is the business case embedded in the social solidarity economy?
Mohamed Rasheed, Bari
This article is published in and is part of our Vol 1. Issue 4 Journal with a special focus on Food Security - Editors
In 2015, governments approved the Sustainable Development Goals (SDGs), a 15-year plan of action for people, planet and prosperity addressing issues such as poverty, hunger and child mortality reduction; combating major endemic diseases, preserve the environment and set up a partnership for development among others. The emphasis together with eradicating poverty and hunger was also on achieving universal social protection and ‘fundamental changes in the way that our societies produce and consume goods and services’ (para 28) suggesting that business-as-usual is no longer an option. Approaches centered on trickle-down economics, jobless growth, corporate-led green economy, fragmented social, economic and environmental policies and targeting the poor through social assistance programs are inadequate if the ‘transformational vision’ of the agenda is to be realised.
Among the 17 Global Goals or SDGs, Goal 2 addresses global food security and agricultural sustainability requiring urgent and concerted action from developed and developing countries. In spite of policies, strategies, international collaboration in development, the agricultural sector has not taken off in the Maldives even though the tourism sector and the local consumer base comprising of domestic, hospitals and schools represent a huge market for wholesome local produce alongside successful innovative farming technologies home tested by some resorts and local food suppliers.
The following discussion, in the context of Government of Maldives (GOM)’s continuing efforts with the assistance of development partners, for Maldives agricultural sectoral development, introduces the concepts defining food security and how it relates to food security policy, strategy and product-service delivery mechanisms for the purpose of spurring further thought and discussion towards identifying the nature of business models or where they are located in the economy for achieving national food security goals.
Theoretical background to food security framework
Ensuring national food security is a vital concern of all governments. Examples from two South Asian countries below bring to life the concepts of food security as defined by FAO (figure 1), in a nutshell: food security embodies how the four dimensions of food security delivers health and development goals as set out in SDG via system influencing factors of agroecology, policy, governance and institutions.
Food security exists when all people, at all times, have physical and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy life (FAO 1996). Figure 1 is a simplified framework depicting food security in the context of dimension of 1) availability; 2) access - physical and economic; 3) food utilisation; and 4) stability in availability, access, and food utilisation.
The first of these pillars, food availability is dependent upon the supply of food through the sectors of production, distribution and exchange. Food distribution logistics involves efficient and effective storage, processing, transport, packaging, and marketing as a decrease or poor handling can effect food wasted leading to public health and environmental issues as well as increasing the overall price of food.
It is not unthinkable that core strategies as described above - whether focused to offset limitations of the limited space for farming or poor agricultural land and lack of capacity and awareness as in the Maldives - mitigated by diversification as practiced in Singapore (local production and stockpiling), need to be coupled with supporting strategies: research and development; reducing food wastage; strengthening infrastructure; developing financial instruments; focusing on welfare and enabling strategies: cross-government coordination; emergency planning; communication; developing and tracking market and performance indicators; monitoring; and strengthening fiscal, legal, and regulatory frameworks. However, fragmented approaches and well-guarded silo confinement of institutions seems to have created the bottle necks that need to be removed to transform the sector.
At home, addressing uncertainty in global food security supply chains following COVID-19 lockdowns, quarantine and isolation of people, STO has stocked essential food items, GOM is making provisions to ensure that 25 per cent of produce is generated from inhabited islands, leasing agricultural land for free of charge towards this end. Ministry of Fisheries, Marine Resources and Agriculture (MFMRA) is continuing to play the central role in providing expertise and advice to farmers and has identified 44 islands for the agriculture program to increase food security to 50 per cent towards reducing the dependency on foreign food supply to ensure self-sufficiency.
Visions and plans facilitating the above policies, strategies and activities are included in FAO MCPF 2013-2017 and 2018-2020; therefore, these recent announcements by GOM may not be considered as firefighting responses to COVID-19. However, it may serve the civil society well to note MCPF’s observation on the several policy documents prepared by the agriculture sector (with FAO assistance) such as national policy framework, ADMP and commercialisation plan “unfortunately none of these had received the required attention” (p. 19). Reflecting on how the tourism sector grew and took off under pioneering entrepreneurship, it is important to recognise the challenges of developing a sustainable business plan where there is no business case for the shareholders as in the case of tourism. Perhaps a common enemy or an external coalescence force can initiate scaling food production in the islands. But then what about sustainability? In hindsight, the cholera epidemic of 1978 led to transformation of water and sanitation in the Maldives, yet after 40 years the sector is still not technically, economically or environmentally sustainable. Perhaps this pandemic has the potential to initiate transformation of the agricultural sector in the Maldives in tandem with potential post COVID-19 tourism. However, sustainable business models would need to embed innovation by responding to communal demand, engagement and development of social capital and capture social impact along with economic value.
