INVEST Indonesia – Building Sustainable Aquaculture Cooperatives

A case study of Canadian assistance. Authored by Robby Tulus, CDF Canada volunteer

The aquaculture sector, where populations of sea and fresh water are cultivated under controlled conditions, plays a very important role for human consumption as well as local employment. The demand for aquaculture products, especially seaweed, milkfish, and shrimp (SMS) is very high and continues to rise as people are adopting healthier seafood-based diets.  In spite of such high demand, producers in coastal areas of Indonesia are still facing structural challenges of dependence on trader bosses and money lenders. Lack of working capital and poor market integration are weakening the ability of these small producers to capitalise on a growing market opportunity, consequently contributing to a decline in incomes, livelihoods and risking to reverse poverty gains. If this trend continues, and aquaculture stocks are exploited by trader bosses simply to reap as much profit as possible without heed for the environment, the problem will not just be poverty but also food safety, food security and environmental degradation.

State-managed aquaculture resources have come under scrutiny because of their top-down nature. Experience has revealed the need to co-manage these resources through bottom-up mechanisms, which can enable producers to have their say in managing coastal resources for betterment of their livelihoods. Cooperatives for small aquaculture producers are an effective mechanism to help producers become the masters of their own destiny. The case study below clearly illustrates this point.

CDF CANADA INVEST COOP PROJECT

Indonesia is one of the largest maritime countries in the world, with immense and rich coastal regions, fish and aquaculture resources. With the knowledge that the provincial government of South Sulawesi was planning to boost aquaculture production among the poor coastal producers in a number of regencies in the early 2010s, the Canadian Cooperative Association (CCA), CDF Canada’s predecessor, took the initiative to initiate a project with the assistance of the Canadian International Development Agency (CIDA), currently integrated into Global Affairs Canada, to help these small aquaculture cultivators in 2015.

H.E. Cameron MacKay (second from left), Canadian Ambassador to Indonesia visiting project beneficiaries in Jeneponto regency, South Sulawesi

The idea was to boost their productivity and form well-governed cooperatives to gain access to markets and hence raise their income. CCA initiated INVEST Cooperative Indonesia as part of the multi-country coop development project, which also included Malawi, Mongolia and Peru. Following organizational changes and rebranding, CCA continues to actively implement international development projects under the name of CDF of Canada. The CDF of the Canadian movement has been in existence since 1947.

CDF Canada entered into a partnership with the Marine Institute of the Memorial University of Newfoundland, to enhance the quality of seaweed products so as to meet international standards, to educate farmers about best aquaculture practices, sustainable aquaculture principles, warehousing, and also assist in identifying alternative aquaculture crops with co-op members. The second partner is Kospermindo, a marketing cooperative in South Sulawesi. Kospermindo, with the technical assistance of a number of experienced volunteers from Canada, as well as local consultants from Indonesia, provided training which generated four seaweed cooperatives in four regencies, namely in Bantaeng, Jeneponto, Takalar and North Luwu. With these four coops well-established, coop leaders and members were further trained on value-chain and market analysis, the design of sound marketing strategies and business plans, as well as strategic negotiations and contracting with buyers. The integrated cooperative model encourages sustainability by reducing uncertainty and risk.

A very important cross-cutting mechanism throughout the coop enhancement process is the empowerment of women with gendered value chain analysis for shrimp, milkfish, and seaweed and additional crop(s) for sale through cooperatives and other channels. In doing so, sound cooperative governance was also intensively and experientially inculcated using the Development Ladder Analysis (DLA) method, facilitated by an experienced Canadian volunteer and assisted by local consultants.

In the second year of project implementation, access to finance was deemed imperative to support the South Sulawesi small aquaculture producers. Access to finance must begin with financial literacy training to equip these small cultivators with the basic know how and skills to defend themselves from the intrusion of moneylenders and middlemen who exploit their livelihood conditions.  A third partner was identified by CDF Canada, namely the Credit Union Central Organisation (CUCO) of Indonesia that fielded experienced trainers on the important subjects of financial literacy and credit union development. The combination of high-quality production, access to finance and marketing creates a holistic approach to development in the aquaculture sector in South Sulawesi, whereas its sustainability is strengthened by collective actions through the cooperatives and credit unions built from the ground up.

Robby Tulus (left) and H. E. Cameron MacKay (second from right) are observing seaweed production off the coast of Jeneponto, South Sulawesi

Notwithstanding, existential challenges could not be easily shaken off. Historical evidence has shown that state-sponsored aquaculture in the past has failed because cooperatives were often indulged with government subsidies, leaving a climate of dependency among these small aquaculture producers and cultivators.

Thus, the newly organised cooperatives and credit unions are subjected to a dependency way of life and the additional burden of indebtedness to moneylenders and trader bosses. Changing the mindset of these farmers is therefore high on the priority list of CDF Canada. Experiential training and continuous education must be engendered. With proper guidance and mentorship by experienced Canadian volunteers and local consultants, the INVEST Coop project has been progressing steadily with increased self-reliance by both the male producers, as well as women cultivators in all four regencies.

In addition to intensive monitoring by voluntary cooperative leaders selected by CDF Canada, the government of Canada has also conducted its own field observation. Two successive Canadian Ambassadors to Indonesia and their development colleagues conducted their field observations on project sites of South Sulawesi (see pictures). The gendered value chain mechanism has been given particular attention. This mechanism empowers women to participate in decision-making processes of the cooperative, including production, handling and marketing of seaweed. Women have shown their vigilance in the strengthening of their cooperative enterprises, despite a familiar male-dominated environment witnessed in many rural communities in Indonesia. These women aquaculture coop members eventually decided to form their own Women Credit Union in South Sulawesi, and despite the disruption of COVID19, they have continued to discuss procedural and subject matters among themselves using online Zoom conferencing to formalize the establishment of the much-anticipated Women Credit Union. In one regency in North Luwu, milkfish production has increased significantly and is now being primed not just for local consumption but also for exports. Marketing of seaweed also proceeds as planned, and in all these cases Coop leaders and members are heeding the advice to keep social distancing and by staying home as much as possible.

This case study is a demonstration of cooperative resilience in times of crisis. The long-term success of coops will obviously be determined by members themselves who will dictate the extent to which effort, time and space will be best utilized for the ultimate growth and development of their collective actions.

Robby Tulus is a former Regional Director ICA Asia Pacific and currently a volunteer of the Cooperative Development Foundation of Canada. The views expressed are in a personal capacity and do not necessarily reflect those of CDF Canada.

This piece was originally published by the International Cooperative Alliance Asia and Pacific on May 5th, 2020.

Stay updated on our news, projects and opportunities.

Subscribe Now