Organic production and distribution in a two-echelon food supply chain with stochastic demand using a game theory approach

Comparison of Organic and Conventional Food and Food Production

The strategic implications of a major, unique effort in the U.S. to expand organic food and agriculture are examined in this article. The authors recently completed an evaluation of the Upper Midwest Organic Marketing Project (UMOMP), funded initially by The Pew Charitable Trusts, and under the guidance of the Midwest Organic Alliance (MOA). The UMOMP was designed to increase the land area under organic production in North Dakota, South Dakota, Minnesota, Iowa, and Wisconsin. On the supply side, the focus was on organic grain, edible bean, and dairy commodities. On the demand side, an increase in organic food consumption was the focus in the Minneapolis—St. Paul metropolitan area. The UMOMP not only encouraged growth in demand, but also aided in the creation of necessary regional organic production, processing, distribution, and retail infrastructure. The UMOMP was generally successful, notably in the increased involvement of mainstream grocery stores in providing and promoting organic food products. Part of this success was due to the MOA's help in forging broker and distributor connections between mainstream stores and regional and national organic suppliers. A broad-based public awareness campaign about organic food and agriculture was another important element in the UMOMP strategy. The organic production and marketing educational effort should help to enable future expansion of organic hectarage. However, serious national or regional strategies to encourage organic farming probably will need other elements as well. Such strategies will involve some fundamental issues about the future structure and nature of organic farming and food systems, e.g., whether organic agriculture can remain centered on small- and moderate-sized family farms that operate in a somewhat independent and entrepreneurial fashion. Whether organic agriculture can be a vehicle for encouraging food systems that are more regional in geographic scope is a related issue. Preserving an organic farming and food system that differs substantially from the presently evolving “industrial” system may necessitate a slower and more deliberate approach than was used in the UMOMP. However, that could involve some sacrifice in the rate of growth in organic supply and demand.

The research survey suggests that there are organic products that are often purchased by consumers such as vegetables, rice, seasonings, meat, tempe, milk, eggs, fruit, coffee, tofu and cooking oil. Vegetables are the most frequently purchased organic product at 23% (David & Ardiansyah, 2017). Consumer decisions in purchasing organic food products are influenced by the premium price and this is the main obstacle (Bryła, 2016). Research survey results show that 82% of consumers are unwilling to pay a premium price above 10-20% for organic food (Xie et al., 2015). The price range of organic products ranges from 6% to almost 300% higher than the price of inorganic products (Sörqvist et al., 2013). The price difference can affect consumers' willingness to pay. Based on this, it is necessary to research how much the value of willingness to pay is to be paid by people in the city of Bogor to pay for organic leaf vegetable products. The research was conducted in Bogor City and the location selection was done by purposive sampling. The independent variables studied were age, education, expenditure, gender, number of family members, marital status, health awareness and environmental awareness. The data source in this study uses primary data. Data collection time was conducted in April-June 2024. The number of samples used in this study were 200 respondents spread in five modern market places like all fresh, farmer market, yogya bogor junction, superindo and agrimart. The dependent variable is the amount of willingness to pay value of consumers' willingness to pay for organic leaf vegetable products. The stages of discrete choice experiment (DCE) analysis include (1) determining product attributes and levels; (2) constructing product profiles; (3) obtaining a discrete choice model (DCM); (4) analyzing DCM data sets using Stata software. Selection of DCE analysis to find the WTP value chosen by respondents as consumers of organic leaf vegetables with 3 physical attributes such as product type (organic or non-organic), label (there is or there is no label) and place (directly to modern markets or through online applications). The results showed that organic vegetable consumers are willing to pay more on attributes for organic products amounting to IDR 5,890.8; having / including labels of IDR 4,292.8; and IDR 2,992.45 on online purchases. Willingness to pay provides important insights for making strategic decisions in terms of pricing, production planning, and marketing of organic vegetable products. When knowing consumer WTP, marketers can set the optimal price according to consumer purchasing power and preferences. The right price can maximize sales as well as profit margins. In addition, by knowing the price limit that consumers are willing to pay, marketers can design attractive promotions without hurting their profitability. Producers can adjust the quality or type of product according to the preferences of consumers who want to buy organic vegetables.

