# **III. Overview of the Dominican Coffee Sector**

An overview of the coffee sector in Dominican Republic is presented in this chapter. Data and other information are drawn from various publications and public data bases. Expert opinion was also elicited. In addition, we refer to a survey of coffee (and cocoa) producers carried out by the World Bank’s Commodity Risk Management Group (CRMG) in mid-2002.<sup>26</sup> This survey of about 300 coffee (and 300 cocoa) producers is not statistically representative of all coffee (cocoa) producers in the Dominican Republic, and contains a relatively higher proportion of medium and larger-scale producers. The survey, however, illustrates some of the conditions faced by coffee (and cocoa) producers and information and analysis from it are used throughout the text. We refer to this survey as the “CRMG” survey. Details on the survey, including the sample, survey instrument and descriptive statistics can be found in World Bank (2002a). Econometric analyses using the survey data are referred to as CRMG (2003).

# **A. Trends in Production and Exports**

Coffee was introduced to the Dominican Republic as early as 1715, and since then has continued to be an important crop among small-scale farmers. Coffee is currently grown by 40,000 to 50,000 producers in the Dominican Republic, on about 120,000 hectares (table III.1).<sup>27</sup> These numbers represent about 20% of all agricultural producers and about 3% of land under cultivation. Since 1981, the number of farms producing coffee has decreased by about 39% and the area devoted to coffee production declined by about 22%, so average farm size has increased marginally.

**Table III.1 Number of Farms and Area under Coffee Cultivation, 1981 and 1999**

||Unit|1981|1999|Change %|
|---|---|---|---|---|
|Number of Farms||71,235|43,613|-39%|
|Area under Coffee<br>Cultivation|Tareas<br>Hectares|2,428,418<br>152,731|1,883,445<br>118,456|-22%|

Sources: 1981: National Agricultural Census. 1999: SEA, National Registry of Producers.

The significant reduction in the number of producers and land devoted to coffee production has not translated into a sharp decline in total national production. The data indicate the exit of lower productivity coffee producers and the adoption of improved technology by those continuing to produce (see table III.2).<sup>28</sup> Average yields based on total land area and total production, however, remain relatively low.

> 26 The survey was conducted in the cocoa growing regions of the Dominican Republic by the Commodity Risk Management Group (CRMG), Agriculture and Rural Development in conjunction with Centro Para el Desarrollo Agropecuario y Forestal, Inc (CEDAF) from May 20<sup>th</sup> to June 7<sup>th</sup> 2002.

> 27 Data on the number of coffee producers and land under cultivation vary by source (e.g., whether from SEA,  the Department of Coffee, or the Coffee Council).  Because the sector is characterized by small scale producing units and coffee is often inter-planted with other crops, it is difficult to carry out nationwide inventories of producers, or even to define “coffee farms”.

28 Table III.2 shows a 20% increase in yields over an 18 year period. Data on coffee yields are contradictory. The FAO data base (FAO/AgStat) indicates a 30% decline in DR coffee yields between 1980 and 2000 (from 364 to 264 kg/hectare). Over the same period, FAO shows yields in Colombia growing by 23% and yields in Brazil growing by over 130%.

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