How do Texas Conventional and Organic Producers Differ in their Perceptions of Barriers to Organic Production?

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1 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 56 How do Texs Conventionl nd Orgnic Producers Differ in their Perceptions of Brriers to Orgnic Production? Mud Roucn-Kne *,1 Foy D. Mills, Jr. 1 L. A. Wolfskill 1 Mry York 2 1 Deprtment of Agriculturl nd Industril Sciences, Sm Houston Stte University, PO Box 2088, Huntsville, TX Texs Deprtment of Agriculture, PO Box 12847, Austin, TX ABSTRACT In response to n increse in consumer demnd for orgnic products, the number of orgnic opertions hs incresed in the U.S. However, unlike the rest of the U.S., the number of certified orgnic opertions in Texs hs remined reltively stble. As mens to understnd the perceived brriers to the doption of orgnic production prctices in Texs, survey ws distributed to strtified smple of 4006 Texs producers. The difference in perception of brriers (from both mrket nd production stndpoints) to orgnic production between orgnic (or in the process) nd conventionl producers ws ssessed. In generl, conventionl producers perceived brriers to entry to be more severe thn orgnic producers. KEY WORDS: orgnic, Texs, perception, brriers, mrketing, production INTRODUCTION The number of certified orgnic frms in the U.S. is incresing; simultneously the number of compnies involved in the processing, mnufcturing, distributing, nd retiling of orgnic products is expnding s well (Dimitri nd Greene 2002; Dimitri nd Oberholtzer 2009; Freundl 2009). However, orgnic production is not keeping pce with demnd (Cntor nd Strochlic 2009; Dimitri nd Oberholtzer 2009), prticulrly in Texs (Lu et l. 2010). The objective of this reserch is to study the perceived brriers to orgnic production held by Texs producers nd how perceptions differ between conventionl nd orgnic growers. Cntor nd Strochlic (2009) ddressed mrketing brriers fcing smll nd midsize orgnic producers in Cliforni. Volume (too much or too little) ws the brrier most often cited (84%) mong producers. Obtining orgnic price premiums ws presented s being chllenge for 66% of the producers, locting nd ccessing mrkets ws brrier for 65%, competition ws cited by 55%, lck of pricing informtion ws concern for 47% of respondents, nd difficulties meeting buyer requirements ws cited by 37% of respondents. Goldberger (2010) nlyzed production nd mrketing brriers fced by certified orgnic frmers in Idho. The most problemtic production fctors were * Corresponding uthor: mud.roucn@purpn.fr

2 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 57 wether-relted production losses, high cost of orgnic inputs, high lbor costs, nd weed-relted production losses. The most chllenging mrket fctors noted by certified orgnic frmers in the study were limited demnd, limited distribution opportunities, nd obtining orgnic price premiums. Goldberger did not interview conventionl frmers. Using production type (e.g., crop, beef) s the dependent vrible, Lu et l. (2010) presented n nlysis of the respondents rections to perceived impediments to orgnic production. Results indicted tht producers in Texs (both orgnic nd conventionl) found ll mrket fctors to be moderte brriers to orgnic doption except the distnce to vilble mrkets, which ws considered severe brrier to most respondents. Production fctors were considered moderte brriers, with the vilbility of orgnic processing fcilities considered the most severe brrier to considering orgnic production. This study did not delinete between conventionl nd orgnic frmers. MATERIALS AND METHODS Severl studies hve considered the brriers orgnic producers fce s they engge in orgnic production. However, this study is the first one to focus specificlly on the differences in perceived brriers to orgnic production between conventionl nd orgnic producers. The dt source used in this nlysis is the sme s tht used by Lu et l. (2010). Using dtbse of producers cquired from the USDA Ntionl Agriculturl Sttistics Service (NASS), Texs frmers with frm sles bove $25,000 were grouped by wht self-reported primry commodity they produced. Subsequently, strtified smple of bout 6% of the totl popultion ws drwn bsed on the commodities identified. The survey ws distributed in the Spring 2007 vi mil to 4006 rndomly selected producers. Second nd third milings were used to increse the response rte. The totl number of surveys returned ws 1178 (29.4%) with 961 (24.0%) of these surveys usble. The primry reserch hypothesis ws tht the perceived brriers to engging in orgnic production differed between frmers who hd, were, or plnned to engge in orgnic griculturl production compred to frmers using conventionl methods. Therefore, respondents were sked the question presented in Figure Which of the following sttements re most ccurte regrding your CURRENT griculturl opertion? (Mrk ll tht pply.) Conventionl Previously certified orgnic but no longer certified Certified orgnic Non-certified orgnic Conventionl but in the process of becoming certified orgnic Figure 1. Survey question regrding respondents type(s) of griculturl opertion. After reviewing survey respondents replies, the dt were orgnized into two groups s follows: Conventionl - respondents checking only the conventionl box (n = 851), Orgnic (n = 111) - respondents checking: Previously certified orgnic but no longer certified (n = 2), Conventionl but in the process of becoming certified orgnic (n = 19), Certified orgnic (n = 5),

