Original scientific paper
Relational governance – an examination of the apple sector in Albania
2015, 16 (2) p. 72-88
This study provides an in-depth analysis of the value chain governance in the fruit sector in Albania. Particular attention was paid to the nature of relations between agricultural producers and marketing channel chosen by them, distinguishing between big wholesalers, local collectors and exporters, longer-term relations, commitment and trust, and contracting along the value chain. Given the absence of, or weak, contract enforcement and the clear evidence of embeddedness in dyadic relationships in this chain, we focused our analysis on sustained relationships, contracting and personal bonds as a determinant factor to improve business relationship quality. This paper is based on a structured survey targeting 182 orchard farmers in two leading fruit production regions in Albania, namely Korca and Peshkopia. The survey showed a weak prevalence of verbal contracts in embedded relationships. The percentage of contracts between farmers and local collectors is slightly higher compared to wholesalers. This evidence is much stronger when we investigate the incidence of contracts in stable relationships (i.e. selling to the same buyer). We also find that mature relationships generate higher sustainability - a result which does not come as a surprise, although the coordination between farmers and other actors downstream is only at early stages. The main implications which arise from our analysis are relevant for agribusinesses, farmers and policy makers.