impact of consumer behaviour on organic food consumption
TRANSCRIPT
Impact of Consumer Behaviour on Organic Food Consumption in Select Cities in
Maharashtra
Thesis Submitted to the Padmashree Dr. D. Y. Patil University, Department of Business Management,
in partial fulfillment of the requirements for the award of the Degree of
DOCTOR OF PHILOSOPHY
In
BUSINESS MANAGEMENT
Submitted by
MS. DOEL MUKHERJEE
(Enrolment No. DYP-PhD 076100016)
Research Guide
Dr. R. GOPAL
DIRECTOR, DEAN & HEAD OF DEPARTMENT
PADMASHREE DR. D.Y. PATIL UNIVERSITY,
DEPARTMENT OF BUSINESS MANAGEMENT,
Sector 4, Plot No. 10,
CBD Belapur, Navi Mumbai – 400 614
November 2012
Impact of Consumer Behaviour on Organic
Food Consumption in Select Cities in
Maharashtra
i
DECLARATION
I hereby declare that the thesis entitled ―Impact of Consumer Behaviour on
Organic Food Consumption in Select Cities in Maharashtra‖ submitted for
the Award of Doctor of Philosophy in Business Management at the
Padmashree Dr. D.Y. Patil University Department of Business
Management is my original work and the thesis has not formed the basis
for the award of any degree, associate ship, fellowship or any other similar
titles.
Place: Navi Mumbai.
Date:
Signature of the Signature of the Signature of
the Guide Head of Dept. Student
ii
CERTIFICATE
This is to certify that the thesis entitled ―Impact of Consumer Behaviour on
Organic Food Consumption in Select Cities in Maharashtra‖ submitted by
Ms. Doel Mukherjee is a bonafide research work for the award of the
Doctor of Philosophy in Business Management at the Padmashree Dr. D.
Y. Patil University Department of Business Management in partial fulfilment
of the requirements for the award of the Degree of Doctor of Philosophy in
Business Management and that the thesis has not formed the basis for the
award previously of any degree, diploma, associate ship, fellowship or any
other similar title of any University or Institution. It is also certified that the
thesis represents an independent work on the part of the candidate.
Place:
Date:
Signature of the
Head of the Department Signature of the Guide
iii
ACKNOWLEDGEMENT
I am greatly indebted to Padmashree Dr. D.Y. Patil University, Department
of Business Management which has accepted me for the Doctoral Program
and provided me with an excellent opportunity to carry out the present
research work.
I am grateful to Dr. R. Gopal, my guide, for his continuous encouragement
and patience with me during the course of the study. It would not have
been possible for me to complete the study without his advice and proper
direction.
I am thankful to my parents, husband and sister without whose support this
study would never have fructified; and to the almighty for giving me the
strength to carry on in spite of many hurdles on the way.
I owe my thanks to many other people dear to me who have supported me
in this research all of whose names will be impossible to mention. I would
like to convey my sincere thanks to all of them for their effort and time.
Place:
Date:
Signature of the student
iv
TABLE OF CONTENTS
Chapter No. Title Page
No.
DECLARATION i
CERTIFICATE ii
ACKNOWLEDGEMENT iii
LIST OF TABLES vi
LIST OF FIGURES viii
LIST OF ABBREVIATIONS x
EXECUTIVE SUMMARY xiii
1 INTRODUCTION 1
1.1 The meaning and origin of organic 2
1.2 The Organic Food Market – General
Trends
3
1.3 Consumers’ organic food purchase
behaviour
36
1.4 The future of organic food 37
2 REVIEW OF LITERATURE 40
2.1 International studies on consumers of
Organic food
40
2.2 Studies on consumers of organic food in
India
50
2.3 Gaps in literature 61
3 OBJECTIVES & RESEARCH
METHODOLOGY
62
3.1 Objectives of the study 63
3.2 Hypotheses 64
v
3.3 Research Methodology 65
4 THE ORGANIC FOOD MARKET IN INDIA 71
5 DIFFUSION OF ORGANIC PRODUCTS 112
5.1 Organisations and their role in the spread
of organic food
121
5.2 Barriers to the diffusion of
environmentally friendly products
149
6 THEORETICAL FRAMEWORK 154
6.1 Consumer Behaviour Theories 155
6.2 Factors influencing food choice 174
7 FINDINGS 188
7.1 Profile of the sample 188
7.2 Findings of the survey 189
8 INTERPRETATIONS AND CONCLUSION 193
9 SUGGESTIONS AND
RECOMMENDATIONS
218
10 SCOPE FOR FUTURE RESEARCH 224
Annexure I BIBLIOGRAPHY 226
Annexure II A QUESTIONNAIRE FOR USERS 263
Annexure II B QUESTIONNAIRE FOR NON-USERS 269
Annexure III STATISTICAL TABLES OF SPSS
FINDINGS
271
vi
LIST OF TABLES
Table 1 Sampling Statistics 69
Table 2 Status of India’s organic food industry 76
Table 3 Average farm gate prices in India 83
Table 4 Certification Agencies in India 92
Table 5 Maharashtra- Organic Crop wise
statistics
97
Table 6 APEDA Export Figures 142
Table 7 Commodity Wise export data from
APEDA
143
Table 8 Summary of Hypotheses 192
Table 9 Variables used for Discriminant analysis 198
Table 10 Frequency table - Taste of Organic food 201
Table 11 Cross tabulation of Consumption and
Taste
201
Table 12 Chi Square output Consumption and
Taste
202
Table 13 Cross tabulation of User category by
Income
214
Table 14 Chi Square for User Category by Income 215
vii
Table 15 Cross tabulation of User Category by
Age
216
Table 16 Chi Square values for User category by
Age
216
Table 17 User category by Education table 217
viii
LIST OF FIGURES
TITLE PAGE
NO.
Figure 1 Countries with the largest organic markets 3
Figure 2 Distribution of organic sales by country
2010
4
Figure 3 Countries with the most organic
agricultural land 2010
5
Figure 4 Countries with the highest number of
producers
6
Figure 5 Countries with the highest per capita
consumption
7
Figure 6 Farmland growth vs Retail Sales in the U.S. 9
Figure 7 US Organic food sales 11
Figure 8 Development of Organic Agriculture in
Europe
12
Figure 9 Development of organic market in Europe 13
Figure 10 Product share of the French organic market 20
Figure 11 Distribution of French organic retail market 21
Figure 12 Districts of Maharashtra 94
Figure 13 Districts of Uttarkhand 103
Figure 14 End to End Integrated Projects 111
Figure 15 The India Organic Logo 146
ix
Figure 16 The Theory of Buyer Bahavior Model 159
Figure 17 The Nicosia Model 161
Figure 18 The Andreasen Model 165
Figure 19 The Engel-Blackwell-Miniard Model 168
Figure 20 The Pilgrim Model 175
Figure 21 The Steenkamp Model 176
Figure 22 Component Plot for Nutrition/ Lifestyle
Seekers
206
Figure 23 Component plot for media exposure/
consumption
212
x
LIST OF ABBREVIATIONS
1. AMS – Agricultural Marketing Service (Unites States Department of
Agriculture)
2. APEDA – Agricultural and Processed Food Export Development
Authority (India)
3. CAP – Common Agricultural Policy (Europe)
4. CII – Confederation of Indian Industries
5. COF- Centre for Organic Farming, Uttarakhand, India
6. DITC – Division on International Trade in Goods and Services, and
Commodities (UNCTAD)
7. EAGGF – European Agricultural Guidance and Guarantee Fund
8. EC – European Commission
9. EU: European Union
10. FAO: Food and Agriculture Organization of the United Nations
11. FIBL: Research Institute of Organic Agriculture (Forschungsinstitut
für Biologischen Landbau)
12. FIELD – Foundation for International Environmental Law and
Development (United Kingdom)
13. FVO – Farm verified organic (FVO)
14. GAIN – Global Agriculture Information Network (United States)
15. GMO – Genetically Modified Food
16. GOI – Government of India
17. GTZ – German Organization for Technical Cooperation
18. HACCP – Hazard Analysis and Critical Control Point
xi
19. IAASTD: International Assessment of Agricultural Knowledge,
Science and Technology for Development
20. IAP – IFOAM Accreditation Programme
21. IBS – IFOAM Basic Standards
22. ICAR: Indian Council of Agricultural Research
23. IFAD: International Fund for Agricultural Development
24. IFOAM: International Federation of Organic Agriculture Movements
25. IFPRI : International Food Policy Research Institute
26. IMO – Institute for Market Ecology (Switzerland)
27. IOAS – International Organic Accreditation Service
28. ITC – International Trade Centre (UNCTAD/WTO)
29. LEISA – Low External Input Sustainable Agriculture
30. NCOF: National Centre of Organic Farming
31. NGO – Non-Governmental Organization
32. NOP – National Organic Program (United States)
33. NOSB – National Organic Standards Board (United States)
34. NPOP – National Programme for Organic Production (India)
35. OECD- Organisation for Economic Co-operation and Development
36. OF – Organic Food
37. OFDC – Organic Food Development Centre (China)
38. OFPA – Organic Foods Production Act (United States)
39. OFRC – Organic Food Research and Consulting Centre (China)
40. SEWAK – Society for Employment Welfare and Agricultural
Knowledge (India)
41. UAS – University of Agricultural Sciences (Bangalore, India)
xii
42. UN: United Nations
43. UNCED – United Nations Conference on Environment and
Development
44. UNCTAD – United Nations Conference on Trade and Development
45. UNDP – United Nations Development Programme
46. UNEP – United Nations Environment Programme
47. UNESCAP - United Nations Economic and Social Commission for
Asia and the Pacific
48. UOCB - Uttaranchal Organic Commodity Board
49. USDA – United States Department of Agriculture
50. USS & OPCA - Uttaranchal State Seed and Organic Production
Certification Agency
51. WALMI – Water and Land Management Institute (India)
52. WTO: World Trade Organization
xiii
EXECUTIVE SUMMARY
Organic agriculture is one among a broad spectrum of production methods
that are supportive of the environment where ―inorganic chemical free‖
methods of production and post-harvest of crops is practiced. It has been
gaining gradual momentum across the world both in terms of production
and consumption. The trend towards organic has emerged due to the of
increased consciousness of sustainable methods of agriculture, awareness
conservation of environment as well as health hazards associated with
agrochemicals and consumers‘ preference for safe and hazard-free food.
(Singh 2003)
Lampkin et al. (1999) thinks the term ‗organic‘ is best thought of as
referring not to the type of inputs used, but to the concept of the farm as an
organism, in which all the components — the soil, minerals, organic matter,
microorganisms, insects, plants, animals and humans — interact to create
a coherent, self-regulating and stable whole. Reliance on external inputs,
whether chemical or organic, is reduced as far as possible.
This is different from Traditional Farming, which is often subsistence
oriented using few or no purchased inputs. Conventional or Intensive
Farming utilizes Green revolution methods designed to maximize profit
often by extracting maximum output using external purchased inputs,
especially mineral fertilizers and synthetic agro-chemicals and irrigation to
support production.
xiv
Literature review on research that has been done internationally (Davis et
al., 1997; Latacz-Lohmann and Foster, 1997;Thompson and Kidwell, 1998;
Govindasamy and Italia, 1999; Worner and Meier-Ploeger, 1999; Browne
et al., 2000; Anoli and Naspetti, 2001; Magnusson et al, 2001; Krystallis,
2001, 2002a. b; Wier and Calverley, 2002; Fotopoulos et al., 2003; Lea
and Worsley. 2005) suggests that consumer acceptance of organically
grown food has gained momentum due to the following reasons:
1. It is considered more nutritious and of better quality than
conventionally grown food as the consumer is more confident of the
process of production and the environment in which it is produced
(transparency of the food chain).
2. Organically grown food supports sustainable agriculture: the food
web that supports organic farms prevents soil decay, the
requirement for pesticides is minimal and those used are organic.
3. It is considered safer than conventionally grown food as it contains
fewer pesticides and fewer agro-chemical residues. Excess use of
pesticides often results in deterioration of health of the farmers
causing them diseases like cancer.
4. Its taste differs from conventionally grown food: there are differing
perspectives on the taste of organic food. Some studies say that
consumers do not appreciate the taste of organic food while majority
of them report that consumers prefer organic food as it is tastier.
While the main barriers faced are price, irregular supply and lack of
awareness (Thompson and Kidwell 1998; Jolly, 1991; Fotopoulos and
Krystallis, 2002; Miljkovic and Effertz, 2010).
xv
Another concern that was found was that ―wellness‖ which is the result of
proper food consumption is a credence quality and can only be judged a
long time after consumption.
One of the instances where organic food benefits have been proved is at
Therwil near Basel, Switzerland, where FiBL‘s research team, together with
farmers worked on a long-term DOK trial which started in 1978 and is still
in progress. It compares biodynamic and organic agriculture with
conventional systems. This trial has yielded a large amount of
internationally recognized evidence for the ecological benefits of organic
farming in comparison to conventional agriculture.
Research about organic food consumption in India is very scarce. A few
studies have been done on the effect of new food product adoption
process and about factors affecting purchase decisions for major
categories of food products in India. (Choo, Chung and Psysarchik, 2004;
Ali and Kapoor, 2010; Gupta 2009)
Chakrabarti and Baisya (2009) have done one of the first academic studies
on organic food in India. The study rightly considers organic food an
innovative category given that it is purchased by a relatively small
percentage of the potential market and is in the attention spans of relevant
target groups for a relatively small period of time. Other studies on organic
food in India are found in reports by organisations like IFAD, NABARD,
FiBL etc. which have an orientation towards the upliftment of poor farmers
or export promotion. Though consumer behaviour is covered in the studies,
it is brief.
xvi
None of these studies have dealt with the impact of consumer behaviour
on organic food consumption and no study has concentrated on
Maharashtra.
In the light of this above observations, the present research focuses on the
following objectives:
1. To examine if users and non users are equally aware of organic food
2. To determine if taste, status, exposure to media and demography have
an impact on the consumption of organic food
3. To determine if the expenditure on organic food is subject to variation
among organic food consumers
4. To examine if there is an association between the recommendation of a
doctor and the purchase behaviour of organic food consumers
5. To study and suggest measures on how the consumption of organic
food can be spread wider
Behavioural aspects of consumers that have been the basis for the
questionnaire are awareness, recommendation, taste, expenditure on
organic food, lifestyle /status, exposure to media, pricing and demographic
characteristics of the consumer.
The theoretical framework for organic food consumption varies from the
conventional one as it incorporates the ―conscious consumer‖- a consumer
who takes into account the consequences of his or her private
consumption or who attempts to use his or her purchasing power to bring
about social change. Two models of food consumption have been
reviewed – The earliest and the most influential model of food acceptance
xvii
behaviour by Pilgrim and a more recent model by Steenkamp in 1987. The
altruistic behaviour of the consumer has been studied by Zanoli and
Naspetti (2002) in the food consumption process.
The decision to promote organic agriculture has been backed by various
organisations in the world for different reasons. In the process they have
formed the first stage of the diffusion process. This study looks into the
functions and methods of diffusion of information used by organisations like
IFOAM, FAO, FiBL, which are spread internationally; some organisations
that are based regionally like Agricultural Marketing Service (AMS) in the
US and European Agricultural Fund for Rural Development (EAFRD) in
Europe; and some domestic organisations like The Agricultural and
Processed Food Products Export Development Authority (APEDA),
National Programme for Organic Production (NPOP) and an NGO by the
name of Institute for Integrated Rural Development (IIRD).
Methodology Adopted
The study has used both primary and secondary data. Secondary data
provided details of the world organic food market, the food market in the
different states in India and the information regarding organisations which
help to promote organic food around the world. Some data was also
obtained based on interviews with middlemen connected with the selling of
organic food.
Primary data was collected from consumers of organic food from urban
Municipal Corporations and Municipal Councils in the state of Maharashtra
with high population and high literacy levels. The survey was conducted on
a sample of 400 users of organic food and 100 non users.
xviii
Findings
The major findings of the study has been as follows:
The age distribution of the users was highest in the 18-30 category
which is 44% while 37% belonged to the age group of 31-40 and
19% belonged to the above 40 category. 90% held graduation or
higher degrees. Majority (66%) were married and 60% had
household income in excess of 50,000 per month.
The non users are more equally divided in age as 43% fall in the 18-
30 category and 42% fall in the 31-40 category. The non users were
predominantly male (70%) and 92% had graduated college.
It was found that the awareness levels between the users and non
users were not significantly different
The users were influenced by professional recommendation for
usage of organic food
Users are not influenced by taste of organic food
Two groups of consumers emerged among the users- nutrition
seekers and lifestyle seekers
The expenditure of users on organic food is usually constant
Media does not necessarily influence the purchase of organic food
Income and education have a significant association with the
consumption of organic food; affluent and educated people are the
main consumers of organic food
Age did not show any significant association with the consumption
of organic food
xix
Recommendations
The recommendations from secondary research were as follows:
It is essential to maintain the soil-food web and develop a cluster
approach for the success of organic farming.
New methods to lower Certification costs needs to be found
Adopting low cost machinery for farming rather than going for
tractors / other high cost equipment is required
Development training and education for all the resource persons
involved in the organic farming process is required
Promoting the benefits of Organic Food Production among potential
consumers is necessary.
The recommendations from primary research were as follows:
Awareness exists among the educated consumers but the intention
to purchase is not present. When informed about the benefits many
of them are interested to try; trials in fairs, or other methods of free
sampling will create new consumers.
The best method to reach consumers is through the internet blogs/
websites on nutrition/ lifestyle foods or recommendation of
professionals like doctors and dieticians
Organic food could be sold as a lifestyle product if presented
appropriately
Price is a huge barrier to purchase, the consumer must be informed
of the reasons for the high prices and labelling should be
xx
transformed to contain information on nutritional benefits so as to
justify the prices
Limitations of the study
The areas sampled have higher levels of education and income than other
places in the state therefore the trend may not reflect throughout the state.
A wider survey needs to be conducted to reflect the entire country. Since
the education levels of the non users were also high in the survey, it may
not be possible to generalise the same.
Since consumers were not very informed about organic food certification,
all products that were being sold separately from conventional food and
labelled as organic food were considered for the survey.
Scope for future research
Different low cost distribution methods may be researched in the future
along with what information the consumer is expecting on the label of the
food.
Research needs to be done to find out differentiation strategies that will
help it compete with conventional products.
The supply chain needs to be continuous to make this category successful.
Thus research in this area is also required.
1
CHAPTER 1
INTRODUCTION
As the world population grows and countries make choices about the way
they produce and consume along their respective paths of development,
we have so far been fortunate, that the propensity to consume goods
without maximising their utility, has been balanced by less resource-
intense production and consumption in the global marketplace. This is
changing. Globalization and technological innovation have brought the
dream of mass consumption to doorsteps worldwide. Consuming at this
level will not be possible for all countries without exceeding the Earth‘s
carrying capacity. This realization has spawned many social, political and
environmental movements encouraging cleaner production and more
sustainable lifestyle choices.
The social, environmental, and economic costs of the current agricultural
production and distribution system is leading to new and alternative models
of production and distribution being explored. Driven by producers‘
concerns over financing and loss of lifestyle, consumer concerns over food
safety and quality, an increased awareness of health, nutrition and
community concerns over open space, biodiversity, agricultural pollution,
and the economic health of its members, many groups, including
governments, are beginning to realize the benefits that can be gained from
more sustainable agricultural systems.
One such system, organic agriculture, has been known to provide many of
these benefits.
2
1.1 The meaning and origin of organic
The term ―organic‖ is rooted in ―bio‖ from Greek ―bios‖ meaning life or way
of living. ―Organic food products‖ was first coined in the 1940s and refers
to food raised, grown and stored and/or processed without the use of
synthetically produced chemicals or fertilizers, herbicides, pesticides,
fungicides, growth hormones and regulators or generic modification.
(Essoussi & Zahaf, 2008). Roddy, Cowan and Hutchinson (1994) view
organic food products as a product of organic farming.
Lampkin et al. (1999) thinks the term ‗organic‘ is best thought of as
referring not to the type of inputs used, but to the concept of the farm as an
organism, in which all the components — the soil, minerals, organic matter,
microorganisms, insects, plants, animals and humans — interact to create
a coherent, self-regulating and stable whole. Reliance on external inputs,
whether chemical or organic, is reduced as far as possible.
Organic Farming is a certifiable farm management system with controls
and traceability that is in harmony with the local environment using land
husbandry techniques such as soil-conservation measures, crop rotation
and the application of agronomic, biological and manual methods instead
of synthetic inputs. This is different from Traditional Farming, which is often
subsistence oriented using few or no purchased inputs. Conventional or
Intensive Farming utilizes Green revolution methods designed to maximize
profit often by extracting maximum output using external purchased inputs,
especially mineral fertilizers and synthetic agro-chemicals and irrigation to
support production.
3
1.2 The Organic Food Market – General Trends
The organic food market has been slowly moving from a niche market to
the mainstream market within the agricultural industry. Almost all food
products are sold in the organic market, the difference being that the
products that are organic tend to be available at specified seasons.
Figure 1 Countries with the largest organic markets Source FIBL-AMI Survey 2012
Global sales of organic food & drink reached 59 billion US dollars in 2010
according to Organic Monitor. The market has expanded over three-fold in
ten years (2000: 17.9 billion US dollars). Although growth has slowed since
the financial crisis started in 2008, sales have continued to increase at a
healthy pace. Demand for organic products is concentrated in two regions;
North America and Europe comprising 96 percent of global revenues
(Fig.1).
0 5,000 10,000 15,000 20,000 25,000
United States of America
Germany
France
United Kingdom
Canada
Italy
Switzerland
Japan
Austria
Spain
20,155
6,020
3,385
2,000
1,904
1,550
1,180
1,000
986
905
Market Size (Million Euros)
4
Figure 2 Distribution of organic sales by country 2010
Source FIBL-AMI Survey 2012
The high degree of sales concentration in Europe and USA highlights the
disparity between production and consumption. Most organic food
production takes place in regions such as Africa, Latin America and Asia.
The FiBL-IFOAM Survey on certified organic agriculture worldwide, (data
as of end of 2010), uses data on organic agriculture from 160 countries.
This survey shows 37 million hectares of organic agricultural land
(including in-conversion areas). The regions with the largest areas of
organic agricultural land are Oceania (12.1 million hectares), Europe (10
million hectares), and Latin America (8.4 million hectares). The countries
with the most organic agricultural land are Australia, Argentina, and the
United States.
United States of America
45%
Germany14%
France8%
United Kingdom4%
Canada4%
Italy 3%
Switzerland3%
Others19%
Distribution of organic sales by country 2010
5
Figure 3 Countries with the most organic agricultural land 2010
Source FIBL-AMI Survey 2012
Currently 0.9 percent of the total agricultural land is organic. By region, the
highest shares are in Oceania (2.9 percent) and in Europe (2.1 percent). In
the European Union, 5.1 percent of the farmland is organic (Willer & Helga,
2012). In 2010, the countries with the largest markets were the United
States, Germany, and France, and the highest per-capita consumption was
in Switzerland, Denmark, and Luxemburg. (Fig.3). There were 1.6 million
producers of organic food in 2010. Thirty-four percent of the world‘s
organic producers are in Africa, followed by Asia (29 percent), and Europe
(18 percent). The countries with the most producers are India (400‘551),
Uganda (188‘625), and Mexico (128‘862).
About one third of the world‘s organic agricultural land (12.5 million
hectares) and more than 80 percent of the producers are in developing
countries and emerging markets. (Fig 4)
12
4.18
1.95
1.77
1.46
1.39
1.11
0.99
0.93
0.85
0 2 4 6 8 10 12 14
Australia
Argentina
USA
Brazil
Spain
China
Italy
Germany
Uruguay
France
Million Hectares
Countries with the most organic agricultural land 2010
6
Figure 4 Countries with the highest number of producers
Source FIBL-AMI Survey 2012
For almost 90 percent of the organic agricultural land, land use details are
available. About two-thirds are grassland/grazing areas (23.7 million
hectares). With a total of at least 6.1 million hectares, arable land
constitutes 17 percent of the organic agricultural land. Most of this category
of land is used for cereals including rice (2.5 million hectares), followed by
green fodder from arable land (2 million hectares), oilseeds (0.5 million
hectares), protein crops (0.3 million hectares), and vegetables (0.2 million
hectares).
Consumers have demonstrated a willingness to pay premium prices for
organic foods either for health reasons or for economic concerns. In 1999,
the International Trade Centre (ITC) of UNCTAD (United Nations
Conference on Trade and Development) and the World Trade Organization
(WTO) published a survey on the European market for organic foods and
beverages. The study concluded that the demand for these products is
400551
188625
128862
123062
85366
44827
43096
41807
27877
India
Uganda
Mexico
Ethiopia
Tanzania
Peru
Turkey
Italy
Spain
Countries with the largest number of organic producers
No of producers
7
growing rapidly, and that insufficient supply rather than demand is the
problem in these markets (IAASTD, 2008) . Demand for organic foods is
also a growing in the urban centres of many Asian countries. (IFAD, 2011)
Figure 5 Countries with the highest per capita consumption of organic food
Source: FIBL- AMI Survey 2012
As the demand for organic products is concentrated in North America and
Europe, comprising around 96 percent of global revenues, and India being
a primarily production state with export orientation for organic food, the
above mentioned markets are explained in further detail.
1.2.1 The US Market for Organic Food
USA along with Canada has only 1% of the total number of organic
producers in the world and 7% of the total land under organic agriculture in
the world. But consumer demand for organically produced goods in US has
shown double-digit growth for well over a decade, providing market
incentives for U.S. farmers across a broad range of products. Organic
153
142
127
118
100
86
74
65
57
52
Switzerland
Denmark
Luxembourg
Austria
Liechtenstein
Sweden
Germany
United States of America
Canada
France
Countries with the highest Per Capita Consumption of Organic food 2010
Per Capita Consumption
8
products are now available in nearly 20,000 natural food stores and nearly
3 out of 4 conventional grocery stores. Organic food sales account for over
3 percent of total U.S. food sales. This is the largest market for organic
food in the world.
Organic food is sold to consumers through three main outlets in the United
States - natural food stores, conventional grocery stores, and direct-to-
consumer markets. Organic price premiums continue to remain high in
many markets as the demand for organic products expands. (USDA, 2012)
Organic foods now occupy prominent shelf space in the produce and dairy
aisles of most mainstream U.S. food retailers. Retail sales of organic food
have increased to $21.1 billion in 2008 from $3.6 billion in 1997. Organic-
industry growth in the US is evident as an expanding number of retailers
are selling a wider variety of foods. The development of private-label
product lines by many supermarkets, and the widespread introduction of
new products indicate higher consumer demand in the future.
A typical US organic consumer is difficult to pinpoint, but new research
continues to shed light on consumer attitudes and purchasing behaviour. A
broader range of consumers has been buying more varieties of organic
food.
Organic handlers or middlemen, who purchase products from farmers and
often supply them to retailers, are selling more organic products to
conventional retailers and club stores than ever before. Only one segment
is not keeping pace—organic farms are struggling to produce sufficient
9
supply to keep up with the rapid growth in demand, leading to periodic
shortages of organic products. (Dimitri & Oberholtzer, 2009)
Figure 6 Farmland growth vs Retail Sales in the U.S.
Source: www.ers.usda.gov Bulletin No 58, 2009
Retailing organic food is changing as traditional purveyors of organic food
is facing increased competition from companies new to the sector, organic
food is being sold not only in natural-products stores, such as Whole Foods
and food cooperatives, but also in traditional supermarkets such as
Safeway, big-box stores such as Wal-Mart, and club stores such as
Costco. By 2008 Organic manufacturers were either competing directly
with conventional food manufacturers or had been subsumed by
conventional firms. The effect of structural change at the retail and
manufacturing levels has been twofold: there are more firms participating in
the sector and the average size of these firms are larger.
One by-product of rapid market growth in the US has been periodic
shortages of organic products due to the inability of organic farms to supply
enough products to keep pace with demand. Increases in acres of certified
10
organic farmland (the best available measure of organic production) have
lagged behind growth in demand and have been relatively volatile during
the decade. Potential organic farmers may opt to continue using
conventional production methods because of social pressures from other
farmers nearby who have negative views of organic farming, or because of
an inability to weather the effects of reduced yields and profits during the
transition period.
Ramifications of the slow response of farm-level supply have rippled
through the supply chain, resulting in situations where manufacturers,
distributors, and retailers have periodically been unable to locate organic
producers or procure a sufficient quantity of organic products (Dimitri and
Richman, 2000; Dimitri and Oberholtzer, 2008)
Fresh fruits and vegetables have been the top selling category of
organically grown food since the organic food industry started retailing
products over three decades ago, and they are still outselling other food
categories, according to the Nutrition Business Journal. Produce
accounted for 37 percent of U.S. organic food sales in 2008, followed by
dairy (16 percent), beverages (13 percent), packaged and prepared foods
(13 percent), bread and grains (10 percent), snack foods (5 percent), meat,
fish, and poultry (3 percent), and condiments (3 percent).
Most organic sales (93 percent) take place through conventional and
natural food supermarkets and chains, according to the Organic Trade
Association (OTA). OTA estimates the remaining 7 percent of U.S. organic
food sales occur through farmers' markets, foodservice, and marketing
11
channels other than retail stores. One of the most striking differences
between conventional and organic food marketing is the use of direct
markets.
Figure 7 US Organic food sales
Source: Nutrition Business Journal
1.2.2 The European Market for Organic Food
Hamm and Michelsen (1996) distinguish three periods in the development
of the market for organic produce in Europe: supply-induced, demand-
induced, and policy-induced development.
Supply-induced development occurred from the 1920s up to the early
1970s, when farmers were the driving force behind the development of
organic agriculture. This period is characterized by excess supply and
short distribution channels, which consisted mainly of direct sales to a
small group of dedicated consumers.
12
Figure 8 Development of Organic Agriculture in Europe
Source: FIBL & IFOAM The World of Organic Agriculture. Statistics and Emerging trends 2012
The organic movement was largely driven by ethical considerations and
grew slowly (Daw, Slee, & Wynen, 1991). From the mid-1970s to the late
1980s, development was largely consumer led, prompted by public
concern about food production and health, and the growth of the
environmental movement. Demand increased significantly and outstripped
supply in northern and central Europe, a situation which still prevails in the
UK. Most organic produce was able to command price premium, leading to
an upsurge in conversion to organic farming.
The third and latest period relates to the developments induced by
agricultural policy. In the late 1980s, the EU and national governments
initiated programmes to support conversion of farms to organic agriculture.
Especially in Germany, where generous conversion payments have been
offered, uptake rates are high, resulting in a dramatic increase in supply. In
13
contrast, organic agriculture in the UK has received very little direct
government support. The introduction of the Organic Aid Scheme in 1994
was a step forward, but with an allocated budget of only 1 million Pounds,
its impact has been marginal.
Organic agriculture in Europe started in a small way in 1985. The growth
was gradual but continuous with land covered under organic agriculture
reaching 9.3 million hectares in 2009 (Fig 8).
By the end of 2010, 10 million hectares of agricultural land in Europe were
managed organically by almost 280'000 farms. In Europe, 2.1 percent of
the agricultural area is organic, and in the European Union, 5.1 percent of
the agricultural area is organic. Twenty-seven percent of the world's
organic land is in Europe. Compared to 2009, organic land increased by
nearly 0.8 million hectares. The countries with the largest organic
agricultural area are Spain (1.5 million hectares), Italy (1.1 million
hectares), and Germany (0.99 million)
Figure 9 Development of the organic market in selected European countries
14
Source: FIBL
There are six countries in Europe with more than ten percent organic
agricultural land: Liechtenstein (27.8 percent), Austria (19.7 percent),
Sweden (14.1 percent), Estonia (12.5 percent), Switzerland (11.4 percent),
and Czech Republic (10.5 percent). Sales of organic products were
approximately 19.6 billion Euros in 2010. The largest market for organic
products in 2010 was Germany with a turnover of 6 billion Euros, followed
by France (3.4 billion Euros) and the UK (2 billion Euros).
A discussion of the three top markets for organic food in Europe follows.
GERMANY
Germany was a founding member of the European Community in 1957,
which became the EU in 1993. It is the most populous member state in the
European Union, a major political and economic power of the European
continent and a historic leader in many theoretical and technical fields. The
country has developed a very high standard of living and features a
comprehensive system of social security; the country has the world's oldest
universal health care system.
In Germany, organic food supply has increased dramatically since the late
1980s as a direct result of conversion schemes. The fact that many farms
in former East Germany converted in the six years after reunification has
magnified increases in supply.
The marketing debate within the German organic movement has been
carried out on more ideological lines, to the extent that marketing organics
through conventional supermarkets was for many years unthinkable. To a
15
large extent, this explains the lack of success of attempts to market organic
food in supermarkets and the predominance of direct marketing and
specialist organic food shops (Naturkostladen), which together account for
60-65 per cent of retail sales.
Naturkostladen (Translation: Health food store) sell organic food and other
natural and health products. The Naturkostladen are independently owned
and strongly motivated by organic ideology. They see themselves as an
integral part of the relationship between producer and consumer, in that
they adhere to strict standards of quality and authenticity of organic food
(BUND, 1993, Bio-Direkt, Bund fur Umwelt und Naturschutz Deutschland;
translated: Bio-Direct, Association for the Environment and Nature
conservation Germany). A core group of consumers purchase from these
shops because of the unique services they have to offer, such as a less
anonymous atmosphere and greater assurances of authenticity than the
supermarkets (Kesseler, 1994).
Organic food in Germany is not associated exclusively with the high
income group or protective mothers. Organic has gone mainstream. Mom
and pop health food shops carry organic Yogi Tea and organic massage
salts along with fruits and vegetables. There are more than 300
supermarkets across the country devoted exclusively to trade in pesticide,
antibiotic and hormone-free fruits, vegetables, cereals, meat etc.
Discounters like Lidl and Aldi all have their own inexpensive "bio-label"
products which are not necessarily expensive.
16
The German organic food market had total revenue of US $7.8 billion in
2010. The fruit & vegetables segment was the most lucrative in 2010, with
total revenue of US $2.5 billion, equivalent to 32.3% of the market's overall
value. The performance of the market is forecast to accelerate, with an
anticipated CAGR of 7.4% for the five-year period 2010 - 2015, which is
expected to drive the market to a value of US $11.2 billion by the end of
2015. (Wood, 2012)
The importance of organic markets in Germany has resulted in the setting
up of the international headquarters of FIBL in the German city of
Frankfurt.
UNITED KINGDOM
The marketing of organic food in the UK has been dominated by
supermarkets. In 1981, Safeway became the first major supermarket to
stock organic food. By 1989, virtually all major supermarket chains were
stocking organic produce (Tate, 1994). The supermarkets retain the bulk of
organic produce sales in the UK, accounting for more than 60 per cent.
Despite the fact that supermarkets are the largest distributors of organic
food in the UK, and that the willingness of major retailers to stock organic
food has emphasized demand (Boyle, Cathro, & Emmett, 1991), they do
not appear to be successfully meeting demand. Also, farmers in the UK are
becoming increasingly dissatisfied with their relationship with the multiple
retailers. Tate(1991) states that it is "ironic that in a country where
mainstream food retailing has taken up organic produce to a greater extent
than elsewhere, the response of supply has been so low". However, while
some producers believe supermarkets are partly responsible for these
17
problems (Powell, 1995), supermarkets such as Safeway and Asda cite
lack of interest among farmers as a reason for not expanding significantly.
(Latacz-Lohmann & Foster, 1997)
While the growing global sales of organic products defied the economic
downturn in 2011, the United Kingdom was the only exception where,
despite areas of strong growth and improvement in the long term trend,
overall sales were down. The main cause of the market‘s overall decline
was a 5% drop in multiple retail sales, which account for 71.4% of organic
food sales. Reduction of choice, lack of communication about the reasons
to buy organic products and a lack of investment in own-label organic
ranges are the key factors of this decline. Dairy products and fresh fruit and
vegetables continued to be the most popular organic categories accounting
for 29% and 23% of sales respectively. (Cottle & Twine, 2012) There were
categories outside retail like the baby food and the restaurant and catering
sector which grew by 2.4%. Notable successes in 2011 included an
increased take-up of organic food in schools, nurseries and hospitals. 8 out
of 10 households (83%) bought organic products in 2011 in the UK.
There are over 500 home-delivery box schemes for organic products in the
UK. These range from individual producers with under a hundred regular
customers to large operations delivering tens of thousands of boxes each
week. Box scheme, home-delivery and mail-order sales grew by an
impressive 7.2% in 2011 to £167 million – a second successive year of
growth.
18
The online home-delivery specialist Ocado increased its organic sales by
5.5% in the year to September 2011 The company stocks around 1,500
organic lines, having linked with leading branded primary producers such
as Daylesford and Laverstoke Park to expand its range. It reports that 79%
of customers buy at least one organic item.
The two leading companies delivering vegetable boxes, Abel & Cole and
Riverford, increased their turnover by 28% and over 5% respectively. Box
schemes with a turnover above £2 million saw their combined sales grow
by 15%. Abel & Cole increased its customer base by 28.5%. (Cottingham,
Rose, Twine, & Cottle, 2012)
FRANCE
France possesses the world's fifth largest economy measured by GDP, the
ninth-largest economy measured by purchasing power parity and is
Europe's second largest economy by nominal GDP. France is the
wealthiest nation in Europe – and the fourth wealthiest in the world – in
aggregate household wealth. France enjoys a high standard of living as
well as a high public education level, and has also one of the world's
longest life expectancies. France has been listed as the world's "best
overall health care" provider by the World Health Organization.
France was one of the first countries to create a Ministry of the
Environment, in 1971. Although France is one of the most industrialised
and developed countries, it is ranked only seventeenth by carbon dioxide
emissions, behind such less populous nations as Canada, Saudi Arabia or
Australia. This situation results from the French government's decision to
19
invest in nuclear power in 1974 (after the 1973 oil crisis), which now
accounts for 78% of France's electricity production and explains why
France pollutes less than comparable countries.
Like all European Union members, France agreed to cut carbon emissions
by at least 20% of 1990 levels by the year 2020, in comparison the USA
agreed to a cut of 4% of its emissions. France was even set to impose a
carbon tax in 2009 at 17 Euros per tonne of carbon dioxide emitted. The
carbon tax would have brought in 4.3 billion Euros of revenue per year.
However, 6 months later, the plan for a carbon tax was abandoned for
various reasons, one being that French companies would have a more
difficult time competing with companies in neighbouring countries who
would not have to pay such steep taxes on carbon dioxide emissions.
Instituting a carbon tax was also an unpopular political move for President
Sarkozy. In 2010, a study at Yale and Columbia universities ranked France
the 7th most environmentally conscious country in the world.
The French organic food market had total revenue of $4.4 billion in 2010,
representing a compound annual growth rate (CAGR) of 15.5% between
2006 and 2010. The prepared food segment in France was the market's
most lucrative in 2010, with total revenue of $1 billion, equivalent to 23% of
the market's overall value. The performance of the organic food market is
forecast to decelerate, with an anticipated CAGR of 8.3% for the five-year
period 2010 - 2015, which is expected to drive the market to a value of
$6.6 billion by the end of 2015. (Research and Markets.com, 2012). In
terms of organic farms, the French organic market will be approaching 4
billion Euros with 23,100 organic farms, 12,000 organic distributors and
20
950,000 ha of organically managed land. The organic food market has 2-
3% share of the total food market in France. 2011 reports show that 40%
people in France buy organic products at least once a month.
Figure 10 Product share of the French organic Market in 2010
Source Evaluation de la consummation alimentaire biologique and Agence BIO 2011
The environmental impact of food choices is a key purchasing
consideration for French consumers. Thus, organic, local, seasonal and
sustainably produced products receive strong consideration by French
shoppers. French consumers overwhelmingly share a common belief that
organic products are more natural, healthier, maintain more nutrients and
help preserve the environment. Organic consumers are primarily educated,
working women in the Paris region and in southwest France. One-third of
French consumers intend to consume more organic products, particularly,
fruits and vegetables, meat, dairy and bread and are looking to find more
organic products in schools, restaurants and cafeterias. 37% regularly pay
21
up to 11% more for an organic product than its conventional counterpart.
Organic, local, seasonal and sustainably produced products receive strong
consideration by French shoppers. (Journo, 2009)
Figure 11 Distribution of French organic retail market 2010
Source:
France is ranked fourth in the European Union (EU) in organic production,
but to encourage more production the French government has initiated a
15 million euro plan to triple the organic acreage. A growth in retail outlets
for organic products is expected to continue as consumers seek additional
access to organic products in restaurants, cafeterias and school lunches.
(Journo, 2009)
1.2.3 The Asian Market for Organic Food
The total organic agricultural area in Asia is nearly 2.8 million hectares.
This constitutes seven percent of the world‘s organic agricultural land.
22
There were almost 0.5 million producers reported, 0.4 million in India. The
leading countries by area are China (1.4 million hectares) and India (0.8
million hectares)
Asian agriculture is dominated by small farmers and herders, with very few
exceptions (notably large extensions of rangeland and grains in places
such as Kazakhstan, Mongolia and Northern China). While many are
directly benefiting from the dramatic urban-oriented growth that
characterizes many parts of Asia, a far greater number still struggle to
produce sufficient food and income (IFAD, 2011); UNESCAP 2002; (IFPRI,
2003). Many millions of Asia‘s poorest farmers live in mountainous or semi-
arid areas where both economic and agricultural opportunities are limited.
While a great many migrate to industrial and urban areas, many more must
depend on their agricultural endeavours to provide both food and a basic
income for clothing, education, and healthcare.
Small and poor farmers have a unique set of needs that, in many cases,
are not adequately satisfied by conventional modern agricultural
paradigms. Green Revolution approaches have certainly been effective in
dramatically increasing crop yields in many parts of Asia. The Green
Revolution has, in part, enabled countries to address the pressing macro-
level need for food security that plagued them until recently. Using hybrid
seed, irrigation, and agrochemicals to fuel intensive farming, these
methods have in a few short decades become embedded in the
educational, policy, and extension systems of most countries. While most
Asian countries — certainly the larger ones — have achieved food security
at the macro level, pockets of poverty and malnutrition persist.
23
(Giovannucci, 2005 Feb). India for example, classifies 81% of its farmers
as small and China‘s average farm size is less than 0.5 hectare per
household.
In most Asian countries, the trade in organic agriculture has not been well
tracked or measured. Many countries don't have tracking codes for organic
trade since it represents a relatively small portion of agricultural trade.
