Regional Markets

4 Opportunities for development
ence of the institutional infrastructure, policymaking, and governance bodies is evident.
TechnoServe seeks to provide advice on these issues and link individual farmers to
coffee boards, associations and cooperatives. By strengthening the cooperative unions
and exploring the possibilities of domestic markets, TechnoServe aims to establishing
a new—more equitable—power balance in the value chain. Finally, the Fairtrade
case provides examples from different countries where the position of producers is promoted
through organisational development. Portions of the premiums from fair trade
have been invested in both institutional and physical infrastructure.
Looking at the questions of how institutional arrangements are organised in regional
market value chains, and their effects on the functioning of these value chains, we
notice that relatively widely different approaches are utilised. Figure 4.5 shows the level
of organisational structure or governance modalities of the various projects. ‘Low’ in
this graph signifies that the intervention did not consider the reduction of transaction
costs through (infrastructure and) institutional (group) development a high priority.
‘High’ indicates the opposite.
Figure 4.5 Focus on organisational development
NGOMA
FoSHoL
C:AVA
TAHA
ZIM banana
RUDI
Coffee TZ
FT
LOW
HIGH
Senegal
Cotton ZIM
Fig 4.5 shows the relative extent to which organisational development aimed at reducing transaction
costs was prioritized.
Transaction costs: Infrastructure
The issue of (physical) infrastructure in the context of regional markets is closely connected
to the regional networks for mass-transport and local producers’ access to market
information. In export-oriented chains a different type of actor is involved, often
operating large-scale operations in a longer supply chain. The different needs of exportoriented
value chains pose specific requirements for economies of scale in logistics and
organisation (governance at the higher level).
Road infrastructure affects the performance of the value chain directly and is critical
for producer prices. Both central and local governments invest in road networks, to
reduce transaction costs and improve their regional competitiveness. The banana case
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