Assessment on Consumers Willingness to Pay for Organic Products in Rupandehi District, Nepal

Abstract

In recent years, production and consumption of organic product is increasing due to increasing awareness among consumers about its use. A study was conducted in two municipalities of Rupandehi district viz. Devdaha and Siddharthanagar to know about awareness, perception and consumer willingness to pay for organic product. Altogether 200 interviews were conducted, 100 from each municipality using interview schedule. According to a study, 86% of individuals were aware of organic products. Result also revealed that education status of household head (p<0.01), number of economically active female members (p=0.05) and annual household income (p<0.05) had significant positive effect, while number of economically active male members (p=0.01) had significantly negative effect on awareness of organic product. The majority of consumers believed that organic product was pesticide free, nutritious, and eco-friendly thus being healthy, tasty, and fresh and environmentally sound. However, the preference for organic products was shown to be hampered by factors like low availability, low trust, and high cost. Organic products preferred were mostly vegetables and fruits. Most of the people were willing to pay up to 20% price premium. Preference level (p<0.01), awareness about organic food (p<0.01), education status of household head (p<0.1), distance willing to travel for purchase (p<0.01) and annual household income (p<0.01) were found substantially related with willingness to pay price premium. Thus, it is necessary to motivate farmers for production of organic product owing to its increasing demand. Similarly, organic product certification from authorized organization is also necessary to boost its consumption.