ASSESSMENT OF CONSUMERS’ PREFERENCE AND POTENTIAL DEMAND FOR LOCAL RICE IN ONDO STATE, NIGERIA

Abstract

The study assessed the preference of consumers and their potential demand for local rice in Ondo State, Nigeria. 150 rural household heads were sampled with multistage sampling procedure. Data collected were analyzed using Descriptive statistics, Likert scale, Tobit regression model and Double Bound Contingent Valuation Method. The study revealed that mean age of the respondents was approximately 36 years. Gender distribution among the respondents showed that majority were males and married with a mean household size of 5 in the study area. The study also revealed that 98.6% of the respondents were educated. Households in the study area earned an average of N 75,571.33 monthly. Respondents consumed both local and foreign rice in the study area, while 59.3% consume local rice occasionally. Respondents perceived that local rice brand was healthier, tastier, and superior in quality than the foreign brands and that local rice brand is less attractive, dirtier, and difficult to prepare compared to the foreign brands. Ofada rice was the most preferred among the local rice brands consumed. Tobit model estimation of the preference of consumers for local rice in the study area established that, four variables significantly influenced consumers’ preference for local rice and these were; household size, grain quality, ease of preparation and grain price. Grain quality and ease of preparation positively affected consumers’ preference for local rice while household size and grain price posed negative influence on preference for local rice. The double bound logit model estimation of the potential demand for local rice revealed that the potential demands was N359.92/kg which fell below foreign rice price in the study area. The double bound logit model showed that grain ease of preparation, grain quality and quantity of local rice consumed, positively influenced potential demand for local rice in the study area, while household size, household monthly income, year of formal education and bid amount significantly affect the potential demand for local rice but in a negative direction. Conclusively, local rice was preferred to foreign rice, nonetheless the potential demand for local rice is low as revealed by a lesser amount consumers were willing to pay compared to the market price of foreign rice in the study area.