Introduction: Given the significance of organic food research in food manufacturing industry, bibliometric analysis within the period of 1998 to 2023 was utilised to provide a review of the body of work published in this area. The framework and central idea of the literature on organic food production in food and beverages industry by using the bibliometric analysis of the literature was further determined. To comprehend the thematic organisation and knowledge of organic food research in food manufacturing industry, the bibliographic coupling and co-citation analysis are carried out. Additionally, research trends and research direction in organic food development in food and beverages industry were fully understand by utilised co-occurrence and confluence analysis. The results of this study has suggested that there are more research are related to organic food demand and consumption which are linked to production of the organic food. Objective: Given the significance of organic food research in food manufacturing industry, bibliometric analysis within the period of 1998 to 2023 was utilised to provide a review of the body of work published in this area. Theoretical Framework: Organic production and terms related to organic food were combined in this study's nomenclature. The keywords linked with each sector had to be used to make sure that this research addressed all aspects of organic food and organic production. Method: The Scopus database, which is the largest biographical database, was used for data extraction and analysis. The research evolution and themes of organic food research in the food manufacturing industry were covered in the study for various time periods. Results and Discussion: The research evolution and themes of organic food research in the food manufacturing industry were covered in the study for various time periods. This study outlined the evolution of organic food research in the food manufacturing industry as well as potential research topics for academics.To further comprehend the research paradigm from high-quality publications, future studies may use bibliometric analysis on SCI, SSCI, and ABDC-listed articles solely. Research Implications: The current study has a number of ramifications for academics, businesspeople, marketers, and scholars. They ought to learn about the general studies that have been done in this field. They can use these papers to address the current issues in academia and business by being aware of the important contributors to this field of research and their motivations for doing so. Originality/Value: By examining many facets of organic food research, researchers have made significant contributions to this field. Studies are primarily focused on consumers’ demand facet, but there are fewer studies on the supply side from food and beverages industry. The first study on organic food development was carried out in 1998, according to the Scopus database. Since its inception till the present, organic food has taken many different forms. As there is no study that specifically focuses on organic food production in food and beverages industry, there is a need to research develop in the field of development of organic food production in food and beverages industry.

RESEARCH DIRECTIONS FOR ORGANIC TREE FRUIT PRODUCTION IN NORTH AND SOUTH AMERICA

Some consumers have shown a willingness to pay a price premium for organic products because organic agriculture is considered a more environmentally friendly form of agricultural production. These price premiums result from the limited supply relative to demand for organic products and the added cost of maintaining a separate food-distribution system for organic products. The U.S. Organic Foods Production Act of 1990 requires the segregation of organic production and distribution in order to maintain the integrity of foods labeled “organic.” Despite relatively high organic price premiums, demand for organic foods has been growing rapidly (Dimitri and Greene 2002). Organic price premiums have been examined at the wholesale level, mostly for their impact on farm profi tability. Limited data on organic prices at the retail level are reported in a U.S. Dept. of Agriculture (USDA) study on the growth of the U.S. organic market (Dimitri and Greene 2002) and in an examination of retailers’ attitudes toward organic products (Lohr and Semali 2000). Several studies have examined specifi c categories of organic foods (CDS, Inc. 2002; Glaser and Thompson 1999; Glaser and Thompson 2000; Rosen and Larson 2000). Studies of consumption of organic foods have looked at who buys organic, where they buy organic, and why they buy organic (Estes and Smith 1996; Thompson 1998; Thompson and Kidwell 1998). Promar International (1999) generalizes that retail organic foods have an average 70% price premium. Thus a household would need 70% more income to consume all organic products and continue spending the same proportion of its income on food, or that household would spend 17% of its income on food compared to the U.S. average of 10%. Study results regarding the income levels of organic consumers are mixed. Thompson (1998) found that higher-income households were not more likely to purchase organic products, and that some groups of consumers who are committed to buying organic products have relatively low incomes. No studies have analyzed the impact that the higher cost of an all-organic diet could have on food expenditures. The purpose of this research is to assess the impact that organic price premiums could have on consumers trying to purchase an allorganic diet in the mid-Atlantic region of the U.S. using foods that might be consumed by a family during a given period.

Combining text mining of social media data and conjoint approach to investigate consumer choices on organic food

The aim of this research is to compare the sustainability of organic versus conventional hazelnut production in the Terme district of Samsun province, Turkey. Structured interviews were used to collect data from 64 randomly selected conventional and all 39 organic hazelnut producers living in the study area. The sustainability of organic production activities was analyzed in terms of economic, social and environmental aspects. A sustainability index was calculated based on 23 sustainability indicators. Research results showed that organic hazelnut production activities were relatively more sustainable than conventional organic production. With respect to economic sustainability, organic hazelnut producers had more income from both agricultural and non-agricultural sources, used more credit from the banks and were less risk averse than the conventional producers. Concerning environmental sustainability, the organic producers, as expected, had more diversified products, used more organic inputs, adopted more organic farming methods but needed more labor input than their conventional counterparts. As far as the social sustainability was concerned, the organic producers had more formal education and used more often and diverse sources of information than conventional producers. Both environmental and economic sustainability had more critical issues than social sustainability for both groups of producers. Supporting commercial organic fertilizer rather than organic compost and manure use endangered the sustainability. Thus, the growers were motivated to use inputs from their own farms and to decrease their dependence on commercial inputs from outside. In addition, the dependency to foreign markets and contract companies due to limited domestic market opportunities also threatens the sustainability. Agricultural products should be diversified rather than hazelnut monoculture, and the entire organic cropping system should be supported to integrate organic cropping system. Conventional growers should be trained to use more sustainable agricultural methods rather than excessive and incorrect use of chemically inputs. Organic producers should be encouraged to benefit from research, extension and financial support services.

