Progress 10/01/98 to 09/30/04
Environmental certification programs are prevalent throughout the world both in developed and developing countries. Countries such as United States of America, Canada, and countries in European Union have considerable environmental certification programs. Programs such as eco-labeling, green marketing and Integrated Pest Management (IPM) fall under the broad category of environmental certification program. More than 20 countries and the European Community have adopted eco-labeling programs to encourage the development of manufacturing processes and products with less environmental impacts (U.S. EPA 1993a, 1993b, 1993c, 1994). Numerous studies have documented prevalence of environmental certification programs. Many studies have also documented consumer awareness, source of awareness, and willingness to pay a premium for environmentally certified programs. This technical paper discusses about past literature on prevalence of environmental certification programs in the
U.S. and around the world, consumer awareness of environmental certification programs, willingness to pay a premium for environmentally certified products, willingness to switch supermarkets to buy IPM produce, and international experiences in environmental certification programs.
According to a study conducted by Pool (1999), less than 12% of consumers know what IPM is, whereas, according to a study conducted by Govindasamy (1997a), about 31% of respondents had prior knowledge about IPM. There is a lot variation in the awareness of environmentally friendly products among different segments of population. Although not common, there are nine environmental certification programs offered for agricultural produce in the U.S. They are Wegmans Food Stores using standards created by the New York-IPM Program, Massachusetts-IPM and Partners With Nature program, Stemilt's Responsible Choice Program in Washington, Core Values Northeast, California Clean Growers, Protected Harvest Healthy Grown Certification, The Food Alliance Certification, NutriClean-Residue Free Certification and Rainforest Alliance Certification. Consumer awareness of pesticide residue issues and availability of environmentally friendly products have increased overtime. In 1965, a study
conducted in Pennsylvania (Bealer and Willits) indicates the only 6% of respondents were concerned about pesticide use. Whereas, a survey (Zellner and Degner) of four cities conducted in 1989 indicates that 83% of respondents were risk averse to pesticide usage.
- No publications reported this period
Progress 01/01/03 to 12/31/03
In 1984, the Jersey Fresh program was implemented by the New Jersey Department of Agriculture and was the first state-funded marketing campaign for agricultural products produced in New Jersey. In an effort to spur demand for New Jersey farm products, this program was designed to increase consumer awareness of the states agricultural products as well as to encourage food retailers to promote Jersey Fresh products. With funding from the USDAs Federal-State Marketing Improvement Program, the New Jersey Department of Agriculture commissioned this study to determine the impact of Jersey Fresh promotion on farmer cash receipts in New Jersey. The econometric analysis was focused on the fruit and vegetable sectors, the primary commodity areas expected to benefit most directly from Jersey Fresh promotion. The results of the econometric models show that: For every dollar spent on the Jersey Fresh Promotional Program in 2003, New Jerseys agricultural fruit and vegetable sector
revenues increased by $31.54. The additional economic activity created in the agricultural industry also had impacts on other parts of the economy, namely agricultural suppliers and service providers. In fact, each dollar spent on Jersey Fresh promotion resulted in an additional $22.95 of sales in agricultural support industries and other related industries. In total, each dollar spent on Jersey Fresh promotion resulted in $54.49 of increased economic output in the State.
In 2003, the $1.16 million spent on the Jersey Fresh program increased fruit and vegetable cash receipts by $36.6 million and created an additional $26.6 million in economic activity within agricultural support industries. The total statewide economic impact of the Jersey Fresh program in 2003 was therefore an estimated $63.2 million. The economic activity generated through Jersey Fresh promotion also impacts local, state, and federal taxes. An analysis of these tax impacts shows that New Jerseys State and local tax revenues increased by $2.2 million in 2003 due to the increased economic activity attributable to Jersey Fresh promotion. Comparing this return to the 2003 program budget of $1.16 million, the Jersey Fresh program appears to be better than revenue-neutral.
- Bhuyan, S., H. Stewart, R. Govindasamy, F. Hossain, and A. Adelaja. "Satisfaction Evaluation of Food-Away-From-Home Choices by Consumers," Journal of Food Distribution Research. 34(2003): 7-12.
- Schuzzler, A., R. Govindasamy, and A. Adelaja. "A Comparative Evaluation of Organic Produce Consumers in New Jersey to New York and Pennsylvania," Journal of Food Distribution Research. 34(2003): 153-162.
- Govindasamy, R., J. Italia, M. Zurbriggen, and F. Hossain. "Producer Satisfaction With Returns From Farmers Market Related Activity," American Journal of Alternative Agriculture, 18(2003):80-86.