Although Japan has separate codes for some organic products, there is no
international trade classification for organics in either the Standard
International Trade Classification to or the Harmonized Commodity Coding
Systems. Estimates in the region typically put certified organic sales at less
than one percent of a nation's agricultural sales. Of course, many
organically grown but uncertified products enter local market channels
without organic labelling and identification and these volumes or values,
although likely to be considerably greater, are much more difficult to
estimate. The three main countries that are involved in organic agriculture
in Asia are Japan, China and India. A short perspective of the Japanese
and Chinese market follows.
Japan’s Domestic market for organic products
The largest Asian market for organic products is located in Japan. The
Japanese name for organic products is ―yuki‖, directly translated from the
English word ―organic‖. However, products that are called ―yuki‖ also
include conventional products, which are produced in a more
environmentally friendly manner, but nonetheless are not certified organic.
24
The market is reported to be growing rapidly, as consumers are becoming
increasingly concerned not only with their health but also with the
environment. With the introduction of a JAS label for organic products in
2001 there is greater awareness of what organic food is. Clearer rules and
regulations have also had a positive effect on sales.
Japan is a major importer of organic products which are mainly supplied by
Australia, US, New Zealand and Canada. The most commonly imported
organic products are soybean, organic frozen vegetables, mate tea and
bananas. (Yossefi & Willer, 2002). However, the share of imported fresh
and frozen organic fruits and vegetables is not even five percent. This is
due to the spraying-treatment against pests for all imported fresh produce
and this is forbidden for organic products by Japanese law. On an average
the price of an organic product was 1.65 times higher than that of its
conventional counterpart. The pricing of organic products varies within a
wide range, although most are somewhere between 1.1 to 1.7 times their
non-organic counterparts.
Traders (including importers and domestic traders) and wholesalers
generally believe that imported certified organic agricultural products are
relatively easy to deal with, as they are clearly standardized and can be
acquired in consistent quantities. In fact, imported organic foods are
increasingly prevalent in the domestic market. In 2001, only two-thirds of
Japan‘s organic foods were imported. As of 2004, there were nine times
more organic products sold in Japan that were imported in comparison to
those produced domestically. Most of the increase comes from products
25
that Japan does not produce, such as coffee and buckwheat. The sale of
imported organic produce is outpacing that of domestic organic produce.
The growth rate for domestic organic production, while still positive,
decreased from 25.2% in 2001-2002 to 20.4% in 2003-2004.
On one hand, large companies such as Nissho Iwai or Kirin demonstrate
increasing interest in the organic market, and on the other hand, there are
also many family businesses. Companies rich in tradition like the Hatcho
Miso or the Sendai company and so-called "Health Food Shops" lead the
way with "yuki" products in their assortment. Also, "yuki" products are
increasingly sold in supermarkets. The largest market share considering
both quantity and sales, however, belongs to food delivery services, which
deliver "yuki" goods directly to the consumer. Japanese consumer groups
participate in Tei-kei, a system of community-supported organic agriculture
in which consumers obtain food directly from farmers. Tei-kei promotes
small-scale, local, organic farming through volunteer-based, non-profit
partnerships between producers and consumers. One of the founding Tei-
kei groups is the Japan Organic Agriculture Association (JOAA), which
promotes organic agriculture and this system (FAO, 2005).
China
The Green Revolution in China occurred in the 1980s, much later than in
other East and Southeast Asian countries due to the economic sanctions
imposed by western countries after political change in China in 1950. The
Green Revolution was driven by the Chinese government to increase
agricultural productivity, with the main aim of ensuring national food
security. Cheap agrochemicals manufactured by local Chinese factories
26
with subsidies from the government, together with improved irrigation and
high-yield varieties, allowed the Green Revolution to expand and penetrate
all parts of the country, even remote areas. However, within a decade the
environmental impact of agrochemicals was apparent, with soil becoming
degraded and water polluted. As a result, agrochemical residues in food
products, especially fresh food, became a major concern among Chinese
consumers and policymakers.
By the late 1980s, some local government bodies concerned about the
environment began promoting what was known as Chinese Ecological
Agriculture. This eco-farming gave rise to organic agriculture. Seeing
opportunities in the growing global demand for organic foods, other
government bodies began to promote organic farming. One such agency
was the Rural Ecology Sector of the Nanjing Institute of Environment
Science (NIES) of the State Environment Protection Administration (SEPA,
now known as the Ministry of Environmental Protection, or MEP). This
agency became a member of the International Federation of Organic
Agriculture Movements (IFOAM) and started to promote organic farming in
its state in 1989.
The main drivers of modern organic agriculture in the early period were
Chinese enterprises, both state owned and private, which were contracted
to produce organic products such as Chinese tea to be exported to
European countries. The first certified organic tea was in the Lin‘an County
of Zhejiang
Province, inspected and certified by Dutch certifier SKAL, and exported to
Europe in 1990. Most of the early development of Chinese organic
27
agriculture was driven by export opportunities in the European Union and
United States, and later on Japan. This also led to the proliferation of
organic certification bodies, both local organizations and overseas offices
of foreign agencies. The first local organic certifier was the China Organic
Food Development Center (OFDC), which was established in 1994 by the
NIES. Meanwhile, concerns about food safety for both export and domestic
markets led the Chinese government to introduce food-labelling schemes,
comprising two levels – pollution-free food and green food. Local
governments first introduced such schemes in the mid 1980s and these
were later taken up by the central agency, the Ministry of Agriculture
(MoA). Pollution-free products comply with basic food safety standards and
green food, while similar, follows some stricter standards. The MoA
established the China Green Food Development Center (CGFDC) in 1992
as a public certification body. Initially, CGFDC focused on food safety
certifications but it later extended its scope to include organic certification.
Another important turning point for the organic sector came in the early
2000s, when national regulations for certification and accreditation were
introduced. In the same period, the Chinese domestic organic markets
began to grow more rapidly, with the emergence of new middle- and upper-
class consumers.
Unlike in other developing countries with free market systems, China‘s
organic production is mostly based on organized systems rather than
farming by individuals, and there are very few individual organic farmers in
China. With such organized production, there are only a few thousand
certified organic farms in China. Xie and Xiao (Xie & Xingji, 2007) estimate
28
the number at 2,500 certified organic producers (with more than 100,000
individual farmers) in 2007.
Until quite recently, Chinese organic agriculture mostly has been export-
oriented. As in many other developing countries, Chinese organic exports
have three main markets – Europe, North America, and Japan. Main
organic products exported are processed vegetables, soybeans, honey,
grains, green tea, herbal medicines and beans.
China‘s organic industries have been importing organic products,
especially raw materials and semi-processed products, as ingredients for
processed goods, most of which are then exported. Organic sugar, dried
fruits, nuts, and honey are the main imported ingredients.
Another category of imports is destined for the domestic market, which has
been growing rapidly since the mid 2000s. This mainly involves goods that
cannot be produced within the country. Initially, such imports were only
finished products, but at a later stage imports included bulk products that
were repacked in China. Main imports for Chinese consumers include fresh
tropical fruits, dried fruits, nuts, spices, quinoa, honey, coffee and snacks.
As export markets could not keep up with the rapid development of organic
production in China, since the mid 2000s the Chinese organic sector began
to focus on the domestic market. Since then, the Chinese domestic market
seems to have grown steadily. A summary of the four marketing aspects –
product, price, place and promotion of organic foods in China follows.
Product
29
As the Chinese consumers have serious concerns about the
integrity of the organic products, and some may even doubt the
effectiveness of Chinese organic certification, producers should
carry the seal of an internationally recognized certification body.
Chinese regulations stipulate that imported products should also
have a Chinese organic seal.
Products should be of reasonable quality, taste good, satisfying
Chinese taste preferences and be sold in attractive packages.
Consistent and stable supplies are important. China‘s organic
market is already saturated with some locally produced products,
such as vegetables, rice, grain and medicinal herbs.
The image and reputation of a product‘s origin should be good,
particularly regarding environmental issues. Producers should check
specific food safety requirements of Chinese authorities to see
whether these differ from standards used in the export product‘s
production and processing.
Products should have a reasonable shelf-life because of the time it
can take for importing and distribution
Price
Chinese consumers are generally price sensitive. Prices should be
competitive for mass products and reasonable for premium quality
products.
Importing costs, including custom clearance, are quite significant,
making it preferable to ship as large a volume as possible to spread
costs
30
Place
Most organic products are sold in hypermarkets, while premium
products are sold in high-end supermarkets and specialty stores
Distributors are normally regional, rather than nation-wide. It is
important to find a good, reputable and committed Chinese importer-
distributor as a partner to introduce, distribute and market the
product
Promotion
Should focus on the organic integrity and product quality, especially
if the product has unique nutritional or functional value. The
promotions Should portray clean environment and sustainable
ecosystem of place of origin
Attractive packaging with exporting country‘s characters which does
not need to be luxurious, but should be clear and attractive
Consumer Profile
As in many other countries, organic products are relatively expensive and
consumers who purchase them are mainly from well-off families with high
levels of education. They include people working for large or foreign
companies, managerial staff, expatriate families and high-ranking
government officials.
Most Chinese consumers are price sensitive and look for value for money
when buying food. While consumers traditionally prefer to buy Chinese
foods, western lifestyles and food consumption are increasingly becoming
31
popular, especially among younger generations who have travelled
overseas to study or work.
It is possible to divide organic consumers in China into eight main groups:
white collar families; families with young children; families with health
issues; overseas returnees; business people from Chinese Taipei and
Hong Kong (China); government officials; young people; and foreigners
living in China. Each group has different consumption preferences and
behaviour. (Portocarrero, 2011) A study on consumer buying behaviour
carried out among 204 Chinese organic consumers in Beijing and
Shanghai reported that 98% have a university degree or higher and 67%
are office workers.9 In the survey, the researchers also found that almost
three quarters, or 71%, were prepared to pay a price premium of 20%–
50% for organic food and almost a quarter, or 21%, would not be prepared
to pay any price premium.
Supermarkets are the preferred location for buying (74.5% of the
respondents). When asked why they buy organic foods, the top five
reasons were: 1) Enforcement of quality 2) Overall quality 3) Certification
relating quality 4) Food safety and 5) Information about nutritional value.
Issues that Chinese consumers were less concerned with were: Promotion
and advertising of organic food 2) appearance 3) whether the organic food
was produced in China 4) the social status of people purchasing organic
food and 5) The idea of face saving (mianzi) when purchasing organic
food.
Innovations in China:
32
―Green Food‖ is a Chinese food production innovation, and has been
described as ―one of the most successful eco-labelling programs in the
world‖. Green Food provides a ―middle way‖ between chemical and organic
farming. China‘s development of the Green Food concept resolves issues
with both chemical and organic agriculture – for the former by offering
reduced pesticide use, and for the latter by providing a stepped pathway
for conversion from chemical to organic agriculture while simultaneously
providing a Green Food price premium. After nearly two decades of
development, Green Food is by now well known to Chinese consumers,
and is readily available for retail purchase in China.
Critical aspects of organic food consumption
There have been many claims that eating organic foods increases
exposure to micro-biological contaminants. Studies investigating these
claims have found no evidence to support them. It is important to realize
that all organic foods must meet the same quality and safety standards
applied to conventional foods. These include the CODEX General
Principles of Food Hygiene and food safety programmes based on the
Hazard Analysis and Critical Control Point (HACCP) system, where
required by national regulations. Often, however, the standards of the
individual organic certification body are even stricter.
One of the suggested sources of micro-biological contamination is manure.
The use of manure is common in both conventional and organic systems;
the potential for contamination is therefore applicable to both. It is well
known that manure is a carrier of human pathogens, but properly treated
(e.g. composted), it is both a safe form of organic fertilizer and more
33
efficient nutrient source to crops. Furthermore, certified organic farmers are
restricted from using untreated manure less than 60 days before the
harvest of a crop and are inspected to make sure these standards and
restrictions are met.
Another stated source of worry is that of E.coli, especially virulent strains
such as 0157:H7. The main source of human infection has been identified
by the US Centre for Disease Control (CDC) through meat contaminated at
slaughter. Evidence suggests that such virulent strains develop in the
digestive tract of cattle mainly fed with starchy grains. Cattle fed with hay
produce less than 1% the E.coli found in the faeces of those fed with grain.
As organic cattle are fed with diets containing a higher proportion of hay,
grass and silage, reducing the dependency on fodder sources off-farm,
organic agriculture invariably reduces the potential risk of exposure.
As fungicides are not permitted anywhere in the production and processing
of organic foods, concerns have been raised about contamination with
mycotoxins due to moulds. If ingested in low doses over long periods of
time, aflatoxins, the most toxic of these substances, can cause liver
cancer. It is therefore important to have good agricultural, handling and
processing practices, as required by both organic and conventional
agriculture, in order to minimize the potential for mould growth. Studies
have not shown that consuming organic products leads to a greater risk of
mycotoxin contamination.
Packaging, processing, transportation and storage is another point along
the path that food travels where contamination could occur, but likewise,
this is an argument equally relevant to both organic and conventional
34
foods. The main aim of packaging is to ensure food is microbiologically
stable for a defined period, and this is achieved by organic foods.
Ingredients of non-agricultural origin are limited during processing and the
use of irradiation for the control of pests and deteriorative changes is not
permitted, but this does not mean they are necessarily less safe. Irradiation
itself is a technology that is not accepted by some consumer groups and
organic foods therefore provide the consumer with an alternative. Although
the organic label is not a health or safety claim, the way food is produced
does affect its quality.
The management system of an organic farm is the key to success.
However, there are many information gaps and knowledge on technical
details is often scarce, especially in developing countries. Technical
information needs to be very location-specific and product-specific.
Advancements to date have largely been due to private investment,
including consumers' willingness to pay for organic products and farmers'
creativity and desire to undertake on-farm experimentation. Research
institutes are starting to pay attention to organic agricultural practices and
approaches and improved understanding of natural resources process and
interactions within organic systems are under investigation.
Dr. Norman Borlaug, the father of Green Revolution is of the opinion that
organic agriculture cannot increase agricultural productivity.
A long term experiment as conducted by ICRISAT also sustains the view
that yield of different crops in low cost sustainable system, the annual
35
productivity (rainy + post rainy season yields), in particular, is comparable
to that in the conventional system.
While organically grown products may seem more expensive, current
prices for conventionally grown foods do not reflect their hidden costs
borne. Even consumers need not to pay these costs right after its
purchase. The cost will have to be paid by tax payers and the whole
society for subsidy, foreign exchange, damage of environment etc. The
organic food has high demand and it gets high premium over
conventionally grown food.
Conclusion
The developed world saw the organic food market grow the fastest
because of research, money spent and the rapid depletion of ecological
factors. The less developed nations are now realising the importance of
―going green‖ but their concerns are monitored due to lack of money,
poverty, proper dissemination of information, farming practises etc.
Development professionals increasingly posit that organic agriculture could
be a useful tool to meet farmers' needs. In some areas, organic agriculture
methods appear to show considerable promise for fulfilling these basic
needs of small farmers and also allegedly providing positive externalities
such as ecological benefits. Yet, there has been little data collection and
external analysis to understand what works and what doesn't. Relatively
little information is available about the mechanics of implementing organic
agriculture with smallholders in developing countries. As the popularity of
organic projects grows, it will be useful to recognize the inherent risks and
36
benefits of converting to organics. Rural development projects can
determine whether and how to integrate organic approaches if they better
understand the drivers of success and the pitfalls of such projects.
(Giovannucci, 2005 Feb)
1.3 Consumers’ organic food purchase behaviour
Research shows that the dynamics of food demand on the basis of income
is quite similar around the world. Studies show that for earnings up to $2
per day (Rs 3000/month) the demand consists of staple food like cereals
and pulses; between $2 and $9 per day (Rs 3000 to Rs 5000/month)
people eat more animal protein, fruits, vegetables & edible oils, causing
rapid growth in raw agricultural commodity demand and for earnings in
excess of $10 per day (Rs 5000/month) people buy more Processed and
packaged food, and have an increased variety in their intake. (Thompson,
2005). Studies also show that consumers equate organic food with A-grade
brands (Mondelaers, Verbeke and Huylenbroeck 2009) which means that it
will be tried by people with income higher than $9 per day as a nutritious
supplement to a meal or for extra variety.
The purchase behaviour of the organic food consumer seems to differ
according to the level of development of the organic food market in the part
of the world where they live.
Consumer surveys indicate that the primary reason for buying organic food
in both Germany and the UK is concern about health and the safety of food
(Booth, 1992; Mintel, 1995; Ploger et al., 1993) and are strongly influenced
37
by factors such as age and income. Altruistic motives are more evident in
Germany than in the UK.
In the U.S. consumers have become more mature and are much more
knowledgeable about organics today than they were 10 years ago.
Consumers are demanding even more from organic manufacturers in
terms of transparency and narratives regarding product origin. They are
also now looking to retailers as docents in the product selection process.
European consumers have also been introduced to organic food for some
time and many European governments and non governmental bodies are
responsible for the development of rules and regulations for production,
growth and labelling of organic food worldwide.
Although research has been done on consumers of organic products,
much of this research relies on ―willingness-to-pay‖ surveys or 1-day in-
store consumer surveys that collect purchase and demographic information
from shoppers. These studies usually focus on specific demographic
attributes, such as income, education, and presence of children, and those
factors‘ influence on the probability of a consumer‘s willingness to pay for
organic. Many of the findings of these studies are inconsistent, likely
because they focus on consumers in different parts of the world, consider
different products, and include different explanatory variables.
1.4 The future of organic food
Regulatory bodies such as the USDA have declared various benefits for
organic farming, for example the 2008 Farm Act allocated $5 million in
initial spending for an expanded organic data collection initiative, along with
38
an additional $5 million per year of authorized funding for researchers. With
these sorts of funding and research the possibility of the spread of organic
food is definitely going to accelerate rapidly.
Social acceptance of organic food will take time as it is in the reverse
process of going from fast to slow in terms of preparation and use. Those
people who are privileged to know about the harmful effects of too much
fertilisers on food grains and those who are capable of paying extra for
organic food will be adopt them more easily.
Long gestation periods required by farmers for conversion of their land to
be able to produce certified organic food is the biggest hindrance in the
adoption of organic farming. Moreover the yield may fall for consecutive
years before the full potential of organic farming is realised. In our country
where most of our farmers are poor, it will be difficult for them to adopt the
process without considerable hand holding by government / semi
government agencies.
Increasing productivity of resource efficient farming can adapt to climate
change and mitigate its worst impacts. Equitable, sustainable access to
natural resources is crucial, as is managing them well. Focusing on
smallholder farmers, particularly women, who are likely to be the main
agents of change contributes to the cause of organic farming.
Advocating sustainable agriculture needs to be a political priority to be able
to provide food for all. The demand for organic products has created new
export opportunities for the developing world. While some consumers
express a preference for locally-grown organic foods, the demand for a
39
variety of foods year-round makes it impossible for any country to source
organic food entirely within its own borders. As a result, many developing
countries have begun to export organic products successfully.
Diffusion of organic food is speeding up due to various governments and
organisations taking interest to promote the benefits of using and growing
organic food.
40
CHAPTER 2
REVIEW OF LITERATURE
The existing literature has been grouped into two broad categories. The fist
category is on organic food consumption internationally. A second category
of literature refers to the studies done on organic food consumption in
Indian.
Literature for the study has been collected from different sources. Some
literature has been collected from studies undertaken by international
public bodies, stakeholder organisations and academic establishments on
organic agriculture and food. A second source derives from national
government funded research reports and associated documentation.
Thirdly some literature has been reviewed from reports of individual
country contributions to research projects and from individual research
papers published in well known peer reviewed journals.
2.1 International studies on consumers of Organic food
Literature review shows consumer acceptance of organically grown food
has grown mainly due to the following reasons:
1. It is considered safer than conventionally grown food as it contains
fewer pesticides and fewer agro-chemical residues.
2. It is considered more nutritious and of better quality than
conventionally grown food as the consumer is more aware of the
process of production and the environment in which it is produced
41
3. Organically grown food supports sustainable agriculture: the food
web that supports organic farms prevents soil decay, the
requirement for pesticides is minimal and those used are organic.
Excess use of pesticides often results in deterioration of health
causing the farmers serious diseases like cancer.
4. Its taste differs from conventionally grown food: there are differing
perspectives on the taste of organic food. Some studies say that
consumers do not appreciate the taste of organic food while majority
of them report that consumers prefer organic food as it is tastier.
Literature relating to the above mentioned points are discussed below.
Magkos, Arvaniti and Zampelas (2006) are of the view that Organic fruits
and vegetables can be expected to contain fewer agrochemical residues
than conventionally grown alternatives; but the significance of this
difference is questionable, as the actual levels of contamination in both
types of food are generally well below acceptable limits. They also mention
that though some leafy, root, and tuber organic vegetables appear to have
lower nitrate content compared with conventional ones, whether or not
dietary nitrate indeed constitutes a threat to human health is a matter of
debate. They conclude saying that other factors rather than safety aspects
seem to speak in favour of organic food. This is a common statement form
studies on organic food and therefore leaves the consumer confused as to
the real conclusion. Further research in the area is extremely necessary to
get an opinion.
42
Most studies on consumer perception however find that the consumer
believes that organic is safer than conventional food. (Rimal and
Balasubramanian 2005). Another study on safety relating to organic food
found three segments of consumers with different risk perceptions. The
segments were found to be financial risk orientated, physical risk oriented,
and performance risk oriented. Even the extent of risk perceived in different
product categories differed.
In general, it has been found that use of nutritional label affects purchasing
behaviour mainly because consumers want to avoid the negative nutrients
in food products. The effects can be even greater if labelling is combined
with an information campaign to educate consumers. It appears that
nutritional information affects purchasing behaviour because it influences
valuations and perceptions of the product. (Drichoutis, Lazaridis and
Naygya 2006)
Mondelaers, Verbeke and Huylenbroeck (2009) tested the hypotheses that
1. Consumers prefer health over environment related quality traits;
2. Organic farming is perceived to be healthier and more
environmentally friendly than conventional farming;
3. Purchase intention is mainly driven by health related quality traits;
4. Health and environmental concerns influence purchase frequency,
though to a different extent.
They found that the health-related traits scored better than
environmental traits in shaping consumer preference for organic
vegetables. Consumers‘ preferred organic products over B-branded
43
products, but not over A-branded products, which suggests that
consumers classify organic products among other quality niche
products. However, they attribute a better score to the health and
environment related quality traits of organic products.
Concern for health, environmental protection, concern for the chemical
residues in conventional food products, pesticides, nutritional concerns, as
well as improved taste and flavour in organic products are also some of the
factors identified by Squires et al. (2001).
A recurring concern in studies has been that consumers are unable to
assess the organic quality of food simply by looking at it. Consequently,
organic quality must be assured by the application of credible industry
standards, including strict organic labelling. From the consumers‘ point of
view, such certification is crucially important to their perception, not only of
quality but also of the safety of organic foods. It is also essential if
consumers are to develop trust in the quality of unseen or ‗extrinsic‘
credence characteristics.
Extrinsic quality attributes incorporate a wide range of symbolic, imagined
and other less tangible characteristics, many of which are focused on the
perception of organic quality as a symbol of sustainable agriculture and
healthy living. Such perception is interwoven with confidence in production
processes (process-related quality), and in the particular use of safe or
natural raw materials (health-related quality). These dimensions of quality
are not readily experienced by the consumer and are described as
credence characteristics in literature. However, there is some indication in
44
existing literature that a positive attitude towards these qualities is also
encouraged by lack of faith in the conventional food sector rather than by
pro-active support for organic methods or low input farming.
Given this diversity of attributes, organic foods have been said to exist in
both the rational and emotional spheres, and it is in this latter context that
we find the most intangible aspects of quality perception in relation to
consumer preferences. (Midmore, Naspetti, Sherwood, Vairo, Wier, &
Zanoli, 2005)
The increasing relevance of quality attributes when buying food has
signalled the emergence of a discerning, ‗pro-social‘ and ‗pro-ecological‘
consumer: one who responds to the continuing depletion and pollution of
natural resources and, more recently, to food scares and their potential
consequences for human health, through their choice of an ‗organic quality‘
way of life.
A study in Australia by Lea and Worsley (2005) also found that most of the
respondents believed that organic food was healthier, tatier and better for
the environment than conventional food.
Greek consumers (Fotopoulos and Krystallis 2002) seem to be informed
about environmental and health issues. They seek information about the
nutritional value of food and demand more products free from chemical
residues. Most Greek consumers associate organic consumption mainly
with fruit and vegetables. (Tsakiridou, et al. 2008)
A number studies conducted in the European Union and the United States
(Davis et al., 1997; Latacz-Lohmann and Foster, 1997;Thompson and
45
Kidwell, 1998; Govindasamy and Italia, 1999; Browne et al., 2000; Anoli
and Naspetti, 2001; Magnusson et al, 2001; Krystallis, 2001, 2002a. b;
Wier and Calverley, 2002; Fotopoulos et al., 2003;) had investigated how
consumers perceive the organic concept, the issues related to the demand
of organic produce, consumers‘ attitudes, and the factors that facilitate or
hinder the acceptance of these products. They reveal that purchase
motives are attributed to environmental and health consciousness, safety
and quality concerns and exploratory food buying behaviour, as well as to
specific product attributes such as nutritional value, taste, freshness and
price (Tregear et al., 1994; Grunert and Juhl 1995; Davis et al., 1995;
Roddy et al., 1996; Reicks et al., 1997; Zanoli, 1998; Zotos et al., 1999;
Worner and Meier-Ploeger, 1999; Chryssochoidis, 2000; Browne et al.,
2000; Fotopoulos and Krystallis, 2002a, b).
Some studies also reveal a variety of other purchase motives that seem to
reflect national interests, such as ―support to organic farmers‖ for German
consumers (Worner and Meier-Ploeger, 1999) or ―animal welfare‖ for
British consumers (Meier-Ploeger and Woodword, 1999).
Some other studies have tried to profile the organic consumer. Jolly (1991)
found organic food buyers tend to be younger than non-buyers. Essoussi &
Zahaf (2012) have classified the organic food consumers as ―classic‖ or
―emergent‖ consumers. The former being well-educated, professional or
white collar worker, willing to pay a premium for organics and to search out
sources of organic food products (e.g. producer or farm markets). The
latter is also well educated, a professional but committed to personal
health, and shopping in supermarkets as convenience is an important
46
factor in his/her purchasing decision. Fotopoulos and Krystallis (2002) have
segmented consumers of organic products could be segmented into four
groups, according to their purchasing behaviour. They are:
Environmental Militants – consumers who associate environmental and
ethical values with organic farming. They are usually middle aged, married
with children and deeply concerned and committed to a greater protection
of the environment and a more sustainable usage of natural resources.
They are well informed of the positive environmental impact of organic
agricultural practises. That is why they are regarded as consumers by
choice (FAO 2000). Price and quality are of no importance to them.
Traditional- consumers are concerned with flavour and authenticity. They
are interested in products of traditional quality and bear in mind the
concept of returning to old farming. Price is of no importance to them.
Dietary – consumers with careful nutritional values. What is of utmost
importance to them is their health. Moreover they are very influenced by
medical research. They search for therapeutic products with balanced
trace elements rather than the true organic ones. Dieters do not seem to
be very well informed.
Youthful - these consumers are young, impulsive and interested in their
health and physical condition (fitness). They are modern consumers
looking for flavour, quality and pleasure, concerned with dietary and
environmental safety (ecologists).
Davis et al. (1995); Wandel and Bugge (1997) found that women seem to
be more interested in organics than men, and they were more frequent
47
buyers than men. Overall, more positive attitudes towards organic food
have been detected in women as opposed to men (Lea and Worsley,
2005).
Age seems also to affect consumer attitudes towards organic food. Young
people are more environmentally conscious but less willing to pay more
due to their lower purchasing power, whereas older people are more health
conscious and more willing to pay an extra price for organic food (Wandel
and Bugge, 1997; Thompson and Kidwell, 1998; von Alvensleben, 1998;
Fotopoulos and Krystallis, 2002).
Education has also been reported as a significant factor affecting
consumer attitudes towards organic food products. People with higher
education are more likely to express positive attitudes towards organic
products; require more information about the production and process
methods of organics (Magnusson et al., 2001; Hill and Lynchehaum, 2002;
Wier et al., 2003); have the confidence to negotiate conflicting claims in
relation to organic food (Padel and Foster, 2005); and are more willing to
pay a premium for organic food (Jolly, 1991; Wandel and Bugge, 1997).
Demand for organic food seems to be positively correlated to income (von
Alvensleben, 1998). Higher income households are more likely to form
positive attitudes and to purchase more organic food (Grunert and
Kristensen, 1991; Magnusson et al., 2001). However, income appears to
affect mainly the quantity of organic products bought and not the general
willingness to buy. Higher income households do not necessarily indicate
higher likelihood of organic purchases. Some lower income segments
48
seem to be more entrenched buyers (Fotopoulos and Krystallis, 2002).
Disposable income seems to affect mainly the quantity of organics bought
and not general willingness to buy. However, despite high organic price
premiums, higher household incomes do not necessarily indicate a higher
likelihood of organic purchases.
In Canada, consumers identify health, the environment, and support of
local farmers as principal values explaining their OF consumption
(Hamzaoui and Zahaf, 2008). These motivations and values are leading
Organic food consumers to accept large price difference between organic
and conventional food products.
The presence of children in the household has also been regarded as a
significant factor, which positively influences consumers‘ organic food
attitudes as well as buying behaviour (Davis et al., 1995; Reicks et al.,
1997; Thompson and Kidwell, 1998; Fotopoulos and Krystallis, 2002).
However, children‘s age can be considered as a key factor, meaning that
the higher the age of children in the household, the lower the propensity to
buy organic food (Wier et al., 2003). Overall although there is conflicting
evidence, those who are more likely to buy organic are females with
children, in younger age groups, of higher education and income levels
(Govindasamy and Italia, 1999)
Leger Marketing found in 2004 that out of 3.3 million regular and several
time buyers of OF, 1% purchased on every food-shopping trip, 17%
purchased them often, and 37% rarely purchased OF. Despite these
results, Tutunjian (2004) notices that OF consumers share attitudes and
49
values rather than demographics. The purchase of organic food products
tends to be based on reasons ranging from dealing with food allergies to
valuing the philosophy upon which organic farming is based. Overall,
redefining OF consumers profile helps to better address the specific values
underlying their food consumption.
Although some organic consumers are environmentally conscious, most
studies confirm the predominance of egocentric values like health, attitude
towards taste, and freshness that influence organic food choice more than
the attitudes towards environment and animal welfare (Millock et al., 2002;
Fotopoulos and Kryskallis, 2002a; Zanoli and Naspetti, 2002).
The main reasons that prevent consumers from buying OF are
expensiveness, limited availability, unsatisfactory quality, lack of trust, lack
of perceived value and misunderstanding of Organic food production
processes (Fotopoulos and Krystallis, 2002a, 2002b; Verdurme et al.,
2002; Larue et al., 2004).
There are some constraints regarding the purchase of these products.
Consumers are unaware of the existence of the organic products or the
specific attributes that differentiate organic products from conventional
ones as there is no appropriate information background. The other main
difficulties faced by the consumers are marketing problems related to the
supply, distribution and promotion of the products that exist. Majority of
consumers consider organic products difficult to find, they cannot easily
distinguish these products from the conventional ones and are not so well
informed about the labelling of the product. (Baourakis, 2004)
50
2.2 Studies on consumers of organic food in India
The study by Jabir Ali and Sanjeev Kapoor in 2010 on the buying
behaviour of consumers for food products in an emerging economy was
done to develop a marketing strategy for a modern food/grocery
supermarket based on consumer preferences and behaviour.
They surveyed a total of 101 households having sufficient purchasing
power. The data collection was done with a structured questionnaire.
These households were spread across the well-developed Gomtinagar
area of Lucknow city. They analysed the consumers‘ preferences for food
and grocery products and market attributes was carried out. The
preferences of the consumers clearly indicated their priority for cleanliness/
freshness of food products followed by price, quality, variety, packaging,
and non-seasonal availability. They found that the consumers‘ preference
of marketplace largely depended on the convenience of purchasing at the
marketplace along with the availability of additional services, attraction for
children, basic amenities and affordability. Results suggest that most of the
food and grocery items were purchased in loose form from the nearby
outlets. Fruits and vegetables were mostly purchased daily or twice a week
due to their perishable nature, whereas grocery items are less frequently
purchased. This study analysed the buying behaviour of the consumers
under survey with respect to food and grocery items. These consumers
were in a relatively advantageous position in terms of purchasing power
and awareness of health and nutrition. The results helped us to understand
the diversified set of preferences for products and market attributes so that
51
food processors and outlet owners can make better decisions in the
emerging organized food and grocery retail environment. Especially as
organized retail is still in its early stages in emerging markets. The study
was carried out with the help of State Agricultural Marketing Board,
Government of Uttar Pradesh who funded the project ―Feasibility study of
Apna Bazaar in Gomti Nagar, Lucknow‖.
Zee-Sun Yun & Dawn Thorndyke Pysarchik studied the ―Indian
Consumers' Value-Based New Food Product Adoption‖ process in 2010. In
response to increased attention toward Indian markets in general and food
markets specifically, multinational companies needed to accurately identify
the attitudinal and product attribute factors that impact new food product
adoption among Indian consumers. Applying integrated decision utility
theories, they examined the influence of product familiarity on value-based
product purchase decisions and intentions. The results indicate that
expected value, perceived value, and purchase intentions are influenced
by familiarity; only expected value influences purchase intentions.
Marketing implications are also discussed.
Shu-Shian Ling; Dawn Thorndike Pysarchik; Ho Jung Choo in the study
―Adopters of new food products in India‖ proposed to compare the attitudes
about new food purchases between innovators/ early adopters and non-
innovators, and to determine the food purchase characteristics of
innovators/ early adopters and non-innovators. Income was taken as a
covariate while determining how innovators/ early adopters and non-
innovators differed in their attitudes about new food purchases. Processed
52
food category has been taken as the new product. The Hypotheses that
are relevant to the present study are given below
Innovators/early adopters will be significantly less price-conscious of
food products than non-innovators
Innovators/early adopters will be more health-conscious when
purchasing food products than non-innovators.
Innovators/early adopters of food will be significantly more attracted
by promotion than non-innovators.
Innovators/early adopters will more actively seek food product
information from advertisements than non-innovators.
Other variables tested by them include variety seeking behaviour and
opinion leadership of innovators/ early adopters.
The findings revealed food innovators/ early adopters tend to be opinion
leaders, seek variety in food types and brands, and are more responsive to
sales promotions and advertisements. Food prices were relatively
important to both consumer groups. Marketing implications for food
businesses were discussed.
Choo, HoJung; Chung, Jae-Eun; Dawn Thorndike Psysarchik (Choo,
Chung and Psysarchik 2004) discuss antecedents to new food product
purchasing behaviour among innovator groups in India. They used
structural equation modeling, Fishbein and Ajzen's modified
theory of reasoned action model (TORA) to study the impact of innovation
on Indian consumers' purchase behaviour of new processed foods.
53
They studied if subjective norms will have a positive effect on Indian
consumers' attitudes about processed foods among two groups of
consumers (a) those with high innovativeness (b) and those with low
innovativeness.
The results indicated that subjective norms were a key
factor in understanding Indian consumers' new food purchase decisions
regardless of their level of innovation. Specifically, subjective norms were
found to have direct effect on attitudes, intention to buy, and purchase
behaviour for new processed food products. It was also found that attitudes
have little effect on less innovative consumers' intention to buy.
Additionally, product familiarity had a significant impact on Indian
consumers' attitudes, subjective norms, intention to buy, and, ultimately,
purchase behaviour of the low innovator and high innovator groups.
Daniele Giovannucci studied Organic Agriculture and Poverty
Reduction in Asia, with emphasis on China and India for IFAD Office of
Evaluation in 2005.
This report gives us a better understanding of organic agriculture in Asia
and to clarify how organics can serve or hinder small farmers and rural
communities – especially poor ones. The International Fund for Agricultural
development commissioned this evaluation to determine the role of
organics in development programs and under what circumstances they
should be integrated into future strategies.
This study evaluated organic initiatives that are diverse in terms of: agro-
ecological zones, product types, institutional structures, geographic areas,
54
and market orientation. Taking a market oriented focus, the document also
addresses key investment issues and the organizational forms of organic
agriculture such as adoption of standards, certification, civil organizations,
value-chains, and marketing channels. It draws primarily from the work of
nine researchers on 14 case studies in China and India, as well as reviews
of several other countries and more than 100 related studies and
documents. Some anecdotal evidence is included when it is consistently
reported and credible – this is necessary due to the lack of baseline studies
and useful measurements in many small farmer projects. India and China
are the dominant focus countries since these two together have more than
half of the world‘s farming households.
Organic context
In both countries, governments had initially adopted a position of benign
neglect toward what is typically perceived as a marginal agricultural
segment. However, estimates for India suggested that most of its farming
community relies on traditional or organic methods.
Overview of markets and marketing
In India organic development has focused predominantly on farmer welfare
and localized benefits rather than market development. A number of
organic products are sold informally but the domestic market for certified
organics is no more than a couple million US dollars. India's 2003 organic
exports are officially estimated at USD 15.5 million.
Characteristics of Organic Production and Markets
55
The report points out the lack of expertise in market information or
promotion is reflected in the modest success of the firms or NGOs that
undertake marketing and sales. Financing for transition or expansion was
another area of difficulty faced followed by high cost of certification and
assistance with quality management and internal control systems.
It is important to note that the markets for quality safe foods —for which
organic products are particularly well-suited — are large and are likely to
continue growing strongly. This demand makes safety and quality
increasing prerequisites for entry to the market.
Workable solutions: public sector roles in each country
The market aspect is most often a primary factor for farmers. The report
states that today's development professionals (government, NGOs,
international agencies) are often not adequately trained to help farmers
develop a strong market orientation and therefore it must be sought
elsewhere. The most efficient way to do this is by inviting the private sector
to provide marketing services. However some caution is warranted since at
least some of a firm's goals, such as maximizing their profits, may be in
opposition to the best interest of farmers. The public sector, including
government and NGOs, can support farmer organizations at the outset and
help ensure equity in their partnership with private companies as well as
foster adequate contract-farming laws. Ultimately, a market-oriented value
chain can be developed that takes full advantage of each partner‘s strength
in order to fortify competitiveness while also ensuring a fair share for
producers.
56
The report finds that the quality of certification systems is very uneven and
in both countries, the domestic verification and certification systems that
should be the most accessible to farmers, often lack the necessary checks
and balances to ensure credibility. In both India and China, since
landholdings can be very small, farmers must organise in groups in order
to apply for group certification that can significantly reduce their individual
costs and enable them —by owning their certification rather than having a
firm own it— the independence to negotiate their own terms of sale.
India, through its NGOs and state governments, has begun to disseminate
organic information more broadly and directly to farmers while China‘s
dissemination to its farmers is still in the nascent stages. This may hinder
adoption of organic agriculture. China's development of Green Food may
provide a basis for domestic organic development whereas India's
domestic markets are very marginal. Domestic market development can be
an important factor in order to stimulate farmers to improve their practices
and adopt organic methods in both countries. Improved consumer
education efforts in regard to standards and what they represent could
stimulate this considerably.
Public investment in organic agriculture is very limited and in order to
advance, it will be important to overcome the systemic biases in public
expenditures that favour conventional agricultural systems.
Consumer Behaviour for Food Products in India: Submitted to
International Food & Agribusiness Management Association for 19th Annual
57
World Symposium to be held at Budapest, Hungary on June 20-21, 2009
by Kriti Bardhan Gupta (IIM L)
This study tries to find the factors affecting purchase decisions for major
categories of food products in India, perception of quality about various
categories of food products and whether there is a change in the food
consumption habit when people move to different regions. The study was
based on focus group discussions followed by a survey.
The relative importance of various food purchasing parameters was
estimated for four different food categories, food and vegetables; milk and
milk products; food grains and pulses; and processed foods on 1-5 Likert
scale. Based on grand mean score for all the four categories of food
products, the five most important parameters that respondents rated very
highly for food purchasing decisions were: cleanliness, free from
pesticides, freshness, good for health, and clean place of sale.
Value for money, overall quality, taste, variety of products availability at
same place, seasonality, flavour, good display of products, nearby
availability and good ambience were some other parameters, which were
rated highly by respondents. Parameters like promotional offer and
products produced in other country were not considered as very important
by respondents.
Looking at the relative importance of different parameters separately for
different product groups the study found that freshness, cleanliness and
good for health were the three most important parameters for relatively
more perishable products like fruits vegetables and milk products. Safety
58
was the prime concern while buying these products. For processed food
items, apart from cleanliness and freshness, free from pesticides and clean
place of sale were the most important criteria.
For food grains and pulses, which people usually buy in large quantities,
only two parameters cleanliness and free from pesticides mattered. Value
for money was another important criteria for purchase of food grains and
pulses.
Somnath Chakrabarti and Rajat K Baisya (2009) in their paper
Purchase of Organic Food: Role of consumer Innovativeness and
Personal Influence Related Constructs, investigate purchase behaviour
in the light of such variables as consumer innovativeness, related
perceived risk and the personal influence, demographic factors and time of
adoption.
The study was done through a survey of organic food buyers in the Delhi
national capital region (NCR). The study has considered Organic food in
India as an innovative category as it is purchased by a relatively small
percentage of the potential market and is in the attention spans of relevant
target groups for a relatively small period of time.
The main constructs discussed in the study are: domain specific
innovativeness (DSI), opinion leadership (OL), opinion seeking (OS),
relevant word of mouth (WOM). The study looks at the importance of
channels of communication between consumers suggest channels for the
marketing of organic produce.
59
The findings suggest that the demand for organic food is positively
correlated with income and education. It also reveals that affluent
households and people with higher education are more likely to buy
organic products and in larger quantities and more willing to pay extra for
organic food. Women were found to buy organic food more often than men.
The study also found that Consumer innovators influence later buyers by
serving as models to be imitated and as opinion leaders.
Pratap S. Birthal, P. K. Joshi and Ashok Gulati (2006) in their study
―Vertical coordination in high-value food commodities: implications for
smallholders‖ find that the rising per capita income, urbanization and
globalization are changing the consumption basket in developing countries
towards high-value commodities (like fruits & vegetables, milk, meat,
poultry, fish, etc.).
The study examines the institutional mechanisms adopted by different
firms to integrate small producers of milk, broilers and vegetables in supply
chain and their effects on producers‘ transaction costs and farm
profitability. It also finds that the innovative institutional arrangements in the
form of contract farming have considerably reduced transaction costs and
improved market efficiency to benefit the smallholders. The study does not
find any bias against smallholders in contract farming. Also, the study does
not find that the relevant firms have exploited their monopsonistic position
by paying lower prices to farmers. On the contrary, contract producers
were found enjoying benefits of assured procurement of their produce and
higher prices. The study lists policy hurdles in scaling up the innovative
models of vertical coordination in high-value food commodities.
