Food Policy 34 (2009) 287–294

Contents lists available at ScienceDirect

Food Policy
journal homepage: www.elsevier.com/locate/foodpol

Consumers’ willingness-to-pay for organic conversion-grade food: Evidence

from five EU countries
R.B. Tranter a,*, R.M. Bennett a, L. Costa b, C. Cowan c, G.C. Holt a, P.J. Jones a, M. Miele d,
M. Sottomayor b, J. Vestergaard e
a
Centre for Agricultural Strategy, University of Reading, P.O. Box 237, Reading RG6 6AR, UK
b
Faculty of Economics and Management, The Portuguese Catholic University, Centre Regional do Porto, Rua Diogo Botelho1327, 4169-005 Porto, Portugal
c
Ashtown Food Research Centre, Teagasc, Ashtown, Dublin 15, Ireland
d
School of City and Regional Planning, University of Cardiff, King Edward VII Avenue, Cardiff CF10 3WA, UK
e
Department of Management, Aarhus School of Business, University of Aarhus, Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark

a r t i c l e i n f o a b s t r a c t

Article history: In recent years, in overall value, the EU has become a net importer of organic food to supply increasing
Accepted 3 March 2009 demand. Financial support for farmers during the conversion period has been made to help expand
organic production as this was seen as a barrier to conversion. Meanwhile, farmers have been marketing
products produced in this conversion period and labelled as such, the extent to which is described here
Keywords: for the UK, Portugal, Denmark, Ireland and Italy. Consumers’ attitudes towards, and willingness-to-pay
Organic conversion-grade food for, conversion-grade food in these countries is examined. It was found that consumers would be pre-
Willingness-to-pay
pared to pay a premium for conversion-grade produce of around half the premium for organic produce
Marketing
Denmark, Ireland, Italy, Portugal and the UK
with vegetables attracting a higher premium than meat. Finally, the potential of policies for marketing
conversion-grade products to encourage more conversion is examined, together with barriers to achiev-
ing this. It is concluded that barriers to marketing such products, particularly from retailers, will be for-
midable. Thus, alternative policies are suggested.
Ó 2009 Elsevier Ltd. All rights reserved.

Introduction
The decision to convert to organic farming in the European Un-
ion (EU) is now highly influenced by governmental financial incen-
tives arising from EU regulations. The exact mix of these depends
on national policies and farmers’ access to premium markets for
their products. A particular problem for those converting to organic
farming is the ubiquitous 2-year conversion period (3 years for
permanent crops) during which additional costs are usually in-
curred. Typically, these relate to declining yields associated with
the mandatory reduction in agro-chemical inputs, lower livestock
density resulting from reduced herbage production, investment
in conversion-related items such as new livestock housing and
an increase in labour requirement over conventional agriculture.
However, during this time, organic premium prices are not gener-
ally realisable (Lampkin et al., 2004). Hence, most governments re-
flect this lean financial period in their structure of support which is
often considerable (Padel et al., 1999). Consequently, the recent
waves of ‘conversion’ have resulted more from conscious financial
assessment than mere ideological beliefs. Hence, the terms ‘com-
mitted’ and ‘pragmatic’ are now employed to describe organic pro-
* Corresponding author. Tel.: +44 (0) 118 378 8155; fax: +44 (0) 118 935 3423.
E-mail address: r.b.tranter@reading.ac.uk (R.B. Tranter).
ducer motivation, with the latter being used for those exhibiting a
weaker affiliation, who are more likely both to enter when prices
are strong and also leave when margins are squeezed (Fairweather
and Campbell, 1996).
Under the Agenda 2000 CAP reforms agricultural support was
gradually reduced and, though more support was provided for
agri-environment measures than previously (MAFF, 2001), the
importance of investigating market incentives for conversion in-
creased. In addition, the Fischler CAP reforms, which came into ef-
fect in 2005, both lowered support to agriculture and decoupled it
from production. To soften the impact, more agri-environmental
payments were made and organic farming received further assis-
tance (Council of the European Union, 2003). This reflected policy-
makers’ belief that organic farming provides environmental and
other benefits and could help stabilise rural communities and aid
rural development by providing more employment than conven-
tional farming. Other perceived benefits include aiding consumer
confidence in food quality and safety, a reduced effect on climate
change and a lower ‘food miles’ profile through organic food tending
to be produced locally (e.g. Lampkin and Padel, 1994; FiBL, 2000;
Lampkin, 2002; Smith and Marsden, 2004; Jones and Tranter, 2006).
EU governments have supported farmers converting to organic
production to try to increase the amount of organic produce being
produced and marketed for economic, environmental and social