3 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 58 Non-certified orgnic (n = 85) - self-reported bsed on personl definition. Tking the totl number of usble surveys, frmers identifying themselves s conventionl growers (88.6%) nd those who consider themselves orgnic growers (11.4%) were compred bsed on their perceptions of brriers to orgnic production. The dt ws nlyzed using IBM SPSS Sttistics 20. Descriptive sttistics nd cross tbultion sttistics were generted, nd Anlysis of Vrince (ANOVA) ws conducted. Significnt differences in this study re expressed by: * p < 0.10, ** p < 0.05, nd *** p < RESULTS AND DISCUSSION Frm Chrcteristics. The frm chrcteristics of the conventionl growers nd orgnic group were nlyzed. Respondents were sked to indicte the production ctegory(ies) tht best described their business. Figure 2 presents respondents nswers orgnized by ctegory. There is significntly lrger percentge of orgnic respondents engged in vegetble/fruit/nut (p = 0.000), greenhouse/floriculture/sod (p = 0.002), nd poultry/egg production (p = 0.008) compred to the conventionl growers. Conversely, significntly lrger percentge of conventionl respondents re engged in row crop production (p = 0.000). Figure 3 compres the two groups by yers engged in griculturl opertions. Those frming for less thn 10 yers re using orgnic prctices t significntly higher rte: < 5 yers (p = 0.010) nd 5-10 yers (p = 0.025) compred to those frming more thn 20 yers where conventionl methods re more commonly used (p = 0.006). The dt indictes tht the trnsition period begn 10 to 20 yers go where there is no significnt difference expressed between the two methods of griculturl production. Figure 4 shows tht lmost 70% of orgnic growers generte sles of less thn $50,000 (p = 0.000) likely implying smll opertions. Finlly, Figure 5 indictes some differences in terms of how conventionl nd orgnic opertions see the future of their frming opertion. A significntly lrger percentge of orgnic frmers envision their opertion becoming more diverse (p = 0.001) over the next three yers while conventionl respondents re more likely to expect no chnges (p = 0.066).

4 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 59 Plese indicte the type of producer ctegory tht best describes your business. (Select ll tht pply.) 60% 50% 40% 30% 20% 10% 0% Conventionl Orgnic Figure 2. Types of production ctivities reported by survey respondents (* p < 0.10, ** p < 0.05, *** p < 0.01). Plese indicte your yers in griculturl opertion (including conventionl nd orgnic). 80% 60% 40% 20% Conventionl Orgnic 0% Figure 3. The number of yers survey respondents hve been involved in griculturl opertions (* p < 0.10, ** p < 0.05, *** p < 0.01).

5 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 60 Plese identify the size of your opertion by selecting the ctegory tht best describes your nnul gross sles. 70% 60% 50% 40% 30% 20% 10% 0% Conventionl Orgnic Figure 4. Respondents nnul gross sles. * p < 0.10, ** p < 0.05, *** p < How do you see your opertion CHANGING in the next three yers? (Select ll tht pply.) 60% 50% 40% 30% 20% 10% Conventionl Orgnic 0% Figure 5. Respondents perception of the future of their opertion. * p < 0.10, ** p < 0.05, *** p < Perception of Brriers. Vrious questions regrding the mrketing nd production brriers to orgnic production re summrized below. These questions were presented in the survey using three-point Likert-type scle. The results re first summrized for the overll smple nd then broken down to compre rnkings cross conventionl nd orgnic producer ctegories.

