Strengthening Value Chain Relationships

Abstract

The dairy value chain in Bangladesh has been characterized as fragmented and disconnected with limited trust, which reduces cooperation, coordination, and flows of information. A central objective of CARE’s approach to value chain development, therefore, was strengthening mutually beneficial relationships between value chain actors. In underdeveloped value chains, trust and coordination are often low. This can be due to a variety of reasons, including a lack of leadership, mistrust of competitors, a zero-sum outlook, or simply an inability of actors to see the long-term benefits for cooperation.1 To work more effectively, value chains require coordination. In the absence of coordination by markets or governments, nongovernmental organizations (NGOs) such as CARE have an important role in the facilitation of mutually beneficial exchanges and learning. Stronger and more trusting value chain relationships are an important element of achieving this because greater trust and coordination promotes cooperative behavior, reduces transaction costs, enables rapid problem solving, reduces conflict, enables flexibility and adaptability, increases information flows, and reduces risk.2