0306-9192/$ - see front matter Ó 2009 Elsevier Ltd. All rights reserved.
doi:10.1016/j.foodpol.2009.03.001
288 R.B. Tranter et al. / Food Policy 34 (2009) 287–294
reasons. Despite this, and allowing for the spectacular increase in
production since 1990, barriers to conversion existed and remain.
An EU-funded project (Jones and Tranter, 2006), investigated
whether the establishment of markets for products from the con-
version period would help remove some barriers. We now draw
on this work after describing the methodology by providing details
of the extent of marketing conversion-grade products from a sur-
vey of farmers in the five study countries – UK, Italy, Denmark, Ire-
land and Portugal. These countries were classified by Foster et al.
(2001) according to their stage of organic market development:
Denmark and the UK were ‘mature’ market countries; Italy and
Portugal were ‘growth’ market countries; and Ireland was an
‘emerging’ market country. Indeed, these countries were represen-
tative of the, then, EU15. We then discuss the findings of the pro-
ject’s consumer survey in these countries which examined the
beliefs and attitudes of consumers regarding conversion-grade
products, barriers to the purchase of such goods and the price pre-
mia that consumers said they would be willing to pay for them. Fi-
nally, some conclusions are made and issues of relevance to
policymakers arising are discussed.
Methodology
The organic farmer survey
The organic farmer survey examined the use of different market-
ing channels by producers in each study country and the sales vol-
umes of each product by different marketing channel. Surveys were
carried out in 2002 in each country simultaneously using an identi-
cal questionnaire posted to registered organic producers, including
those in conversion; responses ranged from 217 farms in Ireland to
535 in the UK. The proportion of respondents with in-conversion
land was lowest at 5% for Ireland to highest with 35% for Italy.
The consumer survey
To help design the consumer survey, 22 focus groups were held
with groups stratified by age, gender, income and organic purchas-
ing status (conditional or dedicated consumers). Each group had
around 10 participants and discussion lasted approximately 2 h
and was audio-taped and transcribed for analysis. To enhance rig-
our, analysis followed procedures used in Grounded Theory, where
researchers build theories from the concepts emerging from the
data (Cassell and Symon, 1994). The focus groups were designed
to obtain information on consumers’ attitudes and beliefs towards
organic and conversion-grade products and any barriers that ex-
isted towards purchase.
The questionnaire was drafted in English, translated, pilot
tested and revised. A computer assisted telephone methodology
was used by a market research company in all countries in 2003.
The questionnaire1 obtained information on: purchasing behaviour,
concerns about food production and perceptions regarding organic
food; whether they might purchase conversion-grade products; their
consumption of carrots and chicken and their willingness-to-pay
(wtp) for conversion-grade carrots and chicken; reasons for re-
sponses given to the wtp questions; and contextual information such
as age and household size.
A total of 1527 consumers were surveyed. Stratification was
based on dimensions known to influence organic purchasing
behaviour (e.g. Caswell and Joseph, 2007; Shaw and Shiu, 2002;
Yiridoe et al., 2005), ensuring adequate quotas for each region to
capture rural/urban differences and respondent age. Commitment
to organic purchasing was sampled randomly, with 31% indicating
1 3
A specimen questionnaire is available from the first author.
they never purchased organic foods, while 17% were regular pur-
chasers. The respondent had to be the main, or joint, food pur-
chaser in the household so, consequently, the final sample was
75.6% women.
In estimating the premia that respondents might pay for con-
version-grade products, a particular logistic regression technique
was employed which accounts for the effect of a range of determi-
nants of wtp, other than price. These included such socio-economic
factors as household income, education etc. The value that con-
sumers were wtp for conversion-grade products was estimated
using contingent valuation (CV). This is a popular means of valuing
non-market/public goods where no market price exists e.g. envi-
ronmental amenities, as well as ‘hypothetical’ goods i.e. goods for
which a market price could exist but are currently not on sale.
Here, direct questioning was used to elicit wtp for hypothetical
goods (conversion-grade carrots and chicken) at a range of prices
(see Cameron, 1988; Bennett et al., 2003).
Carrots and chicken were selected as representative of basic
meat and crop products in the study countries. Those who did
not purchase the conventional forms were excluded. Consumers
were asked to indicate their weekly food expenditure and begin
thinking about the proportion allocated to various foods. They
were also reminded that their food budget was limited and were
informed of the current conventional and organic prices of carrots
and chicken. By providing this, it was hoped they would give real-
istic wtp estimates. A hypothetical scenario was then posed: that
conversion-grade carrots or chicken2 were available for purchase.
The wtp elicitation used a single dichotomous choice format (Mitch-
ell and Carson, 1989) which presented each respondent with one
randomly selected ‘bid’ value i.e. ‘Would you be willing to pay €3x/
kg for conversion-grade carrots?’ to which they could answer Yes,
No or Don’t know. The ‘bid’ question made no mention of the public
good benefit of organic farming. However, earlier in the questioning,
a paragraph was read out describing what organic farming entails,
including the conversion period.
Six bids were used and around 50 consumers were asked the
same question at each level. The bid levels were between the aver-
age national conventional and organic price in approximately equi-
distant steps (Table 1). Once a response to the dichotomous choice
bid question was given, ‘debriefing’ questions tested the rationality
and consistency of responses. First, to explain the reasoning behind
responses and, second, several attitudinal questions relating to or-
ganic and conversion-grade foods.
Various techniques could have been used to estimate wtp. That
actually employed was Maximum Likelihood Estimation (MLE)
after Cameron (1988) and as used by Bennett et al. (2003). Once
the coefficients of the explanatory variables are obtained, it is then
possible to estimate wtp. In this case a logit model was specified
(Bennett and Larson, 1996) using standard procedures available
in the SAS (2000) software. (Full details of the estimation proce-
dure are provided by Jones et al. (2004).)
Results from the organic farmer survey
The survey of organic farmers showed that some were selling
products from the conversion period labelled as conversion-grade
(Jones and Tranter, 2006). Most were cereals for animal feed, which
2
In practice, it is not possible to produce conversion-grade chicken, as their life
cycle is too short to require a conversion period. Chicken was chosen as a
representative common meat and because it has a more uniform position in
consumer perceptions than other meats such as beef which is a luxury product in
some countries and not in others. This was felt more important than possible
problems from some respondents realising that conversion-grade chicken could
never, in practice, be marketed.
Prices are in national currencies in the UK and Denmark and € elsewhere.
 R.B. Tranter et al. / Food Policy 34 (2009) 287–294 289