60
In the Indian context the study states that demand for and supply of high-
value food commodities (e.g. fruits, vegetables, livestock and fisheries)
have grown much faster than that for food grains (Kumar et al. 2003; and
Joshi et al. 2004). The study further finds the processes adopted by
different business houses in linking production and marketing of high-value
food commodities; their effect on transaction costs and farm profitability,
especially from the point of view of smallholders; the various policy options
that can be arrived at for strengthening vertical linkages between
smallholders and the business houses.
Manisha Singla in the study ―Usage and understanding of food and
nutritional labels among Indian consumers‖ gives the initial requirements
for a nutritional labelling policy in India. The findings of the study state that
food labels are read by the consumers for brand comparisons and not for
consulting nutritional information. Difficult terminology, small font size and
inability to understand nutritional labels are the major problems
encountered by the consumers. Television, friends and magazines are
commonly used by consumers for assessing nutritional information. Labels
are considered more consumer friendly when benchmarks regarding
serving size are provided. She also found that income levels, size of
household, number of children and age did not play a role in the usage of
nutritional labels by the consumers. Consumers with special dietary needs
were found to use nutritional labels regularly.
61
2.3 Gaps in literature
Literature on food consumption in India is scarce with very little research
work done on organic food. Studies on organic food in India are found in
reports by organisations like IFAD, NABARD, FiBL etc. which have an
orientation towards the upliftment of the poor or export promotion.
The literature on organic food that is available focuses on the northern part
of the country. Maharashtra being the highest producer of fruits and
vegetables needs to have a research done in the area.
None of these studies have dealt with the impact of consumer behaviour
on organic food consumption and no study has concentrated on
Maharashtra.
Most research done on food behaviour keeps individual characterises in
mind. The effect on consumption because of sustainable agriculture or
environmental benefit of food has not been studied earlier.
62
CHAPTER 3
OBJECTIVES & RESEARCH METHODOLOGY
The focus of the study is on the impact of behaviour on organic food
consumption. Most consumer behaviour studies focus on purchase rather
than consumption as it is the actual point at which a contract is made
between the buyer and seller, money is paid and the ownership of products
transfer to the consumer. Yet from a social and environmental perspective,
consumer behaviour needs to be understood as a whole since a product
affects all stages of a consumption process. Sustainable consumer
behaviour is consumers‘ behaviours that improve social and environmental
performance as well as meet their needs. Behavioural models based
around economical rationality tend to assume a high degree of self-interest
on the part of the consumer. While sustainable behaviour tends to assume
a high degree of community/ group interest. Progress toward more
sustainable consumption is therefore not simply a question of what
products and services are purchased, it is about the adoption of a lifestyle
in which sustainability is reflected in all aspects of consumers` behaviour.
The most advanced form of sustainable consumption behaviour is among
those identified as voluntary simplifiers.
Statement of the Problem
The green revolution in India reformed the dwindling agricultural sector, but
the costs have been high. Overuse of fertilizers, use of too much pesticide,
low knowledge in agricultural sciences and technology among the farmers,
inadequate education, improper seed collection, hybrid seeds etc. have
63
resulted in reduced soil fertility and improper balance of nutrients in the
food that is produced. The health of farmers who use chemical pesticides
is at risk. Consumers are at risk. The developed countries have started to
realise these challenges and are propagating the sale and consumption of
organic food. The Indian farmer had been used to the system of Jaivik
krishi for generations. If the produce of this system of agriculture results in
better quality food then the people and consequently the government
should look at methods to promote its use among the citizens. Because of
the high cost of conversion and greater demand in the developed
countries, most farmers who are converting to organic farming are
exporting their produce. The inflow of foreign exchange has also resulted in
the government promoting it as an export oriented item. Organic produce
has not got enough push within the country despite its many benefits to the
citizens and farmers.
With economic growth and spread of education in the country, people are
now able and willing to make sustainable choices.
3.1 Objectives of the study
The main objective of this study is to find the impact of behaviour on
organic food consumption. The behavioural parameters that were
considered for the study are recommendation, awareness, taste, status,
media exposure, price and demography. The objectives of the study are as
follows:
1. To examine if users and non users are equally aware of organic food
64
2. To determine if taste, status, exposure to media and demography have
an impact on the consumption of organic food
3. To determine if the expenditure on organic food is subject to variation
among organic food consumers
4. To examine if there is an association between the recommendation of a
doctor and the purchase behaviour of organic food consumers
5. To study and suggest measures on how the consumption of organic
food can be spread wider
Based on the above objectives, the following hypothesis were initiated:
3.2 Hypotheses
The following hypotheses were framed from the above objectives.
H01 There is no association between doctor‘s recommendation and organic
food consuming habit
H11 There is an association between doctor‘s recommendation and organic
food consuming habit
H02 Awareness towards organic food is not equally distributed amongst the
users and non-users of organic food
H12 Awareness towards organic food is equally distributed amongst the
users and non-users of organic food
H03 Consumption of organic food is not independent of its taste
H13 Consumption of organic food is independent of its taste
H04 Consumption of organic food is not a matter of status
65
H14 Consumption of organic food is a matter of status
H05 There is no significant variation on the expenditure of organic food for
regular users
H15 There is a significant variation on the expenditure of organic food for
regular users
H06 Exposure to media is not significantly associated with consumption of
organic food
H16 Exposure to media is significantly associated with consumption of
organic food
H07 Income, age and education do not have a significant association with
the consumers of organic food
H17 Income, age and education have a significant association with the
consumers of organic food
3.3 Research Methodology
Research methodology involves visualising the framework for the study to
be conducted. It consists of research design, sampling design, deciding on
the data collection process and tools, and finally the interpretation of the
data.
3.3.1 Research Design
The research deign has an exploratory as well as a descriptive approach. It
is exploratory in the sense that organic food consumption is a recent
phenomenon and few studies have been done on it. Descriptive research
consists of the survey of organic food users and non-users.
66
Data Collection
The study has used both primary and secondary data. Secondary market
research refers to any data gathered for one purpose by one party and
then put to a second use by or made to serve the purpose of a second
party. It is almost inevitable that all marketing research studies have to use
some amount of secondary data and any decision stage may incorporate
some kind of secondary research. Secondary data was gathered from
journals, magazines, industry reports, newspaper articles and organisation
websites.
In this study secondary data provided details of the world organic food
market, the food market in the different states in India and the information
regarding organisations which help to promote organic food around the
world. Some data was also obtained based on interviews with middlemen
connected with the selling of organic food.
The primary data has been collected with the help of a survey which
comprised a vital part of the study as it would indicate the consumer
behaviour and preferences in this particular region. The survey was
conducted on a sample of 400 users of organic food and 100 non users.
3.3.2 Data collection tool
The questionnaire is an essential data collection tool for the survey. Data
collection has been done with the help of two separate questionnaires. One
questionnaire was administered to users of organic food and the other to
non-users. The questionnaire for the users consisted of 6 sections for
testing the parameters in the study. The six sections were as follows:
67
1. Awareness regarding organic food
1. Purchase knowledge of consumers on organic food
2. Exposure to media
3. Health benefits and lifestyle
4. Willingness to pay a premium
5. Socio demographic details of the respondent
The questionnaire for non users of organic food had four sections
consisting of the following:
1. Awareness regarding food
2. Purchase knowledge
3. Organic food consciousness
4. Socio demographic details
These sections contained attitudinal scaled questions using a 5 point Likert
scale; while others were multiple choice questions. The Likert scale is a
widely used rating scale that requires the respondents to indicate a degree
of agreement or disagreement with each of a series of statements about
the stimulus objects. The Likert rating scale is often use in social sciences
research to measure abstract constructs. By having several items that
measure the same construct, the problem of having single
unrepresentative questions is solved. The greater the number of initial
items generated, the better will be the final scale. The larger the scale, the
greater is the reliability, but shorter scales are easier for respondents to
answer. Hence, a balance between brevity and reliability has been struck
to determine the scale.
68
Data on purchase knowledge of organic fruits, vegetables and cereals
were collected from the consumers. The non consumers‘ were asked
questions in those areas were comparisons between them were
necessary.
3.3.3 Sampling
The sample frame consisted of urban Municipal Corporations and
Municipal Councils in the state of Maharashtra with high populations and
high literacy levels. The sample size was arrived as given below:
Formula for sample size calculation:
= 384.16 or 384
Where:
ss = Sample Size
Z = 1.96 (Z value for 95% confidence level)
p = percentage expressed as a decimal (0.5 used for the sample size
needed)
c= confidence interval expressed as decimal (0.05)
Two groups were sampled – 400 users and 100 non users
Serial No.
Name of municipal
corporation / council
Population Size
Sample Required (Users)
Sample Selected (Users)
Non-Users
1 Navi Mumbai
(Mun. Corp)
11,19,477 21 37 7
2 Thane (M Corp) 18,18,872 35 35 9
3 Greater
Mumbai (Mun.
Corp)
1,24,78,447 236 236 61
69
Serial No.
Name of municipal
corporation / council
Population Size
Sample Required (Users)
Sample Selected (Users)
Non-Users
4 Pune (M Corp) 31,15,430 59 59 15
5 Pimpri-
Chinchwad
17,29,359 33 33 8
TOTAL
POPULATION
SIZE
2,02,61,555 384 400 100
Table 1 Sampling Statistics
Source: Provisional Population Totals, Census of India 2011
The sample frame consisted of urban Municipal Corporations and
Municipal Councils in the state of Maharashtra with high populations and
high literacy levels. The total population for the sample has been calculated
as given above.
3.3.4 Pilot Study
A pilot study was conducted after gathering the data from 40 users. Factor
loadings were calculated for the attitudinal scaled questions to reduce the
number of statements and the questionnaire was revised to incorporate the
changes required. A significant reliability was achieved in the pilot test.
Survey
The survey was carried out in the Municipal Corporations / Councils of Navi
Mumbai, Thane, Greater Mumbai, Pune and Pimpri-Chinchwad. These
urban Municipal Corporations and Municipal Councils were chosen
because of their high populations and high literacy levels in the state of
Maharashtra. The questionnaire was administered to 400 users of organic
70
food and 100 non-users. Thus a total of 500 respondents were considered
in the study.
3.3.5 Data Collection
Data was collected with the help of the questionnaires that was
administered to the respondents in the areas sampled.
3.3.6 Statistical tools used for data analysis
Statistical tools used for data analysis includes percentages, cross
tabulations, simple correlation, regression, Chi Square test, F test, factor
analysis, discriminant analysis and logit analysis The statistical package
used for data analysis was IBM SPSS 19.
3.3.7 Limitations of the study
The areas sampled have higher levels of education and income than other
places in the state therefore the trend may not reflect throughout the state.
A wider survey needs to be conducted to reflect the entire country. Since
the education levels of the non users were high in the survey, it may not be
possible to generalise the same.
Since consumers were not very informed about organic food certification,
all products that were being sold separately from conventional food and
labelled as organic food were considered for the survey.
71
CHAPTER 4
THE ORGANIC FOOD MARKET IN INDIA
Organic Agriculture in India – a historical perspective
The oldest practice of organic farming is 10000 years old, dating back to
the Neolithic age, practiced in ancient civilisations like Mesopotamia, the
Hwang Ho basin etc. The Indian epic Ramayana mentions ―All dead things
- rotting corpse or stinking garbage returned to earth are transformed into
wholesome things that nourish life, such is the alchemy of mother earth‖
(as interpreted by C. Rajagopalachari). The Mahabharata (5500 BC)
mentions Kamadhenu, the celestial cow and its role on human life and soil
fertility. The Rig Veda (2500-1500 BC) has the mention of organic manure
(Rig Veda I, 161, 10 between 2500- 1500 BC) Green Manure is mentioned
in the Atharva Veda (Atharva Veda II 8.3, 1000 BC). In Sukra (IV, V, 94,
107-112) it is stated that to cause healthy growth the plant should be
nourished using dung of goat, sheep, cow, water as well as meat. A
reference of manure is also made in Vrksayurveda by Surpala (manuscript,
oxford, No 324 B, Six, 107-164) Kautilya‘s Arthashastra (300 BC)
mentioned several manures like oil cake, excreta of animals. Brihad-
Sanhita by Varahmihir described how to choose manures for different
crops and the methods of using manure.
The Holy Quran (590 AD) mentions at least one third of what you take out
from soils must be returned to it implying recycling or post-harvest residue.
72
In the more recent period, one of the first mentions of organic food came
from the works of Rudolph Steiner (1861-1925) an Austrian philosopher,
social reformer and architect who built a bio-dynamic farm in Germany. Sir
Albert Howard (1900-1947) considered the father of modern organic
agriculture, developed the organic composting process (mycorrhizal fungi)
at Pusa, Samastipur, Bihar and published a document "An Agriculture
Testament".
Inspired by the ideas of Albert Howard, J I Rodale (1898-1971) popularized
the term sustainable agriculture and method of organic growing in USA by
publishing an Organic Farming and Gardening magazine started in 1942.
The International Federation of Organic Agriculture Movement (IFOAM)
was formed in 1972. Masanobu Fukoka an eminent Japanese
microbiologist, farmer and philosopher celebrated for his natural
farming methods and re-vegetation of desert lands is remembered through
his book titled ‗One Straw Revolution‘ in 1975. This outstanding book which
was translated into English in 1978 has highly influenced the spread of
organic farming. He visited India several times to promote organic farming
in the country. Several schools and universities have also been started in
India in recent times. Bija Vidyapeeth Earth University in Dehra
Dun, Uttarakhand in northern India is one example.
The Organic Movement in India
Certified organic farming in the modern sense as understood in developed
countries is only around 15 years old in India. The 1990‘s saw a vigorous
growth of two branches in the organic movement in India. The first was
initiated by environment conscious urban-based NGOs who started
73
extension work at the grass root level among the small farmers popularly
known as low external input sustainable agriculture (LEISA). Opposition to
foreign companies controlling agricultural inputs, along with a drive towards
self sufficiency at the farmer level to avoid market manipulations seemed
their objective. Efforts to save the local seed biodiversity, opposition to
multinational agribusiness companies, as well as pressurizing the
government on the need to be careful with genetically modified seeds have
been notable highlights of the NGO‘s initiatives. When funds from donors
declined, these initiatives could not be sustained mainly because the
financial viability and marketing aspects of emerging organic farms had not
been taken into consideration in the planning by these NGOs.
The other organic movement push came from private companies who have
facilitated large scale conversions to organic systems, especially tea,
coffee, spices and cotton. They are professionally managed and have tied
up with their markets which are mostly overseas and are to a large extent
successful.
An exception to the two initiatives mentioned above is the government itself
becoming an organizer like in the State of Sikkim and Uttaranchal, where
the Uttaranchal Organic Commodities Board has been set up and the State
Government has adopted an active policy to encourage organic farming
and to help these farmers to access markets.
Ecology & Environment Initiatives by the Government: The Indian
Government recognizing the severity of environmental problems has
adopted a comprehensive policy to address the environment. India was the
74
first country to insert an amendment into its constitution allowing for the
state to intervene and to protect public health, forests and wildlife. Further,
in response to national commitment to a clean environment (mandated in
the Constitution in Articles 48A and 51A (g), strengthened by judicial
interpretation of Article 21), the Government has come out with an
Environmental policy in 2006. The dominant theme of this policy is that
people dependent on particular resources obtain better livelihoods from
conservation, than from degradation of the resource (GOI Government of
India, 2012).
The second major input that is found in the approach paper to the twelfth
five year plan is the need for the preservation of soil fertility and nutrition
management. Quoting from the report ―Soil is the basic natural resource
that supports life on earth. Millions of small organisms live in healthy soil
which is rich in organic matter. A living soil ecosystem nurtures and
nourishes plants by providing a healthy medium to take roots and through
a steady supply of nutrients. Indiscriminate use of synthetic chemical
fertilizers can seriously disturb the natural soil ecosystem.‖
Chemical fertilizers are highly subsidized in India and the amount of
fertilizer subsidy has grown exponentially during the last three decades
from a mere Rs. 60 crore in 1976-77 to an astronomical Rs. 61,264 crore in
2009-10 and is likely to exceed the budgeted subsidy of Rs. 58,000 crore
in 2010-11. Such heavy subsidies often encourage an imbalance in soil
nutrition. Although there is still a need to increase fertiliser use in many
parts of the country, the overuse of chemical fertilizers in many other areas
has resulted in severe degradation of soils. Since synthetic chemical
75
fertilizer use is conditional upon assured availability of water, the water
constraint in rain fed areas demands exploring alternative ways of
enhancing soil fertility.
To rejuvenate soil and restore soil health addition of soil organic matter and
micro-nutrients in bulk quantities is required. Balanced nutrient
management will gradually ameliorate the effects of imbalanced/ excessive
use of chemical fertilizers. Support for soil amelioration and ecological/
organic fertilization is now available under various schemes but will require
a clearer focus, along with it, better methods of assessment of soil health
and nutrient needs at the farm level needs to be developed.
The 10th five year plan emphasized promotion of, and encouragement to,
organic farming with the use of organic waste, Integrated Pest
Management (IPM) and Integrated Nutrient Management (INM) (GOI,
2003). Even the 9th five year plan had emphasized the promotion of organic
produce in plantation crops, spices and condiments with the use of organic
and bio inputs for protection of environment and promotion of sustainable
agriculture (GOI, 2001). Various organs under different Ministries such as
Commerce, Textiles and Agriculture have taken up the effort to promote
and encourage organic farming.
Organic Farming and India: India has evolved a rich history of
agricultural practices and continues to adapt technologies like
biodynamic and other systems into its organic practices. India's organic
farmers have been at the forefront of developing field based
technologies ranging from vermi-composting to integrated livestock
76
practices that facilitate their ability to improve soil fertility even in semi-
arid or barren areas.
Table 2Overall status of India’s organic food industry Source: National Centre of Organic
Farming, Ministry of Agriculture, Govt. of India, Ghaziabad
Different parts of India have developed their own local or regional systems
for ecological agriculture such as agnihotra and panchakavya that are now
gathered in one umbrella term: ‗Jaivic Krishi’. The overall status of organic
production in India is given below:
Presently there are three types of organic producers in India – traditional
organic growers who grow for their subsistence needs, commercial farmers
who have surplus and export their produce through different channels, and
private companies which either have their own farms or organise large
conversion programmes with growers (Yussef and Willer, 2003).
77
Civil society, primarily in the form of NGOs and farmer groups, play a
primary role in India's organic sector. They have helped to evolve basic
cultivation practices in the poorer and remote areas where extension
services and improved agricultural technologies rarely reached. As
organizations, they have served a vital role of disseminating information
and knowledge as well as facilitating the access to markets. More recently,
as business opportunities have emerged in the organic field, private
companies have increasingly taken a role in organic development.
The common understanding that organic standards merely mandate the
absence of synthetic agrochemicals is widespread and leads to the
perception that most poor or remote farmers are organic by default — and
some certainly are. However, while many such farmers may come close to
the organic ideal of integrating their farming practices into the greater
biological system and its cycles, there are a number of clearly defined
standards that their methods must meet if organic certification is a goal.
Although these requirements are usually not onerous, they do necessitate
a measure of preparation and attention for most farmers.
These requirements are also the main principles of organic agriculture.
These principles encompass the fundamental goals and caveats that are
considered important for producing high quality food, fibre and other goods
in an environmentally sustainable way. The International Federation for
Organic Agriculture Movement‘s (IFOAM) definition of Organic agriculture
is based on the following four principles:
78
The principle of health: Organic Agriculture should sustain and
enhance the health of soil, plant, animal, human and planet as one
and indivisible. This principle points out that the health of individuals
and communities cannot be separated from the health of
ecosystems - healthy soils produce healthy crops that foster the
health of animals and people.
The principle of ecology: Organic Agriculture should be based on
living ecological systems and cycles, work with them, emulate them
and help sustain them.
The principle of fairness: Organic Agriculture should build on
relationships that ensure fairness with regard to the common
environment and life opportunities. Fairness is characterized by
equity, respect, justice and stewardship of the shared world, both
among people and in their relations to other living beings
The principle of care: Organic Agriculture should be managed in a
precautionary and responsible manner to protect the health and
well-being of current and future generations and the environment.
Organic agriculture is a living and dynamic system that responds to
internal and external demands and conditions.
Several state governments have also established their own organic policies
and programme implementation guidelines. Still in the early stages, the
public sector is beginning to respond to the increasing demand for
information on organic production and marketing. Twelve of the Indian
Council of Agricultural Research Institutes has been given the mandate
lately to move into organic production either as a main focus or as a
79
sideline to their mainstream research. The discussion on how to overcome
the knowledge gap is now focused on quickly providing basic information
tailored to various soil and ecological zones of the country, on developing
integrated packages of organic crop production practices, improved input
production and utilization, and certification issues.
Indian agriculture has begun to diversify and future sources of agricultural
income are likely to come increasingly from the high value segment, driven
by rising demand for high value horticultural, livestock, and fishery
products. While the potential benefits of high value agriculture, including
higher income and employment, are significant, it will be necessary to
overcome key challenges associated with meeting farmer resource needs
and mitigating production and marketing risk. The challenge is to identify
innovative solutions, possibly based on contract farming models, that are
efficient and competitive and also ‗inclusive‘ in terms of working with small
holders on sustainable basis.
The Indian agricultural sector consists of large number of small/marginal
farmers who have poor market orientation in agriculture production. There
is increasing risk in farming business and inadequate facility to address
farm risk. The sector needs to evolve appropriate business models to
handle the lack of knowledge amongst farmers and the increasing risk that
prevails in the sector. In fact the structure of the holdings and area are
opposite to each other throughout the world. A large number of farmers
with small holdings cover a smaller area than the few farmers who have
very large holdings. By FAO (2005) statistics, only 6.2% of the farm holders
cover 87.1% of farm area worldwide.
80
The Government of India‘s National Agriculture Policy envisages that
―Private sector participation will be promoted through contract farming and
land leasing arrangements to allow accelerated technology transfer, capital
inflow and assured market for crop production‖. The agri-based food
industry requires timely and adequate inputs of good quality agricultural
produce and many Indian farmers are trying to sustain through their age–
old means of livelihood. This underlying paradox of the Indian agricultural
scenario has given birth to the concept of Contract Farming, which
promises to provide a proper linkage between the farm and market.
Contract farming is defined as a system for the production and supply of
agricultural/horticultural produce under forward contracts between
producers/suppliers and buyers. The essence of such an arrangement is
the commitment of the producer/ seller to provide an agricultural
commodity of a certain type, at a time and a price, and in the quantity
required by a known and committed buyer.
Contract farming in wheat is being practised in Madhya Pradesh by
Hindustan Unilever Ltd (HUL), Rallis and ICICI. Under the system, Rallis
supplies agri-inputs and know-how, and ICICI finances (farm credit) the
farmers. HUL, the processing company, which requires the farm produce
as raw material for its food processing industry, provides the buyback
arrangement for the farm output. In this arrangement, farmers benefit
through the assured market for their produce in addition to timely,
adequate and quality input supply including free technical know-how; HUL
benefits through supply-chain efficiency; while Rallis and ICICI benefit
through assured clientele for their products and services. The consortium is
81
also planning to rope in other specialist partners including insurance,
equipment and storage companies. (The National Institute of Agricultural
Extension Management, 2003)
Critics in the industry are of the opinion that the results are very promising
in early years. Farmers benefit from improved technology and higher
productivity, quality and production. The contract price does not appear to
matter much in the early years. However once the farmers are confident of
being able to deploy new technology, problems start cropping up. If the
market price is more advantageous than the contract price, farmers renege
on the contract; and the present legal systems makes it impossible to
enforce the performance under contract.
Diversifying out of traditional crops towards high value agriculture like
organic food poses two key challenges. First, higher production risk
(susceptibility to pest attack and climatic adversities) and price risk
associated with high value agriculture compared to grains often deters
diversification. Second, lack of resources (financial assets as well as
access to credit) coupled with inadequate market and crop knowledge
often restricts shifts to new enterprises and investments in variable and
fixed inputs. Small farmers often find themselves locked in a situation of
income uncertainty and low risk bearing capacity, thus constraining shifts
towards higher value and income generating activities. Again, contract
farming models that can share risk and overcome resource constraints
emerge as a possible approach to facilitate the transformation of small
holders to high value agriculture. (Gifford & Bernard, 2006).
82
Commonly grown organic products in India
India is emerging as one of the world's most significant countries for
organic agriculture. It ranks among the world's largest producers of rice,
tea, fruits and vegetables, various spices, pulses, medicinal plants, and
cashew nuts. Its first internationally certified organic products began
emerging in the mid 70‘s, supported by UK‘s Soel.
Organic agricultural products in India are mainly destined for export. The
export of organic agricultural products began with dried fruit in the early
80s and has since expanded to include fresh fruit and vegetables, nuts,
oils, cotton, and spices. Unlike in other countries the home market in India
does not have separate markets for organic products in many
commodities. This does not offer any incentive for the production of organic
produce. Some of the major organic products produced in the market and
comparative price differencial to inorganic products are shown in Table 2.
Demand for organic food in India is about Rs 600 crore. Currently, India
exports about 86 products worth over 100 million dollars to the world
certified organic market.
Crop Inorganic Organic % Increase
Basmati Rice 3000 3400 13.33
Non-basmati 850 850 0
Wheat 1050 1100 4.76
Finger millet 685 700 2.19
Maize 590 600 1.69
Barley 770 800 3.9
Jowar 630 650 3.17
Sugarcane 140 150 7.14
Peas 1700 1800 5.88
83
Crop Inorganic Organic % Increase
Tomato 450 475 5.56
Potato 990 1000 1.01
Cauliflower 430 450 4.65
Ginger/Turmeric 2800 3000 7.14
Chilli green/red 650 700 7.69
Tulsi green 700 700 0
Coriander green* 1900 2000 5.26
French beans 850 900 5.88
Soybean 2000 2100 5
Rajma 5200 5400 3.85
Arbi 800 800 0
Mustard 1800 2000 11.11
Onion 550 550 0
Table 3 Average farm gate prices in India
Source: Impact Assessment study of Center of Organic Farming, Uttarakhand state by Dr.
Joginder Singh, Consultant to Sir Ratan Tata Trust (SRTT) December 2009
Nearly 4.5 million hectares area is currently under certified organic farms.
Certified organic products including all varieties of food products namely
basmati rice, pulses, honey, tea, spices, coffee, oil seeds, fruits, processed
food, cereals, herbal medicines and their value added products are
produced in India (ASSOCHAM, 2012).
Banana, pomegranates, pineapple, grapes, amaranth, ginger, large
cardamom, sweet fennel, peanut, onion, sugar/jaggery are other
commodities are expected to emerge as significant organic commodities
produced in India in the next two to three years. Apart from edible sector,
organic cotton fiber, garments, cosmetics, functional food products and
body care products are also produced (ASSOCHAM, 2012).
84
Domestic Sales
Domestic sales and consumption of organic products is low largely due to
the lack of a separate market for organic products in most commodities.
This does not allow the farmer to charge the premium prices that he would
get from exporting the produce. This does not offer any incentive for the
production and sale of organic produce. Lack of awareness among
consumers is also a hindrance in sale of organic produce.
The lack of proper supply chain facilities means that the possibility of value
addition is low. Warehousing and product handling needs to be done by
skilled people and the transaction time need to be reduced to suite
consumer requirements of freshness and availability. Since the premium
charged is large, packaging and display also has a major role in the sale of
the produce. This requires professional planning and coordination and a
market oriented production process.
A commonly emerging channel for the distribution of organic food in and
near the metro cities is through a co-operative or an NGO. This enhances
the trust factor while increasing traceability. The more commercially
oriented and the large scale producers try to shorten the supply chain and
often sell directly to retailers. Similarly, some retailers are also tying up with
producers for their own brand /range of organic products. These result in
lower transaction costs and less wastage. This produce is often not
certified or graded reducing the possibility of high value realisation for the
goods.
85
Selling on the domestic market can be difficult. One Uttaranchal producers‘
group learned this lesson painfully as their crops languished in the field
unsold after high expectations from the first transaction. Most of the
projects have experienced this difficulty. The necessary steps to ensure the
required quality and standards for organics can take much more time and
skill; many producers would prefer having a dedicated specialist handle the
post harvest and marketing. Establishing a market orientation can be
difficult and contracting with a dedicated professional i.e. trader or private
company can often be necessary, especially as producers are occupied
learning new requirements for organic standards or for quality levels. In
any case, consistent and experienced staffing is vital in order to sustain
long-term marketing efforts that gradually move farm products up the value
chain, progressing from simple raw materials toward value-added products.
The table below shows the major organic products produced.
Organic Bazaars
This is a new concept introduced by the late Dr. Alexander Daniel of the
Institute for Integrated Rural Development (IIRD) based in Aurangabad.
This is path breaking because it facilitates the direct linkage between the
producer and the consumer. Besides it follows our normal Indian
purchasing behaviour of buying from the bazaar. In the IIRD model, the
NGO facilitates the farmers and their produce to come to a particular
organic bazaar in a nearby city once a week. Only certified farmers in the
organic group can display and sell their products like vegetables, cereals,
pulses, fruits, etc. Display of prices, proper tables and crates to store the
produce, aprons for the salesmen, friendly behaviour of the salesperson,
86
etc. all add colour and value to the customer. Adequate publicity is given
about these bazaars through radio, local newspapers and over a period of
time, a set of specialized clientele will emerge in the local area facilitating
more organic farmers to enter the market.
Non Governmental Organizations (NGO)
A strong NGO sector promotes organic agriculture among small-scale
farmers operating under various forms of collective organisations. NGOs
are also successful at marketing although many have undergone a
sometimes difficult and costly learning process. Unless they have
experience, often hard earned, NGOs may not have the necessary
business skills to succeed at marketing. NGOs appear to excel at the
learning aspects of organic agriculture and all established demonstration
farms and supported practical research that was reportedly very beneficial
for local farmers, particularly in Karnataka. NGOs in all cases also seem to
excel at issues of farmer equity and resource management. Sustainability
is not clear since some NGOs encourage farmers‘ organizations to develop
while others tend to retain their position paternalistically.
In many cases, local government has been very supportive of organic
farmers the organic initiative emanated from local government itself and
utilizes the government's resources largely followed in Uttaranchal and
Sikkim. The Uttaranchal government, recognizing that its organic farmers
would have many unmet needs, particularly in marketing their products,
established the Uttaranchal Organic Commodity Board (UOCB). It has
conducted research on the availability of organic products in the state and
their demand both nationally and internationally, assessed potential
87
areas/crops for development, and has helped to establish retail outlets as
well as export opportunities.
Farmer organizations
Governments (Uttaranchal) and NGOs (Kerala) have used farmer
organizations known as self-help groups (SHG) that are already
established in rural areas as a base and help them to integrate
professional services such as extension services to leverage extra value
and reduce duplications or redundancies between similar groups in rural
areas. The state of Karnataka is considering the potential supporting the
establishment of farmer-owned companies that can serve as full-time
managers of the post harvest, processing, and marketing needs, thereby
allowing farmers to concentrate on farming.
Where farmer organizations are directly involved, they appear to more
wholly adopt organics and consequently appear to have better results in
the field (Karnataka, Maharashtra, Madhya Pradesh, Kerala). Those cases
where farmer organizations were clearly evident and encouraged were also
among the ones to receive a higher percentage of the selling price
(Karnataka, Maharashtra, Kerala).
Where farmer organizations have been formed, they have required
considerable support on a number of levels like donor which provides
funding for the tangible assistance of the association‘s start-up costs,
operational expenses, processing machines, and training. By training the
organization to manage its own processes and to provide value for its
members, it set a useful best practice example. Farmer led organizations,
88
even when they required a fee from their members were well accepted by
farmers as a means to improve both their cultivation and marketing. The
farmers' perception of their association's functions can be described as
follows:
Creating a platform for farmers to exchange experiences and ideas
Improving quality control
Serving as an information and technology centre for local organic
production
Illiterate or poorly educated farmers can receive technical support
from the association
For introducing useful techniques and varieties
For playing an important role in organic products marketing
It ensures that farmers own the benefits of their labours i.e. the
association has registered a brand for its organic products
Indian farmers have a distinct approach to organic conversion. Though
they valued the economic aspects of organic farming, they are likely to put
primary emphasis on the environmental, health, and farmer empowerment
aspects of organic agriculture. This concurs with the findings of the
UNESCAP studies (2003).
India's domestic market is small and mostly informal with only a few shops
dedicated to organic products. Much of the organic produce reaches
consumers without being subject to organic identification or specific
labelling. Even formal distribution channels — primarily through traders to
individual retailers — are difficult to monitor and measure. One survey
notes that more organic products in India are sold through the supermarket
channels (31%) and to the processing industry (30 %) than through any
other (Garibay & Jyoti, 2003). The same document cites a recent Mumbai
89
survey noting that organic products sold at retail were about twice the cost
of conventional products (Garibay and Jyoti 2003 p.17). There have been
several attempts to establish chains of shops in India specializing in
organic products (i.e. Green Foundation, AME, Yardi and Soree) but they
did not succeed initially. Today however there are a number of shops like
Navdanya, India Organic, Fab India which carry a organic products line.
In parts of India traditional markets provide outlets for products produced in
an ecological manner. These markets operate on trust enforced by local
familiarity and none are certified per se, but they can require significant
standards that are comparable, and in some cases more demanding than
organics.
Marketing requirements for the sale of organic foods in rural India:
Being certified as organic is often a very useful distinction that helps to
differentiate an organic farmer‘s products from the conventional
competition. Markets that recognize this and will pay a premium for
organics are often not readily available, especially to remote small farmers.
In Uttarkhand, the attempt of a loose conglomeration of farmers to deal
directly with an urban retailer ended poorly because neither they nor the
government agents facilitating the transaction were familiar with the
business requirements of this trade. In a number of the farmers learned to
use traders to facilitate such transactions since small farmers are typically
constrained in three distinct areas of marketing.
First, farmers should assess their specific market orientation by honestly
evaluating what they have to offer. For example, the types of products,
90
quality levels, presentation or processing capabilities, and the quantities
available. They must also evaluate the level of risk they are prepared to
tolerate since, for example, exporting can be intrinsically riskier than
dealing with a known local company. That assessment helps them to
segment the market analysis to determine whether to focus on export or
domestic markets and then select the appropriate market channel(s) within
those markets in order to develop a marketing plan that leads to productive
contacts with potential buyers.
Second, farmers must learn the requirements needed to access their
targeted organic markets. By mapping out market channels, they can
better understand purchasing patterns and behaviour so as to ascertain the
current and future market potential and its attractiveness. As with a
conventional marketing effort, they must determine whether they can meet
the prices required, arrange the contracts, meet certifications, fulfil the
required quantities, ensure the agreed-upon quality, and deliver at the right
time and in the right packaging. Producers in Uttaranchal and Karnataka
are beginning to develop this understanding through their own retail
outlets. Experience suggests that local markets ought to be developed first,
where possible, and that international orientation and certification should
be pursued only when sufficient capacity, export crops, and interested
buyers have been identified.
Third, farmers must recognize that these processes require dedicated
attention and some training. Getting beyond a local market is more than an
occasional task that a few of the farmers can undertake in their spare time
and that is especially true for export marketing. Farmers can hire a trained
91
person in this field or, at the very least, assign one of their members with
aptitude for this area to do the work. They can afford to offer some
remuneration, acknowledging that such a job would clearly conflict with
time spent farming. Time and dedication are important because organic
markets are not very deep. With relatively few buyers scattered in different
countries and regions, the demand can be unsteady and finding a new
buyer can take time.
Steps taken for promotion of organic products in India:
The year 2000 is very important year for India from organic point of view.
The Planning Commission constituted a steering group on agriculture
who identified organic farming as National challenge and suggested it
should be taken in the form of a project as major thrust area for 10th-plan.
The group recommended organic farming in NE Region, rain fed areas and
in the areas where the consumption of agro chemicals is low or negligible.
The National Agricultural Policy (2000) recommended promotion of
traditional knowledge of agriculture relating to organic farming and its
scientific upgradation. The Department of Agriculture and Cooperation
(DAC), Ministry of Agriculture constituted (2000) a Taskforce on organic
farming under the chairmanship of Shri KunwarJi Bhai Yadavand this task
force recommended promotion of organic farming.
The Ministry of Commerce launched the National Organic Programme in
April 2000 and Agricultural and Processed Food Products Export
Development Authority (APEDA) is implementing the National Programme
for Organic Production (NPOP). Under the NPOP, documents like National
92
standards, accreditation criteria for accrediting inspection and certification
agencies, Accreditation procedure, inspection and certification procedures
have been prepared and approved by National Steering Committee (NSC).
NPOP standards have been recognised by the European Commission for
equivalence and inclusion in the article 11 list of EC regulation and by
USDA for the conformity assessment systems of the accreditation
procedures of NPOP (ISO17011). Switzerland had also offered for NPOP
equivalence. A list of Certification Agencies in India is shown below:
Sr. No. Name of Certification Agency
1 BVQI (India) Pvt. Ltd Marwah Centre, Krishanlal Marwah Marg, Andheri (East), Mumbai
2 Ecocert SA, Sector-3, S-6/3 & 4, Nakshatrawadi, Aurangabad
3 Indian Organic Certification agency, (INDOCERT) Thottumugham Aluva, Cochin
4 . IMO Control Pvt. Ltd.1314, Double Road, Indiranagar 2nd Stage, Bangalore
5 International Resources for Fairer Trade, Unit No. 7, Parsi Pandhayat Road, Andheri (E), Mumbai
6 Lacon Quality certification Pvt. Ltd. Chenathra, Theepany, Thiruvalla, Kerala
7 Natural Organic Certification Association, 5th Lane, Shikshak Nagar, Kothrud, Pune
8 OneCert Asia Agri Certification Pvt. Ltd. Agrasen Farm, Vatika Road, Jaipur
9 SGS India Pvt. Ltd.250 Udyog Vihar, Phase – IV, Gurgaon
10 Skal International (India), No. 191, 1st Main Road, Mahalaxmi Layout, Bangalore
11 Uttaranchal State Organic Certification Agency, 12/II Vasant Vihar, Dehradun
Table 4 Certification Agencies in India
Source: NPOP Newsletter July 2007
93
Major organic producer states
The study looks into the organic food markets of Maharashtra which has
the second largest area under organic farming with 0.96 m ha or 33.6% fo
the total land; Madhaya Pradesh as it has highest area under organic
farming in the country (1.1 million ha or 52%) and Uttarkhand where the
state government has taken initiatives to create a successful marketing
mechanism for the sale of organic products. Orissa is at the third place
(0.67 m ha or 9.7%) in terms of land under organic farming but the state is
yet to develop the type of systems developed by Uttarkhand. States in
mountainous regions are particularly active as is evident from the fact that
three states namely Uttarakhand, Sikkim and Mizoram have declared their
states as organic states.
Maharashtra
Maharashtra has diverse agro climatic conditions suitable for the cultivation
of a wide range of crops, and a progressive farming community. The State
has a large urban population with high purchasing power. It is one of the
major horticulture States in India, with more than 13 lakh ha under different
fruit crops. Almost all the area under grapes and more than 60 percent of
the area under banana in the state has access to drip irrigation. The State
is the largest exporter of Thompson seedless grapes, Alphonso mangoes,
onions and long stem cut flowers. Over the last 5 years Maharashtra has
shown a growth of 6% in agriculture sector as compared to the national
average of 2% (FY10) insipte of 2 structural weakness water scarcity and
small land holdings
94
Maharashtra‘s Gross State Domestic Product (GSDP) at current prices for
2008-09 is estimated at Rs. 692479 crores and contributes more than 13%
cent of national GDP. Agriculture and allied activities contribute nearly 12%
per cent to the State‘s income, although 55% of the population is
dependent on them.
Figure 12 Districts of Maharashtra
Source: Maps of India, Map not to scale
Organic cultivation in Maharashtra (2009-10)
The state is geographically divided into 4 clusters and each cluster has a
different set of crops due to different soil composition:
CLUSTER 1- KONKAN REGION: Districts: Thane, Raigad, Ratnagiri,
Sindhudurg
CLUSTER 2 - WESTERN GHAT REGION: Districts: Nasik, Pune,
Ahmednagar, Satara, Sangli, Solapur, Kolhapur
95
CLUSTER 3 - MARATHWARA REGION: Districts: Aurangabad, Jalna,
Beed, Latur, Nanded, Parbhani
CLUSTER 4 -VIDHARBHA REGION: Districts: Akola, Amravati, Wardha,
Yoetmal, Washim, Nagpur
Maharashtra State Land and Farmers in organic cultivation
Total Area in ha (Organic) 105172.6
Total Area in ha (In conversion) 45295.12
Total Area in ha 150467.74
Total number of organic farmers 44551
Total number of farmers in conversion 21098
Total no of farmers 65649
The Maharashtra Industrial, Infrastructure and Investment Policy, 2006,
which is also applicable to agri-processing and other agro-industrial units,
stated that the Government of Maharashtra would formulate a separate
policy for agro-industry with a focus on food processing and preservation.
The Government of Maharashtra Agro industrial policy 2010 draft states
that the State Government will promote and support the development of
end to end integrated projects by identifying the need gaps across the
entire value chain, and provide specific schemes to address them.
Some government initiatives & implementation by the Maharashtra
government for the Agriculture sector of the state. It compasses training
support, R&D, other infrastructure & financial support to attract private
players at various stages of value chain. Some such Government Schemes
are given below:
96
1. Rashtriy Krushi Vikas Yojana
a. Farm Pond – Supplies pump set, sprinkler etc.
b. Onion Storage capacity
c. Onion Chawl erection
d. Up gradation of pacs
2. National Food Security Mission
3. Maharashtra agricultural competitiveness project (MACP)
Knowledge, Training & R&D
Agricultural Universities – 4, Agricultural colleges - 88 (25 Govt. & 61 Pvt.,
2 aided)
1. Centers for capacity Building:
a. State agricultural Extension Management Training Institute –
SAMETI, Nagpur
b. Regional Agriculture Extension Management Training Institute–
RAMETI (7)
2. Six National Research Centres for
a. Cotton, Orange, Pomegranate, Grape, Onion & Soil Survey
b. Post Harvest Training Centre at Talegaon, Pune is one of its kind
in the country
Infrastructure Support
1. Marketing platform through 294 APMCs in the state
2. Pre and post harvest soil health check up
a. Soil Testing Labs – 118 (29 Public, and 89 Private)
b. Residue Testing Labs – 2
c. Fertilizer testing labs - 5
97
d. Seed Testing Labs - 3
e. Agro polyclinic - 231
f. Taluka Seed Farm - 194
g. Horticulture nurseries - 1373
h. Bio- control lab - 10
i. Pesticide Testing Labs - 4
3. Seeds Infrastructure
a. MSSCL & NSC is major public sector organization in seed
production and distribution
b. Private & Public sector produces 18 lakh qtls. seeds
c. 150 Seed processing Plants
d. Average Capacity – 400 qtls/ day
e. 4 SAUS are engaged in Breeder & Foundation seed
production
f. Seed testing laboratory
About two lakh farmers have been registered as certified organic farmers in
Maharashtra. This is about one third of the total number of certified organic
farmers in the country. Crop wise statistics for Maharashtra state is given
below:
Paramet
er
Cotton Wheat Other
cereals
Pulses Oil
seeds
Spices Fruits/
vegetables
Herbal/
medicinal
Other
s
Area (in
lakh ha)
155766 2795 15355 13756 55607 8516 143093 6214 1206
Quantity
(tones)
81360 1294 5860 9201 35058 1897 10561 1022 6276
Table 5 Maharashtra – Organic crop wise statistics
Source: Confederation of Indian Industries (CII) report 2012
98
Organic farming in Maharashtra started with the production of cotton.
