Smart Solutions
Small-scale Community Production
Production and selling of local products by disadvantaged local families through a non-profit company.
Implemented in : Szalatnak
Country : Hungary
How do you rate this example?
- What’s the solution?
- What makes it smart?
- How is the solution implemented?
- In what local context has it been applied?
- Who was behind the implementation?
- What was the local journey?
- What have been the main outputs & results?
- What does it bring the village/community?
- What’s needed
- What to do…
- and not to do.
Where and when
Implemented in : Szalatnak
Country : Hungary
Population : 405
Date : 10/2019 – Ongoing
Find out more
Contact person : Erika Gulácsi
E-mail : erika.gulacsi@yahoo.com
Link(s) :
Last updated : 13/06/22
What’s the solution?
Local families are helped by professional mentors to create local produce to then sell through in local settings – such as markets – through a non-profit company.
The solution involves the provision of mentoring support to disadvantaged individuals and families in a community to enable them to produce and sell a typical local product at a small scale.
As well as mentoring support, participating families are provided with raw materials and tools to get them started in their chosen initiative. The produce is then sold locally through a cooperative, social enterprise or similar format.
Example produce can include locally grown fruits and vegetables or artisan-made products such as baskets. The choice of produce should be inspired by the local area, its existing specialities and the produce that can generate the greatest return on investment.
The use of pilots can be useful in training local people and creating the community spirit around the initiative.
The solution allows families living in deep poverty to earn an additional income, which can represent a substantial increase – especially for families whose only income is otherwise from social benefits. The community spirit generated can be mobilised to develop further income-generating activities.
What makes it smart?
The solution is smart because it takes a readily available existing asset in many disadvantaged rural areas – typically land and/or local people – and turns it into an economic opportunity for some of the poorest members of the local community. It is also builds from the traditional activities, which may have been lost at local level, but which are readily understandable and approachable for local communities.
By bringing in targeted expertise and advice in the form of consultancy - and led by a local instigator – the solution taps into the latent capacity and energy within the local community to create new income generating activities. It enables the local people to start a value-creating activity, which they would be otherwise highly unlikely to be able to begin by themselves.
The solution is also smart in enabling local people to start slowly, with minimal initial investment and to build up their activities as they become more successful and as the spirit of entrepreneurship develops within the participating families. The activities can develop readily from, for example, the more traditional vegetable growing to more ambitious activities based on recycling materials or anything else that inspires the local inhabitants. It is a flexible solution that can adapt to the specific skills and interests of any community.
The solution can produce significant economic benefits for individual families – estimated as a potential doubling of their income for the poorest families in Hungary – - with which they are finally able to start planning beyond their daily survival. It can also create a meaningful additional income for the community as a whole, creating further economic opportunities in the village.
The creation of a non-profit or social enterprise for the joint selling of the produced goods is a useful innovation for rural communities in deprived areas.
How is the solution implemented?
- Secure local funding for the development of the activities
- Engage local people with the promise of support to start an income-generating activity.
- Find and engage appropriate experts/consultants to advice on the most appropriate local production methods and approaches.
- Identify and select the most appropriate products for growing locally – bearing in mind local interest and income generating potential
- Find the most appropriate legal format of the business (public employment programme, or cooperative, or non-profit company etc)
- Create a first pilot or model garden
- Provide the needed tools and raw materials, and engage and train vulnerable local people in the cultivation activities
- Test and fine-tune the business model (sales channels, remuneration of the participants, size of the garden etc.)
- Grow and expand – the aim is that the participating families become independent in the long run.
In what local context has it been applied?
Szalatnak is a small municipality located in the Komló district of Baranya County in the south of Hungary – a heavily rural country relatively near the border with Croatia.
The vast majority of the local population lives in deep poverty, and their only source of income is social welfare payments. This means that they cannot plan and think beyond everyday survival. The mayor of Szalatnak, Erika Gulácsi, wanted to help in this hopeless situation and provide families with a proper source of income, a meaningful and sustainable occupation, and a purpose in life. As a consultant to the Children's Opportunity programme in the neighbouring district of Hegyhát, Erika Gulácsi already developed a local economic development programme aiming to help families living in deep poverty to find additional sources of income.
Who was behind the implementation?
The initiator of the project is Erika Gulácsi, the mayor of Szalatnak. One part of the project is being implemented within the framework of the Hungarian public employment programme, while another part through the Szalatnaki non-profit company.
What was the local journey?
- The mayor of Szalatnak was a consultant to the Children's Opportunity programme of Hegyhát – a neighbouring district to Kolmó where Szalatnak is located. In that context, she supported the development of activities aiming to help families living in deep poverty to earn a supplementary income.
