Retail demand estimation of organic rice and other rice variants in the Philippines and its implications to sustainability and self sufficiency

Abstract

While it is clear that rice is highly demanded in the Philippines, its different variants in the market have provided this research an interest for exploration. Particularly, organic rice has been seen as a potential way of addressing sustainability issues especially in production. This paper aims to assess the status of organic rice in comparison with both local and imported conventionally grown rice in terms of demand using the almost ideal demand system model. Expenditure elasticities revealed that demand for organic rice is less responsive to increases in the expenditure than local and imported conventional rice. Moreover, organic rice is highly substitutable with local conventional rice as its own price increases. If this trend continues to exist, there would be a low potential on significant increase in market prices for organic rice which would not generate enough incentives for the farmers to adopt organic farming in rice production.