Organic cotton production was concentrated in low productivity and high
uncertainty areas like Vidarbha and has been growing since the early
1990s. The Vidarbha Cotton Growers‘ Association, set up in 1994 with 135
members, has tied up with international agencies for the exports of the
crop (GOI, 2001; Vaswani et al, 2003). The farmers preferred organic
cotton for risk aversion, lower cost of production (30 per cent) and cash
payment, in that order. The yield was lower by 20 per cent though the price
was higher than that of conventional cotton. Some agencies like the
Maharashtra Cotton Marketing Federation have tried to create separate
market outlets for organic produce. They purchased organic cotton from
growers separately, for export (GOI, 2001).
The seeds of commercial Indian Organic cotton cultivation were sown for
the first time in Maharashtra in the early 1990s. Some progressive farmers,
distressed by the negative effects of pesticides for insect suppression in
cotton crop, reduced the chemical inputs and increased the use of organic
manure, developed their own techniques to optimise resources in order to
develop sustainable farm. The pioneers, in this field, are M.V. Wankhede,
S.P. Wankhede, R.S. Wankhede (from 1978 onwards) of Amaravati dist.,
Anantrao Subhedar, Om Prakash Mor and Tukaram Bhimsingh Jadhav of
Yavatmal dist. (from 1990 onwards, after being introduced to the "Fukuoka"
type of farming to them by Shri Dabholkar of Pune), or Shri Jain (for at
least 60 last years) of Karanja-Lad who has a historical cultivation
background of a few decades. They tested the `Fukuoka' principles of
farming, and stabilised their farms due to their ingenuous approaches. A
99
team of CICR scientists visited the Yavatmal farms in 1992 crop season to
analyse their package of practices. (GOI (Government of India), 2001)
A brief history of Organic farming in Maharashtra is given below:
Organic farming has been linked with the publication 'Eka Kaditun
Kranti' (One straw Revolution by M. Fukuoka).
It was carried on with the help of the press. A Marathi magazine
organized a workshop of natural farming 1991
No cultivation/ No chemical failed in general except in some fruit
crops in 1991-92
Switch over to Organic by supplementing traditional cultivation
practices. Technology fined tune by farmers for field crops.
Central Institute for Cotton Research (CICR) Nagpur planned the
first field experiments from 1992 onwards.
Vidarbha Organic Farmers Association (VOFA) was established in
1994 with 135 members.
Eco farms India Ltd. commenced activities in 1996-97 for packaged
organic products
Natural Agricultural Research Centre, Nagpur was commenced
popularising organic farming through radio, TV, Cassettes,
publications, posters, pamphlets, books.
Krishi Vigyan Kendra (KVK) under Indian Council of Agricultural
Research, Barad, Nanded became actively engaged
Socio economic organisation at Kerwadi, Parbhani formed a group.
Organic Jaggery sold at Perimium from Hingoli.
In Jalgaon organic banana was achieved by a group of 80 farmers.
KVK'S particularly Pal, Babhuleshwar, Ambajogai promoted organic
farming
A successful NGO in Pune, Gram Parivartan had successfully
organised 40 farmers for growing sugarcane, flowers, grapes,
vegetables using organic methods from 2006 under the founder
Pandurang Shitole. Their learnings have been made into booklets
100
and Gram Parivartan and another NGO Pani Panchayat have
approached some companies to sponsor the printing of the
booklets.
Dharamitra, Wardha – a sub-project under the Convergence of
Agricultural Interventions (CAIM) in Maharashtra‘s Distressed
District Programme has general data from organic fields on soil
fertilizer, meteorological conditions on 400 small farms. This
program is involved in enabling rural poor to overcome poverty by
developing sustaining means, it so as to increase their socio
economic status, household on farms and off farms livelihoods,
allowing household to face production and market risk without falling
back in to poverty and distress.
Madhya Pradesh
Madhya Pradesh is the located in the heart of India, and has rivers like
Narmada, Betwa, Ken and Chambal. It grows high value trees like Teak,
Sal, Bamboo and has vast grasslands with fascinating wildlife in their
natural habitat. It earns foreign exchange from exports of high value farm
produce like soybean DOC, soybean oil, variety of pulses, best quality
bread wheat, fruits like mango, banana, vegetables of all types and
seasons, spices, condiments, aromatic and medicinal herbs, produce from
forests both timber and non timber, minor forest produce like leaves, fibre,
natural dyes and many products of plant and animal origin. It has 11 agro–
climatic zones, with more than 20 million ha of gross cropped area with
cropping intensity in excess of 135%. It state has over 40% irrigated area
and possess large portfolio of crops seasonal, perennial and perishable. It
is therefore largely suited for organic agricultural development.
101
The state occupies prime position in terms of having more than 1.48 Lakh
ha area under certified organic farming out of a total certified area of 3.40
Lakh ha in the country. An estimated 5.86 Lakh million tonnes (MT) of
production was organically produced in the country out of which 19456 MT
was exported which amounted to RS 300 million during the year 2007–08.
A growth of 39% has been registered in terms of certified area under
organics country wide taking it over 12 Lakh ha as per International
Competence Centre for Organic Agriculture (ICCOA), in Bangalore. The
state has large area under extremely low external and chemical input
agriculture of tribal population both in the eastern and western extremes of
the state, natural grasslands, forests proves to be organic and or natural
niches by default. Hit by the Bhopal gas tragedy, the state is more than
eager to use its land for organic farming. The state government is trying to
implement the concept of the Bio Village or Javik Kheti Gaon. Organic
farming practices are being implemented under the guidance and
supervision of a team of experts comprising scientists, environmentalists,
and food management personals in 1565 villages selected from 313 blocks
of 48 districts in the State. Use of agro-chemicals in these selected villages
for growing crops is strictly prohibited. The state has come out with a MP
State Organic Farming Policy. The policy has a farm–to–fork approach
assuring supply of healthy food. A model Gau-Shala has been
establishment at a Government Agri.Farm at Phanda in Bhopal which
teaches the use of cow dung & cow urine as a resource for nutrient & pest
management activities.
102
Madhya Pradesh has about 45 per cent of total area under certified
organic farming in India. It has the potential to take India’s
global share in organic exports from 0.2 per cent to about 2.5 per
cent by 2015.
A study by The Associated Chambers of Commerce and Industry of India
(ASSOCHAM) titled “Madhya Pradesh: Inching towards Organic Farming”
released in January 2012 for promotion of organic farming in Madhya
Pradesh says that it can lead to wealth accumulation of Rs 23,000 crore,
generate exports worth Rs 600 crore and create nearly 60 lakh
employment opportunities across the state during the course of next five
years. The study also states that more jobs can be generated as on-farm
storing, processing, grading, packaging and marketing facilities are not
included in the direct job creation process. Organic farms being labour
intensive provide more than 30 per cent more jobs per hectare as against
non-organic farms. Adoption of organic farming will bring down the
expenditure on input costs and will fetch premium pricing up to 50 per cent
higher than normal price and about 100 per cent in retail market thus, it
can increase the net per capita income of a farmer in the state by almost
250 per cent from the current level of about Rs 4,200 to over Rs 10,600 per
month in next five years thereby, arresting the migration of people from
Madhya Pradesh to other states in search of jobs (ASSOCHAM, 2012).
103
Uttarakhand
The recently carved out Uttarakhand state falls under Western Himalayan
Region of India and has five distinct agro-ecological sub-regions based
mainly on altitude varying from 300m to 3600m.
Figure 13 Districts of Uttarkhand Source: Maps of India
Lower Dun and Tarai sub-region constituting the plains, has wheat, rice
and sugarcane as the major crops. Upper Dun, Bhabar, lower Shivaliks
cultivate wheat, rice, finger millet, jhangora, chaulai and maize crops.
Middle Garhwal-Kumaon and Upper Garhwal-Kumaon subregions with
altitude of 1200-1800m and 1800-2400m respectively raise wheat, rice
finger millet, jhangora, cheena, potato, barley, and chaulai. Cold Zone
having an altitude of 2400-3600m has wheat, barley, potato, phaphra,
chaulai, kauni, ogal, kodo and uva crops in summer season only. Various
pulses (Masur and Kulat) are intercropped during the two harvest seasons
— early winter after the rainy season. Dry and wet rice, taro, pumpkins,
beans, corn, ginger, chilli, cucumbers, leafy vegetables, and tobacco are
also grown. Potato has become an important cash crop, grown in areas
104
unsuitable for other plants. It has a geographical area of 53,483 square
kilometres, of which 65 per cent is forest land and only 776 thousand ha
(15 per cent of the total land area) is net cultivated. The cropping intensity
has steadily increased to 166.1 per cent. About 44.6 per cent of cultivated
area is irrigated mainly by canals and tube wells. Over hundreds of years,
many of the slopes have been cut into field terraces, a common
characteristic of mountain agriculture throughout the world. The region's
farmers have also developed advanced manure, crop rotation, and
intercropping systems. Most land on the slopes is not irrigated. Traditional
Himalayan agricultural systems and knowledge base are being steadily
eroded by market pressures, bringing both economic and cultural changes
in Uttarakhand. Age-old self-reliance has given way to dependency on
imports from the productive plains. Cultural domination from the plains also
threatens Uttarakhand's traditional foods as an increasing taste for mill-
polished rice is outcompeting mountain crops.
After attaining statehood in 2000, Uttarakhand explored the possibility of
Organic Agriculture for improving the existing livelihood pattern – through
improved technology and marketing inputs. Organic farming, with on-farm
input production, premium markets and quality parameters, was found to
befit the situation prevailing in the state. As a consequence of it the use of
pesticides which touched a level of 147 tonnes of Technical Grade Material
in 2003-04 has gone down to 132 tonnes in the very next year.
In 2001 Sir Ratan Tata Trust, with its partners, launched an initiative, the
―Himmothan Pariyojana‖ to address core areas of concern with a view on
participatory watershed development and tackling land degradation, by
105
implementing micro-watershed projects through community based
watershed committees, improving community health through village-level
drinking water and environmental sanitation projects and focusing on
enhancing rural livelihoods through farm and non-farm activities.
The Uttaranchal Organic Commodity Board (UOCB), Dehradun was
formed in 2003. Since its formation, the UOCB has been acting as a nodal
agency to enhance organic activities in agriculture and allied sectors like
horticulture, medicinal and aromatic plants, herbs, milk production and
animal husbandry, throughout Uttarakhand. UOCB has also been providing
professional, managerial, technical support and enhancing organizational /
management skills of farmer‘s organizations and lead farmers.
The Centre for Organic Farming (COF) was conceived and a three year
grant to operationalise the same. It came into existence in July 2003. COF
is a deemed centre for excellence in the making and provides technical
assistance to those critical areas in the on–going organic initiatives in
Uttarakhand, which are being presently provided through state
departments. These areas of support are primarily in the form of technical
expertise and human resources.
There are 14 Jaivik Krishi Sewa Simties registered with UOCB each
covering 1500 farmers and thus an overall area of 4238 acres with various
crops such as basmati, wheat, pulses, vegetables, millets, medicinal crops,
turmeric, mustard, soap-nut etc
Two assessment studies were made in the first and second phase of the
study and impact projections were made by UOCB, based on the three
106
year design of the whole project, which ended in March 2010. The
projections included: (i) the annual income of farmers which ranges
between Rs. 98,000 – 123,000 would rise to Rs. 107,800 – 150,000; (ii) an
increase in organic farmers from the current level of 5,000 to 50,000
farmers, with 73% being from BPL families; (iv) the present income of BPL
families, which is below Rs. 24,000 per annum is expected to increase to
Rs. 35,000 per annum; (v) 20,000 families will directly get benefits by
continued organic market build up; and (vi) an additional 10,000 families
are expected to get benefits through the Green Restaurant outlets.
The main objective of the efforts of UOCB is to benefit both consumers and
producers. The gain to the farmer as producer is due to higher demand
and price of organic products stemming from quality consciousness and
pocket of domestic and international consumers. Apart from this reduced
cost of inorganic agro-inputs can help in lowering the cost of production of
farm products. Landless labour is also believed to reap the benefit from
increased employment and wage rate as most of the operations of organic
farming are manual and labour intensive. The study was carried out in five
major districts of Uttaranchal Pradesh; namely Udham Singh Nagar,
Nainital, Almora, Dehradun and Hardwar. (J. Singh 2009 Dec.)
Similar efforts of promotion of organic farming have been made in many
states. Efforts have been made by the NGOs to study organic farming in
Gujarat, Madhya Pradesh, Kerala, Karnataka, Tamil Nadu. Agricultural
Universities organised workshops, Group meetings. Seminars and
Conferences on this topic drew attention of scientists to the need of
research in this area. The use of bio-fertilisers, bio-pesticides, vermin-
107
compost, farmyard manure, green manure, crop residues have been based
on long experimentation. In fact, a number of farmers, NGOs and even
some Universities/Institutions are practising organic farming, using
traditional sources and methods of nutrient supplies to the crops and
nonchemical forms of plant protection measures with varying degree of
success. However, the technology adopted and methods followed are not
well-documented.
The initiatives taken by Bombay Burmah Trading Corporation (BBTC) to
convert Singampatti group of estates in southern India to market organic
tea internationally is the first of the few efforts for commercial organic
agriculture. A number of organisations such as The Ecological
Development Society in Pondicherry, Institute for Integrated Rural
Development at Aurangabad, The Society for Equitable Voluntary Actions
(SEVA) in West Bengal, The Indian Agency for Organic Agriculture (IAOA),
Peekay Tree Crops Development Foundation (PTCDF) at Cochin
undertake training of personnel towards organic farming. All India
Federation of Organic Farmers promotes organic farming in the country.
In Karnataka, groundnut, jowar, cotton, coconut and banana were organic
crops and the major reasons for shift to organic farming were sustained soil
fertility, reduced cost of cultivation, higher quality of produce, sustained
yields, easy availability of farm inputs and reduced pest and disease
attacks. Most of the organic inputs were being obtained in houseor from
local farms though all of it was totally non-certified because of the high cost
of certified organic manure and ignorance about it.
108
Marketing Learnings
The major problems for sale of organic food were non-availability of
suitable varieties, very few certification agencies, and delayed procurement
and payment by the buyers (Singh, 2003).
For farmers practicing more intensive cultivation methods these
requirements also require radical changes that may be costly in terms of
time spent learning and initial crop yield response. Adjustments will be
necessary in cultivation methods, the production and use of organic inputs
such as fertilizers and pesticides, and the use of labour.
The promise of higher prices is often the primary driver used to induce
adoption of organic methods. It is often farmers who bear the shock of
realizing that the market for their organic product may not be so easy to
access or may not pay much of a premium. Many times the organic
requirements and the realities of those markets surprise farmers and
development professionals alike, it can be devastating to unfairly raise
expectations that any farmer can readily convert to organic and earn
considerably more.
It is wise to start from the market requirement first and then work
backwards to the farm level on what needs to be cultivated, when and in
what quantities. Hospitals, ashrams, health spas, hotels, special
supermarkets, and IT companies are all potential places where active
organic marketing efforts are needed. In the end, the customer is king and
customers require a portfolio of products like vegetables, grains, milk,
fruits, pulses, spices, tea, coffee, processed products, etc. Hence the
109
farmers‘ cooperatives must have diverse farm producers who produce a
whole range of products for the market. Specialized farmers‘ groups like
tea, spices, cotton need specialised marketing activities.
In a recent study ASSOCHAM proposed the formation of a National
Commission for Organic Agriculture with participation of all stakeholders
including private sector. They also suggest that an Organic Food Council
can also be set up to institutionalise policy dialogue between the
government and the organic sector.
Another suggestion could be to increase the area under crops through the
cluster approach to generate marketable surplus and provide economy of
scale in marketing the production.
Regional action plans should be developed for organic farming stating
direction and target for adoption and combination of specific measures
including direct income support, marketing and processing support,
certification support, consumer education and infrastructure support.
State governments should promote a concept to set up an organic village
in each district to encourage usage of organic fertilisers to protect land
from residual effect of chemical fertilisers.
A niche market of organic products should be developed to exploit
advantage and tap the potential of organic farming. This will help
strengthen domestic market and support export of organic food.
Organic certification is imperative for adding value to default organic
system and enable farms to explore domestic and export markets for
fetching better prices.
110
Formation of a state organic institution for training, certification, production,
packaging, processing and marketing through PPP model for setting up a
value chain and consultations especially with bodies like Agricultural and
Processed Food Products Export Development Authority (APEDA) is
necessary. Organic certification also needs to be looked into.
To further facilitate expansion of organic farming sector and to increase its
production capacity, information related to new technologies must be
imparted to farmers.
State government must provide rural credit through co-operatives,
commercial, regional rural banks thereby playing a proactive role in
providing institutional credit to enhance adoption of organic farming in the
state.
A dynamic debate is underway in India, which cuts across the agriculture
sector from government ministries, universities, research centres, farmers
and associations of producers. One side argues that what is taking place
need to be seen precisely not as a process of conversion rather than a
temporary substitution during a period of crisis. The opposite point of view,
put forth by organic farming associations holds that the green revolution
model was import dependant and environmentally damaging to be
sustainable. This camp argues that the present change is long overdue
and that further transformations are needed for a truly rational production
system. Such debate aside, what may be most remarkable is the
rediscovery of traditional knowledge and values available with the Indian
farmers. It is time that Government of India launches a programme to
111
recover traditional farming knowledge, recognising that we have always
practised low input-based agro-ecologically sound agriculture.
In conclusion it is apt to quote the statement of the founder of the Organic
Farming Association and an Assistant Dean at University of Havana.
―Many people think that farming is a simple and mundane act, but they are
wrong. It is the soul of any great culture, because it requires not only a
great deal of accumulated knowledge, but also putting this knowledge to
use every single day. Knowledge of the weather, the soil, plants, animals,
the cycles of the nature: all of this is used everyday by a farmer to make
the decisions that have to be made in order to produce the food that we
eat. To use it may seem like food comes from a factory, but in reality it
comes from a culture that, generation after generation, has been created to
produce that food‖.
Figure 14 End to End Integrated Projects
Source: Govt. of Maharashtra, Agro-Industry Policy 2010
112
CHAPTER 5
DIFFUSION OF ORGANIC PRODUCTS
Organic food has shown the potential to grow from a small to a major
portion of the global food sector. The increasing maturity of technology in
the agri-farm sector and infrastructure development will facilitate this
growth. In these circumstances, an understanding of the process of
diffusion of organic food in a social system will provide some insight into
consumption behaviour and help in the development of organic foods in the
near future.
Everett M. Rogers has had a profound impact on the field of innovation
study. From his early work exploring farmers' decisions to adopt
agricultural innovations based on the influence of neighbouring farmers, he
has been shaping and participating in the study of the diffusion of
innovation. According to Rogers (McGrath & Zell, 2001) ―some innovations
diffuse rapidly because they are part of a very well planned, funded, and
very profitable diffusion campaign, especially in Third World countries. But
there is a much slower diffusion process of switching back to earlier
practices when this reversal was promoted, generally without a profit
motive and mainly by public health campaigns. There were extensive
activities to diffuse new high-yielding varieties of wheat and rice in many
countries. Along with the new varieties, one had to use fertilizers and
pesticides. It wasn't until some years later, in the early 1980s, that the
world realized that there were some ill consequences of these heavy
chemical applications, especially pesticides. Then there was a new set of
113
diffusion campaigns to try to convince farmers to use much less pesticide -
usually only about 5% of what they were using before, which was
economically wiser for them and also avoided many of the human
problems that come with pesticide use. That could be done if farmers
closely monitored their fields for the pests in their rice and wheat and only
sprayed when there was a heavy enough infestation of pests to pay for the
cost of the spray. But the low-chemical innovation was very slow to diffuse.
So the diffusion of organic farming and gardening has been much slower
than the earlier diffusion of chemical farming. Sometimes diffusion has
helped to cause the problems, which leads to another round of problems
where it's usually more difficult trying to get people to undo what they
earlier were told to do.‖
As defined by Rogers (2003), an innovation is an idea or object that is
perceived as new by an individual or other unit of adoption. Due to the
traditionally closed markets in India and the fact that Indians‘ palates have
favoured fresh foods, the chances of quicker diffusion of organic foods is
probable for Indian consumers. Organic food is new to the Indian
population after the country became self sufficient in food grains with the
help of the green revolution. In view of this, it is important to understand
the innovation decision process and those constructs that impact
Indian consumers’ adoption decisions. Innovation decision is a process
through which an individual gains initial knowledge of an innovation, forms
attitudes about the innovation, and makes an adoption or rejection
decision. It is an information-seeking and information-processing activity in
114
which the individual is motivated to reduce uncertainty about the
advantages and disadvantages of a new product (Rogers, 2003).
Diffusion processes and consumer behaviour
Throughout history our food consumption patterns have been changing
continuously. Remarkable changes took place as regards the type of foods
we eat, the way we grow our food (e.g. the introduction of pesticides, bio-
industry), how we process our food (e.g. frozen food, microwaves) and our
table manners (e.g. the introduction of the fork in medieval Europe, fast
food). (Vindigni, Janssen, & Jager, 2002) All these changes more or less
slowly conquered the food consumption habits of the masses. Many factors
determine the speed and degree to which such changes diffuse through
the population. Theory on the diffusion of innovation provides an inventory
of the factors that affect the rate of adoption of this diffusion process.
Moreover, this theory draws a perspective on consumer characteristics that
determine if people are "innovators", or belong to the group of people that
follow later in adopting a new practice.
The Diffusion processes
The innovation diffusion theory as introduced by Rogers (1962) is the most
frequently cited publication in this field. The general conclusions of Rogers
provide a means of analysing innovations and exploring the reasons of
how food consumption changes. Rogers states that the cumulative number
of adopters typically follows an s-shaped curve. The s-curve starts to rise
slowly when the first innovators adopt the innovation. Following that, the
cumulative number of adopters rises somewhat faster due to the early
115
adopters. The curve is at its steepest when the early majority and late
majority successively adopt the innovation. The curve increases at a
slower rate when the laggards adopt the innovation slowly. Generally, early
adopters appear to weigh their personal needs more, have a higher
aspiration level (venturesome for the innovator and respect for the early
adopter (Rogers E. M., 1995) and are more actively searching for
information (p. 274), whereas, late adopters appear to attach more weight
to their social needs, have a lower aspiration level and search less for
information. Moreover, early adopters are better at coping with uncertainty
than late adopters (p. 273). This may have consequences for the type of
decision process they employ, because people that have a lower tolerance
level for uncertainty may engage more in social processing (Jager, 2000).
Rogers (1995) emphasises the importance of reaching a certain critical
mass" of adopters, beyond which the innovation will diffuse without much
stimulation. This can be assumed to reflect the importance of having
sufficient role models that increase the chance that the innovation is being
spotted by less innovative people that engage more in social comparison
and imitation.
The speed and degree to which an innovation diffuses (the slope and top
level of the s-curve) is related to several factors. Rogers (1995, p. 206)
states that most of the variance (49 to 87 per cent) in the rate of adoption is
explained by five attributes of the innovation which are:
(1) Relative advantage
(2) Compatibility
116
(3) Complexity
(4) Trialability and
(5) Observability
In addition to the attributes of the innovation, also factors such as type of
innovation-decision, communication channels involved, nature of the social
system in which the innovation is placed, and the extent of the change
agents' promotional efforts affect the rate of adoption.
The general idea is that when an opinion leader has adopted, and a critical
mass of adopters is reached (3-16 per cent), the innovation will diffuse
without much promotion of change agents. Sometimes people may over-
adopt an innovation, for example when they innovate because of status
reasons but the practical applicability of the innovation is relatively low.
Rogers (1995, p. 216) explicitly mentions that this phenomenon should be
studied further. This effect of over-adoption is typically an outcome of
underlying behavioural dynamics, where people overvalue certain aspects
(e.g. status) in making a decision. This makes clear that the decision
process that people use is a critical factor in the innovation diffusion
process. When they deliberate a lot they will perceive the innovation early.
When they engage in imitation or social comparison they may learn about
the innovation from others. But when they habitually repeat their behaviour
they may remain unaware of the innovation. It is evident that the
behavioural dynamics/decision processes that dominate/ characterise a
typical market will affect the rate and speed of innovation diffusion to a
large extent (Janssen & Jager, 2001).
117
Again for example, when people invite other people for a more formal
dinner they often deal with important decisions with respect to which foods
to serve and how these will affect their social identity. For example, we
would not like to serve the boss a simple dish, and a very experimental
dish may also be a bad idea. Moreover, people may be uncertain because
there is a large number of dishes to choose from, and it is at first unclear
how the guests may value these foods, both in terms of taste and social
value for the occasion. This uncertainty causes people in general to talk
frequently about food, and several magazines and television programmes
are devoted to cooking. The market can thus be seen as affected by a
social comparison process. This may explain the various trends that can be
seen in cooking, and may lead to trends such as slow-food, fusion cooking
and locally grown food which are catching on in the developed countries.
In estimating the chances for organic food, as an innovation to diffuse in
the market, the five attributes as identified above play the following roles:
The relative advantage is normally interpreted in terms of economic
profitability, social prestige and other outcomes. Research has consistently
showed that only the perceived advantages of environmental innovation
are one of the best indicators for their subsequent adoption. Thus,
innovations in food consumption which are believed to be profitable are
usually readily adopted. People are generally motivated to think about
alternatives when their current behaviour is not fully satisfactory. Hence,
when they are satisfied with their current behaviour they might remain
unaware of the innovation and its changing characteristics (e.g. decrease
of price). Moreover, it appears that relatively fast positive outcomes speed
118
up the process of diffusion, whereas preventive and/or distant outcomes
lower this rate of diffusion (Rogers, 1995, pp. 216-17). This also makes
clear that when people decide, they do not engage in economic optimising
(rational actor type behaviour), but rather use more simple heuristics or
engage in biased information processing in their evaluation of the relative
advantage.
The compatibility of an innovation refers to the extent to which it fits with
socio-cultural values and beliefs, previously introduced ideas and needs for
the innovation. The higher the compatibility of the innovation, the faster its
diffusion will proceed.
The complexity is related to the perception of how difficult the innovation
is to understand and use. It has a negative effect on the rate of the
diffusion, although the research is not conclusive on this effect (Rogers,
1995, p. 242). People that are very motivated to adopt a new innovation
(organic foods) are more likely to spend cognitive effort in understanding
this complexity, and hence will be better capable of dealing with it, thus
benefiting from the innovation. However, people that are less motivated,
and experience uncertainty because of the complexity, may decide to buy
environmentally friendly produced foods by observing the outcomes of the
early adopters and estimating how they could benefit from eating healthy
food themselves (social comparison). However, these people may
experience much more difficulty and frustration in dealing with the
innovation than the early adopters, which is in line with the observations of
Rogers et al. (1980).
119
The trialability is how much an innovation is easy to test before making a
full commitment. It affects its diffusion positively, especially among the
innovators and early adopters as these have no behavioural examples of
other people that use the innovation (Ryan, 1948). As more people adopt
the innovation, the less important trialability becomes, because the
experience of other people (social capital) can be employed in deciding to
innovate.
Oservability is the extent to which the features and benefits of an
innovation can be observed and described to non-users. It is considered to
be positively related with its adoption (Rogers, 1995, p. 244). Here
observability relates to the innovation use, which may be public or private,
and to the proportion of people who have already adopted the innovation.
As regards the latter, especially the people that base their decisions on
social information may perceive a low proportion of people using the
innovation as a strong clue not to adopt.
The Bass model makes an important contribution to the study of innovation
diffusion by modelling the process in a mathematical way. (Bass,
1969)Bass, (1969) proposed that potential adopters of a new innovation
are influenced by two means of communication, namely mass media and
word of mouth. The Bass model further assumes that there is a group of
"innovators", that exclusively use mass media as a source of information,
and "imitators", that exclusively use word of mouth. Whereas the Bass
model approached the market as an aggregate, several researchers
developed micro-level models to study the individual foundations of
innovation diffusion (Mahajan, Muller, & Bass, 1990). For example,
120
(Chatterjee & Eliashberg, 1990) contributed to the modelling of innovation
diffusion by introducing a micro-level model that allows studying the effects
of heterogeneity in populations on the diffusion of innovations. Such a
micro-level model is the basis of multi-agent modelling of consumer
behaviour.
Overall, diffusion models are divided into two categories according to the
difference of study objects and methods; one is the macro-level
mathematical model based on the overall statistical behaviour of potential
adopters, the other is the micro-level simulation model based on the
individual decision-making behaviour of potential adopters. The basic idea
of micro-simulation model is to obtain the macro results by simulating the
behaviour of individual and interaction between individuals. Such models
mainly include multi-agent model, percolation model, critical value model
and cellular automata models. (Li & Sui, 2011)
Diffusion and organic food choice
Analogy can aid consumers in their attempt to remember and understand
certain aspects of a new product. According to (Birch, 1996), analogical
learning plays a central role in shaping food acceptance patterns.
Analogical learning is a two-step inference process: (1) computation of a
mapping between a new and memorized situation, and (2) transfer from
the known to the unknown situation (Gregan-Paxton, Hibbard, Brunel, &
Azar, 2002).
Familiarity, as an analogy, can aid consumers in understanding an
unfamiliar product by applying their knowledge of aspects of a familiar
121
product to a new, unfamiliar one. Rogers (2003) emphasized the essential
role of familiarity to reduce uncertainty: ―. . . one cannot deal with an
innovation except on the basis of the familiar. Previous practice is a familiar
standard against which the innovation can be interpreted, thus decreasing
uncertainty‖. Familiarity provides the basis for comparing previously
adopted products with new products. Though not detailed in Rogers‘ theory
of diffusion, there is support for Robinson‘s (1967) and Usher‘s (1954)
(Molella, 2005) beliefs that familiar aspects of an innovation promote the
adoption process (Littrell & Miller, 2001). Therefore, familiarity can play a
role in the innovation decision process by providing the basis for comparing
previously adopted products with new unadopted products.
Rogers proposes four main elements that influence the spread of a new
idea among individuals and organizations: innovation, communication
channels, time, and a social system. Individuals progress through five
stages: knowledge, persuasion, decision, implementation, and
confirmation. It is expected that the spread of organic food will have to go
through the same process. Internationally the diffusion of organic food has
reached a large population but in India it is still in its formative stages.
5.1 Organisations and their role in the spread of organic food
As discussed earlier, diffusion will have to be done through a systematic
manner so that the consumer gets gradually familiarised with the benefits
and usage of organic food. A number of organisations worldwide are
working hard to promote a sustainable mode of agriculture. These
organisations will have to lead the Individuals‘ progress through the five
122
stages of knowledge, persuasion, decision, implementation, and
confirmation. Some such organisations and their roles as adoption
pathways are discussed in the following pages. Five organisations that
have worldwide presence has been discussed first followed by another four
organisations that are involved in the spread of organic food within India.
1. IFOAM: International Federation of Organic Agriculture Movements
2. FIBL: Research Institute of Organic Agriculture (Forschungsinstitut
für Biologischen Landbau), Switzerland.
3. FAO: Food and Agriculture Organization of the United Nations
4. AMS – Agricultural Marketing Service (Unites States Department of
Agriculture)
5. EAFRD - European Agricultural Fund for Rural Development
6. APEDA – Agricultural and Processed Food Export Development
Authority
7. NCOF: National Centre of Organic Farming (India)
8. NPOP – National Programme for Organic Production (India)
9. IIRD – Institute for Integrated Rural Development (India)
International Federation of Organic Agriculture Movements (IFOAM)
IFOAM is the worldwide umbrella organization for the organic movement. It
is an independent, global, non-profit organization uniting more than 750
member organizations in 116 countries. It is headquartered in Bonn,
Germany. IFOAM has a rich history that spans over three decades.
123
To fulfil its mission as facilitator of the worldwide organic movement,
IFOAM depends on a system of internal structures and individuals
operating in response to the Federation's evolving plans and objectives.
It all started in 1972 when the President of the French farmers'
organization, Nature et Progrès conceived of a worldwide appeal to come
together to ensure a future for organic agriculture and from there, people
working in alternative agriculture banded together from, initially, as far
apart as India and England. The German-speaking countries, as well as
France, were also sites of the youngest IFOAM activities. Canada, too,
produced key early participation, and by the 80s, IFOAM had leaders in the
US, attracted involvement from African agents of organic agriculture, and
launched a unique and fruitful relationship with the Food and Agriculture
Organization of the United Nations (FAO).
Throughout the 90s, IFOAM made moves to decentralize its governance by
establishing regional bodies and organized the first major international
conference on environmental issues after the 1992 UNCED in Rio, where
IFOAM was an active proponent of the organic way.
Throughout its past, the Federation has consistently succeeded at:
fostering active debate, networking beyond the borders of class, gender,
and region; continually improving organizational structure, policies,
standards; attracting volunteers and overcoming financial challenges;
working with the diversity of organic movements; producing standards
which provided a model for numerous major laws and voluntary standards,
124
(Codex Alimentarius, EU, FAO); and integrating scientific expertise and
business sense into the emotional realm of organic agriculture.
The IFOAM General Assembly serves at the foundation of IFOAM. It elects
the World Board for a three year term. The World Board appoints members
to official committees, working groups and task forces based upon the
recommendation of the IFOAM membership, and IFOAM member
organizations also establish regional groups and sector specific interest
groups.
In March of 2002, IFOAM obtained observer status with UNCTAD, and in
addition received classification in a special category to participate in the
meetings of the Commission on Trade on Goods and Services and
Commodities, the Commission on Enterprise, Business Facilitation and
Development and the meetings of the UNCTAD Board.
IFOAM is accredited by the following international institutions:
ECOSOC Status with the United Nations General Assembly
The Food and Agriculture Organization of the United Nations (FAO)
Codex Alimentarius Commission (FAO and WHO)
World Trade Organization (WTO)
United Nations Environment Program (UNEP)
The Organization for Economic Cooperation and Development
(OECD)
International Labour Organization of the United Nations (ILO)
In order to achieve its mission and address the complexity of the various
components of the organic agricultural movement worldwide, IFOAM
125
established official committees and groups with very specific purposes,
from the development of standards to the facilitation of Organic Agriculture
in developing countries.
Leading the organic movements worldwide, IFOAM implements the will of
its broad based constituency - from farmers' organizations to multinational
certification agencies, ensuring the credibility and longevity of Organic
Agriculture as a means to ecological, economic and social sustainability.
Uniting the organic world, IFOAM provides platforms to stakeholders for a
wide range of purposes. Through international conferences, committee
meetings, and other forums, IFOAM facilitates the ongoing and
constructive dialogue about the future and status of organic agriculture.
IFOAM is working towards the integration of organic principles specifically
in international regulatory systems and policies, which will benefit and
encourage the development of organic markets worldwide.
IFOAM India chapter has over fifty members and associates.
Research Institute of Organic Agriculture (FiBL) (Forschungsinstitut
für Biologischen Landbau)
FiBL International - International Association of Organic Agriculture
Research Institutes - was founded on February 19, 2010 at BioFach in
Nürnberg, Germany. The purpose of the association is the advancement of
science and research.
FiBL is an independent, non-profit, research institute with the aim of
advancing cutting-edge science in the field of organic agriculture. FiBL‘s
research team works together with farmers to develop innovative and cost-
126
effective solutions to boost agricultural productivity while never losing sight
of environmental, health and socio-economic impacts. Alongside practical
research, FiBL gives high priority to transferring knowledge into agricultural
practice through advisory work, training and conferences. FiBL has offices
in Switzerland, Germany and Austria and numerous projects and initiatives
in Europe, Asia, Latin America and Africa.
Since it was founded in 1973, FiBL works to establish scientific foundations
for organic farming and species-appropriate livestock management. Fruit,
wine, vegetables and potatoes are the main crops researched at FiBL.
FiBL has conducted trials on resisting pests and diseases by promoting
beneficial organisms, applying direct control measures, and improving
cultivation techniques. Another key area of emphasis of FiBL is to keep
and to raise soil fertility. One division of the institute is dedicated to finding
the quality of organic products and the processing involved.
Veterinarians are engaged in research into udder health and parasites.
They optimize husbandry, feeding and pasture regimes and test
homeopathic remedies and plant preparations. The socioeconomics
division analyses business problems at organic farms, pricing of organic
goods and cost recovery levels, agricultural support measures and
marketing issues.
On the working farm in Frick the emphasis is on fruit, viticulture, arable
farming, dairy livestock and bees. Furthermore numerous projects and data
collection programmes take place in working farms throughout Switzerland.
127
In Therwil, near Basel, the long-term DOK trial which started back in 1978
is still in progress. It compares biodynamic and organic agriculture with
conventional systems. This trial has yielded a large amount of
internationally recognized evidence for the ecological benefits of organic
farming in comparison to conventional agriculture.
In conjunction with its research FiBL operates an advisory service, so that
results can quickly have an impact on practice. Alongside the provision of
advice to individual farms and to groups, the most important advisory
channels are courses, the monthly journal ―bioaktuell‖, the website
www.bioaktuell.ch and FiBL‘s technical leaflets. The cantons, FiBL and the
private organic organizations cooperate closely within an alliance of
organic advisors (Bio-Berater-Vereinigung, BBV). Its office is based at
FiBL.
FiBL media places the results of FiBL research within the reach of farmers
and other people with an active interest in agriculture, and disseminate
these results to extension workers. Many of FiBL‘s publications are
available in several languages and some are distributed internationally.
FiBL technical leaflets give concise information on specific topics and
highlight solutions to key problems. They are an indispensable aid to
working farmers. Its dossiers provide evidence to support the case for
organic agriculture. It publishes the monthly magazine ―bioaktuell‖ jointly
with Bio Suisse. A cooperation arrangement exists between FiBL and the
German Foundation Ecology & Agriculture SÖL, the publisher of ―Ökologie
& Landbau‖ magazine which is aimed primarily at experts and researchers
in the field.
128
Furthermore FiBL publishes several Internet sites on different themes
concerning organic agriculture, for instance www.bioaktuell.ch, the platform
for Swiss organic farmers. It is published in cooperation with Bio Suisse as
well as the advisory services of the cantons.
The Research Institute of Organic Agriculture (FiBL) and the International
Federation of Organic Agriculture Movements (IFOAM) announced at the
UN Rio G20 Conference the formation of the IFOAM Global Organic
Research Network. They plan to launch the Global Organic Research
Network at the BioFach Organic Trade Fair and Congress in Nuremberg,
Germany in February 2013. Following the launch, the partnering
institutions and key stakeholders will develop projects and collaborative
agreements to conduct, implement and disseminate research throughout
the world.
Food and Agriculture Organisation of the United Nations (FAO)
Another organisation that has been instrumental in diffusion of organic food
and sustainable agriculture around the world is the FAO.
An intergovernmental organization, FAO has 191 Member Nations, two
associate members and one member organization, the European Union.
Achieving food security for all is at the heart of FAO's efforts to be able to
make sure people have regular access to enough high-quality food to lead
active, healthy lives. FAO's mandate is to raise levels of nutrition, improve
agricultural productivity, better the lives of rural populations and contribute
to the growth of the world economy.
129
FAO is a knowledge organization; it creates and shares critical information
about food, agriculture and natural resources in the form of global public
goods. But this is not a one-way flow. It plays a connector role, through
identifying and working with different partners with established expertise,
and facilitating a dialogue between those who have the knowledge and
those who need it. By turning knowledge into action, FAO links the field to
national, regional and global initiatives in a mutually reinforcing cycle.
Their staff - agronomists, foresters, fisheries and livestock specialists,
nutritionists, social scientists, economists, statisticians and other
professionals - collect, analyse and disseminate data that aid
development. The FAO Internet site hosts technical documents. Publishes
hundreds of newsletters, reports and books, distribute several magazines,
creates numerous CD-ROMS and host dozens of electronic fora.
FAO lends its years of experience to member countries in devising
agricultural policy, supporting planning, drafting effective legislation and
creating national strategies to achieve rural development and hunger
alleviation goals.
Policy-makers and experts from around the globe convene at the FAO field
offices to forge agreements on major food and agriculture issues. As a
neutral forum, FAO provides the setting where rich and poor nations can
come together to build common understanding.
Their knowledge is put to the test in thousands of field projects throughout
the world. FAO mobilizes and manages millions of dollars provided by
industrialized countries, development banks and other sources to make
130
sure the projects achieve their goals. FAO provides the technical know-
how and in a few cases is a limited source of funds.
It is composed of seven departments: Agriculture and Consumer
Protection, Economic and Social Development, Fisheries and Aquaculture,
Forestry, Corporate Services, Human Resources and Finance, Natural
Resources Management and Environment and Technical Cooperation.
In its bid to promote sustainable agriculture the FAO Organic Agriculture
Programme was born and developed under the guidance of 190 member
countries since 1999. This started in 1997 when Hervé la Prairie, President
of the International Federation for Organic Agriculture Movement (IFOAM),
visited FAO in order to seek the Organization‘s involvement in organic
agriculture. In July 1997, the Director-General of FAO expressed his
satisfaction with the prospects for successful partnerships in organic
agriculture and the first formal step in the development of organic
agriculture was started at the FAO.
FAO has undertaken several activities specific to organic agriculture, most
of which are in the early stages of development. The FAO Library has
many FAO reports on organic food and agriculture. The FAO Regional
Office for Europe has been supporting meetings of researchers working on
organic agriculture, sponsored a conference in 1990 on Biological Farming
in Europe, and an expert Round Table in 1997 which established a working
group on Research Methodologies in Organic Farming under the European
System of Co-operative Research Networks in Agriculture (ESCORNA).