The consumption of organic food has grown remarkably, both in developed and developing countries. Although organic food comprises only a small fraction of the food market, its rapid growth has generated much interest among consumers and businesses, as well as researchers. For products to be called organic, the production must conform to a certain established organic standard and be certified by a recognized certifying body. In Malaysia, the local organic food industry is still small, as more than 60% of organic food products are imported. Most of the organic products are sold domestically, while some are exported to Singapore. The perception and understanding of organic food production is based mainly on not using synthetic fertilizers and pesticides. In general, there is a lack of awareness among producers, retailers, and consumers of the wider extent of organic production and processing standards in local markets. The organic food industry is facing several challenges in Malaysia. Although the demand for organic food in Malaysia is growing, the supply of local organic products is not able to keep up with the increased demand. In addition to the inconsistent supply, the variety of local organic food is also limited. Another problem faced by local organic food consumers is the price difference between organic and conventional food. Hence, to match the recent increases in demand, the Malaysian Agricultural Research and Development Institute is actively developing the organic farming sector through various programs and activities.

Background: Organic products now a days are considered as healthy by most of the buyers as these are made up of natural substances. Organic products are grown without the use of fertilizers, artificial chemicals, and pesticides. The Indian organic food market although initsnascent stage, has started growing rapidly. Consumers prefer organic food due to safety, human health, and environmental concern and also due to attributes like nutrition value, taste, freshness and appearance of organic food matters a lot for consumers. Methods/Statistical Analysis: Multiple linear regression technique was used to find the determinants which could explain the preference among consumers to buy the organic food products. Descriptive statistics was used to understand the demographic information. Findings: From this study, it is seen that the consumers prefer to buy organic food products, there are various factors impacting the preference including demographic characteristics of the consumers. It has been observed that females have more preference for organic food products as compared to male respondents. More number of educated respondents prefers to buy organic food products. Age group of 29-39 prefers to buy organic food as compared to other age groups. Also people of higher income group prefer to buy organic food. Consumers prefer to buy organic food products because of their perception that the organic food products are healthy and safe, nutritious and environment friendly. Application and Improvement: This research reveals the determinants of consumer preference towards organic food and it will be useful for the marketers to design a suitable marketing mix. This research can be incorporated to implement the various marketing strategies by the marketers and other factors impacting the preference of theconsumers in the various strata of the society.

This research paper analyzes the comparative study of organic food products and non organic food products in India. Increasing use of chemicals, pesticides under intensive cultivation has destroyed the existing soil texture, plants and animals and human health. The access use of chemicals and antibiotics in inorganic food products has compelled the health conscious consumers to explore and support organic food in India. Standards vary worldwide, but organic food products in general practices that strive to cycle resources, promote eco-friendly environment, and conservation of biodiversity biodiversity. Organizations regulating organic food products may restrict the use of certain pesticides, chemicals and fertilizers in organic farming. In general, organic foods are also usually not processed using irradiation, industrial solvents or synthetic food additives. On other hand non organic food products are contained pesticides, herbicides, highly toxic chemical residues and Contaminated Sewage Sludge. This study reveals the fact that the organic food products are better in health, taste, and quality and rich in balance of vitamins and minerals than inorganically grown food. The eating of organic food considerably reduces the heart attacks, strokes, cancer, and many other fatal diseases. Therefore, the importance of organic food products has increased due to its environmental friendly methods and growing consumer awareness of food safety. The role of the Indian Government is critical in motivating the farmers switching over from inorganic food products to organic food products where organic food products are economically viable in India.

