Estimating the Willingness-To-Pay for Organic Products: (A Case Study of Vegetable and Cucumber in Gilan and Tehran Provinces)



Realizing that there is no specific market for organic products in Iran, in this study it is tried to estimate the costs involved in organic productions by means of Contingent Valuation Method and through Willingness-to-Pay estimation approach. Towards this end 219 and 209 Double-Bounded dichotomous questionnaires were developed (for cucumber in Tehran Province and for vegetables in Gilan Province respectively). Logit Model was utilized to assess the Individual Willingness-to-Pay, while the parameters of model being estimated through Maximum Likelihood method. Results indicated that form amongst the variables of the model, income and cancer record appearing in the relations exerted significant positive effects on willingness to pay for organic cucumber. The average willingness to pay by the questioned people per kilogram of organic cucumber and a kg of organic vegetables were estimated as 12200 and 17238 Rials, respectively. Since the price as based on willingness to pay per kilogram may not cover the production costs of organic crops, it seems necessary that the government steps forward to provide some support policies like paying green subsidy to farmers. In addition, for establishing the organic (biologic) agriculture system in the country, there should exist appropriate programs to provide supply security in distribution network along with the promotion of the production of these commodities, because it is evident and inevitable to economize organic agriculture if it is to develop, expand, and flourish.