Aquaculture business models need to be more inclusive of smallholder farmers and others in the industry’s value chain in order to alleviate poverty.
So conclude researchers led by the University of Stirling’s Institute of Aquaculture and WorldFish, who have investigated whether aquaculture can reduce poverty and inequality by offering economic and social upgrading opportunities to those who have lower incomes and are constrained by their resources and market failures.
Lead researcher Alexander Kaminski said: “Inclusive business models are touted as being more sustainable and ethical ways of doing business – examples include contract farming with coffee farmers in Africa or cotton farmers in Latin America.
“These models are based on an economic partnership between private companies and poorer economic actors, which generates development impact and maintains profits at the same time – creating a win-win solution for both stakeholders.
“We conducted a review to understand how such models are being applied in the aquaculture industry in low-income countries and how successful they are in allowing poor or marginalised people to overcome barriers in accessing the value chain – either as producers, traders or even consumers.”
The study identified and reviewed 36 cases of inclusive business models (IBMs) in aquaculture value chains in low-income countries. The models are broadly categorised into: contract farming, micro-franchising, joint ventures, sharecropping and tenant farming, farming cooperatives, certification, and public-private partnerships. The team analysed the economic and social upgrading objectives of each of the IBMs – and how they led to, or inhibited, developmental outcomes.
They considered to what extent each of the IBMs helped poor actors within the chain overcome certain barriers, with a focus on how they may ensure or pose a risk to inclusiveness.
“At times, these models can lead to the opposite of inclusiveness for marginalised people excluded from the model – trapping them in exploitative contracts or worsening conditions,” explained Kaminski.
The team found “few examples” of effective IBMs within aquaculture, compared to agriculture – but they did note overlap between models. For example, contract farming models – typically seen in coffee production – overlapped with farmer organisation models, where farmers first organised into clusters before engaging in contract models with larger firms. The research noted farmers in Thailand and Vietnam who clustered into cooperatives to improve their decision-making and knowledge-sharing capacity between themselves – giving them greater negotiating power as they made connections with wholesalers, processors and traders.
Kaminski added: “The majority of models we analysed seemed to focus on economic upgrading over social upgrading. Providing equipment or credit to farmers is one thing; but providing mechanisms that can improve labour and working conditions, or ensure women’s rights, are equally important.
“For aquaculture to continue along its current growth trajectory and contribute towards achieving the United Nations Sustainable Development Goals, value chains must become more inclusive and the private sector needs to rethink its role in economic growth by engaging with, and including, poorer economic actors.
“We still don’t have good indicators of inclusiveness – and aquaculture systems are so diverse that different models may work for some fish value chains, such as tilapia in Africa; but may not work for shrimp in Asia, for example. Further research is required to pilot new models.”
The paper, A review of inclusive business models and their application in aquaculture development, is published in Reviews in Aquaculture. It was funded by WorldFish and undertaken as part of the Consultative Group for International Agricultural Research’s (CGIAR) Research Programme on Fish Agri-food Systems.
The study included a number of collaborators: The Royal Tropical Institute (Amsterdam); School of Marine and Environmental Affairs at the University of Washington; Institute for the Oceans and Fisheries at the University of British Columbia; and the Deutsche Gesellschaft für Internationale Zusammenarbeit.