Costly Collaboration

Of all the economic principles and notions I have studied, the concept of transaction costs has helped me the most in my own effort to reconcile the tension between business pursuits and humanitarian goals.  Transactions between individuals and groups are not costless.  My collaborations with folks in Indonesian villages are certainly not costless.  In fact, the costs of transacting in those environments are substantial.  Why else would the average investor ignore opportunities?

Each transaction must be carefully scrutinized.  We need to consider the search costs, the information costs, the bargaining costs, the monitoring costs and the enforcement costs of every sort of collaboration.  Of course, those costs would be very small if people were always honest, transparent, forthcoming, compliant, faithful, cooperative, congenial, etc.  But because people are not that way, business pursuits will be costly.  The humanitarian response is not just to bear the costs of collaboration but to impart education and training to such an extent that transaction costs are reduced.  When the humanitarian effort is successful, business pursuits yield a favorable return, investment in the area increases, new local jobs are created and the lives of villagers improve.

Java Bite dried mangos result from painstaking efforts to educate and train village residents.  

It's business.  

But it's not business as usual.

Mango Muffins

Warning:  This blog post contains delicious recipe content.  Viewer discretion is advised.

If you live in North America, you probably have sampled baked goods that have oatmeal as an ingredient, like oatmeal cookies and oatmeal muffins.  You may have noticed that fruit also has found a place in these baked goods to produce things like oatmeal raisin cookies and oatmeal banana bread.  Sounds yummy, right?

If you are from North America, you haven't seen mango appear very frequently in baking recipes.  But it looks like that situation may change.  In 2007, 14% of consumed mangos were in the form of a food ingredient.  By 2011 that figure nearly doubled to 27%.  Indeed, "mango availability per capita has increased 32 percent since 2005 to an estimated 2.47 pounds per year in 2012" (www.mango.org).  As mangos become a more common component in North American diets, it's expected that mango ingredients in baked goods will also become more common.

Here is your chance to get ahead of the curve.

Introducing . . .

Mango Muffins (with Oatmeal Raisin and Apple)

3 cups oatmeal
1 T baking powder
1/2 tsp cloves
1 tsp cinnamon
1/2 tsp ginger
1 tsp salt
5/8 cup Java Bite dried mangos (chopped)
1/2 cup honey
5/8 cup nonfat milk
2 large eggs
1 cup grated apple (about 2 apples)
1/4 cup raisins

Chop oatmeal in blender until it has the consistency of flour.  Combine the oatmeal flour with the remaining dry ingredients in a bowl (cloves, cinnamon, ginger, salt, baking powder and raisins).  Combine the wet ingredients (eggs, honey, nonfat milk) with chopped Java Bite dried mangos in a blender and puree.  Combine puree with dry ingredients and the grated apple.  Pour equal amounts of the mixture into 12 to 16 muffin containers.  Bake at 375 for at least 20 minutes.

You will note that this delicious recipe results in a low-fat, low-calorie snack (about 90 calories per muffin) that has a yummy tropical fruit taste.

Give this recipe a try and let others know the results by leaving comments below!

Mouths to Feed

Village workers earning money

 "Don't try to work with village people.  It will be much more difficult for you."

Those words from a business owner in Indonesia caused me to pause and carefully consider the path I was forging for myself. Although I had that conversation over six years ago I have never forgotten the warning.  It was perhaps the best warning I ever ignored.

Has it been difficult?  Absolutely!  But despite the warning, I felt it was necessary to do what I could to help people who were living on $2 a day.  Over the years since that interaction with the businessman, it seems that my convictions have grown even stronger that, difficult or not, working directly with village residents may be the only way to create jobs among them.  After all, there are mouths to feed in their families.

Has something noteworthy been accomplished?  At the very least, it is now evident that village communities are capable of producing food products for export.  There are mouths to feed in the rest of the world also.

Mouths to Feed in America

In September, we shipped 705 kg of packaged dried mangos to the US.  Of the 2822 packages that were shipped, almost all have been sold.  In fact, as of today (May 17, 2013), only 211 packages remain.  The remaining packages may be sold soon because of the special offer (see below).

Java Bite dried mangos in US stores.

The mouths in America had noticeably different tastes than the mouths in the villages of East Java.  Ask a villager in Tiron to taste three different types of mango blindfolded and he/she will guess them correctly every time.  On the other hand, the average American may not even be aware that three different types of mango exist.

But ask an American about dried fruit and you will discover an awareness of dozens of types of dried fruit products, which are soft, chewy and full of natural flavor.  For an Indonesian, dried fruit is fruit that has been subjected to deep frying in a pan of hot oil!

It was indeed a challenge to train folks who have a very sophisticated knowledge of fresh mango to make a product that they had never seen, and that they didn't even want to buy!  After all, when the fresh product is so abundantly available in such appealing variations, a dried product doesn't seem that appealing, unless it is fried and covered in chili sauce.

