Value Chain Glossary: Intermediary
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Intermediary
An individual or firm that connects the buyer and seller of a product. Intermediaries often operate at the wholesale level, selling to exporters, distributors, and/or retailers. They may deliver the product to the buyer or seller from wholesale markets or productions sites. Intermediaries can be NGO brokers, individual private agents or networks/associations. They often communicate market information and requirements. They can encourage upgrading and provide technical assistance to that end.
In Guatemala's horticulture value chain, intermediaries play a critical role. While lead firms prefer to arrange most of their supplies under forward contracts signed directly with producers, intermediaries serve as a back-up resource to lead firms in the wholesale and spot markets. They provide the extra supplies that exporters and distributors need to complete orders. In other words, lead firms may receive the bulk of their supplies directly from producers, but they still turn to intermediaries to fill in the gaps and sudden shortfalls. Intermediaries are usually MSEs, and they often have paid employees. They operate the main wholesale markets for horticulture crops, and they also organize regional spot markets for the major crops. Intermediaries may work with a set of affiliated producers, providing in-kind credit for inputs under informal forward contracts with these affiliated producers. Unlike lead firms, intermediaries are usually unable to document that SPS standards were met during crop production. However, intermediaries are aware of the US EPA approved agrochemical list, and they discourage affiliated producers from using banned chemicals. [1]
Related Articles
- microREPORT: Integrating Micro and Small Enterprises into Value Chains: Evidence from Guatemalan Horticulture and Handicrafts. Bloom, David; Dunn, Elizabeth; Clark, Cari Jo; Church, Phillip; Evans, Shand; Huang, Yi-an; Atcha, Shehnaz ; Salyer, Patrick. March 2007.
- microREPORT: Inventory and Analysis of Donor-Sponsored MSE Development Programs. Snodgrass, Donald. January 2005.
- microREPORT: Mali Value Chain Finance Study: Using a Value Chain Framework to Identify Financing Needs: Lessons from Mali. Jansen, Anica; Pomeroy, Thomas; Antal, Joel; Shaw,Thomas. July 2007.
- Export Markets for High-Value Vegetables from Tanzania. Neven; David. July 2007.
- Haiti Handicrafts Value Chain Analysis. Derks, Eric; Barber, Ted; Kula, Olaf; Dalziel, Elizabeth. October 2006.
Footnotes
- ↑ [1]microREPORT: Integrating Micro and Small Enterprises into Value Chains: Evidence from Guatemalan Horticulture and Handicrafts David Bloom; Elizabeth Dunn; Cari Jo Clark; Phillip Church; Shand Evans; Yi-an Huang; Shehnaz Atcha; Patrick Salyer, March 2007.