Food insecurity to malnutrition linkage
According to FAO’s report on State of Food Security in the World 2018, food insecurity contributes to overweight and obesity, as well as undernutrition. The Maldives Demographic and Health Survey (MDHS) of 2009 highlighted that malnutrition continues to be a serious concern in Maldives. Figure 2 illustrates details of the link between food access and nutritional outcomes that are difficult to capture in comprehensive conceptual frameworks showing the many basic, underlying causes of food insecurity and malnutrition. The main pathways from food insecurity to malnutrition pass through food consumption, or diet (figure 2). Beyond malnutrition, Food insecurity has negative impacts on the academic performance of children and is associated with behavioural problems.
Good agricultural practice and its challenges in ensuring food security
Agricultural productivity can be increased to meet both quality and quantity demand using good agricultural practices (GAP). GAP addresses a wide variety of farm production and post-harvest practices that contribute to food safety, food quality and environmental stewardship. MFMRA promotes GAP following FAO guidelines. Meanwhile firms such as tourist resorts and their food suppliers are incorporating GAP into production/supply chains and procurement decisions to conform to GAP certifications.
Figure 2: Pathways from inadequate food access to multiples forms of malnutrition
Source: FAO, 2018
Justifiably, with all the benefits, GAP comes at an institutional, administrative and financial cost relating to aspects of selecting the right type and size of land to be cultivated for food crop production; planting the best-quality seeds and appropriate varieties; use of acceptable chemical inputs; controlling the quality of irrigation water; use of appropriate harvesting and on-farm storing and handling techniques; use of suitable methods for shipping of produce to markets or food processors. This calls for a business case that supports the necessary value creation and value delivery to markets at top-end tourism, the domestic consumer, hospital and school food programs in order to shift from mere subsistence farming to market orientation in the Maldives. Revenue optimisation and risk-based decision making requires business plans to respond to markets in the context of agronomic practices adopting a stakeholder centric perspective. A local researcher (Mohamed, 2018), rightfully observes that the new paradigm adopting agroecological approach has the potential to change current nutrient management practices at island level to impact the farming system of the whole region.
Business case for sustainable food security delivery mechanisms and social solidarity economy
According to the Second National Communication of Maldives to the UNFCC, under a national strategy for food security (2012) provided several outputs: integrated farming was introduced, alternative technologies of hydroponics and auto-pot systems successfully demonstrated, storage distribution and supply chains improved (MEE , 2016). However, these projects did not seem to track, rather, they seem more like isolated top-down delivery projects. Three years later, SAP (2019) listed constrains in the agricultural sector as: insufficient technical skills and poor institutional capacity and legal framework for promoting sustainable agriculture, weak policy implementation, weak quarantine, veterinary, and laboratory facilities, lack of appropriate infrastructure for agricultural value chains (storage, transportation, market, electricity, quality water etc.), lack of farmers’ organisations, and inadequate availability of market information and lack of opportunities for women in leadership roles, unsafe food production, degradation of ecosystems, abuse of resources, and increased pest and disease damage in agricultural systems.
Meanwhile IFAD and FAO continue to collaborate with MFMRA attempting scaling up small scale community businesses and SMEs to thrive and sustain in developing the agriculture industry of Maldives enabling the expansion of production capacities, developing island level business and managerial capacity, establishing formal market linkages for SMEs through private sector partnerships. There have been success and disappointments along the way; according to IFAD (2016) the Fisheries and Agricultural Diversification Program has been “very innovative in the Maldives context, spearheading the cooperative business development model promoting affordable micro-finance products to cooperatives and small producers engaged in the agricultural and fisheries sector”, while, FAO CPF 2013-2017 observed that “despite planning over the years, neither the fisheries nor the agricultural sectors have achieved adequate growth”. However, the sector is yet to prove its worth after all the investment and time by GOM and the development partnership.