Table 1
Bid levels used and conventional and organic prices for carrots and chicken (price/kg).

Conventional Bid 1 Bid 2 Bid 3 Bid 4 Bid 5 Bid 6 Organic

Carrots
UK (£) 0.45 0.50 0.65 0.80 0.95 1.10 1.25 1.30
Ireland (€) 1.40 1.45 1.65 1.85 2.05 2.25 2.45 2.50
Denmark (Kr) 8.00 8.50 9.25 10.00 10.75 11.50 12.25 13.00
Portugal (€) 0.40 0.50 1.00 1.50 2.00 2.50 3.00 3.30
Italy (€) 1.20 1.35 1.40 1.45 1.50 1.55 1.60 1.70
Chicken
UK (£) 2.15 2.30 2.70 3.10 3.50 3.90 4.30 4.70
Ireland (€) 3.10 3.30 3.90 4.50 5.10 5.70 6.30 7.00
Denmark (Kr) 38.00 40.00 43.00 46.00 49.00 52.00 55.00 60.00
Portugal (€) 2.40 3.00 4.00 5.00 6.00 7.00 8.00 9.50
Italy (€) 6.40 8.00 9.50 11.00 12.50 14.00 16.00 17.54

is understandable as, at that time (2002), an EU derogation allowed
the use of such cereals, and fodder, in livestock feed on organic
farms. There was also small-scale marketing of products with no
such derogation (i.e. fruit, vegetables and meat), and sales of live-
stock to other farms. Such products were generally marketed sim-
ilarly to equivalent organic products, although there was a trend
for more direct and local marketing of the conversion products.
Most organic and conversion cereals sales were made through
intermediary organisations, particularly grain merchants and co-
operatives who had the infrastructure to handle large quantities.
Marketing of conversion-grade fruit and vegetables varied for, in
Denmark, Ireland and the UK most was direct selling while, in Italy
and Portugal, it was dominated by intermediaries such as co-
operatives.
Direct selling is an obvious outlet for conversion-grade products
to obtain a price premium as it enables the building of close cus-
tomer relationships to explain the special nature of the products.
Notions of ‘local’ and ‘freshness’ can also be capitalised on.
There was little variation in price premia on conversion-grade
products over conventional between countries, although the UK
had the lowest conversion-grade prices, as a proportion of organic
prices, and Italy the highest. Cereals and fodder obtained the high-
est price premia for reasons explained above. Premia for other con-
version products were relatively modest, although worthwhile
premia were obtained if direct and local marketing was used. How-
ever, in each country, according to those in the retail sector who
were consulted, formal markets for conversion-grade products, ex-
cept cereals, did not exist at the time of study. Furthermore, retail-
ers were hostile to the notion of marketing conversion-grade
products for various reasons – the suggestion the practice would
confuse consumers was the most plausible. Nevertheless, the main
finding of use to the consumer survey was that while the purchas-
ing scenarios were hypothetical, they were credible as they were
based on real practice.
Results from the consumer survey
within the model. Eventually, income proved a poor determinant
of wtp, probably because expenditure on carrots is not a significant
proportion of respondents’ expenditure. The five national models
together contain just nine variables suggesting common determi-
nants of wtp across countries; none of the models had concordance
less than 76.8%.
As expected, BID (the presented bid value) estimates are all neg-
ative, meaning the likelihood of a positive response to the dichot-
omous choice wtp question decreases with rises in bid values as
confirmed by Fig. 1. Bid estimates are highly significant, except
for Italy, which may be due to developments there in the food mar-
ket upon the adoption of the Euro when vegetable prices rose dra-
matically, leading to public outcry (see Republica, 2004; ISMEA,
2004). Also, Italian supermarkets had begun to offer organic prod-
ucts with minimum premium over conventional. Thus, the wtp
estimate for carrots for Italy should be treated with caution.
The variable BUY? (willingness to buy conversion-grade prod-
ucts) is a significant determinant of wtp in three of the study coun-
tries confirming a priori expectation that these two measures
would be related. The negative sign indicates the likelihood of a
negative response to the wtp question decreases where respon-
dents indicate that they would not purchase conversion-grade
products if they were available.
Aside from BID, the most significant determinants of wtp are
five preference variables that capture attitudes to, and perceptions
of, organic and conversion-grade produce. The most significant,
appearing in four of the five models, are PREF2 and PREF4; PREF2
reflects extent of agreement with a statement suggesting the
respondent would be wtp as much for conversion-grade as for or-
ganic produce, in order to encourage more conversion. All esti-
mates are positive, indicating that the more strongly respondents
agreed with the statement, the more likely they would give a posi-
tive response to the dichotomous choice wtp question. PREF4 re-
flects level of acceptance of the notion that conversion-grade
foods are the same as organic. For this, three of the four estimates

