Progress 10/01/01 to 10/01/04
Outputs
The USDAs National Organic Program (NOP), with its unified definition and labeling requirements, holds great promise for increasing commerce in and decreasing transaction costs associated with purchasing organic food. However, the label and its meaning must both be well understood and reflect the traits consumers want if this promise is to be realized. The results of a survey and experimental auction on consumers preferences for organic standards are reported in several publications. The USDA NOPs Final Rule broadly conforms to consumer preferences regarding what practices should or should not be permitted in organic production and processing. Consumers support a strict definition of organic in general, opposing the use of a variety of practices historically banned by organic certifiers. For example, both the survey and auction methods found that consumers support the banning of Genetically Modified Organisms in organic food and are willing to pay a premium to avoid
them. Consumers are also in accord with the Final Rule's exclusion of irradiation, biosolids, growth regulators, etc. The survey and auction results reveal a lack of understanding of the labels meaning as well as a disconnect between the labels function (detailing acceptable production practices) and consumers stated motivations for buying organic (e.g., support for a local sustainable food system). Of particular focus will be the role of these agents in promoting products that allow consumers to purchase items that reflect and support these values.
Impacts
Organic family farmers in New York State, and extension educators that work with them, are more aware of what market channels are available, how consumers view and value their products, how best to communicate with consumers (including labels and other promotional initiatives)and how to find market channels that best fit the farmers' needs and goals. They are also more aware of the property rights issues related to genetic and pesticide contamination of their fields.
Publications
- Conner, David and Ralph Christy. 2004. The Organic Label: How to Reconcile its Meaning with Consumer Preferences. Journal of Food Distribution Research, Vol. XXXV, No. 1, March 2004.
- Conner, David. 2004. Beyond Organic: Information Provision for Sustainable Agriculture in a Changing Market. Journal of Food Distribution Research, Vol. XXXV, No. 1, March 2004.
- Conner, David and Ralph Christy. 2002. Consumer Preferences for Organic Standards: Guiding Demand Expansion Strategies for Organic Food. Journal of Food Distribution Research, Vol. XXX, No. 1, April 2002.
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Progress 01/01/03 to 12/31/03
Outputs
Research into the market for organic foods, emphasizing market channels and consumer preferences, continues. A comparison, between the prices of a share from two Ithaca -area Community Supported Agriculture (CSA) farms (an important market channel for NY organic farmers) and the equivalent basket of food purchased from three local retail outlets was conducted. Results show that it is less expensive to buy from the CSA, especially if all pick your own opportunities are taken. Surveys of CSA members indicate that freshness, organic and support for local agriculture are the most important reasons for joining a CSA. Results are summarized in an Extension Bulletin. Questionnaires concerning marketing strategy were given to ten farms identified by the Northeast Organic Network as being exemplary organic farmers. While these farms differ greatly in size, scale, crop choice and market channels, each has found markets and successful marketing strategies, emphasizing quality
product and service. Results are discussed in a Smart Marketing article. Issues of property rights, between conventional farmers using Genetically Modified Organisms and pesticides, versus organic farmers and consumers who wish to produce and consume food free of these inputs, are discussed and summarized in a Choices article. Given the increasingly commoditization and industrialization of the organic food market, it is vital that small sustainable organic family farms like those in New York State be able to differentiate their products from industrialized organic commodities. Research was conducted on how labels, other efforts to communicate with consumers, market channels and other institutions can be used to allow small organic farms to link with consumers who want to support a truly sustainable agriculture system. Results were presented to the 2003 Food Distribution Research Society meetings and will be published in the conference proceedings Labeling and certification regimes
such as organic and Fair Trade also pose opportunities for small firms in New York to find or create niche markets for imported food products that reflect social and environmental responsibility. A survey measured consumer attitudes and preferences for attributes such as organic, Fair Trade and portions of profit donated to charity, as well as price. Conjoint analysis was used to measure how much value consumers place on each trait: while price was the most important trait, it was followed closely by other attributes, indicating the presence of a niche market for firms that sell foods with those attributes. Results will be written in a forthcoming paper.
