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World Bank Study
Even though farmers earn less from selling to middlemen, they still choose to sell to them and brushing facility owners because payments are made on the spot or within a few days. CONAB meanwhile takes on average 10 days to pay for the fiber it receives. In addition, the brushing facilities accept a higher humidity percentage (between 17–18 percent against 14 percent for CONAB). However, there is a maximum volume of sisal that each registered farmer can sell and, therefore, this limits the volumes that middlemen and brushing facilities can sell through this route. As a result CONAB is not a large operator in terms of fiber purchases. Middlemen and brushing center owners also provide financing for the decorticating machines operations and the sisal field owners. Since farmers and decorticating machine operators and owner usually struggle to access credit and have problems with working capital, resources for worker payments and for the acquisition of the machine oil are advanced by the owners of batedeiras or exporters (or middlemen if that is the case). Anecdotal evidence also suggests that brushing center owners receive advance payment from exporters and manufacturers when purchasing sisal. Location of Brushing Centers
The brushing operation is the pivot of the sisal logistic chain. Brushing facilities determine the prices that are paid to sisal producers and the quality of the fiber that is sent and used in downstream value addition. Locally, the brushing operations are known as the empresas de beneficiamento (value addition centers). It is clear that there are such centers with varying capacities distributed across the sisal region. The smaller centers process on average 30 tons per week, while the larger ones process around 1000 tons. Losses during brushing are around 5 percent of the fiber. There are around 60 brushing operations across the sisal region (figure 4.2). Distance from the brushing centers is an important determinant of the presence of middlemen in the supply chain. Average distances to brushing centers are 24–37 kilometers. Inside the traditional sisal region, where brushing machines can be located at a maximum distance of 40 kilometers from the majority of sisal fields, middlemen are not an important presence in the commercialization of sisal. In more remote areas like Campo Formoso, where the closest brushing center could be located 200 kilometers away, middlemen become more relevant for commercialization. Transport
The other reason farmers choose to sell to middlemen is that they are relieved of the responsibility of organizing transportation of the fiber. In the municipality of Conceição do Coité, the cost of the freight is in the range R$0.03–0.05 per kilogram inside the municipality. This means that based on the CONAB price, if the DMO could sell to the CONAB and decide to wait, he could earn around R$0.09–0.10 per kilogram more than he does by selling to middlemen. Actually, this is the more or less the cost of the freight inside the entire traditional region. All municipalities of the traditional region have a CONAB storehouse. The middlemen not only provide transportation services but also serve as consolidators of sisal fiber, establishing contact with decorticating machine operators in different fields to consolidate production and reduce transport costs to the traditional area where most brushing machines are located. Taking into account the average productivity of decorticating machines and the carrying capacity of the trucks used by intermediaries in the region, middlemen would have to consolidate the weekly production