Journal of Arable Crops and Marketing Promoting Organic Production & Consumption: A Case of Punjab, Pakistan

The study seeks to investigate the impact of major determinants influencing marketing potential and consumer’s willingness to pay for organic vegetables in Punjab, Pakistan. In this regard, two districts (Lahore and Toba Tek Singh) were selected purposively. Information was collected for the main organic vegetables. Convenient sampling technique was used to collect data because limited numbers of respondents were available. A sample size of 50 organic farmers (25 from each district) and 50 consumers (25 from each district) was selected. Multivariate regression analysis was employed to identify and evaluate the effects of marketing potential (farmers) and the consumer’s willingness to pay for organic vegetables in the study area. According to selected organic vegetable growers’ potential existed for the organic vegetables farming in the country and major variables influencing significantly the market potential for organic vegetables as income, price, no pesticide residues whereas hygienic food and more nutrients in the organic vegetables affecting insignificantly the market potential for organic vegetables in the study area. The relationship between the dependent variable (demand for organic vegetables) and independent variables (income, hygienic food, price, pesticide residues and more nutrients in the organic vegetables) was estimated by using a regression model. On the other hand, a consumer survey was conducted in order to delineate the effect of consumer’s willingness to pay for organic vegetables in the selected area. The findings of the research depicted that no synthetic pesticide residues, appearance and prices of organic vegetables influencing significantly the consumer’s willingness to pay for organic vegetables whereas quality, long shelf life and taste affecting insignificantly the consumer’s willingness to pay f or organic vegetables in the study area. The price of the organic vegetables should be low that’s why every consumer will purchase organic vegetables instead of conventional vegetables. It should be assured by the government that there are no pesticide residues in the organic vegetables. The farming community may be motivated to produce quality seeds of organic vegetables. A pilot farming program should be initiated with joint involvement of public and private sectors.


INTRODUCTION
Agriculture is the solitary largest sector and driving verve of Pakistan's economy. Despite the structural alterations in the economy of Pakistan, which have taken place since its independence, the share of agriculture in GDP is declining but agriculture still remains the largest sector of the economy accounting for 21 percent to GDP and employing 44 percent of the workforce (GOP, 2015). Production of food crops is one of the most important responsibilities of the agriculture sector. Vegetables are meeting the dietary requirements of a fair majority of the country's population. Ensuring food security is one of the core issues on the priority agenda of governments in almost all countries. The emerging trend regarding food is changing in the sense that consumers have now started showing concerns about food safety as well. A similar pattern of consumer behaviour is also observed in Pakistan and other developing countries too. Organic food has been more popular than ever, and its market is growing swiftly (Michaelidou and Hassan, 2010). Organic farming is a sustainable farming system that produces healthy crops and livestock without damaging the environment. It avoids the use of artificial chemical fertilizers and pesticides (Victor and Owusu, 2010). Nature has blessed Pakistan with fertile land and suitable climate for growing vegetables which are used for food and raw material for the processing industry (Farooqi, 2009). Vegetables grown in Pakistan are unique in taste and aroma. The farmers do not get a reasonable price of their production in normal vegetable season mainly due to abundance/flooded supply (PHDEC, 2008). Consumers have also concerned about residual effects of pesticides and chemical fertilizers used to increase the production of these vegetables. As such, vegetable growers need to adopt innovative practices like more attractive marketing methods and the production of organic vegetables to make their farming experience more profitable. Worldwide specifically in developing countries, urban and peri-urban vegetable production and marketing play important roles in the socio-economic development as they ensure employment generation, wealth creation and poverty alleviation through provision of raw materials for local food industries and fast growing restaurants in most cities in the country (Nouhoheflin et al., 2004;Norman, 2007). In Pakistan, vegetables are mostly grown in periurban areas which are near to vegetable markets (mandis). Conventional vegetables are produced unhygienically by using pesticides and harmful chemicals for the purpose of increasing the production of vegetables and protect them from pests. These pesticides and harmful chemicals are very dangerous for human health. People in Pakistan regularly are using these vegetables without identifying that whether these conventional vegetables are safe or harmful for their health. The trend is changing, and sophisticated technology is available now to analyze the vegetable stuff. As such consumers are now in a position to evaluate their food in terms of safer and harmful implications. Hence any harmful effects in vegetables are considered threat to human health. There are several reports about chemical residues in vegetables showing serious side effects on human health and the environment. Many farmers in developing countries traditionally use organic production practices, but organic cultivation is not in accordance with international regulations. Consumer's interest in organically grown foods is opening new market opportunities for producers and in recent years' consumer demand for organically grown vegetables is also increasing (Datamonitor, 2008;Briz and Ward, 2009). In spite of the numerous advantages of consuming organic food products, information on market demand and prospects appear to be limited (Wang and Sun, 2003). As such, the future of organic agriculture to a large extent depends on consumer demand. Thus, a consumeroriented approach to understanding organic vegetable demand is important (Mahmoudi et al., 2008). Organic farming is environmental friendly ecosystem management in which, use of all kinds of synthetic inputs is eliminated (FAO, 2009). Food safety and environmental concerns are motivating factors for consumers to purchase organic products. Nouhoheflin et al. (2004) argue that the consumption of fresh organic food products is seen as one of the best remedies toward the prevention of numerous health hazards associated with consumption of conventional foods. As such, there exist a niche market for organic vegetables and consumers are ready to pay premium prices. Mostly food is produced and handled in a traditional way in Pakistan, however, with advancement in technology and changes in consumer preferences, the trend for production and consumption of safe and nutritious food is increasing. Major organic vegetables sown in Pakistan are potato, tomato, carrot, garlic, ginger, capsicum etc. Although organic vegetables in Pakistan are grown on a small scale now the scenario is changing in response to the increasing importance of organic vegetables because they are considered superior in quality compared to conventionally produced vegetables as they are safe, nutritious and good for health (Razzaq, 2011).