The Regional Office for Asia and the Pacific has co-ordinated an Asian Bio
131
and Organic Fertilizer Network that has issued annual bulletins on organic
recycling in the region. Software has been developed by FAO's Land and
Water Development Division to facilitate collecting data on the use of
organic nutrients. The Codex Committee on Food Labelling had made the
Draft Guidelines for the Production, Processing, Marketing and Labelling of
Organically Produced Foods. Perspectives and guidelines for post-harvest
handling of organic fruits, vegetables, aromatics, and spices in developing
countries are under development by the Agro-industries and Post Harvest
Management Service.
FAO‘s Organic Agriculture Programme‘s objective is to enhance food
security, rural development, sustainable livelihoods and environmental
integrity by building capacities of member countries in organic production,
processing, certification and marketing. Their website offers information on
organic agriculture available at FAO. It also functions as a "road map"
whereby users are directed to other relevant websites.
FAO in India
FAO plays a catalytic role in India in five areas: technical assistance and
capacity building; piloting innovative approaches in critical areas;
multilateral collaborations on trans-boundary problems; harnessing Indian
expertise for other developing countries; and, as a policy advocate and a
neutral adviser and broker. Cross-cutting issues such as Gender and
Climate Change are also addressed.
132
Based on these strengths and appreciating the needs of India, cooperation
and partnership between FAO and the Government of India is focused on
three major components:
1. Facilitating multi-lateral cooperation to reduce the risk to food security
and economic growth through greater participation by India in multi-
lateral technical programmes. FAO supports India in accessing global
public goods related to crucial areas such as trans-boundary crop,
livestock and fish diseases and pests, fishery management, food safety
and climate change. Moreover, FAO assists India, when necessary, to
contribute to the development of these global public goods. Advocacy
for food and nutrition security and the role of FAO as a neutral advisor
on contentious issues also forms part of this component. FAO also
supports other countries to access centres of excellence within India.
2. Supporting Government of India to strengthen the implementation of
national missions and specific programmes aimed at reducing poverty
and achieving food and nutrition security. FAO provides high quality
technical assistance and capacity building from national and
international sources to transfer best practices, to learn from success
stories from other countries and to build the capacity of government
officers to design and deliver programmes.
3. Piloting innovative approaches with government, NGO and private
sector partners in agricultural and rural development. Successes in
ground water and irrigation management are being expanded to include
the development of value chains involving small-scale farmers and
fishers and other areas where new approaches are identified.
133
AMS – Agricultural Marketing Service (A division of the Unites States
Department of Agriculture)
The United States Department of Agriculture (USDA) is the United States
federal executive department responsible for developing and executing
U.S. federal government policy on farming, agriculture, and food. It aims to
meet the needs of farmers and ranchers, promote agricultural trade and
production, work to assure food safety, protect natural resources, foster
rural communities and end hunger in the United States and abroad.
Regulatory bodies such as the USDA have declared various benefits, for
example the 2008 Farm Act allocated $5 million in initial spending for an
expanded organic data collection initiative, along with an additional $5
million per year of authorized funding for researchers to:
collect and distribute comprehensive reporting of prices relating to
organically produced agricultural products
conduct surveys and analysis and publish reports relating to organic
production, handling, distribution, retail, and trend studies (including
consumer purchasing patterns)
develop surveys and report statistical analysis on organically
produced agricultural products
With these sorts of funding and research the possibility of the spread of
organic food is definitely going to accelerate rapidly.
The Agricultural Marketing Service (AMS) is a division of the United States
Department of Agriculture, and has programs in five commodity areas:
cotton and tobacco; dairy; fruit and vegetable; livestock and seed; and
134
poultry. These programs provide testing, standardization, grading and
market news services for those commodities, and oversee marketing
agreements and orders, administer research and promotion programs, and
purchase commodities for federal food programs. The AMS enforces
certain federal laws such as the Perishable Agricultural Commodities Act
and the Federal Seed Act.
The internal Science and Technology Program provides centralized
scientific support to AMS programs, including laboratory analyses,
laboratory quality assurance, coordination of scientific research conducted
by other agencies for AMS, and statistical and mathematical consulting
services. The program also conducts a program to collect and analyze data
about pesticide residue levels in agricultural commodities. It also
administers the Pesticide Recordkeeping program, which requires all
certified private applicators of federally restricted-use pesticide to maintain
records of all applications. The records will be put into a data base to help
analyze agricultural pesticide use.
The Transportation and Marketing Program of AMS supplies research and
technical information regarding the nation's food transportation system to
producers, producer groups, shippers, exporters, rural communities,
carriers, government agencies and universities. The program also
administers a program involving financial grants to states for marketing
improvements. In addition, the division assists in the planning and design
of marketing facilities, processes, and methods in cooperation with state
and local governments, universities, farmer groups, and other segments of
the U.S. food industry. This program is intended to enhance the overall
135
effectiveness of the food marketing system, provide better quality products
to the consumer at reasonable cost, improve market access for growers
with farms of small to medium size, and promote regional economic
development.
The Organic Trade Association (OTA) is a membership-based business
association that focuses on the organic business community in North
America.
The Organic Trade Association (OTA), formerly the Organic Foods
Production Association of North America (OFPANA), was established in
1985 in the United States and Canada. Since its inception, the association
has been a key player in shaping both the regulatory and market
environment for organic products.
OTA's mission is to promote ethical consumerism, promoting and
protecting the growth of organic trade to benefit the environment, farmers,
the public and the economy. OTA is a member of The International
Federation of Organic Agricultural Movements (IFOAM) and The
International Working Group on Global Organic Textile Standard.
It also promotes and protects organic trade to benefit the environment,
farmers, the public, and the economy. OTA envisions organic products
becoming a significant part of everyday life, enhancing people's lives and
the environment.
OTA is a leader in advocating and protecting organic standards so that
consumers can have confidence in certified organic production. With input
136
from its diverse membership, OTA continues to develop and refine organic
standards for emerging product areas.
OTA monitors the work of government agencies, takes positions on
legislation that affects organic agriculture and products, and represents the
industry to regulators, elected officials, and international bodies. For this
reason the OTA has been widely criticized for being an agent of big
business interests working to undermine the credibility of the organic
movement. The OTA Rider attached to the Agriculture Appropriations Act,
which the USDA approved, and passed before Congress in 2006, opened
the door for non-organic, non-agricultural, and synthetic additives in food
products bearing the "organic" label. The Organic Consumers Association
(OCA) derided the OTA‘s attack. The OCA stated, ―In the broadest and
most basic sense, the OTA rider takes away the organic community‘s
leading role in setting and monitoring organic standards for processed
organic foods, and instead places this power in the hands of the USDA and
industry‖
OTA is helping in increasing the amount of agricultural land under organic
management for the good of the planet and its inhabitants. A healthy
supply chain is integral to the continued growth of the organic industry and
to consumer choice in the marketplace. OTA works on many fronts to
support the transition to organic farming, processing, and handling. OTA‘s
HowToGoOrganic.com website is a clearinghouse of resources for farmers
and businesses interesting in becoming organic or creating new organic
businesses.
137
Through press releases and events, a media newsletter What‘s News in
Organic, and a consumer web site http://www.organicitsworthit.com/, OTA
shares the benefits of organic with the public and helps expand markets for
organic products. OTA directly promotes organic products at retail via its
cooperative marketing programs. OTA is a primary source for fact-based
information about organic products and processes throughout North
America.
OTA‘s membership directory, The Organic Pages, is a fully searchable
directory with comprehensive indexing and twice monthly updates. It is a
virtual organic marketplace, connecting buyers and sellers of organic
products and services, from farm to retail. OTA also publishes an online
Export Directory for international buyers interested in purchasing U.S.
Organic Products.
OTA is the founder of the ―All Things Organic‖ Conference and Trade
Show. All Things Organi is the largest business-to-business trade show
and conference in North America focusing exclusively on organic products
and organic trade issues.
OTA works with public and private organizations to support scientific
research regarding organic production and processing. Research-based
information on the environmental, health, and nutritional impacts of organic
agriculture and its products is critical for the small but fast-growing organic
industry.
138
European Agricultural Fund for Rural Development (EAFRD)
The EARDF supports rural development, the second pillar of the Common
Agricultural Policy (CAP), which has been introduced progressively since
the 1970‘s and institutionalised in 1997 with Agenda 2000. The EARDF,
along with the EAGF (European Agricultural Guarantee Fund), is one of the
two financial instruments of the Common Agricultural Policy established by
Regulation (EC) No 1290/2005.
The reforms of the CAP of June 2003 and April 2004 focuses on rural
development by introducing a financial instrument and a single programme
in the form of the European Agricultural Fund for Rural Development
(EAFRD). It improves the management and controls of the rural
development policy for the period 2007-2013. This Regulation lays down
the general rules governing Community support for rural development,
financed by the EAFRD. It also defines the aims of rural development and
the framework governing it. The Fund contributes to improving:
The competitiveness of agriculture and forestry
The environment and the countryside
The quality of life and the management of economic activity in rural
areas
The Fund complements national, regional and local actions, which
contribute to Community priorities. The Commission and the Member
States are also to ensure that the Fund is consistent and compatible with
other Community support measures.
139
Implementing the strategic plans is carried out through rural development
programmes containing a package of measures grouped around 4 axes
which include:
1. Improving the competitiveness of the agricultural and forestry sector:
These measures are aimed at promoting knowledge and improving
human potential through vocational training and information actions,
schemes promoting the establishment of young farmers, early
retirement for farmers, the use of advisory services by farmers and
forest holders and the establishment of advisory services, farm relief
and farm management support services. The use of these services
should help assess and improve the performance of their holdings.
2. Improving the quality of production and of products: such as
assistance to farmers in adapting to the demanding rules laid down
in EU legislation, partly offsetting the additional costs or loss of
revenue resulting from these new responsibilities, encouraging
farmers to participate in schemes that promote quality food and that
give consumers assurances of the quality of a product or production
method, providing added value to primary products and boosting
trade opportunities, support producer groups in their information and
promotion activities for products covered by food quality schemes.
The above schemes definitely allow the farmers to expand their horizon to
include organic farming without bearing all the difficulties of the transition
period. Further the axis 2 which deals with improving the environment and
the countryside EAFRD contributes to supporting sustainable development
140
by encouraging farmers and forest holders to employ methods of land use
compatible with the need to preserve the natural environment and
landscape and protect and improve natural resources. The main aspects to
take into account include biodiversity, the management of NATURA 2000
sites, water and soil protection and climate change mitigation. Against this
backdrop, the Regulation provides, in particular, for support for mountain
regions with natural handicaps and other disadvantaged areas (defined by
the Member States on the basis of common objective criteria) and for agri-
environmental or forest-environmental payments, which only cover
commitments that go beyond the corresponding obligatory standards.
Assistance also covers support for non-productive investments linked to
the achievement of agri or forest-environmental commitments or the
achievement of other agri-environmental objectives, as well as measures
aimed at improving forestry resources with an environmental objective
(support for the first afforestation of agricultural land, establishment of
agro-forestry systems or restoring forestry potential and preventing natural
disasters).
The EARDF has been allocated a budget of EUR 96.3 billion for the period
2007-2013, or 20 % of the funds dedicated to the CAP. (European
Commission, 2012)
APEDA – Agricultural and Processed Food Export Development
Authority (India)
The Agricultural and Processed Food Products Export Development
Authority (APEDA) was established by the Government of India under the
Agricultural and Processed Food Products Export Development Authority
141
Act passed by the Parliament in December, 1985. The Act (2 of 1986)
came into effect from 13th February, 1986. The Authority replaced the
Processed Food Export Promotion Council (PFEPC). In accordance with
the Agricultural and Processed Food Products Export Development
Authority Act, 1985, (2 of 1986) the following functions have been assigned
to APEDA:
Development of industries relating to the scheduled products for
export by way of providing financial assistance or otherwise for
undertaking surveys and feasibility studies, participation in enquiry
capital through joint ventures and other reliefs and subsidy
schemes;
Registration of persons as exporters of the scheduled products on
payment of such fees as may be prescribed;
Fixing of standards and specifications for the scheduled products for
the purpose of exports;
Carrying out inspection of meat and meat products in slaughter
houses, processing plants, storage premises, conveyances or other
places where such products are kept or handled for the purpose of
ensuring the quality of such products;
Improving of packaging of the Scheduled products;
Improving of marketing of the Scheduled products outside India;
Promotion of export oriented production and development of the
Scheduled products;
142
Collection of statistics from the owners of factories or
establishments engaged in the production, processing, packaging,
marketing or export of the scheduled products or from such other
persons as may be prescribed on any matter relating to the
scheduled products and publication of the statistics so collected or
of any portions thereof or extracts therefrom;
Training in various aspects of the industries connected with the
scheduled products;
Details of the export of organic food through APEDA is shown below
The Major Importing countries
1) USA
2) GERMANY
3) UNITED KINGDOM
4) JAPAN
5) FRANCE
Total production 3.88 million M.T.
Total quantity exported 69837 M.T
Value of total export USD 157.22 million (Rs. 699 Crores)
Total area under Certification (including wild harvest)
4.43 million hectares
Total area under certified organic cultivation 0.24 million hectares
Share of Exports to total Production 4% approx.
Increase in Export Value over previous year 33% approx.
Table 6 APEDA export figures
Source: APEDA website
APEDA has marked its presence in almost all agro potential states of India
and has been providing services to agri-export community through its head
office, five Regional offices and 13 Virtual offices.
143
Commodity Wise Export Data from APEDA
PRODUCT CATEGORIES EXPORT
VOLUME (MT) % SHARE
Oil Crops (exept Sesame) 17966 25.73
Cotton & Textiles 17363 24.86
Processed Food 8752 12.53
Basmati Rice 5243 7.51
Tea 2928 4.19
Sesame 2409 3.45
Honey 2409 3.45
Rice 1634 2.34
Dry Fruits 1472 2.11
Cereals 1348 1.93
Spices-Condiments 1174 1.68
Medicinal & Herbal Plants/Products 627 0.90
Coffee 320 0.46
Vegetables 167 0.24
Aromatic Oil 39 0.06
Table 7 Commodity Wise Export Data from APEDA
Source: APEDA website
The top ten destinations for APEDA products are Bangladesh, U.A.E,
Saudi Arabia, Malaysia, U.S.A., Kuwait, U.K. , Indonesia, Yemen, Arab
Republic, Cote D Ivoire (Ivory Coast)
The National Centre of Organic Farming (NCOF) is under the
Department of Agriculture and Cooperation, Ministry of Agriculture,
Government of India. It is the apex body in India for record keeping for
the government. The specific activities of NCOF/RCOFs (Regional
Centre of Organic Farming) are
144
To collaborate all stakeholders of organic farming in the country and
abroad and act as main information centre on various aspects of
organic farming.
Documentation of indigenous knowledge and practices, compilation
of integrated organic packages and publication of technical literature
in all the languages.
Preparation and publication of uniform and authentic training
literature and training course contents.
Publication of Biofertilizers and Organic Farming Newsletters for
national and international updates on quarterly and half yearly basis.
To provide necessary technical assistance to production units for
quality production of various organic inputs such as biofertilizers,
composts etc.
To serve as data collection centre for biofertilizers and organic
fertilizer production, biofertilizer and organic fertilizers production
units and their production capacities and for details on total area
under certification and various crops being grown under organic
management.
To maintain National and Regional culture collection bank of
biofertilizer organisms for supply to production units.
Development, procurement and efficacy evaluation of biofertilizer
strains and mother cultures.
To act as nodal quality control laboratory for analysis of biofertilizers
and organic fertilizers as per the requirement of Fertilizer Control
Order.
145
To provide all sorts of technical assistance to implementing
agencies for successful implementation of project targets
NPOP – National Programme for Organic Production
India is now understood to be a potential supplier of organic products to the
international market. Presently India is exporting these products to Europe,
US and Japan.
To provide a well focused and well directed development of organic
agriculture and quality products, the Ministry of Commerce, Government of
India has launched the National Programme for Organic Production in the
year 2000 under the Foreign Trade and Development Act. The standards
and procedures have been formulated in harmony with international
standards such as Codex and IFOAM.
The National Programme for Organic Production proposes to provide an
institutional mechanism for the implementation of National Standards for
Organic Production, through a National Accreditation Policy and
Programme. The aims of the National Programme for organic production,
include the following:
(a) To provide the means of evaluation of certification programmes for
organic agriculture and products as per the approved criteria.
(b) To accredit certification programmes
(c) To facilitate certification of organic products in conformity to the
National Standards for Organic Products.
146
(d) To encourage the development of organic farming and organic
processing
The NPOP programme will be developed and implemented by the
Government of India through its Ministry of Commerce and Industry as the
apex body. The Ministry will constitute a National Steering Committee for
National Programme for Organic Production, whose members will be
drawn from Ministry of Commerce and Industry, Ministry of Agriculture,
Agricultural and Processed Food Products Export Development Authority
(APEDA), Coffee Board, Spices Board and Tea Board and other
government and private organisations associated with the organic
movement. To advise the National Steering Committee on relevant issues
pertaining to National Standards and Accreditation, sub-committees will be
appointed.
Figure 15 The India Organic Logo
Source: NPOP Website
The National Steering Committee for National Programme for Organic
Production will formulate a National Accreditation Policy and Programme
and draw up National Standards for Organic Products, which will include
147
standards for organic production and processes as well as the regulations
for use of the National Organic Certification Mark.
Recognizing that India's rain fed agriculture — that accounts for 60 percent
of planted area (Government of India's Economic Survey) — can
potentially make good use of organic methods, the Government has
recently taken a number of steps to promote and regulate organic
production and marketing. The Ministry of Agriculture has set up a special
working committee for organics and the Ministry of Commerce set up a
National Steering Committee that prescribed The National Standards of
Organic Produce (NSOP).
Institute of Integrated Rural Development (IIRD)
IIRD is one of the many NGO‘s in India that is helping with various
activities related to organic agriculture. It was founded by Dr Alexander
Daniel in 1987 with encouragement, support, and advice of Dr A. A
Deshpande, Padmakar Kelkale, Dr. Ulhas Gawli, Raosaheb Shinde, Mr.
Anil Shine and Dr Rajnikant Arole. IIRD started with a mission of economic
and social justice along with sustainable environment for rural communities
of Marathwada region of Maharstra and beyond. From 1987 to 1991 it
functioned from a small hut in the village Kanchan Nagar in Aurangabad.
From 1992 it started training programs in carpentry, the Jeevan Aadhar
and Adopt a Granny Programme (Elderly Care), a Nutrition Programme
was started in 6 villages. IIRD also started training the Vikas Sevika in
various sectors like health, nutrition, child welfare, social and civil
education. In 1993 the total number of villages that IIRD was working in
148
went up to 36. Environment Education Programme and sustainable
Organic Agriculture education was imparted to the people. IIRD purchased
land in Babulgaon where it started organic agriculture workshops. ITI
(technical training) courses were conducted in Bidkin. IIRD became a
member of IFOAM in this year. In 1996 the IIRD office became the Asia
coordinating office for IFOAM.
In 1998 IIRD established the National Voluntary Standards for Organic
Agriculture. In 1999- IIRD received the SARD award. The concept of
organic bazaar started and two Organic Bazaars were started in
Aurangabad city. From then on IIRD‘s growth was phenomenal. In 2000
seed banks were established at all the six Community Learning Centres.
The Organic Agriculture Manual was prepared and farmers started
receiving Community based Certification in organic production. In 2001 the
1st National Conference on Organic Agriculture was organized at IIRD‘s
campus in Bidkin. Peter Proctor of NewZeland came to IIRD and trained
the women farmers on organic agriculture. In 2002- IIRD started working in
other States of India like Kerala, Aandhra Pradesh, West Bengal,
Karnataka and Tamil Nadu. It established the Group certification of organic
produce. In 2003 IIRD started working in other districts of Marathwada
region. These districts include Beed, Hingoli, Parbhani and Jalna. In 2004
an organic retail outlet, Organic Link opened in Aurangabad city. IIRD also
started attending and organising several International Training
Programmes in Sri Lanka, Vietnam, Phillipines, Lahose, etc. IIRD started
47 Farmers Clubs started in Marathwada region. In 2010 the concept of
revolving fund initiated for rural enterprises like drip irrigation, vermin-
149
compost units, CPP, etc. IIRD received the Krishi Bhushan Award from the
Government of Maharastra. IIRD has also started an IGNOU certificate
courses on Water Management and Organic Agriculture.
5.2 Barriers to the diffusion of environmentally friendly products
The rapid diffusion of green technologies will require openness to trade
and investment and promotion of adequate local conditions – including
human capital and access to financing – in order to improve the capacity to
absorb innovation. (OECD, WorldBank, & UN, 2012)
In a number of advanced economies there are important trade barriers on
biofuels.
1. The United States recently let lapse a tax credit and specific-rate
import tariff that previously protected domestic producers of fuel ethanol.
2. Russia, as part of its accession to the WTO (approved at the end of
2011), will start to reduce import tariffs on all industrial goods, including
environmental goods.
3. Encouraging job creation and promoting equity: Labour market
institutions that provide sufficient labour market flexibility with adequate
protection of workers‗ rights, financial, training and job search support for
job seekers will help reduce the costs of transition to green growth. Some
relevant are:
4. The G20 Mutual Assessment Process indicates that Canada, China,
Germany, the European Union and Russia have recently reduced barriers
to labour mobility or are planning to do so.
150
5. France has eased job protection in 2008 and improved incentives
for low-wage workers to take up work with a more gradual withdrawal of
benefits and efforts to improve the efficiency of public job intermediation
services.
6. High-quality education and training will foster countries‗ability to
develop and adopt greener technologies, while enhancing the adaptability
of the workforce to structural change. All G20 countries are engaged in
efforts to improve their education systems. Some countries have put in
place training and other active labour market programmes with a specific
green angle, including for example:
7. The Australian Green Skills Agreement seeks to build the capacity
of the vocational education and training sector to deliver the skills for
sustainability required in the workplace and to enable individuals,
businesses and communities to adjust to and prosper in a sustainable, low-
carbon economy.
8. As part of Brazil's policies for biofuel production and use, the
―RenovAção‖ programme will retrain manual cane cutters displaced by
the total mechanisation of the sugarcane harvest in the state of São Paolo,
expected to be completed by 2014. More than 7000 workers in six
sugarcane regions in the state will be retrained and re-qualified for jobs
either in the sugarcane sector or in other sectors such as reforestation,
construction and tourism.
9. India‗s Natural Rural Employment Guarantee Act provides at least
one hundred days of guaranteed wage employment to every household
whose adult members volunteer to do unskilled manual work in the areas
151
that help limit drought, soil erosion or contribute to sustainable
development in other ways. Turkey has a temporary employment
programme for the unemployed focussing on landscaping and planting
work.
10. Mexico runs a temporary employment programme that includes jobs
sponsored by the National Forestry Commission, involving soil
conservation, wildlife conservation and sustainable use, prevention of
forest fires, integral waste management, ecotourism, reforestation and
water conservation.
11. Working for Water is a government programme in South Africa that
employs and trains jobless individuals to clear alien invasive plants. These
are heavy water users in South Africa‗s arid climate, so their removal frees
water resources for both human needs and the environment.
12. Under agreements signed between the Ministry of the Environment
and the Ministry of National Education the ―15 million seedling for 15
million students‖ campaign has been organised as part of large-scale
afforestation programmes in all Turkish provinces.
13. Argentina seeks to promote job creation in the primary sector
through financial and technical help for afforestation projects organised by
rural communities.
14. The United States, through its Green Jobs Grants, provides funding
for a competitive grants programme for research, worker training and
placement, and labour exchange in the energy efficiency and renewable
energy sectors. These grant programmes have played an important role in
connecting with other Federal agencies‗ green training and job creation
152
programmes. The Green Jobs for Youth programme provides education
and training for at-risk youth. The Environmental Protection Agency also
funds training grants in the environmental field.
15. Social policies are needed to help the poor shoulder the costs of –
and benefit from – green growth policies. Improved public transportation
can help further reduce emissions, while at the same time providing an
affordable alternative to private transportation, where costs may rise as a
result of higher fuel taxes and subsidy withdrawal,. India, starting in
Ahmenabad, and Mexico, starting in Mexico City, have put in place very
successful Bus Rapid Transit Systems, that have induced many
passengers to switch from private vehicles or minibuses, thus reducing
travel time and emissions.
16. A number of countries including Australia, Brazil, India and Mexico
have increased social transfers to compensate poor and sometimes
middle-class citizens for the effects of pricing environmental externalities or
removing environmentally harmful subsidies. The United States
government helps fund energy efficiency improvements in low-income
households. The United Kingdom imposes energy efficiency improvement
targets on energy suppliers that they need to fulfil specifically by supporting
lower-income households to achieve these savings. The Brazilian
government has created a programme, Bolsa Verde, of income transfer for
families in extreme poverty that contribute to environment conservation in
protected or rural settlement areas.
153
17. National green growth strategies will need to consider country-
specific local economic, social and environmental conditions but could
usefully incorporate:
The organisations listed above are trying to bring sustainable choices to
the people in general. Their size and wealth put them in front but there are
many small organisations throughout the world that are promoting organic
in remote places.
154
CHAPTER 6
THEORETICAL FRAMEWORK
A researcher may use inductive reasoning or deductive reasoning when
making the framework of a research. Inductive reasoning starts with details
of an experience and moves to a general picture while deductive reasoning
is a process of starting with the general picture or the theory, and moving
to a specific direction for practice and research. Deductive reasoning uses
two or more related concepts, that when combined, enable suggestion of
relationships between the concepts (Feldman 1998).
Inductive and deductive reasoning are basic to frameworks for research.
The theoretical framework is a collection of related concepts that guides a
research; determines what things are needed to measure and/or what
statistical relationship to look for. It is used in deductive, theory-testing
studies.
Theory may be looked at as a set of interrelated concepts, which provides
a systematic view of a phenomenon. It guides practice and research;
practice enables testing of theory and generates questions for research;
research contributes to theory-building, and for selecting guidelines for
practice. So, what is learned through practice, theory and research
interweaves to create the knowledge fabric of a discipline. (Liehr & Smith,
2012)
155
6.1 Consumer Behaviour Theories
Models of buying behaviour have been developed since the 1940s to
satisfy the objectives of describing and predicting consumer behaviour, so
that a fuller understanding of customers is achieved. Earlier it was studied
by modelling consumer behaviour as a search for utility, thus an
assumption is made that consumers behave rationally, always choosing
the alternative that will lead to the highest utility (Eagly and Chaiken 1993).
The modelling of consumer behaviour using the subjective expected utility
model of decision-making has become increasingly complex as
researchers strive to improve the ability to predict consumer behaviour.
The next part will look at behavioural models and try to illustrate some of
the well known multivariable consumer behaviour models that have been
developed. These models also form the basis for the future models that
have been developed for food purchase behaviour.
The Theory of Buyer Behavior - Howard-Sheth
The Howard Sheth theory of buyer behaviour (Howard & Sheth, 1969) is a
sophisticated integration of the various social, psychological and marketing
influences into a coherent sequence of information processing on
consumer buying behaviour. It aims not only to explain consumer
behaviour in terms of cognitive functioning but to provide an empirically
testable depiction of such behaviour and its outcomes. Utilizing the
learning theory thoroughly and systematically, John Howard came out with
the first truly integrative model of buyer behaviour. He was the first to
introduce the difference between problem solving behaviour, limited
156
problem solving and routinised response behaviour. The model is
essentially an attempt to explain brand choice behaviour over time and
therefore especially pertinent to the field. Focussing on repeat buying, the
model relies on four major components - stimulus inputs, hypothetical
constructs, response outputs and exogenous variables. The theory relies
on three levels of decision making, which are:
1. Extensive problem solving – refers to the early stages of decision
making in which the buyer has little information about brands and has not
yet developed well defined and structured criteria by which to choose
among products.
2. Limited problem solving - this is a more advance stage, choice criteria
are well defined but the buyer is still undecided about which set of brands
will best serve him. Thus the consumer still experiences uncertainty about
which brand is best.
3. Routinised response behaviour - buyers have well defined choice criteria
and also have strong predispositions toward the brand. Little confusion
exists in the consumer's mind and he is ready to purchase a particular
brand with little evaluation of alternatives.
The model then borrows from learning concepts to explain brand choice
behaviour over time as learning takes place and the buyer moves from
exclusive to routinized problem solving behaviour. Here the four major
components get involved.
The Input Variables
157
The input variables consist of informational cues about the attributes of a
product or brand (i.e. quality, price, distinctiveness, service and
availability). This informational cues may be significative if they influence
the consumer directly through the brand's attributes or symbolic if they
derive from the same factors as they are portrayed in the mass media and
by salespeople, influencing the consumer in a indirect way. These two
sources are commercial, in that they represent the efforts of the firm to
build and project these values in the product. A third set of informational
cues may come from the buyer's social environment, including the family,
reference groups and social class - which are influences that are
internalized by the consumer before they can affect the decision process.
Hypothetical Constructs
Hypothetical constructs have been classified in two groups - perceptual
constructs and learning constructs. The first deals with the way the
individual perceives and responds to the information from the input
variables, accounting for stimulus ambiguity and perceptual bias. The
second deals with the stages from buyer motives to satisfaction in a buying
situation. The purchase intention is an outcome of the interplay of buyer
motives, choice criteria, brand comprehension, resultant brand attitude and
the confidence associated with the purchase decision. The motives are
general or specific goals impelling to action, impinging upon the buyer
intention are also the attitudes about the existing brand alternatives in the
buyer's evoked set, which result in an arrangement of an order of
preference regarding brands. Brand comprehension and the degree of
158
confidence that the buyer has about it, choice criteria and buying intentions
converge through the intention to buy.
As a feedback component of learning, the model includes another learning
construct- satisfaction which refers to the post purchase evaluation and
resultant reinforcing of brand comprehension, attitudes etc. (shown by
broken lines in the figure).
Output Variables
The five output variables are the buyer's observable responses to stimulus
inputs. They are arranged in order from Attention to Actual Purchase. The
purchase is the actual, overt act of buying and is the sequential result of
the attention (buyers total response to information intake), the brand
comprehension, brand attitude (referring to the evaluation of satisfying
potential of the brand) and the buyer intention (a verbal statement made in
the light of the above externalising factors that the preferred brand will be
bought the next time the buying is necessitated.
Exogenous Variables
The model also includes exogenous variables which are importance of
purchase, time pressure, financial status, personality traits, Social and
organisational setting, Social class and culture which are taken as
constant. These influence all or some of the constructs explained above
and through them, the output.
Most scholars agree that the study of consumer behaviour was advanced
and given an impetus by the Howard-Sheth Model. The major advantage
and strength of the theory lies in the precision with which a large number of
159
variables have been linked in the working relationships to cover most
aspects of the purchase decision and the effective utilization of contribution
from the behavioural sciences.
Figure 16 A simplified Description of the Theory of Buyer Bahaviour
Source: Bennet and Kassarjian, Consumer Behaviour, 1996
The weakness stems from the fact that, there being substantial
measurement error, the theory cannot be realistically tested. The
distinction between the exogenous and endogenous variables is not clear
cut. And some of these variables do not lend themselves easily to
measurement and others defy precise definition.
In spite of the limitations, the model has given a frame of reference for
studying the buying decision process over time. This is possible because of
160
its comprehensive coverage of almost all aspects of the purchase decision
and operational explanation of the underlying stimuli and responses.
The Nicosia model of Consumer Decision Process (1966):
The model proposed by Francesco Nicosia in 1966, was one of the first
models of consumer behaviour to explain the complex decision process
that consumers engage in during purchase of new products. Instead of
following a traditional approach where the focus lay on the act of purchase,
Nicosia tried to explain the dynamics involved in decision making.
Presenting his model as a flow-chart, he illustrated the decision making
steps that the consumers adopts before buying goods or services; decision
fraiming was presented as a series of decisions, which follow one another.
The various components of the model are seen as interacting with each
other, with none being essentially dependent or independent; they are all
connected through direct loops as well as feedback loops. Thus, the model
describes a flow of influences where each component acts as an input to
the next. The consumer decision process focuses on the relationship
between the marketing organization and its consumers; the marketing
organization through its marketing program affects its customers; the
customers through their response to the marketer‘s action, affects the
subsequent decisions of the marketer; the cycle continues.
The various components that are further distinguished into main fields and
subfields of the model are marketer's communication affecting consumer‘s
attitude, consumer's search and evaluation, purchase action, consumption
experience and feedback. The first field ranges from the marketer (source
of message) to the consumer (attitude); the second from the search for to
161
the evaluation of means/end(s) relation(s) which forms the pre-action field;
the third field relates to the act of purchase; and the fourth to feedback.
Figure 17 The Nicosia Model
Source: Loudon, D.L. and Della Bitta A.J
The output from one field acts as the input for the next. These are
explained as follows:
1. Marketer's communication affecting consumers‘ attitude: This comprises
Field 1 (―from the source of a message to the consumers‘ attitude‖). The
consumer is exposed to the firm‘s attributes through the marketing
communication; this marketing communication could take place
impersonally via mass media (TV, newspaper, websites, etc) as well as
personally. The information could relate to the firm attributes as well as the
product, price and distribution. This message relating to the firm‘s attributes
affects the consumers‘ perception, predisposition and attitude toward the
162
firm and its offering. Of course, the impact on perception and attitude is
also dependent upon the consumer‘s personal characteristics, values,
experiences, culture, social influences etc. Thus, the marketer‘s
communication affects the consumers‘ attitude.
2. Consumer's search and evaluation: After an attitude is formed, the
consumer moves to Field 2 of the model, i.e. the consumer‘s search for
and evaluation of means/end(s) relation(s) which forms the pre-action field.
The consumer searches for information about the product category and the
varying alternatives, and thereafter evaluates the various brands on criteria
like attributes, benefits, features etc. These criteria could be based on his
learning and past experiences as well as the marketer's inputs. This step
creates a motive in the mind of the consumer to purchase the product.
3. Purchase action: The motivated state leads to Field 3 of the modelwhich
is the decision making on the part of the consumer and the act of
purchase. The consumer finally gets into action and buys the product from
a chosen retailer.
4. Consumption experience and feedback: The purchase action leads a
consumer to Field 4 of the model which is consumption experience and
feedback. After purchasing the product, and the resultant consumption, the
consumer may have two kinds of experiences. A positive experience in
terms of customer satisfaction may reinforce his predisposition with the
product/brand and make him loyal towards it. A negative experience on the
other hand, implying consumer dissatisfaction would affect his attitude
negatively, lower down evaluations about the product/brand and even
163
block his future purchases. This Filed provides feedback to the marketer,
who can modify its mix accordingly.
In the first field, the marketer communicates with the customer and
promotes an unfamiliar product to him; depending upon the existing
predispositions and his evaluation, the consumer develops an attitude. In
the second field, the consumer searches for information and evaluates it
based on his attitudes; thereafter, he develops a motivation to act. In the
third field, he makes and purchase and in the fourth field, he would provide
feedback and also memorize his experience and learning for future use.
Thus, the firm communicates with consumers through its marketing
messages and the consumers react through an act of purchase. Both the
firm and the consumer influence each other.
An Assessment of the Model:
Nicosia‘s model is an integrative model that tries to integrate the body of
knowledge that existed at the time of its formulation in the area of
consumer behaviour. It was a pioneering attempt to focus on the conscious
decision-making behaviour of consumers, where the act of purchase was
only one stage in the entire ongoing decision process of consumers. The
flowcharting approach proposed by Nicosia, simplifies and systemizes the
variables that affect consumer decision making. It contributes to the step
by step "funnel approach" which views consumers‘ movement from general
product knowledge toward specific brand knowledge and from a passive
position to an active state which is motivated toward a particular brand.
164
However, the model suffers from limitations in the sense that the model
proposes assumptions, boundaries and constraints that need not be
realistic. It has been argued that attitude, motivation and experience may
not occur in the same sequence. Variables in the model have not been
clearly defined. Factors internal to the consumer have not been defined
and dealt with completely. The mathematical testing of the model and its
validity are questionable.
In the paper Attitudes and Customer Behavior: A Decision Model, Alan
Andreason (1966) proposed one of the earliest models of consumer
behaviour. The model recognizes the importance of information in the
consumer decision-making process. It also emphasizes the importance of
consumer attitudes although it fails to consider attitudes in relation to
repeat purchase behaviour. (The model is shown on the next page)
The Engel – Kollat- Blackwell Model
This model talks of consumer behaviour as a decision making process in
the form of five step (activities) which occur over a period of time. Apart
from these basic core steps, the model also includes a number of other
related variables grouped into five categories.
Step 1: Problem Recognition: The consumer will recognize a difference
between his or her actual state and what the ideal state should be. This
may occur on account of an external stimulus.
165
Figure 18 Andreasen Model
Source:"Attitudes and Customer Behavior: A Decision Model," in Lee E. Preston, New Research in
Marketing (Berkeley, CA: The Institute of Business and Economic Research, 1966), 1-16. Reprinted in Harold Kassarjian and Thomas Robertson, Consumer Behavior (Scott, Foresman and Company, 1969)
166
Step 2: Information Search: Initially the information available with the
consumer may be consistent to the beliefs and attitudes held by him or her.
While being involved in an information seeking or search stage, the
consumer will try to gather more information from various sources. These
sources could be sales persons, personal or friends or neighbours or mass
communication media. The information processing takes place in various
stages.
The individual gets exposure of the stimuli which may catch his or her
attention, be received and stored or retained in memory. This method of
information processing is selective in nature and the consumer will accept
the information which is conclusive to what is perceived by them.
Step 3: Alternative Evaluation: The individual will now evaluate the
alternative brands. The methods used for evaluating the various products
will be dependent on the consumers underlying goals, motives and
personality. The consumer also has certain (predetermined) beliefs about
the various brands in terms of the characteristics associated with the
different brands. Based on these beliefs the consumer will respond either
positively or negatively towards a particular brand.
Step 4: Choice: The consumer‘s choice will depend on his or her intention
and attitude. The choice will also depend upon normative compliance (like
getting influenced by other people like family members, friends etc.,) or by
anticipated circumstances (the person‘s choice of the product can also be
dependent on the sensitivity of the individual to handle unanticipated
circumstances like funds diverted for another urgent cause etc.)
167
Step 5: Outcome: The outcome may be either positive or negative. If the
end result is positive, the outcome will also be positive. Conversely, if
there is dissonance, that is, a feeling of doubt experienced by the
consumer, about the choice made by him or her the outcome will not be
positive. Now the consumer will search for more information to support his
or her choice.
The EBM model has taken into consideration a large number of variables
which influences the consumer. The model has also emphasized on the
conscious decision making process adopted by a consumer. The model is
easy to understand and is flexible, that is, it recognizes that a consumer
may not go through all the steps always. This is because in case of repeat
purchases the consumer may bypass some of the steps.
One limitation of this model is the inclusion of environmental variables and
general motivating influences but not specifying the effect of these on the
buyer behaviour.
Engel, Blackwell and Miniard (EBM) Model
This model is a development of the original Engel, Kollat and Blackwell
model first introduced in 1968. It shares certain things with the Howard-
Sheth model. Both have similar scope and have the same level of
complexity. Primarily the core of the EBM model is a decision process,
which is augmented with inputs from information processing and other
influencing factors also.
The model has distinctive four sections, namely: Input, Information
Processing, Decision Process and Variables influencing decision process.
168
Information Input
Information from marketing and non marketing sources are fed into the
information processing section of the model. The model also suggests
additional information to be collected as a part of an external search
especially when not enough information is available from memory or when
post-purchase dissonance occurs.
Figure 19 The Engel-Blackwell-Miniard Model
Source: Engel et al. (1995)
As the authors argue, the model encompasses all types of need satisfying
behaviour, including a wide range of influencing factors and different types
of problem-solving processes. (Engel, Blackwell and Miniard 1995).
169
This model is the most suited for food choice behaviour. This is justified
because, among the more comprehensive models (the Howard-Sheth
model, the Nicosia model, and the Andreasen model), the EBM model
seems to be simultaneously the more parsimonious and the one that can
be applied with fewer problems to different decision situations and product
categories.
Attitude Models
Regarding the mechanisms leading from problem-perception or attitudes to
behaviour, one can distinguish between different approaches. From an
educational perspective, one approach focuses upon the role of pedagogy
in acquiring information and knowledge, and in the development of
personal involvement with particular issues. Some social psychologists
focus on intention as the factor that best predicts behaviour (Fishbein and
Ajzen 1975; Ajzen and Fishbein 1980). Ajzen and Fishbein have identified
attitudes as one of the key factors, which affect consumers purchasing
behaviour. Their model incorporates beliefs, attitudes and behavioural
intention, and by using specific equations they aim to reveal the manner in
which these are related to each other. Ajzen (1985) has later emphasised
the role of perceived behavioural control, i.e. how easy or difficult the
accomplishment of a given behaviour is perceived to be. The Fishbein and
Ajzen model has been widely used in studies of food choice and
purchasing behaviour (Shepherd and Stockley 1985, Shepherd and
Farleigh 1986).
170
Three behavioural models are discussed; beginning with the simplest
model of attitude such as Fishbein‘s (1967) expectancy-value model then
moving to the slightly more complex Azjen and Fishbein (1980) model of
behavioural intention, and ending with Azjen‘s (1991) theory of planned
behaviour.
Expectancy-Value Model (1967)
A commonly used subjective utility model of the relationship between
attitudes and behaviour is the expectancy-value model. The expectancy-
value model defines the attitude toward an attitude object as the sum of
expectancy-value products related to the attributes of the attitude object
(Fishbein, 1967). The expectancy-value products are the result of the
expectation that the attitude object possesses specific attributes and the
value that the attitude holder places on those specific attributes (Eagly &
Chaiken, 1993).
Attitude = Σ (Expectancy × Value)
For example, a person‘s attitude toward a food item may depend on the
attributes of nutrition and taste. If the individual believes that the food
possesses nutrition and they value nutrition highly, the product of this
expectancy-value for nutrition can be summed with their expectancy-value
for taste to determine the individual‘s attitude toward the apparel item.
Theory of Reasoned Action / The behavioural intentions model
In the theory of reasoned action, Fishbein and Ajzen (1975) expanded the
expectancy-value model and related attitudes to behaviour by suggesting
that attitudes toward an attitude object, in this case a behaviour, will predict
171
an individual‘s intention to engage in a particular behaviour. Besides
attitudes toward the behaviour, the subjective (social) norm, an evaluation
of the attitudes of socially important other individuals, is another variable
included in the model. The theory of reasoned action is also sometimes
called the behavioural intentions model. As the name implies, the theory of
reasoned action is based on a cognitive perspective and suggests that the
cause of behaviour is the decision (intention) to act in a particular way. The
important difference between behaviour and behavioural intention is that,
despite intentions, specific behaviours may not be possible in a given
context (Fishbein & Ajzen, 1975). People may lack the skills, resources or
opportunities to translate their behavioural intentions into actual
behaviours. The difference between behaviour and behavioural intention is
that behaviours can only be predicted from attitudes that are volitional,
under the control of the individual. This focus on behavioural intention also
means that, according to the theory of reasoned action, attitudes do not
predict habitual behaviours. Habitual behaviours are defined as behaviours
performed repeatedly without thought. Taking into account all of these
limitations about the ability of behavioural intentions to predict behaviours,
the theory of reasoned action can be written:
B ≈ BI = wAAB + wSNSN
In this algebraic representation, B is behaviour, BI is behavioural intention,
AB is the attitude toward the behaviour, SN is the subjective norm, and wA
and wSN are weights of the relative importance of the indicated terms.