Carrots
100
Percent accepting

Selecting the best statistical model for wtp for carrots was 80
achieved in two stages. First, a sub-set of demographic and other
60 UK
variables was selected (Appendix 1) on the basis that it is a good
Ireland
indicator of willingness to buy conversion-grade products, to-
40 Denmark
gether with a priori expectation, based on past findings, of the rel-
Portugal
evance of each such variable to wtp. Second, models were varied 20 Italy
repeatedly, to arrive at a smaller set with the best individual vari-
able significance and yielding the highest coincidence of predicted 0
1 2 3 4 5 6
and observed responses (concordance). Bid level (1=lowest price)
Theory suggests that price (i.e. BID), income and preference
variables should be determinants of wtp so should be included Fig. 1. Wtp for conversion-grade carrots.
290 R.B. Tranter et al. / Food Policy 34 (2009) 287–294

are positive, indicating that stronger agreement with the state-
ment increases the likelihood of a positive response to the dichot-
omous choice wtp question. In the fourth case, where a negative
estimate is recorded, the estimate is only borderline significant.
The inverse of PREF4 is PREF5, which poses the notion that conver-
sion-grade products are no better than conventional. A priori, it
would be expected that estimates for this would be negative i.e.
agreement with this would reduce the likelihood of a positive re-
sponse to the dichotomous choice wtp question. This expectation
is confirmed by observation. It is interesting that in all countries,
after bid value, preference variables dominate, leading to exclusion
from the models of several demographic and socio-economic indi-
cators that would be expected to influence wtp, such as household
income, food expenditure and education level.
It is usual to identify ‘protest’ bids and treat these differently.
Such bids do not reflect the true value that respondents place on
a good, but are made to register objection to having to pay by a
particular payment vehicle, or for something previously available
free (see Bennett et al., 2003). For this purpose, ‘debriefing’ ques-
tions are often asked to explain the reasoning behind their re-
sponses. Here, however, there was no indication of protest bids,
so no observations were excluded from the estimation of mean
wtp.
To estimate wtp, the coefficients from the MLE were multiplied
by the values of the relevant explanatory variables, for each
respondent. The resulting estimates are summed and divided by
the number of respondents to derive a mean wtp estimate. Table
2 shows that wtp estimates lie between the conventional and or-
ganic prices in four of the five countries. While premia for conver-
sion-grade in the UK, Ireland and Denmark are 80–95% of the
organic price, Portugal is 29%. This low estimate reflects a number
of indicators, such as low frequency of organic purchasing and low
wtp a premium for conversion-grade products. However, wtp for
conversion-grade carrots in Portugal is still 2.35 times the conven-
tional price.
Fig. 2 shows the wtp distributions for each country; the trend
lines reflect the proportion of each national wtp at several premi-
ums to the conventional price. The point on each line where 50%
would be wtp equates to the wtp estimate presented in Table 2.
As can be seen, the willingness to accept a small premium for con-
version-grade carrots is very low in Portugal, but this level is main-
tained at much higher levels of premia, suggesting a core of very
dedicated organic purchasers who are relatively price insensitive.
Overall, the most common reason for a negative response to bid
was price (54.6% of all responses – see Table 3), followed by a sta-
ted preference for organic (12.7%). This was particularly evident in
the UK, Ireland and Portugal, with lack of trust predominant in
Italy (36.5%), a finding consistent with outcries over price rises.
In Denmark, no single reason for negative responses predominates,
although quality and taste concerns are most common (23.9%).
Chicken
Some 17% of the Portuguese sample did not buy chicken but
reared their own, so they were excluded from the analysis. The re-
sults for chicken are nearly identical to that described above for

Table 2
Mean wtp estimates for conversion-grade carrots and chicken compared with conventional and organic prices.