Perhaps there was not enough success in entrepreneurship development for an economy that has more social benefits -as in the Maldives in the current form agricultural sector- than economic benefits as in the case of tourism, and fisheries sectors. Perhaps a more holistic business model is required to connect people, planet and prosperity. The answer perhaps would lie at the juncture of agroecology and social solidarity economy. Agroecology can connect producers and consumers through a circular and social solidarity economy (SSE) that prioritises local markets and support local economic development by creating virtuous cycles promoting solutions based on local needs, resources and capacities, creating more equitable and sustainable markets.
SSE refers to the production of goods and services by a broad range of organisations and enterprises that have explicit social and often environmental objectives, and are guided by principles and practices of cooperation, solidarity, equity and democratic self-management (UNTFSSE 2014). SSE is considered a form of economy that is centred on social protection and equality. The SSE movement, growing worldwide prioritises social objectives above profit maximisation, recognising the key role of collective action (ILO, 2017) for both economic and political empowerment of disadvantaged groups in society (Utting, 2015).
The field of SSE (Figure 3) includes cooperatives and other forms of social enterprise (SE), self-help groups, community-based organisations, associations of informal economy workers, service-provisioning NGOs, solidarity finance schemes, amongst others. According to ADB Report on Diagnosis of Social Enterprise Land Scape in the SAARC countries (ADB, 2017), SE while still nascent in the Maldives is located in the private sector, reassuring in reference to other SAARC countries that there is good opportunity for SE development across the agricultural sector of Maldives.
Several countries around the globe are still under lock down, while some, easing out of the situation are mindful of a possible second wave of COVID-19 infection. Maldives, having temporarily lost markets in the export industries, has only the agricultural sector to feed the nation in the longer term worst case scenarios not hard to imagine. Individuals already returning to agriculture after having lost jobs in other sectors have set the tone for this trend in the shorter term.
However, turning the long term food security strategies into action requires meaningful, collaborative business models and delivery mechanisms in the agricultural sector. There will be no better time to awaken social entrepreneurship in Maldives and work towards developing the social entrepreneurial landscape embedded in the Social Solidarity Economy to facilitate access to funding, materials, technologies, support services, and markets, thereby increasing the capacity of producers to negotiate supply process of primary materials in line with SDG8 (decent work and economic growth). Economists see COVID-19 as an opportunity to fix what is broken; never let a good crisis to waste! Learning from the current circumstance, it is clear that people need entrepreneurship and active stakeholder engagement to build resilience in food security through the social solidarity economy to continue feeding people in the face of disasters over the longer term while taking care of the environment.
Issues for further research
1. Strengthening organised farming and subsistence farming systems, applying appropriate technologies and developing the required market infrastructure to overcome socio economic challenges in agriculture to improve national food security.
2. Means of overcoming challenges to successful implementation of focused policy level interventions that enable the creation of an environment where small community businesses (SMEs) including social enterprises can grow.
3. Enabling the expansion of production capacities, developing business and managerial capacity at community level, establishing formal market linkages among SMEs, education institutions, hospitals, government agencies, private sector and civil society applying corporate business practices valuing social impact as well as economic value.
4. Linking GAP to integrated water resources management via SDG 6 and SDG2; develop collaboration among the health, agriculture and island development sectors, to practice climate-smart agriculture and to better regulate, manage and use natural resources, and support the development of integrated water resource management systems.
5. Addressing issues related to public policy for SSE: institutional capacity, policy coherence and participation in the policy process; institutionalisation or long-term sustainability of state interventions and initiatives as recommended in Policy Innovations for Transformative Change: UNRISD Flagship Report 2016.
About the author
Mohamed Rasheed, Bari is a Civil Engineer with wide experience in design and construction management consultancy. He continues research in water resources management for small islands having served in a wide range of areas in the water sector from policy (MOH), regulatory (MWSA), to utility management (MWSC executive) and Corporate governance (MWSC Board of Directors).
Through DTM (Development Technologies Maldives) as the proprietor and specialist, Bari currently provides consultancy support to the Ministry of `Environment in water and sanitation. He is the National CSO focus of Sanitation and Water for All, and National contact of Freshwater Action Network South Asia. At WaterCare, a social enterprise, he is advocating for the establishment of Mutual Accountability Mechanisms for SDG6 implementation in the Maldives with his experience in Transparency Maldives as Chairperson to his credit. Bari is currently conducting research on social enterprise as a model for developing a sustainable water industry in the Maldives.