Effectiveness of China's Organic Food Certification Policy: Consumer Preferences for Infant Milk Formula with Different Organic Certification Labels

Abstract

China's current organic certification policy prohibits distribution of food in the Chinese market that has only obtained foreign organic certification but has not obtained Chinese organic certification, and prohibits the independent operation of foreign organic certification bodies in China. In this study, we use consumers’ willingness to pay (WTP) as a criterion for judging the effectiveness of China's organic certification policy. A choice experiment infant milk formula (IMF) with four attributes, including organic certification label, brand, country of origin, and price was conducted in Shandong province of China. Estimation with a mixed logit model revealed that consumers’ WTP for IMF with an American or European organic certification label was higher than IMF with a Chinese label. Moreover, consumers’ knowledge of organic food and food safety risk perceptions had an impact on their WTP. Results suggest scope for policy failure in that allowing independent certification in China by European and American organic certification bodies, or legal sale in the Chinese mainland market of IMF certified by American or European organic certification bodies, could increase consumer surplus beyond the status quo under the present policy regime.