIFA president Christopher Chung Shu-kun believes the Government is unmoved by arguments put forward by such a small sector of the economy, especially if they threaten to stall work on capital works projects whose economic significance is paramount. Mr Chung's prognosis for the inshore fishing industry is not encouraging: ''The fishermen are facing a very difficult situation because previously, when the Government started some development, the fishermen could be moved to other sites. ''But now all the Hong Kong waters are being dredged so where can the fishermen go? They can't go outside Hong Kong because of the size of their boats and they have no Chinese licence.'' As if to confirm Mr Chung's frustrations, the AFD quotes figures which show that the inshore fishing industry is a small part of an entire agriculture and fishing sector which contributes just 0.2 per cent of the territory's gross domestic product. ''There's a policy within Hong Kong of development activity,'' said Mr Wilson. ''Without development activity, Hong Kong is not Hong Kong.'' The HKIFA, the Hong Kong Mariculture Association and the Democratic Alliance for the Betterment of Hong Kong want the Government to buy sand from China instead of disturbing its own waters. The Government's response is that it would like nothing better and that the scope for dredging contractors to do so exists, but they dredge in Hong Kong waters because it is cheaper. ''The contract is written in such a way which allows [the contractor] to bring in his own material and we welcome fill material being imported because it helps to conserve our own resources,'' Dr Martin said. But, as the fish farmers of Lamma are only too well aware, those resources are being rapidly plundered and at an environmental cost no one can estimate with certainty.