Organic price Wtp estimate Conventional price Wtp as % of organic price

Carrots
UK (£/kg) 1.30 1.05 0.45 80.5
Ireland (€/kg) 2.50 2.39 1.40 95.6
Denmark (Kr/kg) 13.00 11.19 8.00 86.1
Portugal (€/kg) 3.30 0.94 0.40 28.5
Italy (€/kg) 1.70 1.78 1.20 104.7
Chicken
UK (£/kg) 4.70 3.64 2.15 77.4
Ireland (€/kg) 7.00 4.89 3.10 69.8
Denmark (Kr/kg) 60.00 47.16 38.00 78.6
Portugal (€/kg) 9.50 0.86 2.40 9.1
Italy (€/kg) 17.54 11.20 6.40 63.9

100

80
% o f sample

60

40

20

0
+10% +25% +50% +75% +100% +150%

UK 94.4 93 88.7 81.1 68.7 39.5

Ireland 93.4 90 77.1 47.2 10.6 0
Denmark 74.9 62.9 44.8 20.6 7.8 0
Portugal 46.7 46.3 45.3 41.7 40.3 36
Italy 86.8 80.7 54.2 22.9 3.2 0

Price increase over conventional

Fig. 2. Distribution of wtp estimates for carrots at a range of prices above conventional.
 R.B. Tranter et al. / Food Policy 34 (2009) 287–294 291

Table 3
Answers to debriefing questions for carrots (Ca.) and chicken (Ch.) (% of all responses).

Reasons UK Ireland Denmark Portugal Italy All

Ca. Ch. Ca. Ch. Ca. Ch. Ca. Ch. Ca. Ch. Ca. Ch.
Too expensive/similar price to organic 55.2 60.4 67.3 46.0 19.0 33.1 89.5 65.2 19.1 45.2 54.6 51.2
Lack of trust/not (yet) certified 3.2 2.8 7.5 12.0 13.4 12.0 2.3 1.9 36.5 16.4 10.0 8.8
Prefer organic 14.4 14.2 9.3 20.0 16.2 10.8 0.0 1.4 26.1 17.1 12.7 11.3
Grow one’s own/don’t buy 12.0 10.4 6.5 10.0 4.9 7.2 4.1 30.9 8.7 6.8 7.1 13.6
Quality and/or taste poor/no better than conventional 5.6 9.4 3.7 6.0 23.9 24.1 0.6 0.0 5.2 2.7 8.2 8.4
Other 9.6 2.8 5.6 6.0 22.5 12.7 3.5 0.5 4.3 11.6 7.4 6.7

over conventional if selling at the same price. Positive correlation

100 with wtp seems counter-intuitive, as it suggests that an unwilling-
ness to pay more than the conventional price for conversion-grade
Percent accepting

80 products signals a higher wtp. What seems to be occurring is that,

60
40
20
0
1 2 3 4
Bid level (1=lowest price)
Fig. 3. Wtp for conversion-grade chicken.
carrots, with the five national models containing just 10 variables,
two of which, EDUC and EDUAGE, measure educational attain-
ment. None of the models had concordance less than 75.4%.
BID2 (the presented bid value for chicken) estimates are highly
significant in all countries and are all negative, indicating decreas-
ing positive responses with increases in bid values (Fig. 3). In three
of the models, the intercept estimates are not significant, meaning
they should not be viewed as significantly different from zero i.e.
zero intercept values have been used in estimating wtp for the
UK, Ireland and Portugal.
PREF1 and PREF2 both generate positively signed estimates
indicating that, in the case of PREF2, respondents who indicated
that they would be wtp a premium for conversion-grade goods
as a means to promoting more conversions, were more likely to
give a positive response to the dichotomous choice bid question.
Not so easy to understand is the positive correlation between
PREF1 and wtp. PREF1 represents extent of agreement with a state-
ment indicating that conversion-grade products would be bought
UK
because this statement is not referenced by statements about will-
Ireland ingness to substitute conventional products for conversion-grade
Denmark ones at different (i.e. higher) price levels, the price dimension be-
Portugal comes irrelevant, as the question is not diagnostic of price accept-
ability. Thus, it can only be seen as willingness to replace
Italy
conventional produce with conversion-grade, so the positive corre-
5 6 lation with wtp is more understandable.
Table 2 shows wtp estimates for each country; they lie between
the conventional and organic price in four of the five cases. For Por-
tugal, the wtp estimate is lower than the conventional price which
is due to low levels of bid acceptance, with only around 20%
accepting bids, at even the lowest prices, and thus there is no sta-
tistical relationship between bid level and likelihood of bid accep-
tance (Fig. 3). As the price of conversion-grade chicken in any real
market is not likely to be less than conventional, this should be
interpreted as consumers in Portugal would not, on average, be
wtp any premium to the conventional price. In the other countries,
results show that conversion-grade chicken could obtain 78.6% of
the organic premium in Denmark, some 77% in the UK, 70% in Ire-
land and 64% in Italy. That these premiums are not as high propor-
tionately as those for carrots must be attributable to the smaller
money sums involved for carrots. Fig. 4 shows that the trend in
Portuguese wtp seen for carrots is repeated for chicken, with low
acceptance levels of any premium but these levels, once estab-
lished, for a core of organic purchasers, are relatively price insensi-
tive. It is also interesting to note the much sharper rate of decline
in wtp for chicken compared with carrots in Denmark, while the
opposite is true for Italy. The UK sample is most wtp the highest
premiums, both for carrots and chicken.