6 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 61 Producers were sked to determine the min doption brriers to orgnic production vi two seprte questions: one pertining to mrketing conditions nd the other to production conditions. The producers were given the following rnking choices: 1 - Not brrier = no issue to entering orgnic mrkets; 2 - Moderte brrier = some level of brrier for entry to orgnic mrkets; 3 - Severe brrier = definite brrier to entry. Conventionl nd orgnic producers perceptions of brriers to mrket conditions re significntly different (Tble 1). Conventionl producers identify the following s greter brriers to entering the orgnic mrket compred to the orgnic group: finding relible buyers/mrket for orgnic products (p = 0.008), the difficulty in obtining orgnic price informtion (p = 0.003), the uncertinty in obtining orgnic price premiums (p = 0.022), the unstble orgnic mrket nd/or prices (p = 0.010), the distnce to vilble orgnic mrkets (p = 0.076), nd the lck of orgnic mrketing networks (p = 0.041). Conventionl producers lso perceive significnt differences mong production fctors (Tble 2). Conventionl producers re more prone to consider production fctors s being severe brrier, while orgnic producers consistently found these sme brriers to be moderte. Avilbility of orgnic processing fcilities (p = 0.000) ws the brrier considered to be the most significnt production brrier to the doption of orgnic frming prctices by conventionl producers. It ws followed by pest-relted production losses (p = 0.000), high input costs (p = 0.000), weed-relted production losses (p = 0.000), disese-relted production losses (p = 0.000), vilbility of orgnic inputs (p = 0.024), lck of understnding regrding orgnic production methods (p = 0.001), wether-relted production losses (p = 0.015), nd finlly, fertility-relted production losses (p = 0.000). Producers were sked, Would n increse in revenue fcilitte your doption of orgnic production? Over 43% of the conventionl frming respondents indicted tht No, no mount of dditionl revenue would prompt chnge in their opertion. Fifty percent of the conventionl frming respondents indicted tht, Yes, dditionl revenue might encourge chnge to orgnic production. The remining 7% of the conventionl growers selected the choice, An increse in revenue is not necessry for me to dopt orgnic production. One might surmise tht those frmers who selected tht, No, no increse in revenue would interest them in switching to orgnic production, lso perceived the brriers to doption s moderte to severe. However, cross-tb nlysis of the production nd mrketing brriers identified by this subset of respondents ctully showed tht they re more prone to consider mrketing nd production fctors s either not being brrier or s being severe brrier (i.e., bimodl distribution) with lrger percentge considering the fctors s not being brrier. In other words, they my simply not be interested in orgnic production.

7 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 62 Tble 1. Differences in perception of mrketing brriers between conventionl nd orgnic producers. Person Mrket Conditions Not Moderte Severe chi-squre Finding relible buyers/mrket for my orgnic products Difficulty obtining orgnic price informtion Conventionl Orgnic Conventionl Orgnic *** b *** Uncertinty in obtining orgnic price premiums Unstble orgnic mrket Distnce to vilble orgnic mrkets Conventionl Orgnic Conventionl Orgnic Conventionl Orgnic ** 9.180** 5.166* Competition with non-orgnic products Lck of orgnic mrketing networks Conventionl Orgnic Conventionl Orgnic ** These numbers represent the Person chi-squre sttistic of the chi-squre test of cross tbultion. b * p < 0.10, ** p < 0.05, *** p < 0.01.

