Building local brand for fresh fruits and vegetables: A strategic approach aimed at strengthening the local agricultural sector

Abstract

Abstract The debate about whether to reduce import barriers on fresh produce in order to decrease the cost of living and increase welfare or to continue protecting the local agricultural sector by imposing import duties on fresh vegetables and fruits has been part of the Israeli and the US political dialog. The alternative of building a strong local brand that will direct patriotic feelings to support of the agricultural sector has been previously discussed in the literature as a non-tax barrier to global competition. The motivation of consumers to pay more for local fresh fruits and vegetables are better quality, environmental concerns, altruism, and ethnocentrism. Local patriotic feelings are expected to be stronger among national-religious consumers and weaker among secular left wing voters. This project empirically analyzes consumers’ attitude toward local agricultural production, perceptions of the contribution of the agricultural sector to society and how these perceptions interact with patriotic beliefs and socio-political variables perhaps producing an ethnocentric preference for fruits and vegetables. This patriotic feeling may be contrasted with feelings toward rival (or even politically opposing) countries competing in the same markets. Thus geo-political landscape may help shape the consumer’s preferences and willingness to purchase particular products. Our empirical analysis is based on two surveys, one conducted among Israeli shoppers and one conducted among US households. We find strong influences of nationalism, patriotism and ethnocentrism on demand for produce in both samples. In the case of Israel this manifests itself as a significant discount demanded for countries in conflict with Israel (e.g., Syria or Palestine), with the discount demanded being related to the strength of the conflict. Moreover, the effect is larger for those who are either more religious, or those who identify with right leaning political parties. The results from the US are strikingly similar. For some countries the perception of conflict is dependent on political views (e.g., Mexico), while for others there is a more agreement (e.g., Russia). Despite a substantially different religious and political landscape, both right leaning political views and religiosity play strong roles in demand for foreign produce.