Progress 01/01/02 to 12/31/02
Farmers' markets play a vital role in supporting the agriculture in New Jersey and other northeastern states. These markets provide an excellent marketing channel for small producers to sell directly to consumers and realize more favorable prices for their products compared to traditional wholesale market. Further, these markets allow small volume producers to directly serve specialized and niche market segments (e.g., customers for organic products) for which the volume is not large enough to support a wholesale market. Consumers also find these markets as convenient places to purchase produce fresh from the growers. Farmers' satisfaction is an important factor for the growth and future success of the farmers' market. This study identifies the farmer characteristics and farm activities associated with higher profitability and farmer satisfaction from farmers' market operations. The results of this study suggest that farmers' profitability is enhanced through catering
to niche markets such as that for organic products. Similarly, greater utilization of the direct marketing (e.g., via farmers markets) also help increase profit margin and hence farmer satisfaction. Although the survey found the majority of the farmers participating at farmers' markets to be satisfied with the profit margin, direct retailing to consumers through these off-farm outlets involve considerable investment in terms of labor, time, and equipment. Harvesting, packing, loading, and transporting the products to farmers' market locations are all labor-intensive activities and require reliable labor supply. Farmers need to be able to sell enough volume at these markets to justify the considerable investment in human and physical capital. Continued growth of these farmers' markets will depend on farmers' ability to sell sufficient quantities of their products at favorable prices. This study uses profitability from farmers' market operations as the indicator of farmer satisfaction.
This measure of business owner/operator satisfaction follows the standard neoclassical theory where a firm's objective is to maximize its profit. However, such a narrow definition of owner satisfaction is a weakness of the present study. Ideally, studies of owner satisfaction should include not only profitability of business, but other factors as well. Future studies should incorporate financial as well as non-financial returns in exploring the issue of farmer satisfaction and its implications for the growth and success of farm businesses.
Over 61% of farmers who sell agricultural products through farmers' markets are satisfied with the returns they generate. Producers who are 50 years of age or older and those who retail at least 70 % of the dollar value of the products are more likely to be highly satisfied with their profit margin from farmers' markets. A strong positive relationship is documented between profit margin satisfaction and growers who offer organic produce for sale. Furthermore, the results suggest that producers with farmers' market businesses in the growing stage are more likely to be highly satisfied with profit margins. The documentation of these characteristics will help identify farmers who are likely to participate in community farmers' markets. Participation in the community farmers' markets leads to diversification of income base for farmers.
- Govindasamy, R., J. Italia, M. Zurbriggen, and F. Hossain. 'Producer Satisfaction With Returns From Farmers' Market Related Activity' American Journal of Alternative Agriculture, 2003. (Forthcoming)
Progress 01/01/01 to 12/31/01
Producer Satisfaction With Returns From Farmers' Market Related Activity. Over 61 percent of farmers who sell agricultural products through farmers' markets are satisfied with the returns they generate. Producers who are 50 years of age or older and those who retail at least 70 percent of the dollar value of the products they sell are more likely to be highly satisfied with their profit margin from farmers' markets. A strong positive relationship is documented between profit margin satisfaction and growers who offer organic produce for sale. Furthermore, the results suggest that producers with farmers' market businesses in the growing stage are more likely to be highly satisfied with profit margins.
The results suggest that organic growers and producers who retail at least 70 percent of the dollar value of the products sold should be targeted by managers and organizers of farmers' markets as prospective participants, since the results indicate that these two groups are more likely to be very satisfied with the profits realized from these operations. Farmers' markets constitute an excellent marketing channel for small acreage producers such as those who cater to a segment of the population like organic consumers and those who do not have enough volume to go into wholesaling.
- No publications reported this period
Progress 01/01/00 to 12/31/00
Nearly 32 percent of consumers surveyed at four supermarkets and one private direct market in New Jersey reported having prior awareness of integrated pest management (IPM). However, knowledge of IPM does not appear homogeneous across all demographic segments. This study empirically evaluates which socio-economic characteristics suggest that a consumer will be more likely to have existing knowledge of IPM. Results indicate that those who reported having higher levels of education, had visited a farmers' market within the previous five years, had no children, grew fruits and vegetables at home, were female, or regularly used media reports about food safety were more likely to claim awareness of IPM.
Significant differences found in demographic groups indicate that knowledge of IPM is not consistent among all segments of the population. Policy makers can use this information when designing programs to educate consumers about the existence and benefits of IPM. For instance the results suggest that the effects of an educational program might be maximized if those with lower levels of income, males, and households with children were selectively targeted. Conversely, food marketing agents may choose to introduce IPM labeled produce in areas where consumers are more likely to have prior knowledge.