8 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 63 Tble 2. Differences in perception of production brriers between conventionl nd orgnic producers. Person chisqure Production conditions (%) Not Moderte Severe Wether-relted production losses Pest-relted production losses Disese-relted production losses Conventionl Orgnic Conventionl Orgnic Conventionl Orgnic ** b *** *** Weed-relted production losses Fertility-relted production losses Conventionl Orgnic Conventionl Orgnic *** *** High input costs Avilbility of orgnic inputs (feed, fertilizer, etc.) Avilbility of orgnic processing fcilities Lck of understnding regrding orgnic production methods Conventionl Orgnic Conventionl Orgnic Conventionl Orgnic Conventionl Orgnic *** 7.496** *** *** These numbers represent the Person chi-squre sttistic of the chi-squre test of cross tbultion. b * p < 0.10, ** p < 0.05, *** p < Usefulness of Informtion nd Services. The finl section of the survey focused on orgnic nd conventionl growers perceptions of informtion nd/or services relted to orgnic production. Not surprisingly, orgnic producers found most informtion nd services described in the survey to be significntly more useful thn the conventionl producers (Tble 3). Assuming tht response of 2 is neutrl or verge, conventionl producers consistently rnked informtion nd services below verge; the only exception ws orgnic processing fcilities t Conversely, orgnic respondents consistently rnked informtion nd services well bove the mid-point of 2, except for orgnic export progrms/mrket development nd crop insurnce for orgniclly grown products, where no significnt difference existed between orgnic nd conventionl growers. Bsed on ordinl rnking, the orgnic group seems most interested in directories of orgnic product buyers, locl or regionl orgnic mrket development, nd consumer eduction progrms bout orgnic options.

9 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 64 Tble 3. Mens of responses to the question Plese rte the usefulness of the following informtion nd/or services for mrketing your products orgniclly. Mens (1 = not useful, 3 = very useful) Informtion nd/or Services Conventionl Orgnic t-sttistic for difference in mens Directories of orgnic product buyers *** Locl/regionl orgnic mrket development Consumer eduction progrms bout orgnics *** *** Orgnic mrketing workshops/seminrs *** Orgnic-specific reserch nd extension services Development of orgnic mrketing coops/ ssocitions *** *** Orgnic price reporting services ** Orgnic processing fcilities Representtion on orgnics-relted public policy issues *** Orgnic export progrms/mrket development * Crop insurnce for orgniclly grown products These numbers represent the t-sttistic of the test for difference of mens (two-tiled). b * p < 0.10, ** p < 0.05, *** p < Respondents were lso sked to select the orgnic production topic they would like to lern more bout (Tble 4). Topics listed, except for post-hrvest hndling, pproprite equipment/mchinery, helth regultions, rottionl grzing, recordkeeping, crop rottions, exporting orgnics, lbeling, nd irrigtion, were found to be significntly more useful to orgnic producers thn conventionl growers. Insect control seems to be prticulrly importnt topic to orgnic producers, s noted in the ordinl rnking. Finlly, respondents were presented with severl sttements regrding orgnic production nd sked to indicte whether they greed, disgreed, or did not know bout the sttement. The percentge of respondents disgreeing with ech sttement is listed in Tble 5. For ll sttements, except I understnd the process of orgnic certifiction, there re significnt differences between the conventionl growers nd the orgnic group. Tble 5 lso shows tht high percentge of respondents disgreed with the sttements, My lenders support the ide of orgnic production nd I understnd the process of orgnic certifiction, suggesting there is room for improvement in these two res.

10 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 65 Tble 4. Responses to the question Plese indicte which of the following topics will help you lern more bout orgnic production. (Select ll tht pply.). % of respondents selecting the Person chisqure Topics topics Conventionl Orgnic Insect control *** Weed control ** Disese control *** Fertilizing techniques *** Mrketing of orgnic products *** Soil mendments *** Best mngement prctices * Orgnic certifiction ** Cover crops *** Consumer eduction on orgnics *** Vlue-dded products ** Composting *** Rottionl grzing Recordkeeping Helth regultions Coopertive input/supply buying ** Seson extension techniques ** Crop rottions Irrigtion Lbeling Approprite equipment/mchinery Post-hrvest hndling Exporting orgnics These numbers represent the Person chi-squre sttistic of the chi-squre test of cross tbultion. b * p < 0.10, ** p < 0.05, *** p < 0.01.