PROBLEM STATEMENT
In Pakistan, the production of organic vegetables is in its initial stages, but the trend is changing. Consumers have the willingness to pay and consume organic vegetables, but they have limited knowledge and opportunities to purchase. A fair proportion of the farming community in Pakistan also intends to produce organic vegetables due to profit attraction in this venture which exists due to increasing demand (Razzaq, 2011). So more aware the consumer will be of the health benefits associated with organic produce, the more likely they are to make the purchase of organic products (Hassan et al., 2007, Nouhoheflin et al. 2004. So, at this stage, it is necessary to explore attitude, perceptions and willingness of consumers to pay for organic vegetables. Furthermore, it is also imperative to estimate market potential so that appropriate policy measures may be taken for their further expansion and adoption. The market potential which is the maximum reasonable sales attainable under a given set of conditions within a specified period of time is critical in determining the economic feasibility of the product and maximum total sales potential for a given market (Lehmann and Winer, 2005). Wolfe (2006) rightly points out that the market potential for a new product determines whether the market is large enough to support the viability of the product. In this regard, it thus seems rational to investigate current perceptions of farmers about the marketing potential and willingness to adopt this venture as their commercial farming system. Consumer's willingness to consume and pay for these organic vegetables needs to be estimated.

LITERATURE REVIEW
Keeping in view the above-mentioned facts, it may be concluded that exploring farmer's perception, market potential and analyzing consumer preferences for organic vegetables is a new area of investigation in Pakistan. As such, limited and scanty literature is available; however, an effort is made to review available related literature from Pakistan and other countries and narrated as under. Piyasiri and Ariyawardana (2002) highlighted that there existed the tremendous potential for organic vegetables and their demand was increasing all over the world. Similar data was presented by the Organic Trade Association (2009) depicting fruit and vegetable category as the largest among organic food sales i.e. 37% of total organic food sold in 2008. Ahmad et al. (2005) suggested that farmers should be trained, and market potential be explored to promote organic agriculture. Similar findings were discussed by Krissoff (1998), Kotler (2001), Holcomb et al. (2004) and Anderson et al. (2006). These studies highlighted that a great potential existed for organic products and developing marketing system was crucial for promotion of organic products. The other studies which emphasized the need of improving marketing for promotion of organic vegetables included Michaelidou and Hassan (2007), Lodorfos and Dennis (2008) and Kwan (2009). These studies also emphasized the need of providing timely information to consumers about characteristics of organic products as it would motivate them to purchase more. Farooqi (2009) argued that the organic farming would have a direct impact to alleviate poverty by providing large scale employment to unskilled semi-skilled labor, if proper planning and fore sighted measures were timely taken in Pakistan. Partap (2010) and Parveen et al. (2010) also showed that organic farming might be promoted to alleviate poverty, and this would put the economy on expansion path towards development. Several studies have investigated consumers' demand and willingness to pay for organic products employing different analytical techniques. Gil et al. (2000) employed contingent valuation and found higher willingness to pay premiums for organic fruits and vegetables by Spanish consumers. Misra et al. (1991) and Boccaletti and Nardella (2000) also used contingent valuation methods to analyze willingness to pay for pesticide-free fruits and vegetables in Italy and the United States of America. Usually, hypothetical markets are set up in such contingent valuation surveys to solicit consumer's willingness to pay (Carson, 2002;Lusk and Hudson 2004) where respondents are asked to value their products, contingent on the available market of the produce (Quagrainie, 2006;Kimenju and De Groote, 2008). Qingbin and Junjie (2003) used conjoint analysis to examine consumer preferences and demand for organic apples and milk. Nouhoheflin et al. (2004) employed hedonic pricing approach, which is an indirect method of valuation to assess consumers' perceptions and willingness to pay for organic vegetable in Benin and Ghana where results revealed a willingness to pay of more than 50% price premium for chemical-free vegetables. None of these studies, however, provided quantitative measures of the potential of these produces on the market. The market potential which is the maximum reasonable sales attainable under a given set of conditions within a specified period of time is critical in determining the economic feasibility of the product and maximum total sales potential for a given market (Lehmann and Winer, 2005). The market potential for a new product determines whether the market is large enough to support the viability of the product (Wolfe 2006). The total value of the product is estimated by multiplying the mean willingness to pay by the number of the population depending on the sample unit used (Asafu-Adjaye, 2000; Lehmann and Winer, 2005;Wolfe, 2006). So, the above-narrated review suggests that in order to frame effective policies for boosting production and consumption of organic vegetable, it seems rational to tap market potential and analyze farmer's and consumer's perceptions.

TECHNICAL METHODOLOGY
Two districts (Lahore and Toba Tek Singh) were selected purposively. A sample size of 50 organic farmers (25 from each district) and 50 consumers (25 from each district) was selected. Primary data was collected through personal interview method using pre-tested comprehensive questionnaires. Information was collected for major organic vegetables (potato, tomato, carrot, garlic, ginger, and capsicum) grown in main areas of Pakistan. Convenient sampling technique was used to select the sample because it is preferred in cases having limited and diverse respondents (Malhotra, 2007). Several characteristics such as nutritive value, taste, freshness, appearance, colour and other sensory characteristics influence consumer preference for organic vegetables (Wied, 2008). The market potential for organic vegetables was assessed using information such as the number of potential buyers, an average selling price, and an estimate of the purchasing rate for a specific period of time. Multivariate analysis (regression models) was used to delineate the effects of major variables affecting willingness to produce (market potential) and consume organic vegetables. A detailed description of models was given as;