100

80
% o f sample

60

40

20

0
+10% +25% +50% +75% +100% +150%

UK 72.1 69.8 57.5 49.5 37.9 19.6

Ireland 82.1 75.1 67.4 46.8 19.6 0
Denmark 70.5 51.1 8.6 0 0 0
Portugal 35.3 31.7 29.7 23.3 21.3 14.3
Italy 92.9 90.7 80.7 50.7 21 0

Price increase over conventional

Fig. 4. Distribution of wtp estimates for chicken at a range of prices above conventional.
292 R.B. Tranter et al. / Food Policy 34 (2009) 287–294
For chicken (Table 3), as with carrots, price was the predomi-
nant reason for a negative response to bids (51.2% for the whole
sample). There is variation in this reason by country but, even in
Denmark, where the lowest percentage occurs, over 33% gave this
response.
Discussion
Comment on the statistical methodology
Theory suggests that price, income and preference variables are
vital in determining demand. Our wtp models conform to this
although income/expenditure variables were not statistically sig-
nificant. This can be explained because carrots and chicken account
for a relatively small proportion of household expenditure and so
demand is not responsive to price changes. Aside from bid value,
the explanatory variables in the models are dominated by prefer-
ence variables, at the expense of socio-economic variables that
the literature suggests might have greater explanatory power
(e.g. Caswell and Joseph, 2007; Yiridoe et al., 2005). It is possible
that socio-economic factors are determinants of wtp but, having
common variance with preference variables, are better predictors
by virtue of being more tightly focused. To test this, separate
regressions were performed excluding preference variables. These
showed that in spite of weak correlations with preference vari-
ables, few socio-economic variables had significant explanatory
power, suggesting that preference variables are not accounting
for the same variance. This also echoes the focus groups’ findings.
Overall, the methodology performed well. Some less than ideal
outcomes resulted, but are explicable using secondary data. The
very low wtp estimate for chicken in Portugal is the logical conse-
quence of low bid acceptance levels and can be interpreted as
meaning that more than 50% of consumers would pay no premium.
Non-significant intercept values occur in some cases and are inter-
preted as the intercept being indistinguishable from zero i.e. the
regression line passes through the origin, signalling a zero wtp at
bid = 0.
Beliefs and attitudes regarding conversion-grade products
The focus groups showed respondents did not think conversion-
grade products were of the same intrinsic value as organic and
many believed they were not significantly different from conven-
tional. However, around 50% in the consumer survey indicated
they might be willing to pay a premium for conversion-grade prod-
ucts to encourage more farmers to convert. Conversion-grade
products appeared more acceptable among better-educated con-
sumers and those with higher household incomes. The lowest rates
of acceptance of conversion-grade products were in Denmark,
whose consumers are very experienced with organic produce.
However, they demonstrated a high level of acceptance of conver-
sion-grade products as a means to encourage more conversion. In
Italy, where mistrust of certification standards and the food chain
are high, there was a low willingness to buy conversion-grade
products. Portugal aside, the majority reporting a willingness to
buy conversion-grade products, also accepted some level of price
premium.
Barriers to purchasing conversion-grade products
Although there is variation across the study countries, unwill-
ingness to consider buying conversion-grade products is generally
dominated by issues of trust/unfamiliarity with them and a prefer-
ence for certified organic products (a failure of the notion of con-
version-grade products offering benefits equivalent to those of
organic products). These two factors account for nearly 50% of all
responses.
Price was not an issue in rejecting conversion-grade products
until consumers were confronted with possible price premium sce-
narios. This does not mean necessarily that consumers changed
their opinion of the intrinsic value of conversion-grade products,
simply that some felt premiums posited were too high for a prod-
uct that did not, to them, compare particularly favourably with cer-
tified organic.
Conclusions and policy implications
For both products, robust and positive wtp estimates were ob-
tained between the equivalent conventional and organic prices.
Conversion-grade carrots tended to command slightly more of
the organic premium than did chicken. However, low wtp esti-
mates are found in Portugal – some 30% of the organic premium
for carrots and zero for chicken.
These results suggest that, excepting Portugal, study country
consumers would be both willing to buy conversion-grade prod-
ucts over conventional and pay a premium of 50–75% of the organ-
ic premium. There were no clear trends in social/personal
characteristics distinguishing those most wtp, rather the role of
attitudes towards the environment and organic production in par-
ticular appears more important.
The EU is a net importer of many organic products, while de-
mand continues to grow. This suggests that policymakers will
encourage further organic expansion. However, there are currently
no official efforts to market products labelled ‘in conversion’ as a
means to achieving this. Despite this, at least one certification body
does this – the German Demeter (2007) brand, which denotes food
from biodynamic production, allowing up to a third of ingredients
to be conversion-grade in fully-certified products, while food con-
taining more than this is labelled ‘in conversion’. Thus, it is not sur-
prising that consumers have little understanding of the concept of
conversion-grade products. Our finding that some farmers in study
countries already market products labelled as conversion-grade, in
spite of this lack of awareness, suggests introducing policies to
facilitate marketing of conversion-grade products is worth
exploring.
What is apparent is that successful marketing of conversion-
grade products needs an appropriate ‘official’ label. Only by this
would farmers supplying longer food chains be able to obtain a
price premium. Farmers marketing directly to consumers have
other means to build trust and familiarity. If such a brand were
established, we have shown that a significant proportion of con-
sumers would be wtp a premium. This would be somewhat less
than the full organic premium, suggesting that conversion prod-
ucts would not be valued as highly. Indeed, we demonstrate that
conversion-grade products would be best marketed on their poten-
tial to encourage more farmers to convert, rather than on the basis
of the perceived health benefits that make organic products attrac-
tive to some. Difficulties would arise as the importance of this
attribute to consumers (and therefore how it might influence pur-
chasing), largely depends on the extent of their understanding of
environmental issues and food production. This suggests that pub-
lic education campaigns to increase awareness of organic issues
would be necessary to support this marketing approach. This
might have unforeseen consequences as we found that opposition
to conversion-grade products was raised in countries where under-
standing of environmental and organic issues was high. Here, con-
sumers may develop ‘philosophical’ objections to the product, as
was observed in the consumer survey. The cost to society of educa-
tion campaigns might also outweigh the benefits that development
of a market for conversion-grade products would bring. However,
 R.B. Tranter et al. / Food Policy 34 (2009) 287–294 293