11 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 66 Tble 5. Miscellneous questions regrding respondents perceptions nd ttitudes bout orgnic frming. Sttements Orgnic frming is ttrctive becuse I hve experienced problems with my conventionl system. My lenders support the ide of orgnic production. I understnd the process of orgnic certifiction. I m concerned bout the economic risks of trnsitioning to orgnic methods. Orgnic production is comptible with my high production system of frming. I feel the necessry informtionl support for orgnic frming is vilble. I m interested in orgnic production, but not orgnic certifiction. I hve the right equipment for orgnic production. % of respondents selecting disgree Conventionl Orgnic Person chi-squre *** *** *** *** *** *** *** Orgnic frming is finncilly vible for me *** Orgnic mrkets re relible to me *** I m stisfied with my present frming system *** Orgnic frming hs proven to be profitble *** Orgnic frming is fesible long-term production method for me. I cn successfully frm without the use of synthetic chemicls *** *** Orgnic frming is techniclly vible for me *** I support the philosophy of orgnic frming *** These numbers represent the Person chi-squre sttistic of the chi-squre test of cross tbultion. b * p < 0.10, ** p < 0.05, *** p < CONCLUSION AND DISCUSSION The differences in respondents perceptions of mrketing nd production brriers to the doption of orgnic frming prctices were nlyzed. The two groups smpled nd compred were conventionl griculturl producers nd orgnic producers in Texs. The two groups do differ in their perceptions. Sttisticlly significnt differences re evident between the two groups in their perceptions regrding mrketing nd production brriers. A substntil proportion of

12 The Texs Journl of Agriculture nd Nturl Resources 26:56-67 (2013) 67 conventionl producers perceive the brriers to dopting orgnic production s being more severe thn orgnic producers. This cn explin the lck of doption of orgnic production. Providing networking opportunities for conventionl producers to meet with orgnic producers in Texs nd discuss their perceptions bout brriers to doption could provide n incentive to some conventionl producers to switch t lest prt of their production to orgnic to meet rising domestic demnd. However, the survey showed tht 43% of the conventionl producers would not move to orgnic production regrdless of the increse in dditionl revenue tht such conversion could possibly generte. The nlysis lso indictes tht producers perceive lck of support for orgnic production from lending institutions nd lck of informtionl support bout the process of orgnic certifiction. In short, conventionl producers perceive tht mrketing nd production brriers re high, which ppers to be stifling the doption of orgnic production prctices in Texs. Note tht 77% of the orgnic group ws composed of those growers identifying themselves s non-certified orgnic producers. The survey s designed did not sk dditionl questions to verify the types of orgnic production prctices employed by this group. Tble 5 revels tht 60.8% of the orgnic smple does not understnd the process of orgnic certifiction. This my imply tht those producers identifying themselves s non-certified orgnic growers my be selectively choosing the prts of the certifiction process tht work best for them or possibly hve different definitions s to wht constitutes orgnic. As indicted, this nlysis is limited to Texs. A similr nlysis could be conducted cross the rest of the United Sttes to see if results re similr in other sttes with specific ttention to sttes where orgnic production is more significnt (e.g., Cliforni). In ddition, this nlysis is bsed on smll number of orgnic respondents, both certified nd non-certified, from the overll strtified smple. A similr survey could be conducted in n effort to cpture responses from lrger number of orgnic producers in Texs. REFERENCES Cntor A, Strochlic R Breking down mrket brriers for smll nd mid-sized orgnic growers. Cliforni Institute for Rurl Studies. Retrieved April 28, 2013 from Dimitri C, Greene C Recent growth ptterns in U.S. orgnic foods mrket. Agriculture Informtion Bulletin No. (AIB777) 42 pp, September. Dimitri C, Oberholtzer L Mrketing U.S. orgnic foods: Recent trends from frms to consumers (No. EIB-58). USDA Economic Reserch Service. Retrieved April 28, 2013 from Freundl E Orgnic frming growing trend. Michign Science, (9). Retrieved April 28, 2013 from Goldberger J Summry Report: Certified orgnic production: The experiences nd perspectives of Idho frmers. Deprtment of Crop nd Soil Sciences, Wshington Stte University. 19 pp. Lu M, Hngriff RD, Constnce DH, York M, VnDelist B, Higgins L Discerning differences between producer groups nd orgnic doption brriers in Texs. Journl of Food Distribution Reserch, 40(2):