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).