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24.4 The Viability of Aquaponics Social Enterprises

4 months ago

4 min read

The examples above illustrate some of the different business models adopted by aquaponics social enterprises. Whether they will continue to thrive and grow or, like Growing Power, ultimately fail, remains to be seen. In the case of Growing Power, potential reasons for its collapse include Will Allen's inability to empower and retain an operational management team, and a lack of oversight by board members, which compromised the organization's financial health (Satterfield 2018). An in-depth analysis of two aquaponics social enterprises conducted in 2012—2013 revealed four distinct factors what were significant to their survival (Laidlaw and Magee 2016). Sweet Water Organics (SWO) began as an urban aquaponic farm in a large, disused, inner city industrial building in Milwaukee in 2008. It was funded primarily by its founders in order to develop creative capacity, employment opportunities, and chemical-free, fresh, and affordable food for the local community. In 2010, a new organization, Sweet Water Farms (SWF), was split from SWO, with the idea that they would grow as a mutually supportive, cohesive hybrid organization, including both a for-profit commercial urban farm (SWO) and a not-for-profit aquaponics "academy" (SWF). SWF managed volunteer operations and hosted training and education programs at the Sweet Water urban farm, while developing programs on a local (Milwaukee and Chicago), regional, national, and international scale. Sweet Water had a loyal following among local restaurateurs and fresh food stores for its lettuce and sprouts produce, and sold its fish to a single wholesaler. However, the hybrid not-for-profit/for-profit enterprise model proved to be challenging, as both sides of the organization struggled to identify their role in relation to the other. While each side had a different structure relating to their operational character, and although their operations frequently overlapped, their strategic planning and visions sometimes did not. After 3 years of operation, SWO had still not managed to make a profit, and in 2011 the Milwaukee municipal government awarded a \$250,000 loan on condition that 45 jobs would be created by 2014. In October 2012, SWO had 11—13 permanent employees, but was still being sustained through loans financing and equity investment. By June 2013, as loan repayments fell due and the job creation targets were not met, the for-profit arm of Sweet Water went into liquidation, and SWF took over as the primary operator of the Sweet Water urban farm. Currently, SWF operates entirely as an educational and advisory enterprise run by volunteers and a small team of part-time employees, and no longer supplies restaurants with produce (Laidlaw and Magee 2016).

The Centre for Education and Research (CERES) in Melbourne, Australia, opened its aquaponics facility in 2010. The system was designed as a suboptimized commercial system with the production capacity to support a single wage for the farmer who maintains it. This wage varies based on how much he/she produces, with the vegetables being sold through the CERES Fair Food organic box delivery service. The scale of the operation does not generate a return that would permit the setting up of a fish-processing facility. Stakeholders at Sweet Water Farms and CERES identified that the principal factor behind their survival was ongoing commitment, in the form of continued support of personnel with technical and business management skills combined with an enduring leadership, and the willingness of the stakeholders to remain involved and prepared to cooperate without strong financial incentives. The second factor was the local political context. While the city of Milwaukee supported Sweet Water both through policy initiatives and direct financial aid, which allowed it to expand its fixed assets and human resources, build market awareness, and acquire a sizeable regular commercial customer base, the CERES project had little such support, beyond an initial grant, and it had struggled to generate revenue, which would have allowed it to expand. Costs of compliance and licensing also made it difficult to engage with local markets in more than a token way, which dampened its motivation to market and sell the produce, and made it untenable for the operation to develop beyond a small part-time income-generating enterprise. The third factor was the availability of markets for urban aquaponics produce. While urban aquaponics is attractive to a customer base that is increasingly responsive to issues of food security and ethical consumption, such as in Milwaukee, this was not the case in Melbourne. The final factor was diversification. Both CERES and SWO/SWF benefitted from translating social and technical experimentation into a range of training and educational services. SWO/SWF, being a larger concern, obviously had greater capacity for developing these services, and these proved vital in sustaining the social enterprise when commercial plans failed to materialize (Laidlaw and Magee 2016).