Without product, market channels can't form. Without market channels, spontaneous production won't happen. Building on past successes, SunREI Food Products is positioned to move marketing and production to new levels. Specifically, the quality of the dried mangos has improved. Total production costs have dropped. Total productivity has increased. In addition, the village production facility employs about 20 people and can offer them wages that exceed those in other local jobs, like rock gathering, rock splitting, and small-scale farming. The group leader of the facility told me recently, "I am so grateful for the help you have given us."
Now is the time to build larger facilities, which have the capacity to supply growing domestic and export market channels. Such an undertaking promises to boost the local economy, creating jobs for rural families, enhancing the value of trees and providing incentive for farmers to refuse offers by mining companies.
Resource Exchange International
Resource Exchange International, Inc. (REI), a non-profit company established under the laws of Florida, announces an intention to assist Indonesian organizations to expand programs that "build people to build nations". In Indonesia, REI's analysis has supported the notion that conditions in Indonesia are such that an industry of fruit dehydration can be developed.
REI has demonstrated that an international market for dried tropical fruit exists, that the price of inputs in Indonesia is lower than in other exporting countries and that the price of labor is also lower than in other exporting countries. That such an industry has not yet emerged, even though economic conditions remain favorable, indicates that transaction costs have long hindered industry creation.
REI began in 2006 to tackle the matter of transaction costs by building into the lives of villagers who are situated to produce dried tropical fruit. The effort endeavored to train villagers so that they might acquire new skills, embrace new standards and adopt new paradigms of collaboration. REI began the effort with the hope of birthing a new industry of dried tropical fruit production.
The REI Plan
The REI Plan required a legal structure that could carry out the commercialization of village production. To accomplish this purpose, REI provided for the creation of SunREI Food Products, an Indonesian limited liability company. The five-year process of assisting a group of rural villagers to become viable collaborators has shed light on the transaction costs involved in birthing a local industry where other investors refuse to participate.
Expansion of the REI Plan
Expansion of the REI plan involves the "Building the Whole Person Foundation", an Indonesian non-profit organization, who will receive funds from REI to construct and own a production and training facility. The facility will be rented to SunREI Food Product for production while the Foundation carries out training that helps participants to obtain the skills and perspectives necessary to become productive collaborators in their village.
The fundraising proposal for the construction of a production and training facility promises to contribute meaningfully to rural economic development in Indonesia. The new model situates economic development efforts by international organizations onto a market-oriented path, sustaining benefits for rural communities long into the future.