Intention to engage in a behaviour is a function of the individual‘s
evaluation of the personal beliefs about the behaviour as well as the belief
172
of important others about the individual engaging in the behaviour (Eagly
and Chaiken 1993).
The expectancy-value model
Attitude toward a behaviour can be further described in the expectancy-
value model as the sum of behavioural beliefs, the evaluation of
consequences of the behaviour, along with the perceived likelihood of
those consequences. Thus symbolically:
AB = Σi =1 n biei
where bi is the belief that performing the behaviour will lead to some
consequence i, ei is the evaluation of the consequence i and n is the
number of salient consequences (Eagly & Chaiken, 1993). For example, a
behavioural belief such as ―my purchasing an organic food is (unlikely to
likely) to result in a fair price for the organic producers‖ can be combined
with ―I believe that a fair price for organic cotton producers is (unimportant
to important).‖ Studies that measure attitude using the theory of reasoned
action will often measure attitude in two ways, one using a semantic
differential scale (e.g. eating organic food is… (good/bad) or (foolish/wise)),
and the other as described previously. The two measures of attitude can
then be correlated to check reliability while retaining the detail provided
with the expectancy-value formulation. Attitude has been measured in
various manners by a number of studies related to environmental
consumer behaviour (Bamberg & Schmidt, 2003).
Sparks and Shepherd (1992) in their study of self-identity and ‗green
consumerism‘ measured attitude using three items. The first item used a
173
traditional semantic differential scale as suggested by Azjen and Fishbein
(1980). The other two items were simple ratings such as ―In general, my
attitude toward eating organic vegetables is…extremely negative to
extremely positive‖ (Sparks & Shepherd, 1992). These items were
correlated with the sum of behavioural beliefs and outcome evaluations.
They then used these items, rather than the summed behavioural beliefs
and outcome evaluations, to predict (β) behavioural intention to consume
organic vegetables in the next week.
Kaiser and Gutscher (2003) also used just the attitude statements without
the summed behavioural beliefs and outcome evaluations. Twelve items
related to six behaviours (e.g. recycling paper) were rated using 2 bipolar
scales (good/bad, appropriate/inappropriate) and were summed to create a
single measure of attitude. This measure of attitude predicted behavioural
intention, which in turn predicted self reported general environmental
behaviour.
Kalafatis et al. (1999) measured both attitude and ―the antecedents‖ to
attitude of behavioural beliefs and outcome evaluations. They do not list
the items used to measure either attitude or behavioural beliefs and
outcome evaluations. In the results of their structural equation modelling
that included both attitude and the summed antecedents, the behavioural
beliefs and outcome evaluations predicted attitude well, while attitude did
not predict behavioural intention well. The authors suggest that other
variables, such as the personal norm, that were not included, might
improve the model fit.
174
Finally, Bamberg and Schmidt (2003) also used a modification of the Azjen
and Fishbein (1980) method of assessing attitude in their study of campus
car use. First, four items related to behavioural beliefs (e.g., ―When I use
the car for university routes next time, this will be quick, flexible, etc‖ were
assessed on a bipolar scale from likely to unlikely. There were no items to
assess outcome evaluation, items that measure how important speed or
flexibility was to the respondents. Two bipolar semantic differential scales
measured general attitude toward car use for the next university trip.
Attitude measured in this fashion predicted intention to use a car for the
next university trip and this intention also predicted the actual car use.
6.2 Factors influencing food choice
Food comes in infinite variety, and food choices are a major component of
all purchase decisions made by consumers. However, in spite of the
research that has been conducted, there is no singular commonly accepted
model for explaining consumer behaviour and food evaluation.
As happens with most of the general models, traditionally, the food models
take a cognitive approach to consumer behaviour, where the decision-
making process and the information processing of marketing stimuli are
central to explain consumer behaviour. One of the earliest and most
influential models was proposed by Pilgrim (Pilgrim, 1957).
In his model, food consumption is dependent on perception. Pilgrim
discussed food acceptance rather than food consumption. He
acknowledged that the operational definition of food acceptance is food
consumption. He described Food perception as a function of three factors:
175
1) physiological effects of the food, 2) perception of sensory attributes, and
3) influences from the environment. Pilgrim hypothesized that these
determinants will interact in influencing food consumption, but he did not
explore these interrelations. The model is depicted below:
Figure 20 The Pilgrim Model (1956) Source: The Components of Food Acceptance and Their Measurement
The model also incorporates the time factor, with external influences being
either recent or long established, and with some physiological influences
being relatively stable for an individual, while other influences will vary over
short periods with ingestion of foods (e.g., hunger). Pilgrim's model served
as point of departure for many subsequent models of determinants of food
consumption behaviour.
A more recent and one of the most pervasive models concerning consumer
behaviour towards food is the model proposed by Steenkamp. This model
176
also distinguishes between the consumers‘ decision-making process with
respect to foods, and the factors influencing this decision process. In the
decision process, ‗borrowed‘ from the EBM model, four stages are
identified: need recognition, search for information, evaluation of
alternatives, and choice. The model is shown below:
Figure 21 The Steenkamp Model (1987)
Source: Agricultural Marketing and Consumer Behavior in a Changing World, JEB Steenkamp
Three groups of factors influencing the decision process are recognized:
properties of the food, factors related to the consumer, and environmental
factors. According to the author, this grouping of factors is based on one of
the earliest and most influential models of factors affecting the behaviour of
food consumers, the Pilgrim model from 1957.
177
Comparing the Steenkamp model with the EBM model, the most noticeable
difference is the lack of an explicit treatment of the information processing
perspective. In the Steenkamp model, the marketing stimuli are spread
across the three groups of factors and are considered to influence
consumer behaviour in the same way as culture or the socio-demographic
characteristics of the individual. However, even Steenkamp (1997)
acknowledges that the boundaries between the three groups of influencing
factors are fuzzy and that mutual influences may occur. In the Steenkamp
model a special emphasis is given to the food product, as one of the major
influences on food choice. The food product affects the decision process
mainly through physiological effects and sensory perception. This focus is
probably related to the fact that, in general, food products are commodities,
sold unbranded or unlabelled and with poor or inexistent communication
around them. Consequently, the models and the research dealing with
consumer choice and behaviour relating to food are, mostly, concerned
with the influence of physical and sensory properties of the products and of
price. In summary, it can be said that the Steenkamp model is a simpler
version of the EBM model, which emphasises aspects that are particular to
food products.
Verbeke argued (Verbeke, 2000) that while there is recognition of external
influences such as product availability and economic factors, most food
choice models focus on the interaction between the individual and the food
product. The decision process is facilitated by information processing
mechanisms and conditioned by psychological, social, cultural, and social
influences that, usually, are afforded a peripheral role.
178
Environmental concern
Variables such as environmental concern are often measured or
conceptualized as part of larger models of behaviour, theories that suggest
why or when a behaviour occurs. As discussed earlier, a theory of
decision- making popular in both psychology and economics, the
subjective expected utility model of decision-making assumes that an
individual is motivated to choose the alternative (behaviour or object) that
affords the highest overall utility (value).
Cognitive and Economic approaches (Torjusen, Sangstad, Jensen, &
Kjærnes, 2001) respect to environmental issues, includes numerous
studies in which the underlying premise is that if consumers are given
enough information about environmental problems, their acquired
awareness will lead to the adoption of environmentally friendly behaviour.
Organic food has been studied not only in association with environmental
concerns external to the individual consumer, but also within the framework
of ‗risk perception‘, including food safety concerns as well as concerns with
the environmental impacts of food. According to Henson and Northen
(2000:97), much of the literature on consumer perceptions of risks
associated with food has focussed on the attitudes and beliefs underlying
consumer concerns, the factors that make some risks more ―acceptable‖
than others, as well as trust in different sources of information. Slovic
(1987, 2000) has characterised risk perception by means of a series of
polar concepts, including such dimensions as the extent to which risks are
perceived to be ‗voluntary vs. involuntary‘, ‗controllable vs. non-
controllable‘, ‗natural chemicals vs. manmade chemicals‘, etc. Consumer
179
perceptions of risk are often investigated along these dimensions. Other
examples of approaches based on psychological theory aim to better
understand key determinants of perceived food safety risks, or to develop
‗mental models‘ of how consumers reach their assessments of risk
associated with pesticide exposure versus other categories of food hazard.
Another typical approach within the consumer behaviour and marketing
literature is the use of the ‗perceived quality risk framework‘3 (Henson and
Northen 2000).
Willingness to pay
Many studies have been designed to measure consumer ‗willingness to
pay‘, most often motivated by the aim of estimating the market potential for
organic foods at premium prices. This task has frequently been combined
with that of distinguishing market segments. In these studies, ‗willingness
to pay‘ is employed as a measure of the relationship between declared
values and the price one is willing to pay for products associated with those
values. Demand, which is the technical term in economics, is a focal point.
However, several factors that can influence demand/‖willingness to pay‖
are often left out of account. These include: the type of products in
question, the relative quality of products at issue, the volume of the
particular product consumed, the social contexts in which the product is
used (weekday/weekend etc.), the social context in which shopping takes
place (Miller 1998), as well as the economic resources of the buyer.
(Examples of studies of organic food, in which ‗willingness to pay‘ has been
in focus, are the Danish studies undertaken by Grünert and Kristensen
(1992) and Hansen and Sorensen (1993). These studies examined the
180
priority accorded to environmental concerns in competition with other
consumer considerations, and how the willingness to search and pay for
products from environmentally sound production varied between different
consumer segments
The social psychological focus on ‗risk‘ and the economic focus on
‗willingness to pay‘ should be seen as complementary approaches. In most
cases they share basic assumptions about the character of consumption,
understood as constituting unit acts of (more or less rational) individual
decision-makers, based on underlying values, attitudes and beliefs, as well
as on informational input.
Some important perspectives in social scientific consumer
research
Understanding the consumption of food from social scientific perspectives
implies taking account of the social and cultural contexts in which people
think about, buy, prepare, eat and relationships from social, cultural,
institutional and political perspectives (Mennell, Murcott and van Otterloo
1992). This may concern questions of politics and economy, as related for
example to the distribution of food - including kinds of shopping outlets. It
may also concern questions of culture and tradition, in which food is seen
as one form of symbolic communication, as a tasty source of pleasure or
as a dimension of care in providing for the needs of families.
Food is a meeting point of numerous symbolic codes: personal, familial,
cultural, biological, industrial and environmental, as well as ethical
dimensions of social justice (James 1993). It follows that organic food can
181
also be understood in relation to such codes. Some studies are of an
ethnographic character (Lien, 1997). A common feature of these
approaches is a focus upon the meanings we connect with material
products (Campbell, 1987) (Douglas, 1975). This does not imply that the
utilitarian values of products in use are overlooked, but rather an
acknowledgement that there is something more than practical or
instrumental values related to these products (Lien 1995; Holm and
Kildevang 1996).
Sociological and anthropological studies of food and food choices have
pointed out – among other issues – that consumers tend to conceive eating
as a moral matter (Stein and Nemeroff 1995, Germov and Williams 1996).
Food purchase, cooking and eating are activities deeply embedded in the
normative structures and routines of everyday life. Food is not only a form
of meaningful communication; it is also a commodity that consumers pay
for, as well as being a necessity of life. Buying food therefore is an
everyday activity, which constitutes a connection between two different
spheres: the market and family life , a duality, which should also be
reflected in studies of food (Gronow and Warde 2001; Warde 2002).
What emerges from these very diverse social scientific approaches is that
the consumption of organic food can be many-sided and complex. A
common theme is that in order to understand the ways in which people
experience organic food, how they evaluate such key concepts as ‗safety‘
and ‗quality‘, and the extent to which organic foods are chosen in
preference to conventional variants, an approach is needed that takes
182
account of the contexts of social action and the manner in which everyday
activities are embedded in interpersonal relationships and institutional
patterns.
Differences in the priority accorded to various quality attributes of food may
reflect differences between the roles of social actors in the food system. In
a Norwegian study of quality conceptions related to the purchase of
vegetables, Lien and Doving (1996) found substantial differences between
consumers, wholesalers, retailers and farmers with regard to their
conceptions of ―good quality‖. Consumers and farmers had a common
focus on quality aspects that are not immediately apparent in the store.
These included the nutritional value of products, their taste and the extent
to which they were produced in an environmentally sound manner,
whereas wholesalers and retailers focussed more on aspects of the
products‘ appearance, such as their size, colour and form Several studies
undertaken during the 90‘s and have addressed the way in which
consumers evaluate food. Many studies document a tendency to evaluate
the quality of products in terms of the extent to which they are perceived as
being ―natural‖ or ―artificial‖ (Wandel and Bugge 1994). Results from a
regional survey in Southern Norway, indicate the need to supplement this
focus on product attributes. It was found that consumer considerations
related to the choice of food include a range of issues related to the
product itself as well as issues related to the food system as such
(Torjusen, Sangstad, Jensen, & Kjærnes, 2001). It is important to note how
broad the range of consumer interests may be, which can be discussed as
consumer conceptions of aspects of ‗quality‘, just as it is important to keep
183
in mind that different concerns may be relevant to consumers in specific
contexts.
Organic food as a strategy to deal with worries about the safety and
quality of food: According to the sociologists Ulrich Beck (1992), modern
society is characterised by a higher level of reflection and risk
consciousness among lay people than in former times. Beck argues that
we have moved from ‗industrial society‘ to ‗risk society‘, the latter being
characterised by an increased recognition of the potentially negative
effects of scientific and technological developments. People feel aware of
risks confronting them, which are neither limited in time (future generations
may be affected) nor space (they reach beyond the local community). Food
might be seen as offering a special opportunity to re-link with both the
natural and cultural environment. Consumers‘ interest in information about
the origin of the food, and it‘s further biography along the food chain (food
additives, degree of processing, distance travelled etc) can be interpreted
as their way of finding alternatives to the modern, industrialised food
system.
Concern, uncertainty, worries and mistrust are important issues in
contemporary discussions about food consumption. For example, a Danish
qualitative study found that the choosing of food was associated with
feelings of insecurity, confusion and mistrust in the products, as well as
guilt about the lack of consistency between wishes/intentions on the one
hand and actual choices made on the other (Holm and Kildevang 1996).
Similar conclusions are also drawn in Norwegian studies of consumer trust
and organic food (Torjusen, Lieblein, Wandel, & Francis, 2001). These
184
studies suggest that buying organic food can be one of several possible
strategies for dealing with worries about the safety and quality of food, and
they also suggest that consumer concern about the safety and quality of
food is widespread. Those themes which are identified as common
concerns regarding food quality among Danish consumers, are largely the
same as those identified as motives for buying organic food.
Consumers‘ concern about food quality appears to be connected to both
food production and food processing. Concerns about long-term
consequences for health and for the environment are also commonly
mentioned when consumers talk about food. Holm (1999) concludes that,
for some consumers, this concern about modern industrial food production
leads to explicit criticism, while for the majority it presents itself in the more
latent form of mistrust and insecurity. The implications of this for research
are that in the case of latent forms of mistrust and insecurity, consumer
concerns may be far from clearly articulated.
Methodologically speaking, it can be therefore a challenging task to obtain
data that can document the character of these concerns. Kjærnes (2006)
argues for the adoption of a sociological approach to understanding
consumer trust and risk perceptions. Her observation is that distrust has
been traditionally regarded (by market analysts and economists) as
constituting a kind of ―failure‖ (Kjærnes 2012). It has been conceived as a
problem to be fixed, repaired or restored, not as a potentially constructive
force, having creative value or as representing an important input from
consumers.
185
Against this point of view, Kjærnes argues that consumer distrust is a
valuable communication from consumers, which could be used in very
constructive ways. In the context of the Organic HACCP project – looking
at the possibilities for defining consumer generated critical control points
for the improvement of organic food production – paying attention to
consumer distrust in food and the food system could be expected to give
us vitally relevant information.
Ethical Attributes
The issue of ethical attributes is a well-known one in the apparel field.
Unethical production methods, including child labour, employee abuse, or
imprisonment, have galvanized consumer sentiment and raised discussion
of the use of labelling for ethical production to allow consumers to place
economic pressure on offending corporations. Labelling for fair trade with
the third world has also created an opportunity for consumers to consider
ethical attributes in a wide variety of products, from crafts to food such as
coffee.
Environmental Behaviour, Environmental Concern
Environmental concern is one of the most commonly studied variables
related to environmental consumer behaviour. It can be defined most
simply as the possession of a concern for the ecosphere itself or over the
degradation of the ecosphere created by human beings. Dunlap and Jones
(2002), researchers in the field of environmental sociology define it as
―Environmental concern refers to the degree to which people are aware of
problems regarding the environment and support efforts to solve them
186
and/or indicate a willingness to contribute personally to their solution‖.
Basically, environmental concern is an attitude toward the environment.
Attitudes can be described or measured at various levels of specificity,
ranging from very specific ―It would be satisfying to purchase this recycled
toilet paper at this exact moment in time‖ to the very general ―I desire to
live in a world of pleasure.‖
Concern for the environment can be measured at the most general (least
specific) levels, where it resembles an ideology or worldview. Attitudes or
beliefs about attitude objects that are part of a larger cognitive structure
reflect an ideology or worldview (Eagly & Chaiken, 1993). When Dunlap
and Van Liere (1978) developed a measure of environmental concern, they
called it the New Environmental Paradigm and characterized concern for
the environment as a new way of thinking about nature and the role of
humans in nature. This new paradigm views the environment as
increasingly endangered by the impacts of human behaviour. The authors
were contrasting this new environmental paradigm with the dominant social
paradigm, a worldview where people act out of concern for their personal
benefit rather than concern for the environment.
Environmental concern can also be described in terms of deeply held
values. Values are concepts or beliefs organized into stable motivational
constructs that relate to fairly abstract goals (peace on earth or inner
harmony). One value orientation that has been related to environmental
concern is that of universalism, an orientation that includes values such as
social justice, equality, a world at peace, and unity with nature (Schwartz,
187
1992. Stern, Dietz, Abel, Gaugano, and Kalof (1999) labelled this same
group of values as altruistic (behaviour motivated by these altruistic values)
in their study of support for the environmental movement.
188
CHAPTER 7
FINDINGS
The research clearly shows that consumer behaviour towards food is
changing. Earlier consumption of food was mainly based on price whereas
there is an emerging category of consumers who are willing to pay for
better quality and nutritious food. These consumers are well educated and
well to do. They would be the ―innovators‖ and ―early adopters‖ in the
organic food / high value food category.
7.1 Profile of the sample
Consumers of organic food in India are different from the general
population because they are people who are initiating change. The study
used the responses of 400 users and 100 non-users. Since the focus of
study was on the users of organic food the number of users were higher
than those of non users. The questionnaire was administered only to
respondents over the age of 18. The age distribution of the users was
highest in the 18-30 category which is 44% (146 respondents) while 37%
belonged to the age group of 31-40 and 19% belonged to the above 40
category. This reduced percentage with progressing age of users would
conform to the findings of other researches that the younger age group is
more responsive in terms of using organic food. There were 58% male and
42% female respondents of whom 90% held graduation or higher degrees.
Majority (66%) were married and 60% had household income in excess of
189
50,000 per month. In the Indian context this would depict a very small
section of the population.
The non users are more equally divided in age as 43% fall in the 18- 30
category and 42% fall in the 31-40 category. The non users were
predominantly male (70%) and 92% who have graduated college. This
balances out the group of users who are also very well educated. But only
55% of the non users have a monthly income of above Rs. 50000 per
month. (Annex III)
The users of organic food respond to recommendations from doctors and
therefore they will probably we convinced if proper authorities could
confirm the higher nutritious value of organic food. The respondents do not
confirm taste being a major reason for the purchase of organic food and
many of them have a disciplined dietary habit.
7.2 Findings of the survey
The survey indicated that organic food users are less in number. The
barriers to usage such as price and availability are high.
Price premiums have a negative effect on purchase of organic food. Only
16.8% of the respondents say they are willing to pay a higher price; 65%
have said they may discontinue purchasing because of price. Even
charging a premium for nutrition is ―strongly agreed‖ by 28% of the
respondents. Tables with the data can be found in Appendix III.
Consumers who have been recommended by physicians or dieticians
seem to be interested to consume organic. The weightage given to organic
food seems to increase due to the credibility of the source.
190
The emergence of the fact that there is no distinction between users and
non users in the level of awareness towards organic food is surprising. But
it must be remembered that the non-users in the sample were a highly
educated group. Users would like to have more information on organic
food. While researches in Europe found that there is a correlation between
environmental consciousness and organic food users, this study shows
very little correlation among the variables. Indians seem to be more
conscious about nutritional value in food than issues that pertain to
farmers, biodiversity, certification, chemicals used or even taste.
Summary of Hypothesis
Hypothesis Test used Finding
H01 There is no association
between doctor‘s
recommendation and organic
food consuming habit
Logistic
Regression
Analysis
Null hypothesis
rejected
H02 Awareness towards organic
food is not equally distributed
amongst the
users and non-users of
organic food
Discriminant
Analysis
Null hypothesis
rejected
H03 Consumption of organic food
is not independent of its taste
Chi Square Test Null hypothesis
is rejected
H04 Consumption of organic food
is not a matter of status
Factor Analysis Null hypothesis
rejected
H05 There is no significant
variation on the expenditure
of organic food for regular
users
F test Null hypothesis
accepted
191
Hypothesis Test used Finding
H06 Exposure to media is not
significantly associated with
consumption of organic food
Factor Analysis Null hypothesis
rejected
H07A Income does not have a
significant association with
the consumers of organic
food
Chi Square Test Null hypothesis
rejected
H07B Age does not have a
significant association with
the consumers of organic
food
Chi Square Test Null hypothesis
Accepted
H07C Education does not have a
significant association with
the consumers of organic
food
Chi Square Test Null hypothesis
Rejected
Table 8 Summary of hypotheses
Organic farming is primarily knowledge intensive whereas conventional
farming is more chemical intensive. Accordingly, it is difficult to establish a
one approach since conditions will vary in different zones. Organic projects
require that time be built into the process for farmers to test and learn new
technology and methods. Knowledgeable extension service is critical.
Local know-how, especially from experienced farmers and knowledgeable
elders, can smooth the transition and reduce risks. It is also important to
provide farmers good access to sources of knowledge about the
application of organic methods to their crops and agro-ecological
conditions. Nevertheless, holistic methods don't often provide a quick fix
and require a longer-term commitment. Therefore, government and local
institutions such as NGOs need to be committed to supporting a multi-year
process. Such a commitment might require: acquisition of organic
192
production technology and training, especially for extension service agents;
preparation for certification and initially covering its costs; and very limited
subsidies to cover possible reduced income during the transition period.
193
CHAPTER 8
INTERPRETATIONS AND CONCLUSION
The interpretation of each hypothesis is presented one at a time. Most of
the data in the study consists of Likert scale items. As Likert item data are
discrete instead of continuous values, have tied numbers, restricted range
and do not possess a normal probability distribution the t-test was not used
for analysis.
The chi-square statistic is designed for use in a multinomial experiment,
where the outcomes are counts that fall into categories. The chi-square
statistic determines whether observed counts in cells are different from
expected counts. Since the chi-square statistic assumes a discrete
distribution rather than a normal distribution, the results will be statistically
valid and can be used as scientific proof. The Chi Square test of
independence statistic has been used in two of the hypotheses.
Logistic and Discriminant analysis is used with the first two hypotheses
respectively. Logistic regression is intended for the modelling of
dichotomous categorical outcomes. Since the outcome is dichotomous,
predicting unit change has little or no meaning. As an alternative to
modeling the value of the outcome, logistic regression focuses instead
upon the relative probability (odds) of obtaining a given result category. So
here we try to find the odds that doctor‘s recommendation will result in
organic food consumption.
194
8.1 Hypothesis 1
The hypothesis that is being tested is:
H01: There is no association between doctor’s recommendation and
organic food consuming habit.
H11: There is an association between doctor‘s recommendation and
organic food consuming habit.
Binary logistic regression has been used to test this hypothesis. The
objective is to estimate the odds (likelihood ratio) of the respondent being
an organic food consumer due to Doctor‘s Recommendation. We also find
the independent contribution of the predictor variables to variations in the
dependent variable (Doctor‘s recommendation) in the form of an OLS
equation. The predictor variables are as follows:
1. The belief in the nutrition value of organic food
2. Having a healthy food habit
3. Taste and
4. Media influence
Out of the 400 respondents 95 were consuming organic food due to a
physician‘s recommendation. They have been labeled Recommended and
have been coded 1. The rest of the respondents (305) who consume
organic food for other reasons have been labeled as a not recommended
and have been coded 2. All these respondents have been asked to rate
the variables belief in nutritional value, healthy dietary habit, taste and
media influence on 5 point Likert scale.
195
An Ordinary Least Squares regression on the data has been formed. The
estimated equation is:
P = 1.248+ 0.331 (belief in nutritional value) – 0.032 (taste) – 0.427
(healthy food habit) + 0.096 (media influence)
Logit equation:
(Where P= probability of consuming organic food on Doctor‘s
Recommendation)
The ―variables not in the equation‖ table shows that all 4 Independent
Variables are significant and if included would add to the predictive power
of the model.
The Wald statistic and associated probabilities provide an index of the
significance of each predictor in the equation. The significance value for a
variable (healthy diet) is less than .05 so we reject the null hypothesis as
the variable does make a significant contribution. Using only the constant
the model predicts 76.3%. This increases to 77.3% with the inclusion of the
independent variables. Thus we can say that there is an association
between doctor‘s recommendation and organic food consuming habit and
we may conclude that the null hypothesis is rejected.
The Cox and Snell R square and Nagelkerke R square measures indicates
a regional fit of the model to the data. Here we can see that about 1.4%
change in the dependent variable is explained by the model. The
196
significance of the estimated coefficient is based on Walds statistics. We
note that only healthy diet and nutritional value are significant in explaining
Doctor‘s recommendation.
8.2 Hypothesis 2
The hypothesis that is being tested is:
H02: Awareness towards organic food is not equally distributed
amongst the users and non-users of organic food
H12 Awareness towards organic food is equally distributed amongst the
users and non-users of organic food
The null hypothesis that in the population, the means of all discriminate
functions in all groups are equally distributed can be statistically tested in
SPSS. We will be testing if awareness is equally distributed amongst the
users and non users of organic food. 500 respondents were undertaken to
determine the correlates of consumption of organic food based on the
respondent‘s awareness towards organic food. The predictor variables
were the following:
1. I am well aware of organic food
2. Organic food is more nutritious than ordinary food
3. I have been purchasing organic food frequently
4. Organic food is costlier than conventional food
5. I frequently consume organic food
6. I often visit organic food websites
7. I buy organic food because I want to be environmentally
conscious
197
8. I often speak to others about the benefits of organic food
Users and non-users were asked to put forward their views on the
statements on a 5 point Likert scale. Discriminant analysis was conducted
where the dependant variable was taken as the respondent‘s awareness or
unawareness towards organic food.
This categorical dependent variable has been divided into two groups. The
grouping variable was awareness where we have taken 1= aware and 2=
unaware.
Respondents who reported a strongly agree on the independent variables
have been classified as aware and the others have been classified as
unaware. (Table shows results of SPSS data sheet)
The assumption that the covariance matrices of the dependent variables
are the same across groups was tested by using Box's M tests. In the case
at hand the p value of 0.237 (which is greater than 0.05) suggests that the
hypothesis of equal covariance matrices cannot be rejected. So we have
not violated the assumption. (Table 7)
Variables in the Analysis
Step Tolerance F to Remove Wilks' Lambda
1 I frequently eat organic food 1.000 11.839
2 I frequently eat organic food .893 6.446 .981
I have been purchasing
organic food frequently .893 4.266 .977
Table 9 Discriminant analysis variables
198
The findings that emerged showed that frequency of purchase and
frequency of consuming organic food are the most effective variables in the
group to show significant discrimination among competitive advantages
groups.
The result of the above two group‘s discriminate analysis is shown in the
data table (Annex III). The results were obtained by examining the group
means and standard deviations. It appears that the two groups were more
widely separated in terms of frequency of organic food consumption than
any other variable. There appears to be more separation on the importance
attached to the other influencer.
The Wilks Lamda statistic varies between 0 and 1. A large value near 1
indicates that the group means do not seem to be different. Small values
near 0 indicate that group means do seem to be different. In testing for
significance in the study noted that Wilks associated with the function is
0.96 which transforms to Chi-square of 15.92 with 2 degrees of freedom.
This is significance beyond the 0.05 level. This shows that the two group
means (aware and unaware) do not seem to be different. Awareness about
organic food is therefore equally distributed among the users and non-
users of organic food.
The variable ―I frequently consume organic food‖ significantly differentiates
who are from which group. The Eigen value associated with function is
0.033 and it accounts for 100% of the variance. The canonical correlation
associated with function is 0.178. The square of association is equal to
0.031 indicating that it results only in 3.1 % of the variance in the
199
dependant variable. Thus we can conclude that the distribution of
awareness between the users and non users of organic food is not
significantly different. Thus the null hypothesis is rejected indicating
significant discrimination.
There seems to be no significant difference in the awareness between the
users and non users of organic food. Discussion during the survey as well
as the data on media usage shows that there is a desire among users for
more information on organic food. Therefore information requires to be
diffused so that it may satiate the people and help in effective dispersion
through opinion leaders. Lack of information and demand supply inequality
has been a major reason for the lack of information diffusion, availability
and therefore usage. It may also be deducted that higher awareness may
not change the group membership of individuals. So we need to further
research to find what variable along with information is required for the
adoption of organic food.
8.3 Hypothesis 3
The hypothesis that is being tested is:
H03: Consumption of organic food is not independent of its taste
H13 Consumption of organic food is independent of its taste
A chi square (χ2) statistic is used to investigate whether distributions of
categorical variables differ from one another. The data for taste has been
taken from Question number 1.3 which is the statement ―Organic food is
tastier than ordinary food‖. The responses of the 400 respondents were as
follows:
200
Likes /Dislikes the taste of organic food
Frequency Percent Valid Percent
Cumulative Percent
Valid Likes 245 61.3 61.3 61.3
Dislikes 67 16.8 16.8 78.0
Undecided 88 22.0 22.0 100.0
Total 400 100.0 100.0
Table 10 Frequency table - Taste of Organic food
Those respondents who have ticked 1or 2 (strongly agreed and agreed) in
the five point Likert scale have been considered to like the taste of organic
food those who have ticked 4 and 5 in the scale have been considered to
dislike the taste of organic food. The ones who have ticked 3 (undecided)
have not been considered for this analysis. There were 88 respondents
with 3 as their response.
Frequency of consumption * Like / Dislike OF Cross tabulation
Like/ Dislike OF
Total
Likes taste of
OF
Dislikes
taste of OF
Frequency
of
consumpti
on
Irregular buyer Count 86 29 115
% of Total 27.6% 9.3% 36.9%
Regular buyer Count 159 38 197
% of Total 51.0% 12.2% 63.1%
Total Count 245 67 312
% of Total 78.5% 21.5% 100.0%
Table 11 Cross tabulation of Consumption and Taste
201
The table above gives the classification of regular and irregular buyers by
their liking / disliking of the taste of organic food.
The result of the chi square test is given below in table 12. High vales for
the Pearson Chi Square test statistic indicate the likelihood that the two
variables are not independent. Thus a value of 1.513 which is close to 1
indicates that the two variables are independent. The large p value in the
result indicates that the observed values do not differ significantly from the
expected values.
Value
Degree of
freedom
Significance
(2- sided)
Pearson Chi-Square 1.513a 1 .219
Continuity Correctionb 1.182 1 .277
Likelihood Ratio 1.491 1 .222
Linear-by-Linear Association 1.508 1 .219
N of Valid Cases 312
Table 12 Chi Square output
Thus the variables consumption and taste are independent of each
other. The null hypothesis H03 is rejected and the alternate hypothesis
―Consumption of organic food is independent of its taste‖ is accepted.
Accordingly the taste of the food should not affect the sales of the product.
There is a lot of conviction among the users of organic food that the taste
of the product is better than the food that is grown with fertilizers and
pesticides by green revolution methods. This was so strong that the
researcher was tempted to believe that it could be a strong selling point for
the product.
202
8.4 Hypothesis 4
The hypothesis that is being tested is:
H04 Consumption of organic food is not a matter of status
H14 Consumption of organic food is a matter of status
This hypothesis has been analysed using factor analysis. This analytical
process is based on a correlation between the variables. Each statement
has been considered a variable for analysis. For factor analysis to be
appropriate, the variables must correlate. If the correlation between all the
variables is low, factor analysis may not be appropriate. Variables that are
highly correlated with each other would also highly correlate with the same
factors or factors. (Malhotra & Dash, 2011)
Bartletts‘s test of sphericity is used to test the null hypothesis that the
variables are uncorrelated in the population which is based on Chi-square
transformation of the determinant of the correlation matrix. A large value of
the Bartltts‘s test will favour the rejection of the null hypothesis.
The Kaiser-Meyer-Olkin (KMO) measures of sampling adequacy compares
the magnitudes of the observed correlation coefficient to the magnitude of
the partial correlation coefficient. Lower values of the KMO indicate that
factor analysis may not be appropriate; a value greater than 0.5 is
desirable.
In this case the null hypothesis, that the population correlation matrix is an
identity matrix, is rejected by Bartlett‘s test of sphericity and it is significant
at the 0.05 level. The value of the KMO for this data is 0.8 which is greater
than 0.05. The communality for each variable is unity.
203
The Eigenvalues are in decreasing order of magnitude as we go from
factor 1 to the end. The Eigenvalue for a factor indicates that total variance
attributed to that factor. (Table attached in appendix III)
Two segments of consumers were seen to form. Attitudinal statements
depicting status / lifestyle, safety and healthy lifestyle were administered to
the users of organic food, who expressed their preferences on a Likert
scale of 1 to 5. The pilot test contained statements on food safety which
showed very low factor loadings and were deleted from the list. Only 15
statements were used for the final questionnaire.
The results showed the respondents were divided into two major groups.
One group perceived organic food to be nutritious and the other group
perceived organic food to be a status symbol or a lifestyle value.
From the cumulative percentage of variance accounted for, we see that the
first two factors account for 73.34 percent of the variance. And that the gain
achieved in going to three factors is marginal. Thus, two factors appear to
be reasonable in this situation.
The ‗Communalities‘ shows the variance extracted from each variable for
the analysis. Principal components analysis is chosen as the primary
concern is to determine the minimum number of factors that will account for
maximum variance in the data. Of the several procedures that have been
suggested for determining the number of factors including a priori
determination and approaches based on Eigen values, scree plot,
percentage of variance accounted for, split-half reliability and significance
204
test for this study we considered, the factors with Eigen values of one and
more than one.
The factor matrix contains the coefficient used to express the variables in
terms of the factors. These factor loadings represent the correlations
between factors and variables. The coefficient with a large absolute value
indicates that the factor and the variable are closely related. Varimax
rotation has been used for this study.
The 15 variables or statements that were used are as follows:
1. Organic food is overrated for its health benefits (H1)
2. Organic food is more nutritious than ordinary food (H2)
3. Healthy lifestyle requires that I consume organic food (H3)
4. There are many nutritional benefits in organic food (H4)
5. Organic food cannot be supplemented by ordinary food (H5)
6. I believe that organic food will keep me healthy (H6)
7. Organic food is free from chemical or pesticide residues (H7)
8. I tend to feel better when I eat organic food (H8)
9. Organic food has more health related benefits than ordinary food
(H9)
10. Wealthy people consume more organic food (S1)
11. Organic food is a status symbol (S2)
12. Consuming organic food is fashionable nowadays (S3)
205
13. Consuming organic makes me feel privileged (S4)
14. People with high rank and status consume organic food (S5)
15. Offering organic to friends shows that I have a high social
standing (S6)
Variables H2 to H9 loads strongly on Factor one. This factor has been
labelled nutrition seeking. While variables S2 to S5 loads strongly on the
other component or factor. This factor could be called status or lifestyle
seekers. The component plot of the factor loading shown below confirms
these interpretations.
Figure 22 Component Plot for Nutrition/ Lifestyle Seekers
206
The rotated component matrix, the table showing the extraction of the two
factors and the scree plot has been shown in the appendix.
Variables at the end of an axis are those that have high loadings on only
that factor and hence describe the factor. Variables near the origin have
lower loadings on both the factors. Variables that are not near any of the
axes are related to both the factors. The scree plot associated with this
analysis shows two distinct breaks occurring at the two factors. Thus the
null hypothesis that organic food is a matter of status is accepted as a
group of consumers do associate the consumption of organic food with
lifestyle. It also means that there is a possibility of sale of the product by
positioning it on the lifestyle platform. This may require financial investment
in the form of branding the product.
8.5 Hypothesis 5
The hypothesis that is being tested is:
H05 There is no significant variation on the expenditure of organic
food for regular users
H15 There is significant variation on the expenditure of organic food for
regular users
Consumers‘ expenses on organic food for two months have been
considered for the testing of this hypothesis. The expenditure of organic
food users for the current month and the previous month has been
considered.
207
The previous month‘s expenditure on organic food has been considered as
the first variable and the current month expenditure has been considered
as a second variable for analysis. The respondents have been divided into
eight groups based on the amount they spend on organic food in two
different months. The amounts were categorised into 8 groups as follows:
less than Rs.1500 , 1500- 2000, 2000-2500, 2500-3000,3000-3500, 3500-
4000,4000-4500,4500-5000.
F-test has been used to carry out the test for the equality of the two
population variances. If a researcher wants to test whether or not two
independent samples have been drawn from a normal population with the
same variability, then we generally employs the F-test. The F-distribution is
most commonly used in Analysis of Variance (ANOVA) and the F test (to
determine if two variances are equal). The F-distribution is the ratio of two
chi-square distributions, and hence is right skewed. It is important to note
that when referencing the F-distribution the numerator degrees of freedom
are always given first, and switching the degrees of freedom changes the
distribution (ie. F(10,12) does not equal F(12,10)).
Formula for F- test:
The obtained F value is 2.398. The calculated value of F is less than the
table value of 12.36 for (8,8) degree of freedom at 5% level of significance.
Hence we accept the null hypothesis and conclude that there is no
significant variation on the expenditure of organic food for regular users.
208
8.6 Hypothesis 6
H06 Exposure to media is not significantly associated with
consumption of organic food
H16 Exposure to media is significantly associated with consumption of
organic food
This hypothesis has been solved using factor analysis. This analytical
process is based on a correlation between the variables. As discussed
earlier, for factor analysis to be appropriate, the variables must be
correlated. If the correlation between all the variables is low, factor analysis
may not be appropriate. The variables that are highly correlated with each
other should also highly correlate with the same factors or factors.
Bartletts‘s test of sphericity is used to test null hypothesis that the variables
are uncorrelated in the population which is based on Chi-square
transformation of the determinant of the correlation matrix. A large value of
the Bartltts‘s test will favour the rejection of the null hypothesis.
Kaiser-Meyer-Olkin measures of sampling adequacy. This index compares
the magnitudes of the observed correlation coefficient to the magnitude of
the partial correlation coefficient. Lower values of the KMO indicate that
factor analysis may not be appropriate; a value greater than 0.5 is
desirable.
The null hypothesis, that the population correlation matrix could be an
identity matrix, is rejected by Bartlett‘s test of sphericity. The approximate
chi-square value is 7312.232 with 78 degrees of freedom, which is
significant at the 0.05 level. The value of the KMO for this data is 0.776
209
which is much greater than 0.05. It can be seen that the communality for
each variable is a unity.
The Eigenvalues are decreasing in order of magnitude as we go from
factor 1 to the end. The Eigenvalue for a factor indicates the total variance
attributed to that factor. The first two factors represent relatively large
amounts of variance whereas subsequent factors represent only small
amount of variance. So the gain achieved in going to three factors is
marginal. Thus, two factors appear to be reasonable in this situation. The
total explained variance from the two factors is 66.04%.
13 attitudinal statements depicting exposure to media and consumption of
organic food were used with a Likert scale of 1 to 5.
The second column under ‗Communalities‘ gives relevant information after
the desired numbers of factors are extracted. Principal components
analysis is used, as the primary concern is to determine the minimum
number of factors that will account for maximum variance in the data.
Several procedures have been suggested for determining the number of
factors. These include a priori determination and approaches based on
Eigen values, scree plot, percentage of variance accounted for, split-half
reliability and significance test. Here we considered factors with one and
more than one Eigen values.
The factor matrix contains the coefficient used to express the standardized
variables in terms of the factors. These coefficients or factor loadings
represent the correlations between factors and variables. The coefficient
with a large absolute value indicates that the factor and the variable are
210
closely related. The method of rotation used in this case is the varimax
procedure.
The thirteen statements used for the survey are:
1. I often visit websites with information on organic food
2. I am satisfied with the information i get on organic food
3. At least one meal in my day has an organic produce
4. I would like sales people to help me when buying organic food
5. I read Newspaper everyday
6. I watch T.V. everyday
7. I shop for organic products once in while
8. I am an occasional user of organic food
9. I read general interest magazines regularly
10. i would like a better source of information on organic food
11. Organic food is not well promoted
12. I have access to the internet throughout the day
13. I am a regular user of organic food
The results showed that three groups were formed. The plot of the factors
in two dimensional space is given below. One group of consumers were
satisfied with the information that they received on organic food. Their main
source of information was the internet. They were proactive and searched
the internet for websites containing information on organic food. These
consumers were also those who have high levels of consumption of
organic food.
211
Figure 23 Component plot for media exposure consumption level
The others group that was formed were well exposed to the various forms
of media like television, newspapers, magazines and internet but were
dissatisfied with the level of information that they received from the media.
They are not proactive and do not look out for information by themselves.
They are looking for better sources of information. They want the sellers to
find out their likes/ dislikes and educate them. They would also prefer help
from the sales people during their purchase. They also consume organic
food but not as much as the earlier group. They would probably increase
their consumption if they were properly informed of the benefits of organic
food.
Conversation with the group also reveals that they want more stores to
carry organic food so that availability and prices are balanced out.