Nevertheless, these villagers succeeded where many thought they would fail.  They produced an exportable product, maintaining hygiene and product quality standards required by certifying agencies.  If you don't believe me, you can check out the health certificates from 2012 and 2013.  But perhaps more importantly, they made a product that satisfied the tastes of Americans.  Check out the unsolicited customer comments here and here and even here.  By feeding mouths in America they are able to feed the mouths of their own family members.

Another Shipment

With dwindling inventory in the US, we felt it was time to execute another shipment.  By the end of May, there will be another 6750 packages of (150 gram) dried mango available for sale in the US.  Packed in 135 cases, the shipment began it's long journey from Tiron village in April.  When the product arrives at the warehouse in Iowa, you will be able to purchase the product on our online store.

Expression of Gratitude

If you live in the US, we want to show our appreciation to you for being a part of the market that is helping us to help the folks of Tiron village.  If you sign up for our newsletter and let me know that you did so by utilizing the "Contact Us" page, I will email you a coupon code that will deduct 33% off of the purchase price for any amount of Sunburst dried mango (250 gram).  Of course, we can only make this offer while supplies last, so you may want to check product availability before you make plans for large purchases.

You can check product availability, sign up for the newsletter, receive updates about the recent shipment and order product at our online store.

http://store.javabite.com

Getting to Know You

Paging through my passport in his stuffy, humid office, the immigration officer probed the little book to find little tidbits of information from which he could assemble a picture of me.  I decided to make it easier for him.  After all, I chose to be the one sitting in the chair opposite his desk, instead of some hired intermediary who typically shuttle documents between foreigners and immigration officials.  I wanted to meet him face to face.

As a newcomer to the city of Malang, where REI-Indonesia is now basing operations, I feel the need to know and be known by an increasing number of people in a growing network of professional connections.  So, within days of our arrival in Malang, I determined to meet as many people as I could in the immigration office by personally carrying out the normal procedures required of foreigners.  It didn't take long before I had personal meetings with heads of the office, all of whom wanted to know who I was.  After all, it is their job to know the foreigners.

I kept the story brief but relevant, describing the period I was consultant, which he noted in my passport, and the insight about poverty alleviation I gained from working with nationals.  Then I told him about the years of technology development and the subsequent years of training village workers.

He offered a quick response.  "Production is the easy part.  There are lots of things that can be produced in villages.  The hard part is marketing.  You can't create jobs if you don't succeed in marketing."

I mentioned the recent export of village products to the US and the plans to expand production, which is why I was requesting a visa from his office.

He chimed in again.  "People need to work and businesses are important.  It's a shame that the environment suffers so much."

I described the ongoing environmental degradation in the village, which has suffered under the unregulated practices of mining interests.  Then I tried to connect the dots for him:  by processing mangos in the village, residents have more economic reasons to refuse the short-term contracts of mining companies that leave their land unusable.

The lights went on for him.  "That's great.  That's a good business model."

Not only have I received a visa, I have gained a friend and an ally in the immigration office.  He represents another person in what I hope to be a growing network of professionals who can grasp our intentions to "build people to build a nation".

Empowerment

I have to admit that I like to work with my hands.  I derive satisfaction from a finished project.  And if tasked with a project of tearing something apart . . . well, I've taken pride in work like that since I was three years old.  Last week when I was in the village, I noted that a neighbor was tearing down a house with nothing but a crowbar!  I was a bit jealous.  But I wasn't the only one.  A seven-year-old also helped out with his hammer.

As a toddler with Lincoln Logs I thought the repeated cycle of building and toppling was great fun.  And seemed that the parents wholeheartedly approved, pointing to abstract child development principles like autonomy and empowerment.

In arenas where ideas and solutions to poverty are discussed, the topics often include notions of empowerment, which usually means that individuals and communities have been granted autonomy to utilize resources according to their own preferences.  Building a new house with your own hands, after first tearing down the old one with your crowbar, gives evidence of an empowered people who can shape their own destiny.

But doesn't the picture of the man with the crowbar also reveal vulnerability?  After all, whatever can be torn down with a crowbar can also be demolished with a small earthquake.

With regard to processing mangos in village areas, if empowerment was the only objective, we would have designed the dehydrator, devised the systems, trained the farmers, . . . and then left.  Doing so would have granted them autonomy, leaving them with the resources to shape their own destiny.  But both the group leader and the village participants have unanimously voiced an appeal for continued involvement with us, who are village outsiders, tackling the matters of process improvements, product development and marketing.

I have received both criticism and commendation for our continued collaboration with the farmer group.  On the one hand, I have been criticized for insulating the village workers from challenging matters like marketing.  On the other hand, I have been commended for the ongoing improvements to the production process.  But no one has mentioned the matter of vulnerability, which I think is the matter most on the mind of the village participants, who have indicated that all production would completely stop if we ceased our involvement.

I don't blame them.  Food manufacturing is a complicated undertaking that requires knowledge, skill and care in all aspects of production.  Understanding the magnitude of the risks, the farmer group would choose to forego production, opting instead to return to the menial tasks of small-scale farming and gravel-making.

As I "build people to build a nation", my objective has shifted away from the granting of resources that can bolster a fragile sense of empowerment.  Instead, my aim is to address remaining areas of vulnerability, like technical competence and management capability.  More than just increasing assets, meaningful community development has to do with improving human capabilities that reduce vulnerability for individuals, families and communities.

