An Investigation of the Role of Aflatoxin in the Instability of Pistachio Market and Measuring wtp for Reducing Contamination

Successful export of a commodity is closely dependent upon observing the related international standards. Aflatoxin standard is an important index of pistachio import/export market. A lot of pistachio consignments are annually rejected because of being infected with aflatoxin. This results in export market's instability and fluctuations. The role of aflatoxin contammination in pistachio market instability was investigated in this study. Mean and variance of pistachio price in the two states of being polluted or non-polluted with aflatoxin as well as the farmers' willingness to pay for using sanitary standards in pistachio dealings were evaluated. Results indicated that export of Iranian pistachio to EU countries remained at the same level, during the study period (2004 – 2007). Along with an increase in total world export of pistachio, the share of pistachio exported to EU countries was reduced. Results also indicate that, the frequency of pistachio (exported to EU countries) being rejected was less during autumn season, as compared to the total export. There was a negative correlation between the number of rejected pistachio consignments and the pistachio price, meaning that the rejection of pistachio negatively affects the pistachio price. An evaluation of the willingness to pay for eliminating aflatoxin indicated that, on the average, it equals 0.25 dollars per kilogram of the produce. But, it is equal to 0.43 dollars per kilogram for a relatively more contaminated year such as 2005. If all the consignments are contaminated, the willingness to pay will be increased to 1.18 dollars per kilogram. Finally, for enhancing sanitary condition of pistachio market, it was proposed to promote early harvesting, and to increase sanitary observance of pistachio market paths after it is sold out by the farmers. Internalization of sanitary costs and receiving them from farmers, traders, and others involved in pistachio industry were suggested.