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Productive Arrangement – An inclusive rural developmental model

This article is based on my experience, as well as plans for future investments developed in collaboration with my business partners. Our aim with this investment is to have an impact not only on our company but on the community and all its stakeholders.

Productive Arrangement – An inclusive rural developmental model

My adventure in rural development began in 2015. I refer to this experience as an adventure because, with no prior practical experience or business knowledge in the field of aquaculture, I embarked in a pilot project for the production of catfish. Alongside my foreign partner, and with the support of a developmental rural program sponsored by the Dutch Embassy in Luanda, we launched our project in the city of Caxito, in the Bengo province.

Today, I am the managing partner of a developing enterprise, planned to produce up to 300 tons/month of catfish, with a heavy focus on research, directly generating over 25 jobs and offering growth opportunities alongside the transfer of knowledge and technology. The expectation is to reach 20 tons/month in production for commercial sale by next year with the stabilization of the reproductive tests of fingerlings. This initiative also benefits the community with indirect job creation, especially among women who buy the fish for drying or resale purposes. In this manner, we are modestly contributing to the dietary variety and improved nutrition of nearby communities, actions impacting the sustainable development goals (SDG 1, 2 and 5).

Obviously, what we are accomplishing bears little significance in the grand scheme of things and is far from the desired solution to the much sought-after diversification of the Angolan economy and the substitution of its imports, but it is the basis of something far more ambitious. The project’s outset was trying, and challenges abounded: delays in licensing, the integration of new technologies in the production of fingerlings, the search for a consistent market, the high variance of prices (in the rainy season, supply of river fish skyrockets, thereby lowering prices).

As an entrepreneur, I am keenly aware of the challenges inherent to agricultural enterprises, but I am also motivated to face them as opportunities. With what I have learned over these past five years, either through self-study or the experience gained through the implementation of this pilot project, I possess the tools to grow this enterprise and launch an expansion project based on a set of premises I would share with you.

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I am keenly aware of the challenges (…), but I am also motivated to face them as opportunities

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Public debate over rural development is often dominated by production matters. Millions in public and private funds are spent on seeds, fertilizers and Agricultural tools, distributed to smallholder farmers for media outlets. However, headlines in social media claim that while production is plentiful, a substantial part ends up spoiled through lack of market access and/or absence of local food processing industry.

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In fact, while stimulating production is an important factor, it is also crucial to have an understanding of why such a large part of agricultural products ends up wasted, resulting in enormous losses for investors: a) Considerable fluctuation of prices due to the seasonality of agricultural production – in times of oversupply, prices drop; b) Value chain is inharmonious – difficult access to the supply chain and freight transport; c) Absence of food processing industry; d) Inconsistency in product quality – not all producers have the know-how and capabilities to produce to the standards of quality demanded of major buyers.

In the specific case of the catfish project, these frailties were also felt: a) In the rainy season demand for our product diminished, as more fish is available in the rivers and our immediate customer – local vendors, prefers buying their fish directly from fishermen at lower prices; b) The implementation of the technological center for the production of fingerlings was a complex challenge, requiring a series of additional investments in research and technical as well as professional training of our employees to guarantee the quality of the fingerlings and the consistency of their production rate (these challenges have been overcome, allowing us to expand the production capacity of our tanks within a short timeframe); c) Demand from larger buyers requires both the availability of sizable quantities and greater consistency in delivery, which smallholder farmers are unable to deliver.

It is within this framework that our expansion project comes to light, through the launch of a new enterprise, centered mainly on improving the value chain and focused on fish processing.

The focus on processing will allow: 1) to extend the shelf life of a highly perishable food item; 2) to minimize the exposure to price fluctuations; 3) to expand production (self and fostered) and 4) to guarantee the consistency and quality of delivery to major buyers.

The emphasis on processing also opens opportunities to small farming community, other semi-industrial initiatives and emerging entrepreneurs in the value chain (maintenance and transport services, commodity suppliers, etc.). I firmly believe the expansion project of the enterprise can be a catalyst for inclusive economic development. In what follows, I wish to present the concept and guiding principles of a possible rural developmental model, based on private enterprise that can serve as a stimulus to further initiatives.

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The concept of the productive arrangement is based on sustainable, private enterprise and in an anchor client, which can generate a multiplying effect in rural development.

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Inclusive development is not the sole responsibility of one organization, consequently, it becomes necessary to prepare and motivate the community

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The concept is grounded in the development of the value chain of catfish, however, I believe the same can be replicated throughout other value chains. (See image)

Inclusive development is not the sole responsibility of one organization, consequently it becomes necessary to prepare and motivate the community, engage the local authorities (and guarantee the necessary public investment funds, namely infrastructure, occurs simultaneously), and connect with the business community, in particular young entrepreneurs, informing them of such opportunities in the rural environment. There is a set of peripheral opportunities complimentary to the emergence of this project which can be transformative to the current situation: from the development of new crops involving hydroponics (the water present in fish farming tanks is nutritional and can be used for horticultural production), to energy/biogas production (with the waste derived from fish processing), to financial services and technical assistance to the communities, as well as increased opportunity for rural tourism.

The present article is based on my personal experience, as well as plans for future investments developed in collaboration with my business partners. Our aim with this investment is to have an impact not solely on our company but on the community as a whole, as with other stakeholders. We are aware that risks and challenges can be minimized and shared if inclusivity is kept in perspective. As such, I would appeal to known or unknown interested parties to discuss, collaborate and test a sustainable, replicable, scalable model, relevant to the rural development in Angola.

Mario Mendes (Economist and entrepreneur)

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