What Can Be the Role of Public-Private Partnerships and the Role of the Collective Action in Ensuring Sustainable Smallholder Participation in High Value Fruit and Vegetable Supply Chains in Albania?
Suli, Dudi, Bombaj, Florjan, Suli, Hergys, Xhabija, Gjergj, European Journal of Sustainable Development
Albania is a Mediterranean country where fruits and vegetables occupy an important place in the cropping systems practiced by the Albanian farms but also in the food consumption of the population. Today, the fruits and vegetables growers in Albania have low production capacity and difficulties in selling their products on national and regional market. These poor producers face problems of how to produce safe food (World Bank 2007), be recognized as producing safe food, identify cost-effective technologies for reducing risk, and be competitive with larger producers with advantage of economies of scale in compliance with food safety requirements. In enabling the smallholders to remain competitive in such a system, new institutional arrangements are required. The new and emerging food system (dominated by domestic urban market and export markets, regional competitiveness, globalization, etc.) with high demands for compliance with food safety and traceability disfavor the smallholders due to high coordination costs. The problem is exacerbated by geographic dispersion, low education, and poor access to capital and information (Poulton 2005; Humphrey 2005; Rich and Narrod 2005). The main idea of this paper is that the public-private partnerships can play a key role in creating farm to fork linkages that can satisfy the market demands for food safety while retaining smallholders in the supply chain. Our big question is "how this can be possible in Albania and which are the right policies to forward this idea?"
Keywords: Sustainable Development; Added Value; Collective Action.
1. The Neo-Institutional Economics Framework
The new and emerging food system (dominated by domestic urban market and export markets) with high demands for compliance with food safety and traceability disfavor the smallholders due to high coordination costs. The problem is exacerbated by geographic dispersion, low education, and poor access to capital and information (Poulton 2005; Humphrey 2005; Rich and Narrod 2005). The smallholders face problem in the two dynamic markets in meeting the standards as well as in ensuring the delivery of a regular supply to their buyers. The list of constraints that smallholders face in the HVA markets given below draws from Rich and Narrod (2005):
?? High fixed costs in production and marketing, especially due to the need to comply with the standards given high perishability (Sykuta M and Cook M, 2001; Codron JM, 2008).).
?? Difficulties in guaranteeing safe products. This can arise either in terms of the quality or the misuse of inputs or the lack of knowledge about the introduction, growth, and transport of pathogens, which can be magnified as products move along the supply chain. For credence goods, reputation matters significantly for demand creation. Smallholders usually have a small history of
presence in the markets and lack branding (Tallec, 2004). ?? Asymmetric and incomplete information and high transaction costs may exist between actors in the supply chain. Lack of information regarding production and marketing can especially deter smallholders as procurement and processing of information involves large fixed costs (Barzel, 1982).
?? Lack of incentives and resources to invest in quality improvement, low access to credit, and the low returns from investing in quality (as they lack reputation) disadvantage the small farmers (Markelova & al, 2009). In HVA chains, smallholders are thus likely to face problems in quality control, handling, and storage (Bienabe and Sautier 2005). Moreover, once involved in HVA chains, smallholders individually enjoy only limited bargaining power.
2. Role of Institutions in enabling smallholder's market access in HVA chains
Conceptually, the role of Collective Action arises wherever there are economies of scale in production or in marketing. This includes the role of farmer groups in being better able to ensure traceability. …