Market Potential or Demand of Organic Vegetables (Farmer's Perception)
The relationship between dependent and independent variables is given as: Y = f (Xi) Where; Y = Quantity consumed of organic vegetables (kg / month) Xi = Vector of qualitative variables i = 5 In a more specific form, equation 1 can be written as: Y = βo Xi βi e μ Equation 2 can be further explained as: By taking natural log on both sides, equation 3 can be written as: lnY = βo + β1lnX1 + β2lnX2 + β3lnX3 + β4lnX4+ β5lnX5+μ X1 = Income of the Respondent X2 =Hygienic food X3 = Price of the organic vegetables X4 = Pesticide Residues in organic vegetables X5 = More nutrients in the organic vegetables Here the demand is dependent variables while income, hygienic food, price, pesticide residues and more nutrients in the organic vegetables are independent variables. βo is the intercept, βs are the elasticities and μ is the random error ln = Natural log

Willingness to Pay for Organic Vegetables (Consumer's Perception)
The relationship between dependent and independent variables is given as: W = f (Zi) Where; W = Willingness to pay for organic vegetables (Rs. / kg) Zi = Vector of qualitative variables i = 6 In a more specific form, equation 1 can be written as: W = βo Zi βi e μ Equation 2 can be further explained as: W = βo Z1 β1 Z2 β2 Z3 β3 Z4 β4 Z5 β5 Z6 β6 e μ By taking natural log on both sides, equation 3 can be written as: lnW = βo + β1lnZ1 + β2lnZ2 + β3lnZ3+ β4lnZ4 + β5lnZ5++β6lnZ6 + μ Where; W is the dependent variable used to check the effect of major variables affecting the willingness to pay for organic vegetables. Categorical data of given independent variables were collected by using 5 points Likert scale (Very high=5, high=4, medium=3, low=2, and very low=1) Zs are the independent variables in which, Z1 = quality of organic vegetables Z2 = long shelf life of organic vegetables Z3 = taste of organic vegetables Z4 = price of organic vegetables Z5 = appearance of organic vegetables Z6= no synthetic pesticide residue of organic vegetables βo is the intercept, βs are the elasticities and μ is the random error ln = Natural log

RESEARCH FINDINGS
The research findings have been discussed as below; Factors affecting demand or market potential for organic vegetables: The relationship between the dependent variable (demand for organic vegetables) and independent variables (income, hygienic food, price, pesticide residues and more nutrients in the organic vegetables) was estimated by using a regression model. Income is a major determinant which increases the demand for organic vegetables. With the increase in income of the respondents the demand for organic vegetables increase in the market, there are chances that consumers will purchase more organic vegetables. The coefficient of price 0.15 (p<0.1) showed a positive sign and was significant. The coefficient of variable explained that for every one percent increase in income of the respondent might be an increase of 0.15 percent in demand for organic vegetables, keeping all other factors constant. Price is also an important determinant which decreases the demand for organic vegetables. With the decrease in prices of organic vegetables in the market, there are chances that consumers will purchase more organic vegetables. The coefficient of price ---0.17 (p<0.1) showed a negative sign and was significant. The coefficient of variable explained that for every one percent increase in the price of organic vegetables there might be a decrease of 0.17 percent in demand for organic vegetables, keeping all other factors constant. 