Agriculture Reference
In-Depth Information
Analysis of Production and Consumption of Organic Products in South Africa
http://dx.doi.org/10.5772/58356
sources of risk are ranked from 1 (being the most important source of risk) to 20(being the least
important source of risk ones). The ranking was done by averaging the scores on each source
of risk and assigning a rank accordingly.
The study area in the Eastern Cape was stratified into the OR Tambo District Municipality and
the Amatole District Municipality representing a broad spectrum of consumers across the
Province. The stratified study areas were further clustered into rural, peri-urban and urban
areas. The respondents were selected by simple random sampling to avoid bias. A total of 100
consumers were selected from OR Tambo District Municipality and represented by a selection
of 30 respondents from peri-urban location, 40 respondents from urban suburbs and 30
respondents from rural areas. In the Amatole District Municipality, 100 consumers selected
and interviewed included 30 respondents from rural Cata, 40 urban respondents from the East
London Suburbs and lastly 30 respondents drawn from the peri urban area of Kwezana and
Tsathu villages. A structured questionnaire was used that covered the respondent's socio-
economic and demographic background, consumer knowledge and awareness of organic
products, perceptions, attitudes as well as consumption decisions.
The ordered probit model was used to identify the determinants of farmers' decision to
participate in organic farming. The dependent variable is the farmer's organic farming status
and was placed in three ordered categories in the survey. The model is estimated as:
age gender education household size farm size farm income off farm income input costs
f
land tenure location land tenure livestock chicken ownership risk attitude
æ
,
,
,
,
,
,
,
,
ö
(1)
Organic farming status
=
ç
÷
,
,
,
,
,
s and assets
è
ø
The organic farming status is modelled using the ordered probit model with the model
outcomes:
S
i
=3 (fully-certified organic),
S
i
=2 (partially-certified organic farming) and
S
i
=1 (non-organic farmers).
The farmer's decision on their organic farming status is unobserved and is denoted by the
latent variable s
i
*
. The latent equation below models how s
i
*
varies with personal characteristics
and is represented as:
*
s X
a e
=
¢
+
(2)
i
i
i
Where:
•
the latent variable
s
i
*
measures the difference in utility derived by individual
i
from either
being fully-certified organic, partially-certified organic or non-organic.
•
(
i
=1, 2, 3……………. n) n represents the total number of respondents. Each individual i
belongs to one of the three groups.