there are benefits from education campaigns to the organic sector Acknowledgments
beyond the effect on marketing of conversion-grade products
alone. This article arises from a project (‘Overcoming barriers to con-
Our farmer survey revealed a strong perception that the pri- version to organic farming through markets for conversion-grade
mary obstacle to organic market development was lack of opportu- products – QLK5-2000-01112’) under the European Commission’s
nities. The means of growing consumer demand most often cited, Fifth Framework Research Programme. We are grateful for this
was more public education on the benefits of organic production support, but the opinions here are ours and not necessarily those
and products. Consumer education and information transmission of the Commission.
in the EU is largely confined to the organic sector itself, primarily
retailers attempting to establish particular organic brands. The Appendix 1
apparent market failure in this regard prompts farmers to demand
that government now take on this responsibility. Variables selected for wtp modelling.
Without government support, the cost of establishing mar-
keting routes for conversion-grade products would fall to food Variable Meaning
chain businesses. In order for them to take on this expense,
the product would have to meet clear public demand and offer EDUAGE Age left full-time education
commercial opportunities. It is currently unclear that conver- CLASS Social class
sion-grade products do either. In addition, some argue that mar- SUPERM Percentage of household food from supermarkets
keting such ‘light green’ products might dilute the organic FOODEXP Weekly household food expenditure
message and confuse the consumer, especially as the message BUY? Willingness to buy conversion-grade products if
itself is not widespread and secure in consumer perceptions available
(Yiridoe et al., 2005). PREF1 Agreement with statement suggesting respondent
Assuming it is technically feasible to market conversion-grade would buy conversion-grade products over
products, and that retailers were willing to try, would consumers conventional if the same price
buy them in sufficient quantity? Consumers primarily purchase or- PREF2 Agreement with statement suggesting respondent
ganic products for food safety and health reasons. Our study would be wtp the same price premium for
showed that conversion-grade products are perceived as little bet- conversion-grade products as for organic to
ter than conventional on these dimensions. The great unknown, encourage more farmers to convert
therefore, is whether consumers would be willing to pay for con- PREF3 Agreement with statement suggesting respondent
version-grade products in competition with the fully-certified believes that organic foods are inferior to
alternative? Conversion products being cheaper than organic conventional
equivalents may have little bearing on purchase decisions, if con- PREF4 Agreement with statement suggesting respondent
version-grade products do not satisfy the food safety and health believes conversion-grade foods are as good as
imperatives of those seeking alternatives to conventional products. organic
If conversion-grade products were marketed as a way of PREF5 Agreement with statement suggesting respondent
encouraging more organic conversions, how would consumers re- believes that conversion-grade foods are no better
act to being asked to pay twice for the same public good i.e. once than conventional
through a price premium and, again, as taxpayers funding direct CONCERN1 Concern about use of agro-chemicals
financial support? If marketing routes for conversion products CONCERN2 Concern about the effect of agriculture on the
and stable price premia became established over time, political environment
pressure might follow to reduce, or even eliminate, public support CONCERN3 Concern about the effect of agriculture on animal
for conversion. welfare
If marketing conversion-grade products is seen as problematic, AGE Respondent age
an alternative policy could be changing EU organic standards to EDUC Highest level of educational attainment
allow more incorporation of conversion-grade products into or- HHINCOME Household income
ganic labelled produce, similar to the Demeter (2007) example.
This would automatically result in a substantial price premium
being paid for conversion-grade products. The danger here is that
this strategy could dilute and devalue the organic brand; our References
study has shown that anything that might confuse the consumer
Bennett, R.M., Larson, D., 1996. Contingent valuation of the perceived benefits of
and detract from the brand needs to be treated with caution. farm animal welfare legislation: an exploratory survey. Journal of Agricultural