0.54 F-Value 9.57 * = Significant at 95% level of confidence **= Significant at 90% level of confidence NS = Non Significant No synthetic pesticide residues may increase the probability of demand for organic vegetables by the consumers. The coefficient of no synthetic pesticide residues 0.15 (p<0.1) showed a positive sign and was significant. The coefficient of variable explained that for every one percent increase there might be an increase of 0.15 percent in demand for organic vegetables, keeping all other factors constant. Hygienic food and more nutrients in the organic vegetables were showing positive sign but influencing insignificantly on the demand or market potential for the organic vegetables in the study area. Factors affecting willingness to pay for organic vegetables: The relationship between the dependent variable (willingness to pay) and independent variables (quality, long shelf life, taste, price, appearance and no synthetic pesticide residues etc.) was estimated by employing double log form of the regression model because scattered plot between dependent and independent variables suggested such a relationship. So the estimated is given below. Collinearity (or multicollinearity) is the undesirable situation where the correlations among the independent variables are strong. Tolerance is a statistic used to determine how much the independent variables are linearly related to one another (multicollinear). VIF or the Variance Inflation Factor is the reciprocal of the tolerance. As the VIF increases, so does the variance of the regression coefficient, making it an unstable estimate. Large VIF values are an indicator of multicollinearity. If the value of VIF is greater than 10 then there exists a problem of multicollinearity. In our analysis, all values of VIF are less than 10 which showed no multicollinearity existed in the data set. The value of R 2 in our analysis was 0.68 which stated that all independent variables jointly explained 68% change in dependent variable i.e. willingness to pay for organic vegetables. This value also explained that the rest of the 32 % change in the dependent variable was caused by some other variables, the effect of which could not be explained by the given model. The value of adjusted R 2 in our analysis was 0.63 which is significant. The value of adjusted R square means that all independent variables explained 63% variation in the dependent variable, keeping all other factors constant. F-ratio implies that all independent variables are significant or non-significant factors for causing variation in the dependent variable. The F-value in our analysis 9.57 (p<0.05) which was highly significant and explained the overall appropriateness of the model. Considering the results, it may be concluded that willingness to pay for organic vegetables might be rupees 7.25 hundred (725) per monds in absence of an effect from independent variables.  The appearance of organic vegetables affects the willingness to pay for organic vegetables. The coefficient of appearance 0.12 (p<0.1) showed a positive sign and was significant. The coefficient of variable explained that for every one percent increase in appearance (Rs. / kg) there might be an increase of 0.12 percent in willingness to pay for organic vegetables, keeping all other factors constant. No synthetic pesticide residues may increase the probability of willingness to pay for organic vegetables by the consumers. The coefficient of synthetic pesticide residues 0.15 (p<0.1) showed a positive sign and was significant. The coefficient of variable explained that for every one percent increase or taste there might be an increase of 0.15 percent in willingness to pay for organic vegetables, keeping all other factors constant.

