# **E.2 Coffee Intermediaries**

When producers wet mill coffee on their farms, they sell it by the box to intermediaries. Producers sell their coffee to intermediaries, exporter agents, or producer associations, usually for cash at the “going market price”. The CRMG survey indicated that 72% of coffee producers sell their coffee to “intermediaries”.

In the case of exporter agents and local intermediaries, purchase occurs either on farm or at local buying centers. From the CRMG survey, 75%, of coffee producers claimed to know the local price of coffee while the less then 30% of producers claimed to know the international price. This lack of information about the international price was uniform across farm size with larger producers having slightly more international price knowledge. Results indicated that local prices were mainly conveyed through friends and intermediaries whereas international prices were communicated by radio and television. Smaller producers relied more heavily on intermediaries for knowledge about the price. The situation is similar for cocoa producers.

Intermediaries buy coffee from the producers and other intermediaries in order to resell it to an exporter or tower processor. Three general types of intermediaries can be identified:

1. Intermediary with factory: purchases moist coffee, prepares the green coffee, and sells it to exporters and to processors.

2. Warehousing intermediary: local merchant who buys moist coffee, collects volumes and sells them to the factories. Generally takes advantage of the needs of the small producers and transports volumes of coffee from the local communities to the factories.

**3.** Broker intermediary:  purchases coffee by moving from one community to another, generally acting as purchasing agent for intermediaries with factories or exporters.

The CRMG survey showed that less than 20% of producers sell coffee directly to exporters, and less than 35% were members of producer associations. Larger scale producers were more likely to sell directly to exporters and are also more likely to be members of producer associations.

# **E.3 Coffee Exporters**

Exporters purchase moist and parchment coffee, process the green coffee, and prepare it for export. They are generally intermediaries with factories, with finance to purchase coffee. They also purchase coffee from other intermediaries and sell non-exportable coffee to processors. Some exporters own and run large coffee plantations; many also export cocoa.

Several types of coffee exporters are found: a) “traditional” commercial exporters , b) “other” commercial exporters, c) exporter producers, and d) producer associations (see table III.10). A small number of traditional commercial exporters export about 70-80% of Dominican coffee, and “other” commercial exporters export another 10-20%. Export and producer associations only account for about 3-10% of coffee exports. Coffee export is thus concentrated in the hands of a few large commercial operations.

The Dominican coffee sector has a number of associations, cooperatives, and other organizations, but few undertake direct marketing or financing. Producer organizations exist more as units of organization and help create links between producers and other actors in the market such as NGOs, donors, cooperatives, and the public sector. These organizations generally do not provide export and marketing services. Coffee producer organizations were once stronger and more 43