Production of freshwater fish in sustainable aquaculture farms

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Production of freshwater fish in sustainable aquaculture farms

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Country

Paraguay

Sector

Food and Beverage

Sub Sector

Food and Agriculture

Indicative Return

> 25% (in IRR)

Investment Timeframe

Medium Term (5–10 years)

Market Size

> USD 1 billion

Direct Impact

Indirect Impact

Industry, Innovation and Infrastructure (SDG 9)

Responsible Consumption and Production (SDG 12)

Business Model Description

Invest in increasing and / or establish new areas of sustainable freshwater fish production in aquaculture farms for consumption

Expected Impact

Increase sustainable aquaculture and provide a means of living to rural population while benefiting the environment

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Disclaimer

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The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

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Country

Paraguay

Region

Paraguay: Itapúa
Paraguay: Alto Paraná
Paraguay: Central
Paraguay: Paraguarí
Paraguay: Canindeyú

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Sector

Food and Beverage

Development need
76% of the total area of the country is used for agricultural activities. The agro-livestock sector is critical in Paraguay since, in 2010, this sector represented 28% of GDP (I).

Policy priority
The Ministry of Agriculture and Livestock made a Strategic Agrarian Framework in 2013. The objectives are, among others: strengthen the capacity of the agricultural sector and increase competitivity (II).

Gender inequalities and marginalization issues
Rural poverty disproportionately affects women and indigenous communities. Key factors contributing to poverty among family farmers include fluctuating prices, insufficient wages, low productivity, limited technology adoption, declining soil fertility, lack of access to financial services, among others (III).

Investment opportunities introduction
The opportunity to modernize family farming in Paraguay using more inclusive business models can accelerate poverty reduction, increase the productivity of the sector and help close inequality gaps (IV).

Key bottlenecks introduction
Paraguay faces infrastructure gaps that include high transport costs, limited connectivity, disparities in regional development, and health-related impacts (V).

Sub Sector

Food and Agriculture

Key bottlenecks introduction
Paraguay faces infrastructure gaps that include high transport costs, limited connectivity, disparities in regional development, and health-related impacts (V).

Investment Opportunity Area

Production of freshwater fish in sustainable aquaculture farms

Business Model

Invest in increasing and / or establish new areas of sustainable freshwater fish production in aquaculture farms for consumption

Market Size and Environment

Market Size (USD)

> USD 1 billion

The monthly demand in Asunción and Greater Asunción is 8,512 kg at an average consumer price of USD 11 (PYG 72,600.) Per kg. Which generates an annual market opportunity of 1,123 KUSD ( PYG 7,411,800,000) in said territory (2).

Indicative Return

IRR

> 25%

A thesis study in Paraguay (2015), "Investment project for the semi-intensive production of Tilapia and Marketing as fillets in Asunción and Greater Asunción," presented an IRR of 37% at a discount rate of 12% in 10 years of evaluation horizon (2).

Investment Timeframe

Timeframe

Medium Term (5–10 years)

According to the thesis study in Paraguay, investment recovers in the short to medium term (2).

A feasibility study for an investment in the production and marketing of red tilapia in Santander, Colombia, in 2017, offers an IRR of 35.05% at year 6 of the investment (3).

Market Risks & Scale Obstacles

Business - Supply Chain Constraints

Limited input access

Sustainable Development Need

It is estimated that only 10 percent of existing natural resources are used, with unsatisfied demands from the internal and external market.

At the national level, the entire demand has not yet been covered, which is why we are working to increase production and thus have prospects for the international market

Gender & Marginalisation

Low-income level of rural population and women

Expected Development Outcome

Increase sustainable fish production and decrease illegal fish production in Paraguay

Increase domestic freshwater fish production to cover the Paraguayan market and export

Decrease the negative impacts of illegal fishing, extraction and/or production of fish in lakes and rivers reducing pollution levels of water

Gender & Marginalisation

Create new job opportunities for vulnerable rural population and women

Primary SDGs addressed

2 - Zero Hunger

2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size

2.3.2 Average income of small-scale food producers, by sex and indigenous status

8 - Decent Work and Economic Growth

8.4.1 Material footprint, material footprint per capita, and material footprint per GDP

14 - Life Below Water

14.4.1 Proportion of fish stocks within biologically sustainable levels

Secondary SDGs addressed

3 - Good Health and Well-Being

9 - Industry, Innovation and Infrastructure

12 - Responsible Consumption and Production

Directly impacted stakeholders

People

There are around here are about 1,200 producers in the activity

Gender inequality and/or marginalization

Women and rural population with low income

Planet

Ecosystems benefiting from better practices

Corporates

exporters, national and international food markets

Indirectly impacted stakeholders

Public sector

Government: benefited by increased production, foreign currency, and food security

Outcome Risks

Inland aquaculture may be responsible for the deterioration of the water bodies used for human consumption (4).

Intensive cultivation practices create greater risks for producers (5).

Post-collection activities include the storage, packaging, transport, and disposal of waste after consumption, all of which could increase CO2 emissions (6).

Impact Risks

Execution risks: Lack of access to inputs, depending on the species in production

Drop Off: Beef is the main food in the country (3), and aquaculture production is low.

Impact Classification

B—Benefit Stakeholders

What

Positive impact creating workplaces and improving fish production to supply national consumption through the establishment of sustainable aquaculture farms

Who

Positive impact creating workplaces and improving fish production to supply national consumption through the establishment of sustainable aquaculture farms

Risk

Lack of education and training to increase quality production

Impact Thesis

Increase sustainable aquaculture and provide a means of living to rural population while benefiting the environment

Policy Environment

National Development Plan 2030 - Its goals include, among others, strengthening the Paraguayan position among the world's leading food exporters (7).

Ministry of Agriculture and Livestock (MAG) - at Expo 2019 the MAG started with an interesting dissertation on the "Situation and Potentials of Organic Production in Paraguay" (8).

National Strategy for the Promotion of Organic and Agroecological Production of Paraguay, during 2007/2008. This seeks to promote the development of organic and agroecological production in the country (9).

Financial Environment

The Development Finance Agency (AFD) - PROCRECER - Financing for investment projects. It finances projects such as - Rural, industrial, commercial, and service development projects (12).

Credit Agrícola de Habilitación (CAH) is a public entity that provides financial services and promotes technical assistance and marketing through alliances with the public and private sectors (13).

Exclusive credit for financing the national program of prioritized items for agriculture of the Ministry of Agriculture and Livestock (MAG). For investments directly related to productive activity, operating and marketing expenses at a rate of 10% per year on balance (14).

Regulatory Environment

Paraguayan Organic Production Standard. Production and marketing chain (10).

Resolution 670/13. Establishing and regulating the participatory guarantee system in organic production of plant origin and its processes within the framework of Law No. 3.481/08 on the Promotion and Control of Organic Production and its regulations (11).

Private Sector

Piscicultura La Familia (Paraguay), Ecopez (Paraguay), Bauman (Paraguay), Hildebrand (Paraguay), Eight sources (Paraguay)

Government

Ministry of Agriculture and Livestock (MAG), Ministry of Industry and Commerce (MIC ), Ministry of the Environment and Sustainable Development, National Development Bank, Agricultural Center for Habilitation

Multilaterals

IDB, World Bank (WB), European Union (EU), Development Finance Agency, GIZ, Jica, Mashav, KOICA

Non-Profit

Rural Association of Paraguay, Praguaya Foundation, Alter Vida.