What might make such a policy feasible is that, over the whole Economics 47, 224–234.
sector, the proportion of product from land in conversion would Bennett, R.M., Tranter, R.B., Blaney, R., 2003. The value of countryside access: a
contingent valuation survey of visitors to the Ridgeway National Trail in the
be very small and, for individual producers, would be transient. United Kingdom. Journal of Environmental Planning and Management 46, 659–
It is also possible that, with some consumer education, such a 671.
derogation might become acceptable as part of the whole organic Cameron, T.A., 1988. A new paradigm for valuing non-market goods using
referendum data: maximum likelihood estimation by censored logistic
concept.
regression. Journal of Environmental Economics and Management 15, 355–379.
Another alternative to encourage conversion to organic produc- Cassell, C., Symon, G., 1994. Qualitative Methods in Organisational Research: A
tion could be a reduction in the conversion time from 24 months to Practical Guide. Sage, London.
Caswell, J.A., Joseph, S., 2007. Consumer Demand for Quality: Major Determinant
18. This would enable farmers to benefit from the organic price
for Agricultural and Food Trade in the Future? Working Paper No. 2007-4.
premium quicker and reduce the barriers to entry. While this could Department of Resource Economics, University of Massachusetts, Amherst,
devalue the organic brand image, probably only the more informed MA.
consumer would object. Council of the European Union, 2003. Council Regulation (EC) No. 1782/2003 of 29
September 2003. Establishing common rules for direct support schemes under
None of these strategies is mutually exclusive and any combina- the Common Agricultural Policy and establishing certain support schemes for
tion might be implemented, subject to further exploration of pro- farmers. Official Journal of the European Communities, L270. pp. 1–69.
ducer, retailer and consumer attitudes to each. Demeter, 2007. Biodyn. <http://www.demeter.net/standards/st_labelling_e04.pdf>.
294 R.B. Tranter et al. / Food Policy 34 (2009) 287–294
Fairweather, J.R., Campbell, H., 1996. The Decision Making of Organic and
Conventional Producers. AERU Research Report No. 233. Lincoln University,
Canterbury, New Zealand.
FiBL, 2000. Organic Farming Enhances Soil Fertility and Biodiversity: Results From a
21 Year Field Trial. FiBL, Zurich.
Foster, C.T., Hyde, T., Midmore, P., Vaughan, A., 2001. Summary Report of the First
Round of the Delphi Inquiry on the European Market for Organic Food.
Aberystwyth School of Management and Business, University of Wales.
ISMEA, 2004. <http://www.ismea.it/MainFrame.asp?Page=’principale/pubblica/
osservatorioprezzi/osservatorioprezzi.htm’>.
Jones, P.J., Tranter, R.B., 2006. Barriers to the Adoption of Organic Farming in the
European Union. CAS Report 16. Centre for Agricultural Strategy, The University
of Reading, Reading.
Jones, P.J., Tranter, R.B., Bennett, R.M., Holt, G.C., 2004. Comparative Report on
Multi-Country Consumer Survey. Conversion Working Paper DL6.4. Centre for
Agricultural Strategy, The University of Reading, Reading.
Lampkin, N., 2002. Development of policies for organic agriculture. In: Powell, J.
(Ed.), Proceedings of the UK Organic Research 2002 Conference, Research in
Context. Organic Centre Wales, University of Wales, Aberystwyth.
Lampkin, N., Padel, S., 1994. The Economics of Organic Farming: An International
Perspective. CAB International, Oxford.
Lampkin, N., Measures, M., Padel, S., 2004. 2004 Organic Farm
Management Handbook. Institute of Rural Sciences, University of
Wales, Aberystwyth.
MAFF, 2001. England Rural Development Programme 2000–2006. The Stationery
Office, London.
Mitchell, R.C., Carson, R.T., 1989. Using Surveys to Value Public Goods. The
Contingent Valuation Method. Resources for the Future. Washington, DC.
Padel, S., Lampkin, N., Foster, C., 1999. Influence of policy support on the
development of organic farming in the European Union. International
Planning Studies 4, 303–315.
Republica, 2004. <http://www.republica.it/speciale/2004/prezzi/t_dinamica.html>.
SAS, 2000. SAS User’s Guide. SAS Institute Inc., Cary, North Carolina.
Shaw, D., Shiu, E., 2002. An assessment of ethical obligation and self-identity in
ethical consumer decision-making: a structural equation modelling approach.
International Journal of Consumer Studies 26, 286–293.
Smith, E., Marsden, T., 2004. Exploring the ‘limits to growth’ in UK organics: beyond
the statistical image. Journal of Rural Studies 20, 345–357.
Yiridoe, E.K., Bonti-Ankomah, S., Martin, R.C., 2005. Comparison of consumer
perceptions and preference toward organic versus conventionally produced
foods: a review and update of the literature. Renewable Agriculture and Food
Systems 20 (4), 193–205.