You probably didn't think that a bag of dried mangos contained abstract ideas, like empowerment.  The next time you taste the sweet, natural flavor of the slices in a bag of Java Bite dried mangos, know that the product was produced with a view to building the people who made it.

Social Entrepreneurship?

A year ago I had never heard of the term - social entrepreneurship, which was first introduced to me by a professor at Iowa State University after she had given a presentation on entrepreneurship.  As I explained what I do - i.e. develop technologies and processes for mango products so that jobs and incomes grow in underdeveloped areas - she said, "Oh, you're talking about social entrepreneurship, which is another huge topic that I didn't have time to address."

Not wanting to look stupid, I didn't ask her to define social entrepreneurship.  After all, if it's a huge topic, I should know something about it, right?  Especially if it's what I do!

It turns out that I'm not the only one who needs some help to understand the term.  Fortunately, some smart people have responded to requests for clarification.  Here are some of their thoughts. . . 

"I think social entrepreneurship is a business built around the objective of solving a social challenge."  -Dina Sherif, Associate Director at John D. Gerhart Center for Philanthropy and Civic Engagement, American University in Cairo.

"Social entrepreneurs are addressing specific social issues and doing something about them to solve those problems and rally support for that cause through various tools." -Fadi Ghandour, Founder & CEO of Aramex.

"Social entrepreneurship is about building systems for changing local solutions to local problems. Social entrepreneurs are committed, unique and creative individuals who are obsessed with finding structural solutions to problems." -Iman Bibars, Regional Director at Ashoka Arab World.

Java Bite products exist as a solution to a social dilemma.  Mango trees are being destroyed.  Unemployment in rural Indonesia is high.  Investment is low.  Average incomes in the area range from $2 to $3 per person per day.  By creating technologies, refining processes and developing markets for dried mango products, we are addressing critical issues faced by tens of thousands of people who depend on the mango industry.

I didn't know the word a year ago, but "social entrepreneurship" indeed describes what we do when we fill up a bag of Java Bite Sweet Dried Fruit.  And the social impact of our business is so important to us that we refer to it on the back of our package.  Visit the online store and purchase these delicious products!  When you do, you will be part of the solution to social dilemmas that exist in Indonesia.

* Quotes are from "Social Entrepreneurship vs. Social Activism: What is the Difference?", http://ht.ly/eCcgG

Talk About Variety

Did I mention that Indonesia has over 200 documented varieties of mangos?  In the markets of Indonesia you might be able to find five or six varieties that have commercial value.  So, 200 hundred varieties seems like a lot, doesn’t it?

So, how does 14,000 varieties strike you?  That was the number of apple varieties in North America in the 19^th century.  Tim Hensley writes,

“In the 19th century, apples came in all shapes and guises, some with rough, sandpapery skin, others as misshapen as potatoes, and ranging from the size of a cherry to bigger than a grapefruit. Colors ran the entire spectrum with a wonderful impressionistic array of patterning—flushes, stripes, splashes, and dots. There was an apple for every community, taste, purpose, and season, with winter varieties especially prized. Apples were used for making cider, baking, drying, eating out of hand—even as livestock feed.” (from “A Curious Tale: the Apple in North America”, Tim Hensley, Brooklyn Botanical Garden,  http://www.bbg.org/gardening/article/the_apple_in_north_america)

Currently in North America about ninety varieties are grown commercially and a host of other heirloom varieties live quietly in the private gardens and orchards of hobbyists.  While they may cultivate apple trees as a hobby, such people are not novices.  Folks like Tim Hensley have an exceptional grasp of genetics, horticulture and grafting techniques.  They are the volunteer guardians of the apple species.

In the village of Tiron, where we are beginning another season of mango drying, recent research revealed that 36 mango varieties exist but only three or four varieties are grown commercially.  The other varieties have lived in quiet neglect in the same mango groves that are being threatened by mining concerns.

In an effort to encourage cultivation of mango trees and preserve existing varieties the national government has recruited the help of Mr. Jem, who has worked with me for six years.  During the past year, Mr. Jem has grown 5000 seedlings to be used for the grafting of underrepresented mango varieties.  Local farmers are expected to take home a seedling, choose a variety to graft, plant the tree on their own land and care for the grafted variety.  Not all of these farmers will have the same motivation as heirloom hobbyists.  “If there is no real commercial value to the farmer, why would they want to care for the tree?”, remarks Mr. Jem, stating an obvious fact about people who live on $2 a day.

An optimist would expect Mr. Jem to become a legend like Johnny Appleseed, propagating mango varieties in a way that preserves biodiversity.  A pragmatist would expect an economic version of natural selection to take place, resulting in a relatively small set of commercially viable mango varieties. 

The researcher in me wants to know how well each of these varieties dry.  Finding some with attractive taste and texture characteristics after drying would allow us to develop markets for previously unknown varieties.  I could be busy for many years to come!

  

Alongside "Johnny Mangoseed"?