To certify or not to certify? Decomposing the organic production and certification decisions

Michael D Veldstra, Purdue University

Abstract

Consumer demand for organic food has increased rapidly over the past decade, generated in part by the advancement and success of USDA's organic regulatory program and label (Greene et al. 2009). This rise in demand has led to a shortage of organic products and strained organic supply chains. There is a need to increase the number of certified organic acres to meet this demand. The objective of this research is to decompose the decision to certify organic, by first identifying the factors that influence the decision to use organic practices then identifying the factors that influence organic producer's decision to certify. A total of 1559 responses were collected from 4312 surveys sent out to fruit and vegetable growers participating in Food Industry's MarketMaker in 16 different states. Two Probit regressions were performed. The first regression was performed on a total of 1026 usable respondents to examine the significant factors in determining a producer's decision to use organic practices. A second regression was performed with the respondents who use organic practices to determine the significant factors in determining the producer's decision to certify. The results from the first regression show that a producer's philosophical beliefs and risk of losses due to disease, weeds, and insects has the largest impact on the decision to use organic practices. The results of the second regression show that the scale of production is positively correlated with the decision to certify, and the process of certification is a barrier to certification. They also show that producers who indicated that direct market channels are their most economically important channels are less likely to certify.

Degree

M.S.

Advisors

Alexander, Purdue University.

Subject Area

Agricultural economics

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