212
The third group of people have lower levels of consumption than both the
other groups and their exposure to media is less than the first group. They
would probably not be the target group for the immediate increase in sale
of the product. This shows that people with different levels of exposure to
media are consumers of organic food. Therefore we can conclude that
exposure to media is not significantly associated with consumption of
organic food. Thus we accept the null hypothesis.
8.7 Hypothesis 7
The hypothesis that is being tested is:
H07 Income, age and education do not have a significant association
with the consumers of organic food.
H17 Income age and education have a significant association with the
consumers of organic food.
This hypothesis has been divided into three parts 7A, 7B and 7C for
convenience. Accordingly:
Hypothesis 7A is
H07a Income does not have a significant association with the consumers of
organic food
H07a Income has a significant association with the consumers of organic
food
Hypothesis 7B is
H07b Age does not have a significant association with the consumers of
organic food
213
H17b Age has a significant association with the consumers of organic food
Hypothesis 7C is
H07c Education does not have a significant association with the consumers
of organic food
H17c Education has a significant association with the consumers of organic
food
Interpretations for Hypothesis 7
H07a Income does not have a significant association with the consumers of
organic food
H17a Income has a significant association with the consumers of organic
food
All respondents have been grouped into four categories based on their
income as shown in the table below. 16 respondents were not willing to
disclose their income (3 non users and 13 users) so the total number of
respondents is 484. The details are shown in the table below:
Table 13 User category by Income Cross tabulation
214
The Pearson Chi square statistic for user by income is 11.163, which is
large. High vales for the Pearson Chi Square test statistic indicate the
likelihood that the two variables are not independent. Thus a value of
11.163 indicates that the two variables are dependent.
The p value less than 0.05 in the result indicates that the observed values
differ significantly from the expected values. Thus the variables income and
consumption are dependent. It can be concluded from the data that the null
hypothesis that ―Income does not have a significant association with the
consumers of organic food‖ is rejected.
Table 14 Chi Square values User Category by Income
Chi-Square Tests
Value Df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 11.163a 3 .011
Likelihood Ratio 12.600 3 .006
Linear-by-Linear Association 6.389 1 .011
N of Valid Cases 484
a. 0 cells (.0%) have expected count less than 5. The minimum expected
count is 17.64.
Thus it is clear that in the sampled area, the higher income group have the
greater propensity to consume organic food.
Hypothesis 7B
H07b Age does not have a significant association with the consumers of
organic food
H17b Age has a significant association with the consumers of organic food
215
Table 15 User Category by Age
Table 16 Chi Square values for User category by Age
Chi-Square Tests
Value
Degree of
freedom
Significance
(2-sided)
Pearson Chi-Square 1.248a 2 .536
Likelihood Ratio 1.269 2 .530
Linear-by-Linear
Association .130 1 .719
N of Valid Cases 500
a. 0 cells (.0%) have expected count less than 5. The minimum
expected count is 18.20.
As the test statistic value of Pearson Chi-Square gets larger the likelihood
that the two variables are not independent also increases. The value of
Pearson Chi-Square (1.248) being low and close to 1 the variables are
likely to be independent. The probability of the result may happen by
chance is 0.536. The large p value also shows that the observed values do
not differ significantly from the expected values. Therefore it can be
216
concluded from this data that the consumption of organic food is
independent of age. The null hypothesis is accepted.
Hypothesis 7C
H07c Education does not have a significant association with the consumers
of organic food
H17c Education has a significant association with the consumers of organic
food
The respondents have been grouped into 3 categories for the analysis as
shown in table below:
Table 17 User category by Education table
Those respondents who had not passed the three year degree course
were considered under graduates. Those who completed college education
were graduates and all people completing the post graduate degree were
considered as post graduates.
As can be seen from the table, the Pearson Chi square statistic is 15.780,
which is very large. High vales for the Pearson Chi Square test statistic
indicate the likelihood that the two variables are not independent. Thus the
two variables education and user category are dependent. The p value less
217
than 0.05 in the result indicates that the observed values differ significantly
from the expected values.
Chi-Square Tests User Category by Education
Value
Degree of
freedom
Significance
(2-sided)
Pearson Chi-Square 15.780a 2 .000
Likelihood Ratio 15.546 2 .000
Linear-by-Linear
Association 10.891 1 .001
N of Valid Cases 498
a. 0 cells (.0%) have expected count less than 5. The
minimum expected count is 9.44.
This further consolidates the fact that these variables are dependent and
shows that the null hypothesis is rejected. So we can conclude that
Education has a significant association with the consumers of organic food
and the null hypothesis is rejected.
218
CHAPTER 9
SUGGESTIONS AND RECOMMENDATIONS
The suggestions may be divided into three parts for the sake of
understanding. The first suggestion deals with organic farming, the second
set deals with lowering costs, and the third one deals with the training and
education of all the people involved.
Suggestions regarding organic farming
1. Maintain the soil - food web. This would include relationships with
plants, organic matter, bacteria, fungi, arthropods, protozoa, birds
and mammals. This along with Probiotic Biotechnology will allow
the soil health to be maintained. It also reduces the use of pesticides
and fertilizers for growth.
2. One of the important requirements for the success of organic
farming is that it cannot be practiced in isolation. It is necessary to
bring in large tracts of contiguous agricultural land under organic
farming. Otherwise, non-organic farming practices such as use of
inorganic fertilizers and chemical pesticides will not only affect the
organic produce but also the chemical residues will make their way
into the organically produced output, and subsequently, results in
the loss of certification. In other words, it is essential to develop a
cluster approach for the success of the organic farming.
Suggestions regarding lowering costs
1. Lowering certification costs
219
Three types of certifications are possible by international organic
certification agencies:
a. "100% Organic": These can only contain organic ingredients,
meaning no antibiotics, hormones, genetic engineering, radiation
or synthetic pesticides or fertilizers can be used.
b. "Organic": contains 95% organic ingredients, with the balance
coming from ingredients on the approved national list.
c. "Made with Organic Ingredients": Products must be made with
at least 70% organic ingredients, three of which must be listed
on the package and the balance must be on the national list.
For each farmer, the expenses required for international certification may
be a difficult task but when they form into groups, it may be possible for
them to afford certification. Farmers who are situated close by may be able
to call one inspector to certify 3-4 farms. This will reduce costs
substantially.
The government can use its food testing centres and test these produce
with the same criteria as conventional products and let it sell at the same
price or let the farmer cultivate a relationship of trust with specific retailers/
consumers who will buy his products. The government may also use the
APMC infrastructure to make separate channel for organic foods.
Infact, the CII in its suggestions to revitalize the Food Processing and
Agriculture Sector, deepen private sector engagement and raise farmer
income has asked for exempting fruits, vegetables and other perishables
from the APMC Act and also to give farmers the freedom to sell directly to
220
food processing companies / aggregators /processors etc in addition to
selling through government or private mandis etc. This will also help
reduce wastage.
2. Adopting low cost machinery :
The size of the holdings and the weak economic status of our farmers
make the buying expensive machinery like the tractor unviable. A ‗relook‘
and 'reengineering' of farm mechanization so that we can effectively bring
small and marginal farmers in the fold of mechanization is necessary. The
future of farm mechanization in India lies
in the success of design, development and easy availability of low-cost
agricultural machineries and equipments that would not only suit the
requirements of our diverse natural resources but also match the economic
strength of the large and relatively low productive 'bottom of the pyramid'
Indian Agriculture. Use of low cost power equipment like the Diesel plough
costs less than Rs 75,000 as against a tractor which costs more than
double is an option. Even this could be shared by more than one farmer.
Machineries like a Self propelled Hydro Tiller, Low Land Manual Rice
Seeder, Manually Operated Single Row Garlic Planter, CIAE 3-row Seed-
cum-Fertilizer Drill and Animal Drawn Jyoti Multicrop Planter each of which
except the hydro tiller costs less than eight thousand rupees. For the
marginal farmers who are unable to afford even the machinery mentioned
above, the possession of a wheel barrow and cycle rikshaw can reduce
drudgery. The government of Maharashtra has suggested the making of an
―equipment bank‖ to be given to a group of farmers to be used free of cost.
221
This would increase productivity, and reduce drudgery and make farming
profitable.
Suggestions regarding training and education
3. As organic farming is labour intensive, a proper training to farmers
about organic inputs and farming techniques is a must. Allowing the
private sector to assist the farmers through knowledge and
information must be encouraged. Naturally contract farming would
be a way out.
4. Research must also be done to support the claims, interventions to
enhance the coverage and quality of training
5. A full fledge educational programme in the area of organic farming is
required. It is difficult to find correct information related to farming
practises like storage or movement of organic food. Translation of
study materials in the regional languages, sponsoring of the learners
and development of educational programme for the farmers and
professionals. For example the Gujarat government has a number of
its agriculture related web pages written in Gujarati.
6. Awareness and short term trainings about the certification must be
started to gain consumer confidence. Like Japan India too needs to
promote the India Organic logo within the country.
7. There are a number of job prospects that would become available in
the area if properly promoted like: Inspector in certification bodies,
group managers, counsellors, market facilitators, trained organic
farmers, Input producer, food safety officers and trained technicians
in the processing units.
222
Promoting Organic Food
Development policies must recognize the critical need to integrate
professional marketing support. Helping farmers to first assess their market
orientation and then access targeted organic markets requires business
and marketing skills that many NGOs and farmer associations often lack. It
is not necessary to turn a farmer into a trader but an apex body or a
network of organizations can be fortified with outside support and training
in order to take advantage of economies of scale, improving bargaining
power and significantly reducing transaction costs.
A private sector partner can also fulfil this role provided that the
arrangement secures a measure of equity for participating farmers. Any
strategy to promote organic agriculture among the poor ought to also
consider crop choices. Local varietal adaptability is important and so is the
exercise of caution regarding commodities such as coffee or tea whose
international markets are inherently volatile.
Selling back to the government in the form of mid-day meals for children, or
to hospitals can play a role in keeping demand stable.
IT companies of the likes of Infosys that are willing to help through
Corporate Social Responsibility could be approached to take up projects to
integrate the organic supply chain. There is a requirement to educate the
farmers on organic farming and there is the need for food companies to
increase traceability. Supply chain crunches, and integration of a good
internal quality management system to help ensure quality, traceability,
and organic compliance is required.
223
Targeting institutional market such as hotels, hospitals, airlines and
railways, to begin with, is an important strategy for promotion of market for
the organic produce in the domestic market.
Further, home delivery can prove effective tool in high end segment of the
market. Tying up of the organic products with other environmental friendly
products can also help.
There is need to establish incentives/penalties system for better/poor
quality of organic produce meant for, export in particular, and domestic
market in general
In order to improve the likelihood of success, parties must assure that
planning and implementation integrate appropriate sequencing and pre-
assessments and that any organic strategies build adequate time—at least
3-5 years – into the learning process.
Negative biases in public expenditures that favour conventional agricultural
systems and discriminate against smallholders and organic systems need
to be tackled.
As said by Mr. M.S. Swaminathan Chairman, National Commission on
Farmers, Government of India ―Our ability to achieve a paradigm shift from
green to an ever-green revolution and our ability to face the challenges of
global warming and sea level rise will depend upon our ability to harmonise
organic farming and the new genetics‖.
224
CHAPTER 10
SCOPE FOR FUTURE RESEARCH
Since this research shows that the consumer is keen on getting more
information and that they value recommendation, the next step would be to
provide proper information through labelling for organic food that is sold
through organised retail. But more often in the early stages of growth, the
route taken by organic produce has been one of direct relationship with the
consumer close to the area of origin. Different low cost distribution
methods may be researched in the future along with what information the
consumer is expecting on the label.
Unlike some European countries like Germany where there is a lot of
public support for organic farmers, in India unconditioned public support
has not developed and producers have to play their role in the competitive
arena. So research needs to find out differentiation strategies that will help
it compete with conventional products.
Consumers are still unused to having a regular supply of organic food due
to supply chain concerns. This chain needs to be continuous to make this
category successful. Thus research in this area is required.
Organic product lines have already reached a number of Indian retailers.
Thus this study is only preliminary in many ways. The whole concept of
how retailers need to deal with organic food is going to be the next stage
for growth. Some private businesses Organic India and Fab India have
started to stock organic products. But to reach the general public the
225
grocery retailers have to start selling at prices comparable to the regular
produce. Research needs to find a unique selling proposition for future
growth.
226
ANNEXURE I
BIBLIOGRAPHY
1. Acebron, L B, J-P Levy Mangin, and D Calvo Dopico. "A proposal
of the buying model of fresh food products : the case of fresh
mussels." Journal of International Food and Agribusiness
Marketing 11, no. 3 (2000): 75-96.
2. Aertsens, Joris, Wim Verbeke, Koen Mondelaers, and Guido Van
Huylenbroeck. "Personal determinants of organic food
consumption: a review." British Food Journal 109, no. 5 (2007):
399-411.
3. Ahlgren, M, I-B Gustafsson, and G Hall. "Attitudes and beliefs
directed towards ready-meal consumption." Food Service
Technology, 2004: 159-169.
4. Ahmad, Siti Nor. "Organic food: a study on demographic
charecteristics and factors influencing purchase intentions among
consumers in Klang Valley." International Journal of Business and
Manangement Vol 5, No 2, 2010 Feb.
5. Ajzen, Icek. "The Theory of Planned Behavior." Organizational
Behavior and Human Decision Processes, 1991: 179-211.
227
6. Ali, Jabir, and Sanjeev Kapoor. "Buying behaviour of consumers
for food products in an emerging." British Food Journal, Vol. 112
No. 2,, 2010: 187-199.
7. Andreasen, Alan R. "Attitudes and Consumer Behavior: A
Decision Model." In New Reserach in Marketing, by Lee E.
Preston, 1-16. Berkley: The Institute of Business and Economic
Research, University of California, 1966.
8. Asp, Elaine H. "Factors affecting food decisions made by
individual consumers." Food Policy Volume 24, no. 2–3, (May
1999): 287–294.
9. ASSOCHAM. Press Releases. January 17, 2012.
http://www.assocham.org/prels/shownews-archive.php?id=3282
(accessed June 2012).
10. B N, Shoja Rani. "Globalization and Contract Farming in India-
Advantages and Problems." Conference on Global Competition &
Competitiveness of Indian Corporate 638.
11. Babutsidze, Zakaria. "How Do Consumers Make Choices? A
Summary of Evidence from Marketing and Psychology
Literature." UNU-MERIT Working Paper Series (United Nations
University, Maastricht Economic and social Research and training
centre on Innovation and Technology), 2007: 5-24.
228
12. Baker, Susan, Keith E Thompson, and Julia Engelken. "Mapping
the values driving organic food choice: Germany vs UK."
European Journal of Marketing 38, no. 8 (2004): 995.
13. Bamberg, S., and P. Schmidt. "Incentives, morality or habit?
Predicting students‘ caruse for university routes with the models
of Ajzen, Schwartz, and Triandis." Environment and Behavior 35
(2003): 264-285.
14. Baourakis, George. Marketing Trends for Organic Food in the
21st Century- Series on computers and Operations research Vol
3. US: World Scientific Publishing Co Ltd, Singapore, 2004.
15. Barnes, Andrew P, Petra Vergunst, and Kairsty Topp. "Assessing
the consumer perception of the term "organic": a citizen's jury
approach." Britsh Food Journal 111, no. 2 (2009): 155-164.
16. Bass, F M. "A new product growth model for consumer durables."
Management Science 15 (1969): 215 -227.
17. Batte, M T, N H Hooker, T C Haab, and J Bearverson. "Putting
their money where their mouths are: consumer willingness to pay
for multi ingredient, processed organic food products." Food
Policy 32, no. 2 (2007): 145-159.
18. Beck, Ulrich. Risk Society; Towards a New Modernity. London:
Sage Publications, 1992.
229
19. Bennet, Peter D., and Harold H Kassarjian. Consumer Brhavior.
New Delhi: Prentice -Hall of India , 1996.
20. Bhardwaj, Arvind, B. D. Kiradoo, N. Saini, and M. S. Sahani.
Emirates Journal of Food and Agriculture 18, no. 2 (2006): 47-51.
21. Bhattacharya, Sourabh. "Consumer Attitude Towards Green
Marketing in India." The IUP Journal of Marketing Management
10, no. 4 (2011): 62-71.
22. Bhattacharyya, P., and G. Chakraborty. "Current Status of
Organic Farming in India and Other Countries." Indian Journal of
Fertilisers 1, no. 9 (December 2005): 111-123.
23. Birch, L. L. "Children‘s food acceptance patterns." Nutrition Today
31 (1996): 1-6.
24. Birthal, Pratap S., P. K. Joshi, and Ashok Gulati. Vertical
coordination in high-value food commodities: implications for
smallholders. Washington: International Food Policy Research
Institute (IFPRI) and the National Centre for Agricultural
Economics and Policy Research (NCAP), 2005.
25. Blackwell, R., Paul W. Miniard, and James F. Engel. Consumer
Behaviour. New Delhi: Vikas Publishing House, 2002.
26. Boyle, C., J. Cathro, and S Emmett. Organic Foods in the UK.
Niche or Mainstream Opportunity? Leatherhead Food Research
Association, Special Report, 1991.
230
27. Brokaw, Stephen C, and C Lakshman. "Cross-cultural consumer
research in India: A review and analysis." Journal of International
Consumer Marketing, 1995: 53-81.
28. Brundtland, Gro Harlem. Brundtland Report, Our Common
Future. United Nations World Commission on Environment and
Development, London: Oxford University Press, April,1987.
29. BUND Bio-Direkt, Bund fur Umwelt und Naturschutz Deutschland.
Bio-Direkt, Bund fur Umwelt und Naturschutz Deutschland.transl:
Bio-Direct, Association for the Environment and Nature
conservation Germany. Germany: BUND, 1993.
30. Campbell, C. The Romantic Ethic and the Spirit of Modern
Consumerism. Oxford: Basil Blackwell, 1987.
31. Chakrabarti, Somnath. "Factors influencing Organic food
purchase in India - Expert survey insights." British Food Journal,
Vol 112, issue 8, 2010: 902-915.
32. Chakrabarti, Somnath, and Rajat Baisya. "Purchase of organic
food: role of consumer innovativeness and personal influence
related constructs." Management Review IIM (B), 2009, March.
33. Chatterjee, Rabikar, and Jehoshua Eliashberg. "The Innovation
Diffusion Process in a Heterogeneous Population: A
Micromodeling Approach." Management Science 36, no. 9
(September 1990): 1057.
231
34. Chen, Mei- Fiang. "Attitude toward organic foods among
Taiwanese as related to health consciousness, environmental
attitudes and the mediating effects of a healthy lifestyle." British
Food Journal 111, no. 2 (2009): 165-178.
35. Choo, HoJung, Jae-Eun Chung, and Dawn Thorndike Psysarchik.
"Antecedents to new food product purchasing behavior among
innovator groups in India." European Journal of Marketing 38, no.
5/6 (2004): 608-625.
36. Chung, J E, J Yu, and D T Pysarchik. "Cue utilization to assess
food product quality: a comparison of consumers and retailers in
India." The International Review of Retail, Distribution and
Consumer Research 6, no. 2 (2006): 199-214.
37. CII, Confederation of Indian Industries.
http://www.cii.in/Index.aspx. 2012.
http://www.cii.in/Sectors.aspx?enc=prvePUj2bdMtgTmvPwvisYH
+5EnGjyGXO9hLECvTuNvCXClqMiUluXn1qQ54jikN.
38. Conner, David. The organic Label and sustainable agriculture:
consumer preferences and values. Ph D Thesis, The Graduate
School of Cornell University: Retrieved from Proquest database,
2002.
39. Cottingham, Martin, Emma Rose, Jim Twine, and Finn Cottle.
Organic Market Report 2012. Bristol: Soil Association, 2012.
232
40. Cottle, Finn, and James Twine. Organic market report 2012.
Septrember 2012. http://www.soilassociation.org/marketreport
(accessed 2012).
41. Cummings, Claire Hope. Japanese consumers hungry for more
organic food. 2003.
http://newfarm.rodaleinstitute.org/international/features/0803/jp_o
rg_retail.shtml.
42. Darby, M.R., and E. Karni. "Free competition and the optimal
amount of fraud." Journal of Law and Economics 16 , no. 1
(1973): 67-88.
43. Davies, Anne, Albert J Titterington, and Clive Cochrane. "Who
buys organic food? A profile of the purchasers of organic food in
Northern Ireland." British Food Journal 97, no. 10 (1995): 17.
44. Daw, M., B. Slee, and E Wynen. Organic Farming: A Review of
the Marketing and Economics of Production with Particular
Reference to Scotland. Scotland: SAC Economic Report No. 32,
1991.
45. Dean, M., M. M. Raats, and R. Shepherd. "The Role of Self-
Identity, Past Behavior, and Their Interaction in Predicting
Intention to Purchase Fresh and Processed Organic Food."
Journal of Applied Social Psychology, 2012: 669–688.
46. Deb, Madhurima, Devesh Mishra, Kalyan Kumar Guin, and
Gautam Sinha. "Impact of Food Marketing on Customer
233
Relationship in India - A Fuzzy logic Approach." Vilakshan, XIMB
Journal of Management, March 2007.
47. Deshingkar, P, U Kulkarni, L Rao, and S Rao. "Changing food
systems in india: response-sharing and marketing arrangements
for vegetable production in Andhra Pradesh‖, Development."
Policy Review 21, no. 5-6 (2003): 627 -639.
48. Dimitri, Carolyn, and Catherine Greene. Recent Growth Patterns
in the U.S. Organic Foods Market. Bulletin Number 777,
Washington D C: Department of Agriculture, Economic Research
Service, Market andTrade Economics Division and Resource
Economics Division, 2002.
49. Dimitri, Carolyn, and Lydia Oberholtzer. Marketing U.S. Organic
Foods: Recent Trends From Farms to Consumers. Washington
DC: USDA,Economic Research Service, Economic Information
Bulletin Number 58, 2009.
50. Dimitri, Carolyn, and Nessa Richman. Organic foods: Niche
marketers venture into the mainstream. Washington D.C.:
Agricultural Outlook, AGO-272, U.S.D.A.- ERS , 2000.
51. Douglas, M. "Deciphering a meal." In Implicit meanings. Essays in
anthropology, edited by M. Douglas, 249-275. London, 1975.
52. Drichoutis, Andreas C., Panagiotis Lazaridis, and R. M. Naygya.
"CONSUMERS‘ USE OF NUTRITIONAL LABELS: A REVIEW
234
OF RESEARCH STUDIES AND ISSUES." Academy of Marketing
Science Review, 2006.
53. Dunlap, Riley E. "Environmental sociology: A personal
perspective on its first quarter century." Organization &
Environment 15, no. 1 (2002): 10-29.
54. Dunlap, Riley E., and Robert Emmet Jones. "Environmental
Concern: Conceptual and Measurement Issues." In Handbook of
Environmental Sociology, edited by Riley E. Dunlap and William
Michelson, 482-524. Westport, CT: Greenwood Press, 2002.
55. Eades, Daniel C. Identifying Spatial Clusters within U.S. Organic
Agriculture. West Virginia: Dissertation, 2006.
56. Eagly, Alice H., and Shelly Chaiken. The Psychology of Attitudes.
Harcourt Publishers, 1993.
57. Elzakker, Bo van, and Frank Eyhorn. The Organic Business
Guide - Developing sustainable value chains with smallholders.
IFOAM, 2010.
58. Engel, James, Roger Blackwell, and Paul Miniard. Consumer
Behavior. Forth Worth: The Dryden Press, 1995.
59. Essoussi, Leila Hamzaoui, and Mehdi Zahaf. "Clustering organic
food consumers using purchasing patterns." Journal of European
Management 9 , no. 1 (03 2009).
235
60. Essoussi, Leila Hamzaoui, and Mehdi Zahaf. "Decision making
process of community organic food consumers: an exploratory
study." Journal of Consumer Marketing 25, no. 2 (2008): 95–104.
61. Essoussi, Leila Hamzaoui, and Mehdi Zahaf. "Profiling organic
food consumers: motivations, trust orientations and purchasing
behaviour." Journal of International Business and Economics 8,
no. 2 (May 2008).
62. —. The Organic Food Market: Opportunities and
Challenges,Organic Food and Agriculture - New Trends and
Developments in the Social Sciences. Edited by Dr.Mathew
Reed. InTech, Jan 2012.
63. European Commission. Summaries of EU Legislations. May
2012.
http://europa.eu/legislation_summaries/agriculture/general_frame
work/l60032_en.htm (accessed 2012).
64. ExIm Bank. Export of Organic Products from India: Prospects and
Challenges. Occational Paper no 97, Export Import Bankof India
(ExIm Bank), Mumbai: Export Import Bankof India (ExIm Bank),
May 2003, 1-66.
65. "Factors affecting food decisions made by individual consumers."
Food Policy 24 (1999): 287-294.
66. FAO. Food and Agriculture Organisation of the United Nations.
2012. http://www.fao.org/organicag/en/ (accessed July 2012).
236
67. —. Japan Country Profiles for Organic Agriculture . December
2005.
http://www.fao.org/organicag/display/work/display_2.asp?country
=JPN&lang=en&disp=summaries (accessed 2012).
68. FAO/ WHO. Guidelines for the production, processing, labelling
and marketing of organically produced foods. Rome: Codex
Alimentarius Commission, Joint FAO/WHO Food Standards
Programme, 1999.
69. Feldman, A. "Teacher education and the practical domain:
Practical conceptual change in collaborative action research." l
Annual Meeting of the American Educational Research
Association, April 13-17. San Diego, CA, 1998.
70. Fishbein, Martin, and Icek Ajzen. Belief, Attitude, Intention and
behavior: An Introduction to Theory and Reserach. USA: Addison
- Wesley , 1975.
71. Fotopoulos, C. "Stratigic planning for the expansion of the market
for organic products." Agricoltura - Mediterranea 126 (1996): 260-
269.
72. Fotopoulos, C, and G Chryssochoidis. "Factors affecting the
decision to purchase organic food." Journal of Euromarketing
USA 9, no. 3 (2000): 45-67.
73. Fotopoulos, Christos, and Athanasios Krystallis. "Organic food
avoidance- reasons for rejection and potential buyers
237
identification in a countrywide survey." British Food Journal, Vol
104, No3/4/5, 2002: 233-260.
74. Fotopoulos, Christos, and Athanasios Krystallis. "Purchasing
motives and profile of the Greek organic consumer: A
countrywide survey." British Food Journal 104, no. 8/9 (2002):
730.
75. Gaetano, Chinnici, Mario D‘ Ameico, and Pecorino Biagio. "A
multivariate statistical analysis on the consumers of organic
products." British Food Journal, Vol 104 no 3/4/5, 2002: 187-199.
76. Gao, Ge. Consumer behaviour: Who seeks information about
genetically modified foods? . Ph D Thesis, University of Alberta,
Canada: Retrieved from ProQuest Dissertations and Theses,
2005.
77. Gardello, A V. "Food quality: reletavity, context and consumer
expectations." Food Quality and Preference 6, no. 3 (1995): 163-
170.
78. Garibay, S. V., and K. Jyoti. Field Survey & Publication – Organic
and Biodynamic farming, Govt. of India, Planning Commission.
FIBL and Org-Marg, 2003.
79. Garibay, Salvador, and Katke Jyoti. Market Opportunities and
Challenges for Indian Organic Products. FIBL, 2003.
238
80. George, Darren, and Paul Mallery. IBM SPSS Statistics 19 Step
by step a Simple Guide and Reference. Boston: Pearson
Education, 2012.
81. Germov, J., and L Williams. "Sexual division of dieting: women‘s
voices." Sociological Review, 1996: 630-647.
82. Gifford, Katie, and John C Bernard. "Influencing consumer
purchase likelihood of organic food." International Journal of
Consumer Studies, March 2006: 155-163.
83. Giovannucci, Daniele. Evaluation of Organic Agriculture and
Poverty Reduction in Asia: China and India focus. Rome: IFAD
Office of Evaluation, 2005 Feb.
84. GOI (Government of India). Report of the Working Group on
Organic and Bio-Dynamic Farming for the10th Five Year Plan.
New Delhi: Planning Commission GOI, 2001.
85. GOI Government of India. Faster, Sustainable and More Inclusive
Growth: An Approach to the Twelth Five Year Plan. New Delhi:
Planning Commission, GOI, 2012.
86. GOI; Government of India . 10th Five Year Plan 2002-2007, Vol.
II – Sectoral Policies and Programmes. New Delhi: Planning
Commission, GOI, 2003.
239
87. Goyal, Anita, and N P Singh. "Consumer perception about fast
food in India: an exploratory study." British Food Journal 109, no.
2 (2007): 182 - 196.
88. Gregan-Paxton, J., J. Hibbard, F. Brunel, and P. Azar. "So that‘s
what that is : Examining the impact of analogy on consumers‘
knowledge development for really new products." Psychology &
Marketing 19 (2002): 533–550.
89. Gronow, J., and A. Warde, . Ordinary Consumption. London:
Sage, 2001.
90. Gulati, Ashok, P.K. Joshi, and Maurice Landes1. Fragmenting
Bottom and Consolidating Top: India’s Changing Food System
and Implications for Small Holders, in India: Some aspects of
Economic and Social development. Edited by S.Mahendra Dev
and K.S. Babu. India: Academic Foundation, 2008.
91. Gupta, Kirti Bardhan. "Consumer behaviour for food products in
India." 19th Annual World Symposium. Budapest, Hungary:
International Food & Agribusiness Management Association,
2009.
92. Haghiri, Morteza, Jill E. Hobbs, and Meaghan L. McNamarac.
"Assessing Consumer Preferences for Organically Grown Fresh
Fruit and Vegetables in Eastern New Brunswick." International
Food and Agribusiness Management Review 12, no. 4 (2009):
81-100.
240
93. Hall, Darwin C., Brian P. Baker, Jacques Franco, and Desmond A
Jolly. "Organic Food And Substainable Agriculture."
Contemporary Policy Issues; 7, 4;, 1989: 47.
94. Hamm, U., and J Michelsen. "Organic agriculture in a market
economy. Perspectives from Germany and Denmark, in
Ostergaard." Fundamentals of Organic Agriculture, Conference
Proceedings, 14th IFOAM International Scientific Conference.
Copenhagen, 1996.
95. Hansen, Torben, Ashesh Mukherjee, and Thyra Uth Thomsen.
"Anxiety and search during food choice:the moderating role of
attitude towards nutritional claims." Journal of Consumer
Marketing 28, no. 3 (2011): 178–186.
96. Hart, Stuart L. Capitalism at the Crossroads- Alligning business,
earth and humanity (2nd ed). New Jersy: Wharton School
Publishing, 2007.
97. Hoefkens, Christine, et al. "A literature-based comparison of
nutrient and contaminant contents between organic and
conventional vegetables and potatoes." British Food Journal 111 ,
no. 10 (2009): 1078-1097.
98. Holm, L., and H. Kildevang. "Consumers‘ Views on Food Quality:
A Qualitative Interview Study." Appetite 27, no. 1 (1996): 1-14.
99. Howard, John A., and Jagdish N. Sheth. A theory of Buyer
Behavior. New York: Wiley, 1969.
241
100. Hustvedt, Gwendolyn. Consumer preferences for blended organic
cotton apparel. Ph.D Thesis, Kansas State University: Retrieved
from Proquest database, 2006.
101. IAASTD. Agriculture at a Crossroads : East & South Asia and the
Pacific. Volume II, East & South Asia and the Pacific,
Johannesburg: IAASTD, 2008.
102. IFAD. Declining agricultural productivity: the role of
biotechnology, organic and regenerative agriculture. 2011.
http://www.ifad.org/poverty/region/pi/PI_part2.pdf (accessed July
2012).
103. IFPRI. IFPRI Annual Report. Washington DC: International Food
Policy Research Institute (IFPRI), 2003.
104. Jager, Wander. Modeling consumer behaviour. PhD thesis,
University of Groningen, 2000.
105. Janssen, MA, and Wander Jager. "Adoption of new products in a
market of changing preferences and social networks." Journal of
Economic Psychology 22 (2001): 745–772.
106. Janssen, Marco A., and Wander Jager. "Stimulating diffusion of
green products Co-evolution between firms and consumers."
Journal of Evolutionary Economics 12 (2002): 283–306.
242
107. Jolly, D.A. "Differences between buyers and non-buyers of
organic produce and willingness to pay organic price premiums."
Journal of Agribusiness Spring (1991).
108. Jolly, D.A., Schutz, H.G., Diaz-Knauf, K. and Johal, J. "Organic
foods: consumer attitudes and use." Food Technology 43, no. 11
(1989): 60-66.
109. Journo, Laurent J. French Organic Market. Paris: USDA Foreign
Agricultural Services, GAIN, 2009.
110. Kaiser, F. G., and H. Gutscher. "The proposition of a general
version of the theory of planned behavior: Predicting ecological
behavior." Journal of Applied Social Psychology 33 (2003): 586-
603.
111. Kalafatis, S. P., M. Pollard, R. East, and M. H. Tsogas. "Green
marketing and Ajzen‘s Theory of Planned Behaviour: A cross-
market examination." Journal of Consumer Marketing 16, no. 5
(1999): 441-460.
112. Kerton, Sarah, and A. John Sinclair. "Buying local organic food: a
pathway to transformative learning." Agric Hum Values 27 (2010):
401-413.
113. Kjaernes, Unni. "Trust and Distrust: Cognitive Decisions or Social
Relations?" Journal of Risk Research 9, no. 8 (2006): 911-932.
243
114. Kjærnes, Unni. "Ethics and Action: A Relational Perspective on
Consumer Choice in the European Politics of Food." Journal of
Agricultural and Environmental Ethics 25, no. 2 (2012): 145-162.
115. Kolanu, Thilotham R, and Sunil Kumar. Greening Agriculture in
India - An Overview of Opportunities & Constraints. FAO
Corporate Document Repository, 2003.
116. Kottila, Marja-Riitta, and Paivi Ronni. "Collaboration and trust in
two organic food chains." British Food Journal 110, no. 4/5
(2008): 376-394.
117. KPMG. Consumer Markets in India: The Next Big Things.
Publication No. 213-405, KPMG, 2005.
118. Krystallys, Athanasios, and George Chryssohoidis. "Consumers'
willingness to pay for organic food - Factors that affect it and
variation per organic product type." British Food Journal, 2005:
320-343.
119. Kumar, P., Z Mruthyunjaya, and P.S. Birthal. "Changing
consumption pattern in South Asia." Paper presented at the
International Workshop on Agricultural Diversification and Vertical
Integration in South Asia, organized by the Federation of Indian
Chambers ofCommerce and Industry,the International Crops
Research Institute for theSemi Arid Tropic, Nov 2003.
120. Lampkin, N., O. Schmid, S. Dabbert, J. Michelsen, and R. Zanoli,
. ORGAPET: The Organic Action Plan Evaluation Toolbox.
244
Institute of Biological, Environmental and Rural Sciences,
Aberystwyth University, Wales and FiBL, Frick, Switzerland,
2008.
121. Lampkin, Nicholas, Carolyn Foster, Susanne Padel, and Peter
Midmore. The Policy and Regulatory Environment for Organic
Farming in Europe. Vol. 1. Stuttgart: Universitat Hohenheim,
Insitut fur Landwirtschaftliche Betriebslehre, 1999.
122. Landes, Maurice, Suresh Persaud, and John Dyck. India's poultry
sector: development and prospects. Washington DC.: (WRS-04-
03) Economic Research Service, United States Department of
Agriculture, 2004, 67.
123. Larue, B., West, G.E., C. Gendron, and R Lambert. "Consumer
response to functional foods produced by conventional, organic,
or genetic manipulation." Agribusiness 20, no. 2 (2004): 155-166.
124. Latacz-Lohmann, Uwe, and Carolyn Foster. "From "niche" to
"mainstream" - strategies for marketing organic food in Germany
and the UK." British Food Journal, 1997: 275-282.
125. Lea, Emma, and Tony Worsley. "Australians' organic food beliefs,
demographics and values." British Food Journal 107, no. 10/11
(2005): 855.
126. Li, Ying, and Mengqing Sui. "Literature Analysis of Innovation
Diffusion." Technology and Investment 2 (2011): 155-162.
245
127. Liehr, Patricia, and Mary Jane Smith. Theoretical Framework,
Department of Psychology. 2012.
homepage.psy.utexas.edu/homepage/class/.../liehr%20class.doc
(accessed 2012).
128. Lien, Marianne Elizabeth. "Fuel for the body – nourishment for
dreams: contradictory roles of food in contemporary Norwegian
food advertising." Journal of Consumer Policy 18, no. 2-3 (1995):
157-186.
129. —. Marketing and Modernity. London: Oxford: Berg., 1997.
130. Likert, R. "A technique for the measurements of attitudes. ."
Archivesof Psychology, 1932: 140.
131. Ling, Shu-Shian, Dawn Thorndike Pysarchik, and Ho Jung Choo.
"Adopters of new food products in India." Marketing Intelligence &
Planning 22, no. 4 (2004): 371-391.
132. Littrell, M. A., and N. J Miller. "Marketing across cultures:
Consumers‘ perception." Journal of Global Marketing 15, no. 1
(2001): 67-86.
133. Loudon, D.L., and A.J. Della Bitta. Consumer Behavior, Fourth
Edition. New Delhi: Tata-McGraw Hill, 2002.
134. Magistris, Tiziana de, and Azucena Gracia. "The decision to buy
organic food products in Southern Italy." British Food Journal 110,
no. 9 (2008): 929-947.
246
135. Magkos, Faido, Fotini Arvaniti, and Antonis Zampelas. "Organic
Food: Buying More Safety or Just Peace of Mind? A Critical
Review of the Literature." Critical Reviews in Food Science &
Nutrition 46, no. 1 (Jan/Feb 2006): 23-56; 34 p.
136. Magnusson, Maria K, Anne Arvola, and Ulla-Kaisa Koivisto.
"Attitude towards organic food among Swedish consumers."
British Food Journal 103, no. 3 (2001): 209-226.
137. Mahajan, V, E Muller, and FM Bass. "New product diffusion
models in marketing: a review and directions for research."
Journal of Marketing 54 (1990): 1-26.
138. Mahajan, Vijay, and Eitan. Muller. "Innovation Diffusion and New
Product Growth Models in Marketing." Journal of Marketing 43,
no. 4 (1979): 55.
139. Malhotra, Naresh, and Satyabhushan Dash. Marketing Research
An Applied Orientation. Noida: Dorling Kindersley (licencee of
Pearson Education), 2011.
140. McGrath, Cathleen, and Deone Zell. "The future of innovation
diffusion research and its implications for management: A
conversation with Everett Rogers." Journal of Management
Inquiry (Journal of Management Inquiry) 10, no. 4 (Dec 2001):
386-391.
141. Meier-Ploeger, A., and L. Woodward. "Ecology and Farming."
Friends between countries 20 (Jan-April 1999): 15.
247
142. Mennell, S., A. Murcott, and P. Van Otterloo. The sociology of
food: Eating, diet and culture. London: Sage, 1992.
143. Menon, Manoj Kumar. "The Market Potential For Organic Foods
In India." International Conference on Organic Agriculture on
Food Security. Rome: FAO, 2007. 65-67.
144. Midmore, Peter, Simona Naspetti, Anne-Marie Sherwood,
Daniela Vairo, Mette Wier, and Raffaele Zanoli. "Consumer
Attitudes To Quality And Safety Of Organic And Low Input Foods:
A Review." 2005.
145. Miljkovic, Dragan, and Cary Effertz. "Consumer behavior in food
consumption: reference price approach." British Food Journal 112
, no. 1 (2010): 32-43.
146. Ministry of Agriculture, Govt of Uttaranchal. Organic Uttarakhand.
2009. http://www.organicuttarakhand.org/market.html (accessed
2012).
147. Ministry of Agriculture, Govt. of India. http://agricoop.nic.in/.
http://agricoop.nic.in/ (accessed 2012).
148. —. http://eands.dacnet.nic.in/latest_2006.htm. 2007.
http://eands.dacnet.nic.in/latest_2006.htm (accessed 2012).
149. Mohamad Salleh, , Musdiana, Siti Meriam Ali, and Etty Harniza
Harun. "Consumer's Perception and Purchase Intentions towards
248
Organic food products: Exploring Attitude among Acedamician."
Canadian Social Science Vol. 6, No. 6,, 2010: 119-129.
150. Molella, Arthur P. "The Longue Durée of Abbott Payson Usher: A.
P. Usher, A History of Mechanical Inventions." Technology and
Culture 46, no. 4 (October 2005): 779-796.
151. Mondelaers, Koen, Wim Verbeke, and Guido Van Huylenbroeck.
"Importance of health and environment as quality traits in the
buying decision of organic products." British Food Journal , 2009:
1120-1139.
152. Muthukumaran, K. "Organic Agriculture and Food
Industry:Trends, Challenges and Opportunities." CAB Calling;
College of Agricultural Banking, Oct-Dec 2006: 13-20.
153. Nagla, Madhu. "Feeding the family in India: an approach to
household food consumption." International Journal of Consumer
Studies, 2007: 295-302.
154. Naik, Gopal, and Vishnuprasad Nagadevara. "Spatial Clusters in
Organic Farming – A Case Study of Pulses Cultivation in
Karnataka." IIM(B) Working Paper No 316.
155. Narayana, Dr.S. Organic Farming In India : Relevance, Problems
And Constraints. Occational Papre 38, Departnnent of Econonnic
Analysis and Research, NABARD, Mumbai: National Bank for
Agriculture and Rural Development (NABARD), 2005.
249
156. Nargundkar, Rajendra. Marketing Research Text and Cases.
New Delhi: Tata McGraw-Hill, 2010.
157. Newton, Jason Robert. Consumer health benefits through
agricultural Biotechnology: an economic examination of obstacles
to Commercial introduction. Canada: A Thesis submitted to the
Department of Agricultural Economics, University of
Saskatchewan, 2005.
158. Nicholls, J. A. F., Sydney Roslow, Sandipa Dublish, and Lucette
B. Comer. "A Relationship Between Situational Variables and
Purchasing in India and the United States." International
Marketing Review 15, no. 6 (1996): 6-21.
159. Nucifora, A M D, and I Peri. "The demand for organic fruit and
vegetable products in EU countries: A survey of the expectations
of the of market agents." Medit no 3 3, no. 1 (2001): 19-23.
160. OECD, WorldBank, and UN. Incorporating Green Growth and
Sustainable Development Policies into Structural Reform
Agendas. A Report prepared for the G20 Summit, Los Cabos,
Mexico, 2012.
161. Onyango, Benjamin M., William K. Hallman, and Anne C.
Bellows. "Purchasing organic food in US food systems- Astudy of
attitude and practise." British Food Journal 109, no. 5 (2007):
399-411.