- No publications reported this period
Progress 01/01/99 to 12/31/99
To date, very few studies have analyzed the marketability or consumer response to IPM. The focus of this study was to empirically evaluate consumer preferences and response to IPM produce. A consumer survey was administered to collect the opinions and preferences of consumers of fresh produce. The respondents indicated strong support for IPM through both a high willingness-to-purchase and willingness-to- pay a premium for IPM grown produce. Prior to participating in this survey, very few respondents had any knowledge of IPM. The results of this survey should provide valuable information for those developing marketing strategies for low-input agriculture. However, before the average consumer exhibits the same level of interest in IPM as the sample in this study, some mechanism must be developed to educate the public about IPM. Consumer recognition also necessitates a labeling system which, to date, has been difficult to establish. While IPM does reduce pesticide
residues, because integrated pest control is need based, the theoretical potential for IPM produce to contain more residues than conventional produce does exist. Such a scenario is most likely during seasons in which substitutive and natural pest control techniques are not sufficient to contain pest damage. This possibility as well as the variety and magnitude of IPM practices in use have further complicated the development of an IPM labeling system. In contrast, organic produce is more concretely defined and more easily certifiable. While the majority of consumers have revealed a relatively high degree of personal concern over pesticide residues, most have not significantly altered their purchasing behavior by buying low-input produce rather than conventional produce. One of the biggest obstacles to low-input agriculture is undoubtedly price. The success of IPM will depend on the retail price at which it is ultimately available to consumers.
The results of this study provide some background into the likely consumer response to IPM labeled fruits and vegetables. While the survey illustrates the potential demand for IPM produce, the findings are limited by the hypothetical nature of the survey and are also reliant on consumer awareness of IPM.
- Govindasamy, R and J. Italia. 1999. Identifying the Market Environment and Consumer Attitudes Facing the Introduction of IPM Produce, Journal of the American Society of Farm Managers and Rural Appraisers, (1999): 55-62.
- Govindasamy, R., J. Italia and D. Thatch. "Consumer Attitudes and Response Toward State-Sponsored Agricultural Promotion: An Evaluation of the Jersey Fresh Program," Journal of Extension. 37(1999)6 pp. http://www.joe.org/joe/1999june/rb2.html.
- Govindasamy, R., J. Italia and D. Thatch. 1999. "An Evaluation of Consumer Patronage of State-Sponsored Marketing Programs," Southwestern Economic Review. 26(1999): 19-32.
Progress 01/01/98 to 12/31/98
 Research was undertaken to empirically evaluate which socio-economic characteristics suggest that a consumer would be more likely to have existing knowledge of IPM. Significant differences found in demographic groups indicate that knowledge of IPM is not consistent among all segments of the population. Policy makers can use this information when designing programs to educate consumers about the existence and benefits of IPM. While several studies have presented aggregate, descriptive illustrations of consumer response to IPM, the willingness-to-purchase and willingness-to-pay for IPM produce as a function of demographic characteristics has not received the exhaustive research attention that has focused on organic produce. A recent study was undertaken to empirically evaluate which demographic characteristics cause consumers to be more likely to purchase IPM grown produce. A willingness-to-purchase model for IPM produce and separate analysis to predict
consumers who strictly purchase only conventional produce was conducted. Income was found to be the most significant determinant of willingness-to-purchase IPM grown produce.  In one of the first studies of its kind, willingness-to-pay for both IPM was explored as a function of socio-demographic characteristics. As anticipated, willingness-to-pay was not constant across the population but varied among demographic segments. The results of this study suggest that many consumers would be willing to pay a premium to obtain IPM produce; specifically, females, higher earning households, younger individuals, and those who frequently purchase organic produce appear to be among the most likely to pay a 10 percent premium for IPM produce. If obtaining a premium was the primary goal for a retailer introducing IPM labeled produce, affluent and suburban areas and places where organic produce is sold seem to be the most likely target areas.
- Govindasamy, Ramu, and John Italia. "A Willingness-to-Purchase Comparison of Integrated Pest Management and Conventional Produce," Agribusiness: An International Journal. 4(5), 1998.
- Govindasamy, Ramu, John Italia and Adesoji Adelaja "Consumer Preference for Integrated Pest Management Produce," Journal of Extension. 36(4), August 1998.
- Govindasamy, Ramu, John Italia, and Adesoji Adelaja. (1998) "Predicting Willingness-to-Pay for Integrated Pest Management Produce," (Under Review)
- Govindasamy, Ramu, and John Italia. (1998) "Identifying the Market Environment and Consumer Attitudes Facing the Introduction of Integrated Pest Management Produce," (Under Review)
- Govindasamy, Ramu, and John Italia. (1998) "Evaluating Consumer Knowledge of Alternative Agricultural Commodities: The Case of IPM Produce." (Under Review)
- Govindasamy, Ramu, John Italia, and Jack Rabin. "Consumer Response and Perceptions of Integrated Pest Management Produce" New Jersey Agricultural Experiment Station, Rutgers University, P-02137-5-98, May 1998, 45 pp.
- Govindasamy, Ramu, and John Italia. "Consumer Concerns About Pesticide Residues," FS896, 1998.
- Govindasamy, Ramu, and John Italia. "Consumer Concerns About Pesticide Residues," FS897, 1998.
- Govindasamy, Ramu, and John Italia. "Consumer Response to Organically Grown Produce," FS898, 1998.
- Govindasamy, Ramu, and John Italia. "Consumer Response to Alternative Agriculture," FS899, 1998.