The organic production in Serbian enclaves in Kosovo has a great potential based on the extensive production mostly in hilly-mountainous areas with rich and convenient environment for the organic production of medicinal plants, fruits, vegetables, wine, honey etc., but it still keeps developing. The enclave can realise a high income, and thereby also an economic basis for the sustainable development of multifunctional agricultural holdings in Serbian enclaves, by the production and sale of organic products on local markets. In this paper, the authors study the consumers’ attitudes on purchase and consumption of organic food in Serbian enclaves in Kosovo. Empirical research was carried out on a spatial sample of 300 respondents, by a personal communication technique using the questionnaire as an instrument of research method. Areas of research are towns: Northern KosovskaMitrovica, Leposavic, ZubinPotok and Gracanica. Goal of the research is to discover the preferences, motives, attitudes and interests of consumers for buying the organic products, based on a defned survey to recognise the basic features of supply and the demand of organic agricultural and food products. After analysing the conducted survey, we have discovered that the organic food market in Serbian enclaves in Kosovo has not been suffciently developed; it is necessary to expand the range of organic agriculture products and a constant supply is required, better marketing, and better information and education of consumers in order to raise supply to a higher level.

The decreases in the nutritional value of foods and food safety issues resulting from the methods developed to increase food production have become the most important nutritional problems encountered all over the world. To solve these problems, agricultural and food processing methods are purified from all kinds of chemicals, hormones, and genetically modified organisms. The objectives of this study are i) to determine which of the environmentally friendly and certified organic foods are consumed the most, consumer preferences regarding these foods, the perception of the consumers on the concept/definition of organic food, and the expectations of the consumers after organic food consumption, ii) to compare the perception of organic food concept/definition and post-consumption expectations of organic food consumers and non-consumers. This study was carried out in the Samsun province of Türkiye where 19.6 thousand metric tons/year of organic agricultural products are produced. A total of 480 people participated in the study, of which 240 were consuming organic products and 240 were not consuming organic products. Results and statistical data were evaluated using frequency, descriptive statistics, chi-square, and t-test. According to the findings of study, more than half of the organic products consumed are milk, dairy, poultry, fresh fruit, and vegetable products. Most consumers agree that organic products are hormone-free and produced without the use of chemical fertilizers and pesticides. However, those who are aware that organic products are certified products are mostly organic food consumers. Some participants still consider organic products to be only natural or farmer products. In terms of expectations after organic product consumption, both groups consider that the prices of organic products are high, sales points and marketplaces should be accessible, purchasing attempt depends on income, and organic products are bought due to the positive effects of organic foods on health, environment, and farmers.

Understanding the economics of organic agriculture is crucial to support of organic production by policy-makers and to facilitate producers converting their lands to organic production. The aim of this research was to compare organic and conventional hazelnut producers, in terms of their socio-economic characteristics, production systems and economic performance. The main data were gathered with surveys of 64 randomly selected conventional hazelnut producers and all the organic hazelnut producers (39) living in villages of the Terme district of Samsun, Turkey in 2005. Results revealed that, compared to conventional hazelnut producers, organic hazelnut producers were more educated, had larger hazelnut areas and spent more time on agricultural activities. The current research also used cluster analysis to define relatively similar farmers from both production systems and to compare variables. Organic producers needed more labor, especially hired workers, and used more lime, organic fertilizer and insect traps, while conventional producers used more synthetic inputs. Organic producers had lower costs of production and had higher income. It is recommended that the organic producers be supported financially, and assisted by research and extension services to produce and use their own inputs, rather than purchasing from outside. They should also be encouraged to establish associations to increase their marketing efficiency.

Microeconomic analysis of exports and imports of agricultural organic products in Ukraine. Organic agriculture is a way of conducting agricultural production on the conditions of sustainability, which with the help of natural, technologically unprocessed means allows to produce agricultural products - organic food. In recent years, Ukraine has seen a rapid change in the structure of the market for organic agricultural products. The progressive increase in demand for organic food is a consequence of a healthy lifestyle. Demand for organic products is the result of consumer demand for certified agricultural products using organic technology, producers' demand for organic raw materials for further processing and export volumes. The market supply for organic agricultural products is defined as the sum of the supply of organic products, which is formed by agricultural enterprises and the volume of products through imports. Demand and supply of organic consumer products in the world and in the European Union in recent decades have shown exceptional growth dynamics. In Ukraine, the market for organic products is small, but is growing systematically. In 2020, the domestic market for organic agricultural products was estimated at approximately 24.3 million euros. Domestic organic products are exported to more than 40 countries. Recently, domestic organic products are exported mainly to the Netherlands, USA, Switzerland, Germany, Great Britain, Lithuania, Austria and Poland. The main organic products exported from Ukraine over the past five years are corn, wheat, soybeans and sunflowers. The growth of the organic market for agricultural products is changing the role of exports and imports. However, in today's conditions, the volume of exports of organic agricultural products significantly exceeds the volume of imports.