- One of these activities involved providing local families with tools and mentorship for cultivating vegetables which they could then sell. Families were able to use their own gardens to grow the vegetables after building their skills in a pilot garden. The initiative was supported under the public employment programme.
- After a few years of positive experience with the initiative in Hegyhát, the mayor of Szalatnak sought to introduce similar activities in her village as well.
- The first step was the creation of a local pilot or model garden based on an estimation of the size of an average local garden.
- Expert consultants were brought in to develop the pilot and also to provide guidance and training on what and how to cultivate on this land. The programme initiators thus started a local pilot cucumber production based on four 50-metre-long rows of cucumbers.
- The initiative also provided raw materials and tools for the local people to use in starting their cultivation. This overcome the barrier to entry that would otherwise have been caused by this initial investment requirement.
- The public employment programme provides 80% of the income of the person working in the programme (the monthly income is around 300 euro per month for someone working in the public employment programme). The local authority (in this case Szalatnak) can decide if they create public employment positions and they have to provide 20% of the income.
- A surprising aspect of the project in Szalatnak was that most of the initial families to join the initiative wanted to keep working in the shared garden, rather than start their own activity in their own garden. This was a surprise for the mayor who therefore revised the format of the operation and decided that it is more meaningful to create a non-profit enterprise to coordinate the selling of vegetables grown in the common gardens. To take the simplest possible legal form, the non-profit has one member who is someone who works in the mayor’s office, but it operates in the interests of the community who are regularly consulted and decisions taken together.
- An additional idea suggested by the consultants and taken up by the local people was the cultivation of loofah for the creation of organic sponge from the fibrous interior of the mature dried fruit.
- The municipality also brought 1.3 ha of apricot plantations into the scheme
- The positive energy generated amongst the participating families led to reflections with the consultants about how to overcome the fact that cucumber and loofah production only provide seasonal income. An idea emerged within the group to create baskets from recycled bicycle wheels and paper during the winter months.
- Consultants provided training for the preparation of the baskets which are then made by the local families using old bicycle wheels and newspapers collected from neighbouring villages and sold at surrounding markets. As a marketing element, to each basket they have added the name of the person who created it.
What have been the main outputs & results?
- Szalatnak created public employment programme jobs in cucumber, apricot and basket production.
- For the time being 8 families work in the initiative of Szalatnak
- In 2021 – 1 ton of organic cucumber was cultivated
- The community spirit generated from the initial activity of cucumber growing has already led to two follow-on activities: cultivating sponges and making baskets.
- From loofah experimental planting, in 2021 around 50-100 sponges were made
- In 2021, 300 baskets have already been created, and sales are starting now. Initial plans to sell the baskets were disrupted because of the Covid 19 situation.
What does it bring the village/community?
- The solution provides a substantial income supplement for participating families. It is expected to amount to around 1400-1650 EUR per year per family. This can help to lift families out of the most serious forms of poverty.
- The economic benefits should not only be for individual families, but provide an additional income which can be spent locally – boosting the village economy.
- Through meaningful value creation activities, the initiative hopes to help participants gain a greater sense of self-worth and potentially stimulate additional community activities.
- The participants learn not only horticultural activities but also entrepreneurship which might allow them to become more independent in the long run.
What’s needed
Financial resources
Main types of cost:
Financial needs:
Set up / Investment costs: EUR 5 880, including:
• Tools: EUR 2 250
• Raw materials (paint, glue, minimal fungicide, plant, many plant conditioners (manure, trace element replacement): EUR 1 950
• Consultancy: EUR 1 680 (mostly on horticultural advice, planning and expertise, but also basket making)
Ongoing costs: EUR 1 260 per year, including:
• Sales activities (e.g. petrol): EUR 560;
• Operating the non-profit company: EUR 700.
Funding received:
| Source | Amount | Funded |
|---|---|---|
| Municipality of Szalatnak | 850 € | In general everything |
| Hungarian Public Employment Programme | 6,290 € | In general everything |
Human resources
• Participant families
• Coordinator or mentor (in this case the mayor of Szalatnak)
• Consultants and trainers when special knowledge is needed
Physical resources
• Garden for cultivation
• A building where loofah and basket preparation can be done – in this case the municipality has a 25 m2 room for that
• A car for selling activities
• Tools (they have a small tractor)
What to do…
- Do something which will provide you financial gain, even if not right away, but see that this activity will pay off sooner or later.
- The not-for-profit association can try to guarantee an income for the disadvantaged families, assuming all the risk for selling the product.
- Choose an activity the community can identify with, love and fit into their culture.
- Start small-scale and sustainable activities in a small settlement.
- Involve families already into the design from as early as possible.
and not to do
- Don't try to compete with big producers, but remain small and local.
- In the case of social innovation, don’t necessarily think about high tech things…
- Do not force things onto local people, but try to match up with their values and preferences.
