Value Chain Glossary: Association

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Association

Organized group of actors in a value chain with the same interests, such as producer associations or exporter associations. Their functions vary according to the needs of the members. Associations can help members compete in ways that would not be possible if they were working individually by:

1. Gaining collective efficiencies that they would not otherwise obtain if they worked individually. FECOAGRO, a rural cooperative in Argentina, was founded in part to improve members' power to collectively negotiate prices on inputs and machinery. ^[1]

2. Helping producers upgrade, and move into higher value markets. When the Guatemalan textiles industry faced fierce competition from mass-marketed products manufactured in China and India, it developed a competitive strategy focused on high quality, differentiated products. Producers formed associations to more efficiently learn new designs, upgrade their skills, and market their products. ^[2]

3. Increasing 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. ^[3]

4. Promoting 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. ^[4]

5. Facilitating collective learning, which can drive innovation, increase demand and grow markets through product diversification and new product development. Cooperatives of 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. ^[5]

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Footnotes

↑ [1] Strengthening agribusiness linkages with small-scale farmers. Chapter 3. Agribusiness linkages in the selected countries. Santacoloma, Pilar; Suárez, Ruth; Riveros, Hernando. Food and Agriculture Organization of the United Nations. Rome, 2005.
↑ [2] microREPORT: Weaving Micro and Small Enterprises into Global Value Chains. Dunn, Elizabeth; Villeda,Lillian. July, 2005.
↑ [3] microREPORT: Assessing the Impact of Kenya BDS and Horticulture Development Center Projects in the Tree Fruit Value Chain in Kenya: Baseline Research Report. Snodgrass, Don; Sebstad, Jennefer. July, 2005.
↑ [4] Briefing Paper: Groups, Associations and Other Horizontal Linkages. McCarthy, Steve. January, 2008.
↑ [5] World Bank Project Summary: Increasing Quality and Value in the Rwandan Coffee Sector. Rwanda SmallHolder Specialty Coffee Company (RWASHOSCCO), 2005.