COFFEECONOMICS

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REVISTA ACADÉMICA ECO (23) : 73-92, JULIO-DICIEMBRE DE 2020

5. How to calculate the National Coffee Production 

Function (NCP-Function)

The application of the National Coffee Production Function (NCP-Function) 
can fundamentally be divided into three basic steps. The first step is to build 
the national production function of producers, brokers, sellers and consumers 
of coffee by measuring the four sub-production functions. The second step is to 
compare the same sub-production function in each producer, broker, seller, and 
consumer of the same coffee market, in order to find which producer, broker, seller 
and consumer is going to get more benefits on a specific sub-production function. 
Finally, the third step is to build the NCP-Function through a surface. The NCP-
Function is made up of the final national outputs of all coffee producers, brokers, 
sellers, and consumers in the same coffee market, as it monitors their behaviour.

The first step will establish the final national output by means of the NCP-Function, 
depending on the results of each sub-production function, represented by all 
producers, brokers, sellers, and consumers (see expressions 7, 8, 9, 10, 11, 12, 13, 
14, 15, 16, 17, 18, 19, 20, 21, 22). The NCP-Function will then join all four sub-
production functions in a common axis shared by the four quadrants of the NCP-
Function (figures 1 and 2). The second step is to compare the same sub-production 
function in different coffee markets interested in getting higher benefits in profits 
or levels of satisfaction. The second step can help to determine which actor (coffee 
producer, broker, seller and consumer) is more competitive and to establish better 
prices (see Expression 23, 24, 25, 26 & Figure 2 and 3).