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Going Against the Tide: The Middelen Magna Trade Inc.-Mahusay Case Study

In 2008, the United Nations Development Programme (UNDP) published a report that documents the ability of firms to be inclusive of the most marginalized sectors of society within the bounds of markets. On this basis, the Program on Escaping the Middle-Income Trap: Chains for Change (EMIT C4C) of the University of the Philippines Center for Integrative and Development Studies (UP CIDS) posited that the litmus test of inclusion [in a value chain ] is whether or not such integration of the poor as producers and consumers eventually lifts them out of poverty (Balaoing-Pelkmans 2020, 12). In this discussion paper, I present a case study that aims to (1) provide a snapshot of a fisheries value chain from the point of view of its lead firms and articulate how the value chain impacts its most primary producers and (2) surface the motivations of lead firms for their strategies. As the fourth case study for the EMIT C4C, the evidence provided may also be used to expand and possibly generalize the Program's theory of change for poverty alleviation via inclusive value chains. The vertical integration of the three main subjects/actors via their interlinked value chains—and the value that it has created—is evidence to support a definition of inclusivity along the utilitarian concept of interlinked value chains, even if the value created is not explicitly higher revenues for the smallest producers in the chain (i.e., fishers). Though this particular value chain has shown to have failed the litmus test of inclusivity, the introduction of Middelen did create value for upstream actors in four ways: block and timely payments; scale; price and buyer criteria certainty; and transparency. Motivations seem to represent the classic business case in van Tulder et al.s (2014) matrix of motivations, which is evidence to suggest potential for generalizability and replicability.


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