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PRODUCTION COSTS:
EVIDENCE FROM COLOMBIA
Mark Lundy
Cost of Production is a function of:
Adapted icons from the Noun Project
Cost of Production is a function of:
Adapted icons from the Noun Project
NARIÑO, COLOMBIA
AN ILLUSTRATIVE CASE
Sheridan, M.
http://coffeelands.crs.org
Adapted icons from the Noun Project
Adapted icons from the Noun Project
Adapted icons from the Noun Project
Adapted icons from the Noun Project
Adapted icons from the Noun Project
Adapted icons from the Noun Project
We aren't talking about "producer cost" but rather
"producers costs"
•3 types of farmers = 3 production costs
•Production ...
Profitability depends on farmer typology AND market
access
• Farmers who specialize and invest in coffee can be
profitable...
1. Farmers are diverse and production costs vary. There is no ONE
production cost. You need to understand who your produce...
 Production costs: evidence from Colombia
 Production costs: evidence from Colombia
 Production costs: evidence from Colombia
 Production costs: evidence from Colombia
 Production costs: evidence from Colombia
 Production costs: evidence from Colombia
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Production costs: evidence from Colombia

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By Mark Lundy
Linking Farmers to Markets

Published in: Science
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Production costs: evidence from Colombia

  1. 1. PRODUCTION COSTS: EVIDENCE FROM COLOMBIA Mark Lundy
  2. 2. Cost of Production is a function of: Adapted icons from the Noun Project
  3. 3. Cost of Production is a function of: Adapted icons from the Noun Project
  4. 4. NARIÑO, COLOMBIA AN ILLUSTRATIVE CASE
  5. 5. Sheridan, M. http://coffeelands.crs.org
  6. 6. Adapted icons from the Noun Project
  7. 7. Adapted icons from the Noun Project
  8. 8. Adapted icons from the Noun Project
  9. 9. Adapted icons from the Noun Project
  10. 10. Adapted icons from the Noun Project Adapted icons from the Noun Project
  11. 11. We aren't talking about "producer cost" but rather "producers costs" •3 types of farmers = 3 production costs •Production costs vary spatially especially over diverse landscapes such as those found in the coffeelands •Be wary of "average costs" which hide variation.
  12. 12. Profitability depends on farmer typology AND market access • Farmers who specialize and invest in coffee can be profitable in more market channels • Lower income or less specialized farmers tend to invest less, achieve lower yields and have higher unit costs • In many case non-specialization in coffee makes sense under market, climatic and price uncertainty
  13. 13. 1. Farmers are diverse and production costs vary. There is no ONE production cost. You need to understand who your producers are. 2. Production costs (and yields) are sticky. One off price increases might not lead to increased on-farm investment; rather market linkages that provide consistent incentives (price and support) are needed to achieve significant gains. 3. If you want famers to receive more income, you need to have a clear idea of how your supply chain works and where additional payments will arrive if they are made. The ability of the chain to deliver coffee is NOT a good proxy for how information and cash flow.

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