Understanding the benefits sought through cooperation is essential

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Horizontal linkages can help producers upgrade and move into higher-value markets. When the Guatemalan textiles industry faced fierce competition from mass-marketed products made in China and India, it realized it had become more competitive and developed a strategy focused on high-quality, differentiated products and producer cooperation so they could learn the new designs, upgrade their skills, and market their products.

Collaboration can increase the bargaining and advocacy power of individual firms. The Kenya Horticultural Exporters Association negotiated a more favorable EUREPGAP agreement with buyers who agreed to drop some of the most stringent requirements, thus allowing more farmers to participate in the high-value export market.

Linkages among lead firms can promote national or regional branding and the development of quality standards. In the Philippines, collaboration by industry leaders in mango exports led to the development of an internationally recognized standard and the branding of Philippine mangoes.

Linkages can facilitate collective learning, which can drive innovation, increase demand and grow markets through product diversification and new product development. Specialty coffee producers in Rwanda undergo continual learning in coffee grading, processing and cupping that facilitates the emergence of a common language of quality and taste characteristics and ensures they are able to respond to constantly changing quality requirements. This collective learning opened up opportunities for producers to deal directly with buyers and introduced them to higher-value organic and FairTrade certification protocols.

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