Abstract
Little is known about the value of sustainably-produced rice and incentive mechanisms for the adoption of sustainable production standards throughout rice value chains in Southeast Asia. This study tests the feasibility of a market-based incentive mechanism by eliciting consumers’ willingness-to-pay (WTP) for rice produced and labeled under a national sustainable production standard in the South of Vietnam through experimental auctions. Domestic consumers are willing to pay a 9% price premium for certified sustainably-produced rice. This premium gradually increases up to 33% when incremental levels of information on certification and traceability are provided. Consumers willing to pay premiums for sustainably-produced rice are more health-conscious, have better knowledge of and greater trust in food quality certification for rice, and tend to be more environmentally conscious and to read food labels before purchasing. Findings suggest that sustainable production labels for rice should be accompanied by supplementary information on certification and traceability to increase consumers’ awareness and appreciation of sustainably-produced rice. Promoting certified sustainably-produced rice hence crucially hinges on strengthening consumers’ knowledge of and trust in food quality certification. Communication strategies are recommended to focus on the environmental and health benefits of sustainably-produced rice.
Highlights
Since the publication of the Sustainable Development Goals by the United Nations (UN) (2015), sustainability has been in the forefront of international debates on agricultural production and trade
Young people seem less interested in receiving food quality information in comparison to more mature adults, as food safety consciousness tends to increase with age and experience (Berges and Casellas, 2006)
The price premiums recorded purely for the Vietnamese Good Agricultural Practice (VietGAP) label are lower than the ones observed in the market for certified rice products, which vary among certification schemes (GlobalG.A.P. or VietGAP), as well as among brands
Summary
Since the publication of the Sustainable Development Goals by the United Nations (UN) (2015), sustainability has been in the forefront of international debates on agricultural production and trade. Whilst most of the discussions have focused on higher-value commodities, the rice sector has generally been neglected, despite its crucial role in providing global food security. In response to this gap, the Sustainable Rice Platform (SRP) released in 2015 the world’s first standard for sustainably-produced rice (SRP, 2017). There is still a research gap on the incentive mechanisms that can be deployed to encourage the adoption of sustainable production standards throughout rice value chains. Different market-based incentive mechanisms have been proposed to encourage the adoption of sustainable production standards throughout rice value chains; i.e., embodying, internalizing, and disembodying sustainability (Demont and Rutsaert, 2017). The success of a market-based incentive mechanism based on embodying sustainability depends on farmers’ awareness and willingness to adopt sustainable production standards, and crucially hinges on consumers’ awareness, acceptance and willingness-to-pay (WTP) for rice certified as being “sustainably-produced.” little is known on consumers’ valuation of sustainable production labels in the rice sector, especially in Southeast Asia
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