250
162. Padel, Susanne, and Carolyn Foster. "Exploring the gap between
attitude and behaviour- understanding why consumers buy or do
not buy organic food." British Food Journal, 2005, Vol 104, No 8:
606-625.
163. Padel, Susanne, and Peter Midmore. "The development of the
European market for organic products: insights from a Delphi
study." British Food Journal 107, no. 8 (2005): 626.
164. Padel, Susanne, Nic Lampkin, and C arolyn Foster. "Influence of
policy support on the development of organic farming in the
European Union." International Planning Studies 4, no. 3
(Oct,1999): 303-315.
165. Pilgrim, Francis J. "The Components of Food Acceptance and
Their Measurement." The American Journal of Clinical Nutrition 5,
no. 2 (1957): 171-175.
166. Pingali, P. "Westernization of Asian diets and the transformation
of food systems:implications for research and policy." Food Policy
32, no. 3 (2007): 281-98.
167. Portocarrero, Emilio. Organic Food Products in China: Market
Overview. Geneva: International Trade Centre (ITC), 2011.
168. Post, Anna, Helena Shanahan, and Lena Jonsson. "Food
processing: barriers to, or opportunities for, organic foods in the
catering sector?" British Food Journal 110, no. 2 (2008): 160-173.
251
169. Powell, J. "Direct distribution of organic produce: sustainable food
production in industrialised countries",." Outlook on Agriculture
24, no. 2 (1995): 121-5.
170. Radman, Marija. "Consumer consumption and perception of
Organic products in Croatia." British Food Journal 107 (2005):
263-273.
171. Ramesh Kumar, S. Consumer Behaviour and Branding,
Concepts, Readings and Cases. Noida: Pearson, Dorling
Kindersly (India) Pvt. Ltd., 2009.
172. Rao, P Parthasarathy, P. S. Birthal, and P K Joshi. Sustaining
Growth in High-Value Food Commodities:Role of Urbanization
and Infrastructure. Patancheru: International Crops Research
Institute for the Semi-Arid Tropics (ICRISAT), 2006.
173. Rao, Pratima, Ramesh V Bhat, R V Sudershan, and T Prasanna
Krishna. "Consumption of synthetic food colours during festivals
in Hyderabad, India." British Food Journal 107, no. 4/5 (2005):
276-284.
174. Rao, S.L. "India‘s rapidly changing consumer markets." Economic
and Political Weekly, Sep 30- Oct 6 2000: 3570- 3572.
175. Research and Markets.com. Organic Food in France. 2012.
http://www.researchandmarkets.com/research/7c3807/organic_fo
od_in_fr (accessed 2012).
252
176. Rimal, Arbindra P, and Siva Balasubramanian. "Agro-
biotechnology and organic food purchase in the United Kingdom."
British Food Journal; 2005; 107, no. 2 (2005): 84.
177. Robinson, Joan. "The Classification of Inventions." Review of
Economic Studies 5, no. 2 (February 1938): 139.142.
178. Roddy, Gerardine, Cathal A Cowan, and George Hutchinson.
"Consumer attitudes and behavior to organic foods in Ireland."
Journal of International Consumer Marketing 9, no. 2 (1996): 41.
179. Roddy, Gerardine, Cathal Cowan, and George Hutchinson.
"Organic food: A description of the Irish market." British Food
Journal (The Emerald Group) 96, no. 4 (1994): 3.
180. Rogers, Everett M. Diffusion of Innovations. 4th. New York: The
Free Press, 1995.
181. Rogers, Everett M. Diffusion of Innovations, 5th ed.,. 5th. New
York: Free Press., 2003.
182. Roslow, Sydney, T. Li, and J.A.F. Nicholls. "Impact of situational
variables on the demographic attributes in two seasons on
purchase behaviour." European Journal of Marketing 34, no. 9/10
(2000): 1167-80.
183. Roux, Cécile, Philippe Le Couedic, Sabine Durand-Gasselin, and
François-Marie Luquet. "Consumption patterns and food attitudes
253
of a sample of 657 low-income people in France." Food Policy 25,
no. 1 (February 2000): 91-103.
184. Ryan, B. "A study in technological diffusion." Rural Sociology 13
(1948): 273- 285.
185. Sabnavis, Madan. Why Organised Retail is Good. May 28, 2008.
http://www.thehindubusinessline.in/bline/2008/05/28/stories/2008
052850330800.htm (accessed January 14, 2012).
186. Saha, Monica, and Geoffrey Darnton. "Green companies or green
con-panies: Are companies really green, or are they pretending to
be? , 110(2),." Business and Society Review 110, no. 2 (July
2005): 117-158.
187. Salvador, V Garibay, and Jyoti Katke. Market Opprtunities and
Challenges for Indian Organic Products. Research Institute of
Organic Agricuklture (FIBL) and ACNielsen ORG MARG, Swiss
State Secretariat of Economic Affairs (SECO), 2003.
188. Santacoloma, Pilar. Marketing strategies and organisational
structures under marketing strategies and organisational
structures under. Rome: Agricultural Management, Marketing and
Finance Service (AGSF, FAO), 2007.
189. Shaw, A, P Mathur, and N.N. Mehrotra. "A study of consumers'
attitude towards processed food." Indian Food Industry 47 (1993):
29-41.
254
190. Sheperd, R., Magnusson, M. and Sjoden, P.O. "Determinants of
consumer behaviour related to organic foods." Ambio Vol. 34, no.
4/5 (2005): 352-359.
191. Sheth, Jagdish N., and Banwari Mittal. Customer Behavior: A
Managerial Perspective 2nd edition. South Western, 2004.
192. Shetty, P.S. "Nutrition transition in India." Public Health Nutrition 5
(2002): 175-182.
193. Shukla, Shailesh, Darshit Shah, Pawan Mehra, Murali Krishna,
and Anil Gupta. Consumer Response to Green Market
Opportunities I and II. Ahmedabad: Center for Management in
Agriculture, IIM-A, 1998.
194. Silverstone, Rob. "Organic Farming: Food for the Future?"
Nutrition & Food Science 93, no. 5 (1993): 10-14.
195. Singh, Joginder. Impact Assessment study of Center of Organic
Farming I & II, Uttarakhand state. Mumbai: Sir Ratan Tata Trust
(SRTT), 2009 Dec.
196. Singh, Sukhpal. "Marketing of Indian Organic Products: Status,
Issues, and Prospects." Sristi. Ahmedabad: IIM_A, 2003.
197. Singla, Manisha. "Usage and understanding of food and
nutritional labels among Indian consumers." British Food Journal
112, no. 1 (2010): 83-92.
255
198. Soler, Francisco, Jose M Gil, and Mercedes Sanchez.
"Consumers' acceptability of organic food in Spain." British Food
Journal 104, no. 8/9 (2002): 670.
199. Sparks, P., and R. Shepherd. "Self-identity and the theory of
planned behavior: Assessing the role of identification with "green
consumerism." Social Psychology Quarterly 55 (1992): 388-399.
200. Squires, Lisa, Biljana Juric, and T Bettina Cornwell. "Level of
market development and intensity of organic food consumption:
Cross Cultural study of Danish and New Zealand Consumers."
The Journal of Consumer Marketing 18, no. 4/5 (2001): 392.
201. Sriram, V, and Andrew M Forman. "The relative importance of
products' environmental attributes: A cross-cultural comparison."
International Marketing Review 10, no. 3 (1993): 51-70.
202. Steenkamp, Jan-Benedict E.M. "Food Consumption Behaviour."
European Advances in Consumer Research 1 (1993): 401-409.
203. Steenkamp, J-B E M. "Dynamics in consumer behavior with
respect to agricultural and food products." In Agricultural
Marketing and Consumer Behavior in a Changing World, by
Berend Wierenga, Aad Van Tilburg, Klaus Grunert, J-B E M
Steenkamp and Michel Wedel, edited by B. Wierenga, 143-188.
The Netherlands: Kluwer Academic Publishers, 1997.
256
204. Stein, R. I., and C. J. Nemeroff. "Moral overtones of food:
Judgements of the others based on what they eat." Personality
and Social Psychology Bulletin 21 (1995): 480-490.
205. Stern, P. C., T. Dietz, T. Abel, G. A. Guagnano, and L. A. Kalof.
"A value-belief norm theory of support for social movements; the
case for environmentalism." Human Ecology Review 6 (1999):
81-97.
206. Subrahamanyeswari, B., and Mahesh Chander. "Registered
Organic Farmers in Uttarakhand state of India: A profile."
International Conference on Organic Agriculture and Food
Security. Italy: FAO, 2007. 55.
207. Sylvander, Bertil, and Aude Le Floc‘h-Wadel. "Consumer
Demand and Production of Organics in the EU." AgBioForum 3,
no. 2&3 (2000): 97-106.
208. Tarkiainen, Anssi, and Sanna Sundqvist. "Subjective norms,
attitudes and intentions of Finnish consumers in buying organic
food." British Food Journal 107, no. 10/11 (2005): 822 (15 pp.).
209. Tate, W. "The development of the organic industry and market:
an international perspective." In The Economics of Organic
Farming,, by Nic Lampkin and Susan Padel, 11-25. Wallingford:
CAB International, 1994.
210. The Economist. "Spice with everything." The Economist,
November 22, 1997: 3.
257
211. The National Institute of Agricultural Extension Management.
"Contract Farming Ventures in India: A few successful Cases."
SPICE, Ministry of Agriculture, Govt. of India (The National
Institute of Agricultural Extension Management (MANAGE), an
organisation of the Ministry of Agriculture, Govt. of India.) 1, no. 4
(March 2003): 1-6.
212. TheHindu. The Hindu online edition. November 15, 2005.
http://www.hindu.com/2005/11/15/stories/2005111516410500.ht
m (accessed May 25, 2012).
213. Thompson, G. D. "Consumer demand for organic foods: What we
know and what we need to know." American Journal of
Agricultural Economics 80, no. 5 (1998): 1113-1118.
214. Thompson, Gary D., and Julia Kidwell. "Explaining the choice of
organic produce: Cosmetic defects, prices, and consumer
preferences." American Journal of Agricultural Economics 80
(May 1998): 277-287.
215. Torjusen, H., G. Lieblein, M Wandel, and C.A. Francis. "Food
system orientation and quality perception among consumers and
producers of organic food in Hedmark County, Norway." Food
Quality and Preference 12 (2001): 207-216.
216. Torjusen, Hanne, Lotte Sangstad, Katherine O'Doherty Jensen,
and Unni Kjærnes. European Consumers' Conceptions of
Organic Food: A Review of available literature. Professional
258
report no. 4-2004, National Institute of Consumer Research, Oslo,
Norway: European Commission, Fifth Framework Programme,,
2001.
217. Tregear, A., Dent, J.B., and M.J. McGregor. "The demand for
organically-grown produce." British Food Journal 96, no. 4 (1994):
21.
218. Tsakiridou, Efthimia, Christina Boutsouki, Yorgos Zotos, and
Kostantinos Mattas. "Attitudes and behaviour towards organic
products: an exploratory study." International Journal of Retail &
Distribution Management 36, no. 2 (2008): 158-175.
219. Turrell, G., B. Hewitt, C. Patterson, B. Oldenburg, and T. Gould.
"Socioeconomic differences in purchasing behaviour and
suggested implications for diet-related health promotion." Journal
of Human Nutrition and Dietetics 15 (2002): 355-364.
220. Tutunjian, J. "Market survey 2007." Canadian Grocer, 122 (1)
(2008): 26-34.
221. Tutunjian, J. "Are organic products going mainstream?‖,."
Canadian Grocer, Vol. 118 118 (2004): 31-34.
222. USDA. Organic Agriculture. July 2012.
http://www.ers.usda.gov/topics/natural-resources-
environment/organic-agriculture/organic-market-overview.aspx
(accessed 2012).
259
223. Vaswani, L K V Venkatakrishnan, R Upadhyay, and J Talati.
Agriculture- Market Linkages: Evaluating and Evolving a
Conceptual Framework in Indian Context, Occasional Paper No.
28,. Mumbai: NABARD, 2003.
224. Veeck, Ann, and Gregory Veeck. "Consumer Segmentation and
Changing Food Purchase Patterns in Nanjing, PRC." World
Development 28, no. 3 (2000): 457- 471.
225. Vepa, Swarna. "Impact of globalization on the food consumption
of urban India." Globalization of Food Systems in Developing
Countries: Impact on Food Security and Nutrition, FAO Food&
Nutrition paper 83. Rome: Food and Agriculture Organization of
the United Nations, 2004. 215.
226. Verbeke, Wim. "Influences on the Consumer Decision-Making
Process Towards Fresh Meat - Insights from Belgium and
Implications." British Food Journal 102, no. 7 (2000): 522-538.
227. Verdurme, A., X. Gellynck, and J. Viaene. "Are organic food
consumers opposed to GM food consumers?" British Food
Journal 104 No. 8 (2002): 610-23.
228. Via, Giovanni La, and Antonio M D Nucifora. "The determinants of
the price mark-up for organic fruit and vegetable products in the
European union." British Food Journal 104, no. 3/5 (2002): 319.
229. Vindigni, Gabriella, Marco A Janssen, and Wander Jager.
"Organic food consumption a multi theoretical framework of
260
consumer decision making." British Food Journal (British Food
Journal) 104, no. 8/9 (2002): 624-642.
230. Vossenaar, René, Veena Jha, and Els Wynen. Trading
Opportunities for Organic Food Products from Developing
Countries. UNCTAD, New York, Geneva: UNCTAD, 2004.
231. Wandel, M., and A. Bugge. Consumers, Food and Market;
Consumer valuations and priorities in the nineties. SIFO-report
no. 2, 1994.
232. Warde, A. "Social mechanisms generating demand: a review and
manifesto." In Innovation by demand. An interdisciplinary
approach to the study of demand and its role in innovation, edited
by A McMeekin, K. Green, M Tomlinson and V. Walsh, 10-22.
Manchester and New York:: Manchester University Press, 2002.
233. Wier, M., L.M. Andersen, and K Millock. "Information provision,
consumer perceptions and values: the case of organic foods." In
Environment, information and consumer behaviour, edited by S.
Krarup and C. S. Russell, 161-178. 2005.
234. Wier, Mette, and Carmen Calverley. "Market potential for organic
foods in Europe." British Food Journal 104, no. 1 (2002): 45.
235. Willer, and Helga. "Organic Agriculture Worldwide – The Results
of the FiBL/IFOAM Survey." In The World of Organic Agriculture.
Statistics and Emerging Trends 2011, edited by H Willer and L
Kilcher, 34-60. Bonn & Frick: IFOAM AND FIBL, 2011.
261
236. Willer, and Helga. "The World of Organic Agriculture 2012:
Summary." In The World of Organic Agriculture - Statistics and
Emerging Trends 2012., edited by Helga Willer and Lukas
Kilcher, 2-10. IFOAM & FIBL, 2012.
237. Willer, Helga, and Kilcher Lukas. The Worldof Organic
Agriculture- Statistics and Emerging Trends. Bonn andFrick: FIBL
& IFOAM, 2010.
238. Willer, Helga, and Minou Yussefi. The World of Organic
Agriculture Statistics and Emerging Trends. Edited by Helga
Willer &Minou Yussefi. 2007.
239. Wood, Laura. Research and Markets: Organic Food in Germany .
January 2012.
http://www.businesswire.com/news/home/20120111005814/en/R
esearch-Markets-Organic-Food-Germany (accessed June 2012).
240. Worner, F., and A. Meier-Ploeger. "What the consumer says."
Ecology and Farming 20, no. Jan-April (1999): 14-15.
241. Xie, Weihua, and Xiao Xingji. "Country Report on Organic
Agriculture in China,." International Trade Centre's Regional
Conference on Organic Agriculture in Asia. Bangkok, Thailand:
ITC, 2007.
242. Yin, Shijiu, LinhaiWu, Lili Dub, and Mo Chena. "Consumers‘
purchase intention of organic food in China." Published online in
262
Wiley Interscience ( ), April 2010: (www.interscience.wiley.com)
DOI 10.1002/jsfa.3936.
243. Yossefi, and Willer. World of Organic Agriculture . FIBL, 2002.
244. Yun, Zee-Sun, and Dawn Thorndyke Pysarchik. "Indian
Consumers‘ Value-Based New Food Product Adoption." Journal
of Food Products Marketing 16 (2010): 398-417.
245. Zanoli, R. "The economics and policy of organic farming: the state
of the art." 4th ENOF Workshop Proceedings, 25-6 June.
Edinburgh, 1998. 57 -68.
246. Zanoli, Raffaele, and Simona Naspetti. "Consumer motivations in
the purchase of organic food –A means end approach." British
Food Journal 104, no. 8/9 (2002): 643.
247. Zepeda, Lydia, and Jinghan Li. "Characteristics of Organic Food
Shoppers." Journal of Agricultural and Applied Economics 39, no.
1 (April 2007): 17.
263
ANNEXTURE II A
QUESTIONNAIRE FOR USERS
Questionnaire for Consumers of Organic Food
Sample No. _________ Geographical location _______________
I am conducting a survey about preference for organic food as a part of my PhD program.
You are one of the select groups of respondents who have been chosen to participate in
this survey. I highly value your opinion and would like to ask you a few questions.
1. Awareness towards organic food
1. Why did you first decide to buy organic food?
1. Curiosity 2.Doctor’s Recommendation
3. Nutritional value 4.Environmental concern
2. What influences you to continue to buy organic food?
1Child’s welfare 2.A healthy diet 3.Family preferences
4. Not a regular buyer 5. Others (please specify)________________
3. Please indicate with a tick mark the extent to which you agree or disagree with
the following statements, where 1 = Strongly agree; 2 = Agree; 3= Undecided;
4= Disagree; 5= Strongly disagree
No STATEMENT 1 2 3 4 5
1. Organic food is more nutritious than ordinary
food
2. Organic food is tastier than ordinary food
3. Organic foods are generally fresh
4. I am well aware of organic food
5. I buy organic because it is tastier
6. A wide range of organic food can be bought
where I shop
7. Organic food are free from chemical or
pesticide residues
264
No STATEMENT 1 2 3 4 5
8. There is not much difference between organic
food and regular food
9. I buy organic food because I want to be
environmentally conscious
10. I believe that organic food will keep me
healthy
11. I never buy food at specialised organic food
shops
12. I am satisfied that the food I eat is safe
13. I buy organic food because I want to be
environmentally conscious
14. I am well aware of organic food
15. Organic food is more nutritious than ordinary
food
16. I have been purchasing organic food
frequently
17. Organic food is costlier than conventional
food
18. I frequently consume organic food
19. I often visit organic food websites
20. I often speak to others about the benefits of
organic food
4. Did any of the following factors ever play a role in your discontinuing of purchase of organic food? Please indicate your choice by ticking (√) yes or no:
1 Shelf Life Yes No
2 Price Yes No
3 Appearance Yes No
4 Poor quality Yes No
5 Availability Yes No
2. Purchase Knowledge of Consumers of Organic Food
1. For how long have you been purchasing Organic food?
1. Less than 6 months 2. 6months- 1 year 3.more than 1 year
2. When did you last purchase organic food?
1. Last week 2. .Last month 3. six months ago
265
3. How often do you purchase the following? Please indicate the frequency of
purchase with a tick (√), and mention the amount spent per purchase.
Food Category Every week (1)
Once in a Month (2)
Amount spent last month (Rs)
Amount spent present month (Rs)
i. Regular Fruits
ii. Organic Fruits
iii. Ordinary Vegetables
iv. Organic Vegetables
v. Ordinary Pulses or
Cereals
vi. Organic Pulses /
Cereals
vii. Ordinary Masala
viii. Organic Masala
ix) Mention two organic products frequently purchased by you______________________
Place of Purchase
4. Where do you make your purchases of organic food from?
1) Directly from producers 2) Specialised organic food shops
3) Supermarkets/ hypermarket 4) Open Markets
5. i)Shop location_____________ ii) Name of brand if any ____________
266
3. Media Exposure
Please indicate with a tick mark the extent to which you agree or disagree with the
following statements, where 1 = Strongly agree; 2 = Agree; 3= Undecided; 4= Disagree;
5= Strongly disagree
Sr No STATEMENTS 1 2 3 4 5
1) I often visit websites with information on organic food
2) I am satisfied with the information i get on organic food
3) At least one meal in my day has an organic produce
4) I would like sales people to help me when buying organic food
5) I read Newspaper everyday
6) I watch T.V. everyday
7) I shop for organic products once in while
8) I am an occasional user of organic food
9) I read general interest magazines regularly
10) i would like a better source of information on organic food
11) Organic food is not well promoted
Sr No STATEMENTS 1 2 3 4 5
12) I have access to the internet throughout the day
13) I am a regular user of organic food
4. Health Benefits and Lifestyle
Please indicate with a tick mark the extent to which you agree or disagree with the
following statements, where 1 = Strongly agree; 2 = Agree; 3= Undecided; 4= Disagree;
5= Strongly disagree
No STATEMENT 1 2 3 4 5
1. Organic food is overrated for its health benefits
2. Organic food is more nutritious than ordinary food
3. Healthy lifestyle requires that I consume organic food
267
No STATEMENT 1 2 3 4 5
4. There are many nutritional benefits in organic food
5. Organic food cannot be supplemented by ordinary food
6. I believe that organic food will keep me healthy
7. Organic food is free from chemical or pesticide residues
8. I tend to feel better when I eat organic food
9. Organic food has more health related benefits than ordinary food
10. Wealthy people consume more organic food
11. Organic food is a status symbol
12. Consuming organic food is fashionable nowadays
13. Consuming organic makes me feel privileged
14. People with high rank and status consume organic food
15. Offering organic to friends shows that I have a high social standing
5. Willingness to pay premium (excess price paid over normal products)
Please indicate with a tick mark () the extent to which you agree or disagree with the following statements, where 1 = Strongly agree; 2 = Agree; 3= Undecided; 4= Disagree; 5= Strongly disagree
No STATEMENTS 1 2 3 4 5
1. A premium can be charged for organic food as they are more nutritious
2. Organic foods are good value for money
3. A premium can be charged for organic food as they protect the bio diversity of the earth
4. A premium can be charged for organic food as they have no chemical waste / pesticides residuals
5. A premium can be charged for organic food as they taste better
6. A premium can be charged for organic food as its production methods are certified
268
No STATEMENTS 1 2 3 4 5
7. A premium can be charged for organic food as its safety is monitored through certification
8. A premium can be charged for organic food as it supports marginal farmers and tribal communities
9. I am willing to pay a premium for purchasing organic products
10. I refrain from buying organic because of the price
6. Socio-Demographic Details (please tick the appropriate answer)
1. Age (i)18 – 30 (ii) 31-40 (iii) over 40
2. Sex (i) Male (ii) Female
3. Education: (i)Under graduate (ii) Graduate (iii) Post Graduate
4. Mention Professional Qualifications, if
any_____________________________
5. Marital status (i) Married (ii) Single
6. Your Hometown ____________________
7. Number of children in the family________
8. Age of children 1st child_____ 2nd child_____ 3rd
child___
9. Your household size: ______________
10. Your Occupation 1) Service 2)Self employed 3)unemployed
11. Monthly Household Income (Rs)
1) Less than 50,000 2) 50 – 1.5 lakh
3) 1.5 -2.5 lakh 4) more than 2.5 lakh
THANK YOU FOR YOUR TIME AND RESPONSE
269
ANNEXTURE IIB
QUESTIONNAIRE FOR NON-USERS
Sample No. _________ Geographical location ____________
I am conducting a survey about preference for organic food as a part of my curriculum.
You are one of the respondents who have been chosen to participate in this survey. I
highly value your opinion and would like to ask you a few questions food consumption.
1. Awareness
Please indicate with a tick mark (√) the extent to which you agree or disagree with the following statements, where 1 = Strongly agree; 2 = Agree; 3= Undecided; 4= Disagree; 5= Strongly disagree
No STATEMENT 1 2 3 4 5
1. I believe food is more nutritious when no pesticides and chemicals are used to grow it
2. I am willing to pay more for food without chemical or pesticide residues
3. Staying healthy is important to me
4. There is not much difference between food without chemical or pesticide and regular food
5. I am satisfied that the food I eat is safe
6. I like to eat nutritious food
7. I consider myself as environmentally aware
8. I refrain from buying organic food because of the price
1. Are you aware of organic food? 1) Yes 2) No
2. Have you ever tried organic food? 1) Yes 2) No
2. Purchase Knowledge of Consumers on food items purchased
How often do you purchase the following? Please indicate the frequency of purchase with a tick (√), and mention the amount spent per purchase.
Food Category Every week
Once in a Month
Amount spent last
month (Rs)
Amount spent present month
(Rs)
i. Fruits
ii. Vegetables
270
iii. Pulses or Cereals
iv. Powdered Masala
3. Please indicate with a tick mark (√) the extent to which you agree or disagree with the following statements, where 1 = Strongly agree; 2 = Agree; 3= Undecided; 4= Disagree; 5= Strongly disagree
Sr No STATEMENTS 1 2 3 4 5
1. I buy organic food because I want to be environmentally conscious
Always Never
2. I am well aware of organic food
3. Organic food is more nutritious than ordinary food
4. I have been purchasing organic food frequently
5. Organic food is costlier than conventional food
6. I frequently consume organic food
7. I often visit organic food websites
4. Socio-Demographic Details (please tick the appropriate answer)
1. Age 18 – 30 31-40 over 40
2. Sex Male Female
3. Education: Under graduate Graduate Post Graduate
4. Marital status: Married Single
5. Hometown ____________________
6. Number of children in the family________
7. Household size: ____________________
8. Your Occupation In Service Self employed neither
9. Monthly Household Income (Rs)
Less than Rs. 50,000 Between Rs. 50 – 1.5 lakh Between Rs. 1.5 -2.5 lakh More than Rs. 2.5 lakh
THANK YOU FOR YOUR TIME
271
ANNEXTURE III
STATISTICAL TABLES OF SPSS FINDINGS
Demographic details of the respondents
Frequency Tables (Users)
Classification by Age
Frequency Percent Valid Percent
Cumulative
Percent
Valid 18-30 176 44.0 44.0 44.0
31-40 148 37.0 37.0 81.0
More than 40 76 19.0 19.0 100.0
Total 400 100.0 100.0
SPSS OP 0-1
Classification by Gender
Frequency Percent Valid Percent
Cumulative
Percent
Valid Male 233 58.3 58.3 58.3
Female 167 41.8 41.8 100.0
Total 400 100.0 100.0
SPSS OP 0-2
272
Classification by Education
Frequency Percent Valid Percent
Cumulative
Percent
Valid Under Graduate 39 9.8 9.8 9.8
Graduate 218 54.5 54.8 64.6
Post Graduate 141 35.3 35.4 100.0
Total 398 99.5 100.0
Missing 99 2 .5
Total 400 100.0
SPSS OP 0-3
Classification by Marital Status
Frequency Percent Valid Percent
Cumulative
Percent
Valid Married 265 66.3 66.3 66.3
Single 135 33.8 33.8 100.0
Total 400 100.0 100.0
SPSS OP 0-4
SPSS OP 0-5 Monthly Household Income
Frequency Percent Valid Percent
Cumulative
Percent
Valid Less than Rs.50000 137 34.3 35.4 35.4
Rs.50000 to Rs.1.5 lacs 78 19.5 20.2 55.6
Rs.1.5 lacs to Rs.2.5 lacs 66 16.5 17.1 72.6
More than Rs.2.5 lacs 106 26.5 27.4 100.0
Total 387 96.8 100.0
Missing 99 13 3.3
Total 400 100.0
273
Frequency Tables (Non Users)
Classification by Age
Frequency Percent Valid Percent Cumulative Percent
Valid 18-30 43 43.0 43.0 43.0
31-40 42 42.0 42.0 85.0
Over 40 15 15.0 15.0 100.0
Total 100 100.0 100.0
SPSS OP 0-6
Classification by Gender
Frequency Percent Valid Percent Cumulative Percent
Valid Male 70 70.0 70.0 70.0
Female 30 30.0 30.0 100.0
Total 100 100.0 100.0
SPSS OP 0-7
Classification by Education
Frequency Percent Valid Percent Cumulative Percent
Valid Under Graduate 8 8.0 8.0 8.0
Graduate 35 35.0 35.0 43.0
Post Graduate 57 57.0 57.0 100.0
Total 100 100.0 100.0
SPSS OP 0-8
274
Classification by Martial status
Frequency Percent Valid Percent Cumulative Percent
Valid Married 66 66.0 66.0 66.0
Single 34 34.0 34.0 100.0
Total 100 100.0 100.0
SPSS OP 0-9
Monthly household income
Frequency Percent Valid Percent
Cumulative
Percent
Valid Less than Rs. 50000 42 42.0 42.0 42.0
Between Rs. 50-1.5 Lakhs 22 22.0 22.0 64.0
Between Rs. 1.5-2.5
Lakhs 22 22.0 22.0 86.0
More Than Rs. 2.5 Lakhs 11 11.0 11.0 97.0
9 3 3.0 3.0 100.0
Total 100 100.0 100.0
SPSS OP 0-10
The cross tabulation of the respondents by age, education and income of
the non users
275
SPSS OP 0-11
Cross tabulation of the users by age, education and income
SPSS OP 0-12
276
Logistic Regression
Case Processing Summary
Unweighted Casesa N Percent
Selected Cases Included in Analysis 400 100.0
Missing Cases 0 .0
Total 400 100.0
Unselected Cases 0 .0
Total 400 100.0
a. If weight is in effect, see classification table for the total number of cases.
Block 0: Beginning Block
Iteration Historya,b,c
Iteration -2 Log likelihood
Coefficients
Constant
Step 0 1 439.547 1.050
2 438.546 1.163
3 438.545 1.166
4 438.545 1.166
a. Constant is included in the model.
b. Initial -2 Log Likelihood: 438.545
c. Estimation terminated at iteration number 4 because
parameter estimates changed by less than .001.
SPSS OP 0-13
277
Classification Tablea,b
Observed
Predicted
logit
Percentage Correct 1 2
Step 0 Logit 1 0 95 .0
2 0 305 100.0
Overall Percentage 76.3
a. Constant is included in the model.
b. The cut value is .500
SPSS OP 0-14
Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Step 0 Constant 1.166 .117 98.556 1 .000 3.211
SPSS OP 0-15
Variables not in the Equation
Score df Sig.
Step 0 Variables nutrition_vlue .057 1 .812
healty_benifit .096 1 .757
taste 1.553 1 .213
media_influence .269 1 .604
Overall Statistics 5.783 4 .216
SPSS OP 0-16
278
Block 1: Method = Enter
Iteration Historya,b,c,d
Iteration -2 Log
likelihood
Coefficients
Constant nutrition_valu
e
taste healty_die
t
media_influe
nce
Step 1
1 434.382 1.113 .236 -.030 -.303 .075
2 432.732 1.274 .324 -.033 -.418 .095
3 432.727 1.284 .331 -.032 -.427 .096
4 432.727 1.284 .331 -.032 -.427 .096
a. Method: Enter
b. Constant is included in the model.
c. Initial -2 Log Likelihood: 438.545
d. Estimation terminated at iteration number 4 because parameter estimates changed by less
than .001.
Omnibus Tests of Model Coefficients
Chi-square df Sig.
Step 1 Step 5.818 4 .213
Block 5.818 4 .213
Model 5.818 4 .213
SPSS OP 0-17
Model Summary
Step -2 Log likelihood
Cox & Snell R
Square
Nagelkerke R
Square
1 432.727a .014 .022
a. Estimation terminated at iteration number 4 because parameter
estimates changed by less than .001.
SPSS OP 0-18
279
Hosmer and Lemeshow Test
Step Chi-square df Sig.
1 134.820 7 .000
SPSS OP 0-19
Contingency Table for Hosmer and Lemeshow Test
logit = 1.00 logit = 2.00
Total Observed Expected Observed Expected
Step 1 1 16 14.396 26 27.604 42
2 4 7.479 24 20.521 28
3 39 11.512 9 36.488 48
4 10 8.146 24 25.854 34
5 0 8.890 38 29.110 38
6 3 24.896 106 84.104 109
7 2 6.219 26 21.781 28
8 12 7.794 25 29.206 37
9 9 5.670 27 30.330 36
SPSS OP 0-20
280
Classification Table
Observed
Predicted
logit
Percentage Correct 1 2
Step 1 logit 1 4 91 4.2
2 0 305 100.0
Overall Percentage 77.3
a. The cut value is .500
Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Step 1a
nutrition_value .331 .187 3.121 1 .077 1.392
taste -.032 .164 .039 1 .843 .968
healty_diet -.427 .191 4.995 1 .025 .652
media_influenc
e
.096 .166 .335 1 .562 1.101
Constant 1.284 .342 14.062 1 .000 3.610
a. Variable(s) entered on step 1: nutrition_value, taste, healty_diet, media_influence.
SPSS OP 0-21
281
Casewise Listb
Case Selected Statusa
Observed
Predicted Predicted Group
Temporary Variable
logit Resid ZResid
26 S 1** .878 2 -.878 -2.685
29 S 1** .924 2 -.924 -3.490
68 S 1** .929 2 -.929 -3.623
69 S 1** .901 2 -.901 -3.019
72 S 1** .860 2 -.860 -2.478
a. S = Selected, U = Unselected cases, and ** = Misclassified cases.
b. Cases with studentized residuals greater than 2.000 are listed.
SPSS OP 0-22
282
Step number: 1
Observed Groups and Predicted Probabilities
160 ┼ ┼
│ │
│ 2 │
F │ 2 │
R 120 ┼ 22 ┼
E │ 22 │
Q │ 22 │
U │ 22 │
E 80 ┼ 22 ┼
N │ 22 │
C │ 22 │
Y │ 12 │
40 ┼ 12 ┼
│ 2 122 │
│ 2 122 2 │
│ 1 2 2 2 1112 2 │
Predicted ─────────┼─────────┼─────────┼─────────┼─────────┼─────────┼─────────┼─────────┼─────────┼──────────
Prob: 0 .1 .2 .3 .4 .5 .6 .7 .8 .9 1
Group: 1111111111111111111111111111111111111111111111111122222222222222222222222222222222222222222222222222
Predicted Probability is of Membership for 2.00
The Cut Value is .50
Symbols: 1 - 1.00
2 - 2.00
Each Symbol Represents 10 Cases.
283
Discriminant Analysis
Group Statistics
I am well aware of organic food
Valid N (listwise)
Unweighted Weighted
1.00 Organic food is more nutritious
than ordinary food 400 400.000
I have been purchasing organic
food frequently 400 400.000
Organic food is costlier than
conventional food 400 400.000
I frequently eat organic food 400 400.000
I often visit organic food websites 400 400.000
I buy organic food because I
want to be environmentally
conscious
400 400.000
I often speak to others about the
benefits of food 400 400.000
VAR00009 400 400.000
2.00 Organic food is more nutritious
than ordinary food 100 100.000
I have been purchasing organic
food frequently 100 100.000
Organic food is costlier than
conventional food 100 100.000
I frequently eat organic food 100 100.000
I often visit organic food websites 100 100.000
I buy organic food because I
want to be environmentally
conscious
100 100.000
284
I often speak to others about the
benefits of food 100 100.000
VAR00009 100 100.000
Total Organic food is more nutritious
than ordinary food 500 500.000
I have been purchasing organic
food frequently 500 500.000
Organic food is costlier than
conventional food 500 500.000
I frequently eat organic food 500 500.000
I often visit organic food websites 500 500.000
I buy organic food because I
want to be environmentally
conscious
500 500.000
I often speak to others about the
benefits of food 500 500.000
VAR00009 500 500.000
SPSS OP 0-23
Box's Test of Equality of Covariance Matrices
Log Determinants
I am well aware of organic
food Rank Log Determinant
1.00 2 1.047
2.00 2 1.357
Pooled within-groups 2 1.117
The ranks and natural logarithms of determinants printed are
those of the group covariance matrices.
SPSS OP 0-24
285
Test Results
Box's M 4.269
F Approx. 1.412
df1 3
df2 457852.294
Sig. .237
Tests null hypothesis of equal
population covariance matrices.
SPSS OP 0-25
Stepwise Statistics
SPSS OP 0-26
Variables Entered/Removeda,b,c,d
Step
Wilks' Lambda
Exact F
Entered Statistic df1 df2 df3 Statistic df1 df2 Sig.
1 I frequently eat
organic food .977 1 1 498.000 11.839 1 498.000 .001
2 I have been
purchasing
organic food
frequently
.968 2 1 498.000 8.091 2 497.000 .000
At each step, the variable that minimizes the overall Wilks' Lambda is entered.
a. Maximum number of steps is 16.
b. Minimum partial F to enter is 3.84.
c. Maximum partial F to remove is 2.71.
d. F level, tolerance, or VIN insufficient for further computation.
286
Variables in the Analysis
Step Tolerance F to Remove Wilks' Lambda
1 I frequently eat organic food 1.000 11.839
2 I frequently eat organic food .893 6.446 .981
I have been purchasing organic
food frequently .893 4.266 .977
Summary of Canonical Discriminant Functions
Eigenvalues
Function Eigenvalue % of Variance Cumulative %
Canonical
Correlation
1 .033a 100.0 100.0 .178
a. First 1 canonical discriminant functions were used in the analysis.
Wilks' Lambda
Test of
Function(
s) Wilks' Lambda Chi-square df Sig.
1 .968 15.925 2 .000
Wilks' Lambda
Step
Number of
Variables Lambda df1 df2 df3
Exact F
Statistic df1 df2 Sig.
1 1 .977 1 1 498 11.839 1 498.000 .001
2 2 .968 2 1 498 8.091 2 497.000 .000
287
Standardized Canonical Discriminant Function
Coefficients
Function
1
I have been purchasing organic
food frequently .550
I frequently eat organic food .674
Functions at Group
Centroids
I am well
aware of
organic
food
Function
1
1.00 .090
2.00 -.360
Unstandardized canonical
discriminant functions
evaluated at group means
Classification Statistics
Classification Processing Summary
Processed 500
Excluded Missing or out-of-range group
codes 0
At least one missing
discriminating variable 0
Used in Output 500
288
Prior Probabilities for Groups
I am well
aware of
organic
food Prior
Cases Used in Analysis
Unweighted Weighted
1.00 .500 400 400.000
2.00 .500 100 100.000
Total 1.000 500 500.000
Classification Resultsa
I am well
aware of
organic
food
Predicted Group Membership
Total
1.00 2.00
Original Count 1.00 260 140 400
2.00 47 53 100
% 1.00 65.0 35.0 100.0
2.00 47.0 53.0 100.0
a. 62.6% of original grouped cases correctly classified.
289
SPSS output for Hypothesis 4 Factor Analysis
Communalities
Initial Extraction
Organic food is not
overrated for its health
benefits
1.000 .067
Organic food is more
nutritious than ordinary
food
1.000 .839
Healthy lifestyle requires
that I consume organic
food
1.000 .942
There are many nutritional
benefits in organic food 1.000 .989
Organic food cannot be
supplemented by ordinary
food
1.000 .978
I believe that organic food
will keep me healthy 1.000 .997
Organic food is free from
chemical or pesticide
residues
1.000 .949
I tend to feel better when I
eat organic food 1.000 .981
Organic food has more
health related benefits
than ordinary food
1.000 .989
Wealthy people consume
more organic food 1.000 .997
Organic food is a status
symbol 1.000 .583
Consuming organic food is
fashionable nowadays 1.000 .623
Consuming organic makes
me feel privileged 1.000 .619
People with high rank and
status consume organic
food
1.000 .366
290
Offering organic to friends
shows that I have a high
social standing
1.000 .082
Extraction Method: Principal Component Analysis.
291
292
293
294
Component Transformation
Matrix
Compo
nent 1 2
1 .995 .098
2 -.098 .995
Extraction Method: Principal
Component Analysis.
Rotation Method: Varimax
with Kaiser Normalization.
295
SPSS outputs for hypothesis 6 Factor Analysis
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .776
Bartlett's Test of Sphericity Approx. Chi-Square 7312.232
df 78
Sig. .000
Communalities
Initial Extraction
I often visit websites with
information on organic food 1.000 .774
I am satisfied with the
information i get on organic
food
1.000 .418
At least one meal in my day
has an organic produce 1.000 .217
I would like sales people to
help me when buying organic
food
1.000 .920
I read Newspaper everyday 1.000 .946
I watch T.V. everyday 1.000 .953
I shop for organic products
once in while 1.000 .154
I am an occasional user of
organic food 1.000 .117
I read general intrest
magazine 1.000 .783
i would like a better source of
information on organic food 1.000 .870
Organic food is not well
promoted 1.000 .930
I have access to the internet
throughout the day 1.000 .758
I am a regular user of organic
food 1.000 .745
296
Communalities
Initial Extraction
I often visit websites with
information on organic food 1.000 .774
I am satisfied with the
information i get on organic
food
1.000 .418
At least one meal in my day
has an organic produce 1.000 .217
I would like sales people to
help me when buying organic
food
1.000 .920
I read Newspaper everyday 1.000 .946
I watch T.V. everyday 1.000 .953
I shop for organic products
once in while 1.000 .154
I am an occasional user of
organic food 1.000 .117
I read general intrest
magazine 1.000 .783
i would like a better source of
information on organic food 1.000 .870
Organic food is not well
promoted 1.000 .930
I have access to the internet
throughout the day 1.000 .758
I am a regular user of organic
food 1.000 .745
Extraction Method: Principal Component Analysis.
297
Component Matrixa
Component
1 2
I often visit websites with
information on organic food -.018 .880
I am satisfied with the
information i get on organic
food
.046 .645
At least one meal in my day
has an organic produce .007 .466
I would like sales people to
help me when buying organic
food
.958 .055
I read Newspaper everyday .972 .029
I watch T.V. everyday .975 -.046
I shop for organic products
once in while -.060 -.388
I am an occasional user of
organic food -.066 -.335
298
I read general intrest
magazine .876 -.121
i would like a better source of
information on organic food .927 .104
Organic food is not well
promoted .962 -.068
I have access to the internet
throughout the day .870 -.019
I am a regular user of organic
food -.009 .863
Extraction Method: Principal Component Analysis.
a. 2 components extracted.
Rotated Component Matrixa
Component
1 2
I often visit websites with
information on organic food -.052 .878
I am satisfied with the
information i get on organic
food
.021 .646
At least one meal in my day
has an organic produce -.011 .466
I would like sales people to
help me when buying organic
food
.955 .092
I read Newspaper everyday .970 .067
I watch T.V. everyday .976 -.008
I shop for organic products
once in while -.044 -.390
I am an occasional user of
organic food -.053 -.338
I read general intrest
magazine .880 -.087
i would like a better source of
information on organic food .922 .140
299
Organic food is not well
promoted .964 -.030
I have access to the internet
throughout the day .870 .015
I am a regular user of organic
food -.042 .862
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 3 iterations.