As a maritime nation, Indonesia is the second largest fish producer in the world. Generating around USD 4.1 billion in annual export earnings, the industry supports more than 7 million jobs in the country, according to the World Bank.
Despite its huge potential, fishermen in Indonesia face major challenges that pose a threat to their ways of life. These range from underdeveloped infrastructure to a lack of transparent market pricing. To date, the Indonesian government has taken several steps to improve the welfare of seafaring workers through the provision of financial assistance for equipment, insurance programs for fishermen, and diversification training, among other means.
Nevertheless, these measures have proved insufficient to address the issues they face. To bridge the gap, tech entrepreneurs have developed smart solutions to improve the operations of fishermen and their livelihoods. From the use of artificial intelligence to weather predicting apps, these aquaculture platforms help small-scale fishermen access technology, financing, and markets.
In recent years, a number of these startups have raised sizable investments in Indonesia. The first is eFishery, which has raised over USD 110 million over eight rounds since 2014.
Another is integrated fishery platform Aruna, which has raised around USD 100 million since 2017. Connecting traditional fishermen with global seafood markets based on fair trade, the e-commerce startup touts itself as a platform designed to improve the lives of fishermen.
Supporting coastal communities
For Aruna, one of these ways includes aid for coastal communities in Indonesia. The tech startup has a network of field officers who hold regular discussions with traditional fishermen to tackle the issues affecting their livelihoods. “There are five [field officers] in Sorong, in Papua in the eastern part of Indonesia, who are assisting nearly 400 fishermen across eight sites,” Aruna field officer Dzul Fikri Liulin Nuh told KrASIA.
These field officers talk with the fisherman about the challenges they face in their day-to-day operations, such as inadequate fishing tools. “For example, these men are fishing in small boats that can only accommodate two people. They also use makeshift crab fishing gear which can only catch 30 to 50 crabs, so production is limited,” said Nuha. Aruna believes that its field officers can help the startup steer progress on the challenges encountered by fishermen.
Besides improving the working conditions of fishermen living in remote coastal settlements, Aruna also provides them with basic amenities. Aruna recently built a network of grocery kiosks in rural areas that allows traditional fishers to purchase daily necessities without having to make long commutes to the city. “We also provide diesel generators to several villages with limited electricity,” Nuha said.
According to the fishery platform, over 26,000 fishermen in 100 cities across 27 provinces in Indonesia have partnered with the company.
Are these startups effective?
It’s clear that fishermen can benefit from the services offered by aquaculture startups like Aruna, such as higher wages through improved access to global markets. According to the company, fishermen’s wages can increase 300% after joining Aruna.
Despite this, there are several factors that may mitigate the value and effectiveness of such platforms, often as a result of the challenges they face.
One significant concern is the connectivity gap in Indonesia, especially in remote regions. According to a 2021 World Bank report on digital technologies, only 36% of Indonesian adults in rural areas have internet access, compared to 62% in urban zones. This means that many fishermen who reside in rural communities may not be able to access the digital technologies and services provided by tech startups.
Indonesia’s fishing industry is highly fragmented, which means aquaculture e-commerce firms have to localize their solutions, according to Gibran Huzaifah, founder of agritech startup eFishery. “We cannot rely on digital marketing channels like Google Ads for the acquisition process, simply because it is irrelevant. Indonesia has 34 provinces with different business cultures in each region, so the nature of our business is localized,” he said.
In Indonesia, fishermen are often wary of partnering with digital platforms, which are known for their disruptive technologies. Many come from traditional fishing communities where local customs are deeply entrenched. “For instance, in Papua, fishermen are only allowed to fish in their own village as a customary practice, and we had to adhere to this. We have to respect their culture and customs to avoid disputes with locals,” said Nuha.
Another concern arises from the sector’s complex supply chain, raising questions about the effectiveness of aquaculture startups in cutting out middlemen who often squeeze fishermen on margins.
“Startups still have to work with middlemen who are part of the supply chain and double as leaders of farmer groups,” said Aldi Adrian Hartanto, a partner at MDI Ventures that has invested in several agritech and fishery startups. While startups such as Aruna have reduced the number of middlemen that fishermen have to deal with, these intermediaries are still needed in the marine industry.
There is also the issue of how most aquaculture startups in the sector tend to focus on the downstream supply chain, such as distribution channels. “Currently, most startups focus on connecting farmers and buyers,” Hartanto said. Instead, he argued that startups should explore more solutions in the upstream supply chain to help fishermen scale up their operations, given its untapped potential. These include increasing operational efficiency as well as improving inventory management and quality control.
One way is by incorporating more upstream technologies. A good example is eFishery’s eFeeder, which helps increase the productivity of fisheries. “The smart feeder system optimizes yield days, increases farmers’ production capacity by up to 26%, and increases feed efficiency by 30%,” Huzaifah said in a press statement.
Smart feeding systems allow farmers to provide food to their fish remotely. This way, the right amount of feed can be dropped into fish ponds at the appropriate time. The method is considered a more efficient method than manual feeding.
As climate change accelerates, the marine and fisheries sector is likely to face more challenges. Going forward, aquaculture startups have to evolve.
“We can expect to see more next-generation startups in aquaculture and agritech use sophisticated technology to boost productivity as well as improve quality control of seafood and freshwater fish,” said Hartanto. “This will create a more efficient and sustainable fishing industry in the long run.”