CONSUMERS’ PREFERENCES AND WILLINGNESS TO PAY FOR ORGANIC AMARANTH AND TOMATO IN ONDO STATE, NIGERIA: EVIDENCE FROM CHOICE EXPERIMENT

Abstract

This study made use of a stated preference technique, Discrete Choice Experiment (DCE), to elicit consumers’ preference and willingness to pay for organic amaranth and tomato. Also, the study investigated heterogeneity in consumers’ preferences at the same time described socio-economic characteristics of respondents driving heterogeneity. A total of 247 respondents were drawn through the administration of well-structured questionnaire following a multistage sampling technique. The analytical techniques employed included descriptive statistics and parametric and semi parametric logistic regression analysis. The results of analysis of key socio-economic characteristics showed that respondents in the amaranth and tomato groups had mean ages of 48 and 44 respectively. Male respondents dominated the survey with 67.9% and 84.3% in the amaranth and tomato groups respectively. Most of the respondents have smaller households with average of four members in the amaranths group and three in the tomato group. It was found that only 28.06% and 5.77% were really fully aware of the organic products in the amaranth and tomato groups. In the unobserved heterogeneity model formulations, price of organic amaranth, chemical reduction, taste, freshness and NAFDAC certified attributes were consistently revealed as strong predictors for consumers’ choice of organic amaranth. In relation to the results for organic tomato, the strong predictors were price, chemical reduction taste, complete and partial freshness. Explaining heterogeneity in mean taste parameters for organic amaranth data, age, gender and level of awareness about organic products were found to be the best explanatory individual-specific factors in preference for chemical reduction. Only gender explained variation in preference for taste while level of awareness explained variation in preference for NAFDAC certification. In the pooled data, age and percentage of spouse income contribution in the total household income significantly explained variation in sensitivities to chemical reduction. Level of awareness explained variation in sensitivities towards NAFDAC certification. The results based on WTP-space model for the organic amaranths reveal that consumers were willing to pay premium for all attributes except the relatively unknown Nigerian Organic Agriculture Network (NOAN) certification. In the tomato group, results showed that respondents were only willing to pay for chemical reduction and tastiness in tomato even though they preferred the other attributes in the preference models. In all of the models estimated and in both commodity groups, chemical reduction was revealed to be the strongest attribute that positively induced consumers’ willingness to pay. Given a relatively low level of awareness of organic concept, we suggest policies that drive consumers' awareness of organic concept. In relation to certification, certified organic market may only speed up to consumers acceptability if a relatively popular NAFDAC would include standardization of organic agricultural production in her portfolio. Furthermore, government can spark up organic food production by reviving the moribund organic fertilizer plant in the study area.