Learning to Collaborate: Value Chain Governance and Finance in the Albanian Apple Sector

This note examines the structure, governance and opportunities for finance to foster linkages in the apple value chain in Korca, Albania, which comprises two main channels, namely, small wholesalers and large wholesalers/importers, facilitating the flow of domestic apples into the wholesale markets. Although the small wholesalers channel is the larger branch of the value chain, the range of alternatives that each buyer and seller has limits development of vertical linkages necessary for developing inter-firm cooperation. In the large wholesalers/importers channel, however, longer-term relationships and advanced levels of cooperation between farmers and importers have begun to gain importance. Large wholesalers are now offering advance payments, negotiating quality standards for suppliers, and requesting farmers to screen the quality of apples in return for higher farm gate prices. The Albanian apple value chain example demonstrates that financing solutions based on shared risk enhances the relationship between actors, since both sides have more incentives for mutual success. This could lead the way for other possibilities of cooperation between farmers and wholesalers.