CONCLUDING REMARKS
In Pakistan, organic vegetables are growing at a limited level but there exists a niche market and consumers prefer and ready to pay high prices for organic vegetables.
The study seeks to investigate the impact of major determinants influencing marketing potential and consumer's willingness to pay for organic vegetables in Punjab, Pakistan. In this regard, two districts (Lahore and Toba Tek Singh) were selected purposively. Information was collected for the main organic vegetables. Convenient sampling technique was used to collect data because limited numbers of respondents were available. A sample size of 50 organic farmers (25 from each district) and 50 consumers (25 from each district) was selected. Multivariate regression analysis was employed to identify and evaluate the effects of marketing potential (farmers) and the consumer's willingness to pay for organic vegetables in the study area. According to selected organic vegetable growers, potential existed for the organic vegetables farming in the country and major variables influencing significantly the market potential for organic vegetables as income, price, no pesticide residues whereas hygienic food and more nutrients in the organic vegetables affecting insignificantly the market potential for organic vegetables in the study area. The relationship between the dependent variable (demand for organic vegetables) and independent variables (income, hygienic food, price, pesticide residues and more nutrients in the organic vegetables) was estimated by using a regression model. On the other hand, a consumer survey was conducted in order to delineate the effect of consumer's willingness to pay for organic vegetables in the selected area. The findings of the research depicted that no synthetic pesticide residues, appearance and prices of organic vegetables influencing significantly the consumer's willingness to pay for organic vegetables whereas quality, long shelf life and taste affecting insignificantly the consumer's willingness to pay for organic vegetables in the study area. The price of the organic vegetables should be low that's why every consumer will purchase organic vegetables instead of conventional vegetables. It should be assured by the government that there are no pesticide residues in the organic vegetables. A farming community may be motivated to produce quality seeds of organic vegetables. A pilot farming program should be initiated with joint involvement of public and private sectors. Mostly less educated people are involved in this profession, so there is a need to improve the abilities of these people. Training programs should be offered to organic vegetable farmers to improve their existing abilities.