Impacts
Organic family farmers in New York State, and extension educators that work with them, are more aware of what market channels are available, how consumers view and value their products, how best to communicate with consumers (including labels and other promotional initiatives)and how to find market channels that best fit the farmers' needs and goals. They are also more aware of the property rights issues related to genetic and pesticide contamination of their fields.
Publications
- Mabaya, E. and Conner, D. 2003. Consumer Preferences for Food Process Attributes: Organic, Fair Trade and Charity. In Progress
- Conner, D. 2003. Beyond Organic: Information Provision for Sustainable Agriculture. Journal of Food Distribution Research, forthcoming.
- Conner, D. 2003. Community Supported Agriculture Pricing and Promotion Strategies: Lessons from Two Ithaca NY Area Farms. Extension Bulletin, Department of Applied Economics and Management, Cornell University, Ithaca NY 14853-7801 (EB 2003-7).
- Conner, D. 2003. Marketing Strategies of Exemplary Organic Farmers. Smart Marketing, June 2003.
- Conner, D. 2003. Pesticide and Genetic Drift: Alternative Property Rights Scenarios. Choices: the magazine of food, farm and resource issues, 1st Quarter 2003.
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Progress 01/01/02 to 12/31/02
Outputs
Results from a survey and experimental auction conducted in Ithaca, NY indicate that the National Organic Program (NOP) Final Rule, as a list of permitted or prohibited practices, broadly conforms to the preferences of these consumers of organic food. Furthermore, both methods reveal that consumers are willing to pay a premium to avoid Genetically Modified Organisms, biosolids and irradiation (the so-called Big 3) in organic foods. Welfare impacts, such as the effect of the median consumer and consumer surplus, were measured; each measure demonstrates the benefit of the prohibition of the Big 3 under the current NOP Rule. These findings indicate that, despite the contentious process by which the NOP standards were defined, the decision to prohibit these three practices in the Rule is in accord with the wishes of the largest stakeholder group of this issue, organic consumers. A major goal of the NOP is to provide a single, universally understood definition of organic
which will facilitate commerce in organic food. If the NOP's definition did not reflect the traits that consumers want in organic food, the goal of increased commerce would not be accomplished. This work provides evidence that the NOP reflects consumers' preferences on the Big 3 and will be effective in accomplishing this goal. The survey and experimental results indicate, however, that consumers are not well informed on the exact definition and implications of the NOP Rule. Recommendations for public policy and private firm strategy responses have been published in a number of journal articles and other publication (see below). Research into firms' response to the NOP, including marketing opportunities, market channel analysis, and options for labeling and other means of providing information to consumers, is ongoing.
Impacts
This project endorses the NOP decision to prohibit the Big 3 in organic foods, implying that the organic label signals the presence of traits that consumers desire. Furthermore, it guides firm responses to the NOP, highlighting opportunities for organic producers and processors to promote their products based on consumers' expressed preferences and concerns. Finally, research into organic market channels and tools for communication with consumers helps firms to select appropriate outlets for their products and effectively promote their products to new and existing buyers.
Publications
- Conner, D. and Christy, R. 2002. Consumer Preferences for Organic Standards: Guiding Demand Expansion Strategies for Organic Food. Journal of Food Distribution Research 23 (1) 46-51
- Conner, D. 2002. The Organic Label and Sustainable Agriculture: Consumer Preferences and Values. Ph.D. Dissertation, Department of Applied Economics and Management, Cornell University.
- Conner, D. 2002. Prospects for the Market for Locally Grown Organic Food in the Northeast US . Research Bulletin, Department of Applied Economics and Management, Cornell University, Ithaca NY 14853-7801 (RB 2002-12).
- Conner, D. 2002. Consumer Preferences for Organic Standards: Does the Final Rule Reflect Them? Journal of Sustainable Agriculture, forthcoming.
- Conner, D. 2002. Expressing Values in Agricultural Markets: an Economic Policy Perspective. Agriculture and Human Values, forthcoming.
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