Overview of the Project

When biotechnology versions of major food crops were introduced into the marketplace in the early 1990s, this technology promised dramatic benefits to both farmers and consumers. The widespread and rapid adoption of Round-up Ready soybeans or Bt corns in North America suggests that farmers may have realized their promised benefits. However, there is considerable uncertainty whether crop biotechnology can fulfill the benefits promised to consumers given the public concerns around the globe about potential health and environmental risks associated with genetically modified organisms (GMOs). Certain consumer segments have highlighted such risks, and openly oppose the application of biotechnology to crop production.

The current debate on crop biotechnology converges on traceability, identity preservation (IP), and labeling as strategies to segregate non-biotech from biotech crops in all food supply chains. Given the substantial costs associated with these strategies, the stakeholders in food supply chains face important business decisions concerning what to do about GMOs. For example, farmers have to decide whether to plant GM seeds, whether to segregate non-GM from GM crops, and whether to invest in facilities that support such strategies. Food manufacturers have to determine whether to demand only non-GM ingredients. Critical to all these decisions is knowledge about what the public demands. Hence, the stakeholders and regulatory agencies have a vested interest in understanding consumer sentiments about agrobiotechnology.

Public demand for costly segregation systems is evident in Europe (EU) but is less pronounced in the United States. EU has even proposed regulations for mandatory traceability and labeling of GM foods that may be effective by the end of 2003. While maintaining its opposition to mandatory labeling, the US has introduced guidelines for voluntary labeling that allows the market to satisfy potential demand for non-GM foods. The remarkable divergence in regulatory approaches between the EU and US deserves research scrutiny, given their enormous implications for international agricultural trade.

In view of the importance of consumer attitudes/perceptions in societal acceptance of a new technology, this project addresses three consumer issues concerning the application of biotechnology to crop and food production: (i) examining current public attitudes about agrobiotechnology in the US and UK, (ii) identifying cognitive and socio-demographic factors determining such attitudes, and (iii) measuring behavioral intentions as represented with willingness-to-pay premium for nonbiotech food products. We designed survey instrument to measure conceptual variables that are crucial in accomplishing the three objectives. For example, the survey instrument includes questions asking consumers' attitudes, perceptions of negative/positive attributes associated with agrobiotech, awareness, level of trust, sense of outrage, and information on socio-demographic profiles of respondents.

Objectives

The specific objectives of this project was (i) to develop empirical models to analyze the structure of consumer preferences underlying the controversy over agricultural biotechnology and biotech foods and (ii) to evaluate the size of the potential demand for nonbiotech foods. Drawing from consumer behavior and risk perception theories, we designed survey instrument to elicit various consumer variables pertinent in explaining current consumer sentiments toward biotech foods. The survey instrument is composed of two sections: (1) measuring attitudes and perceptions as related to agrobiotechnology issues, and (2) measuring behavioral intentions with a focus on willingness-to-pay for breakfast cereals made of nonbiotech ingredients. The survey was administered in two countries: United States and United Kingdom.

Major Findings of this Project

Fishbein's multiattribute and mediation models were used as conceptual models to estimate the effects of risk and benefit perceptions, the degree of trust consumers place on regulatory agencies, awareness of biotech issues, a sense of outrage and socio-demographic characteristics on public acceptance of agrobiotechnology. Contingent valuation methods were used to measure the value that consumers place on nonbiotech food products. Major findings from these empirical models applied to the data collected in the US and UK include:

• Consumer perceptions about negative and positive attributes associated with agrobiotechnology accounted for the bulk of the variance in public acceptance of agrobiotechnology.
• The adverse effect of negative attributes on public attitudes toward agrobiotechnology outweighed the favorable effect of positive attributes. That is, risk perceptions exerted a greater effect on public acceptance than do benefit perceptions.
• Yet the favorable effect of positive attributes was statistically significant in explaining public acceptance of agrobiotechnology, indicating that promoting beneficial aspects of agrobiotech is a viable strategy of reducing public backlash against biotech foods.
• Trust, awareness, and sense of outrage play an important role in shaping public attitudes toward agrobiotechnology, largely via their links with risk perceptions.
• The effects of trust and outrage on risk perceptions were significantly greater than awareness.
• US consumers were willing to pay 10 % - 12 % more on average to avoid biotech breakfast cereals.
• UK consumers were willing to pay 19 % - 35 % more on average to avoid biotech breakfast cereals.
• UK consumers associated agrobiotechnology more (less) intensely with negative (positive) attributes when compared to US consumers.
• These divergences in consumer preferences explain the philosophical difference across the US and EU (i.e., substantial equivalence vs. precautionary principles), eventually leading to divergent labeling recommendations.

Accomplishments

• This project attracted Dr. Siva K. Balasubramanian. He is a Professor of Marketing at Southern Illinois Unversity Carbondale and became involved in various stages of the project from designing the survey instrument to developing manuscripts for peer-reviewed journal publications.
• This project was used to leverage the support from Illinois Council of Food and Agriculture Research (C-FAR).

Titles of Articles Based on the Project

• Public Perceptions and Willingness-to-Pay a Premium for Non-GM Foods in the US and UK. AgBioForum, Vol 4, Number 3 & 4, 2001 (221-231).
• Public Attitudes Toward Agrobiotechnology: The Mediating Role of Perceived Attributes for Trust, Awareness and Outrage. In review with Review of Agricultural Economics.
• Willingness-to-Pay for Nonbiotech Foods: A Comparison Across US and UK Consumers. In review with Journal of Consumer Affairs.
• Multi-attribute Model of Public Attitudes Toward Agrobiotechnology. http://www.aaea.org/ageconsearch.html. 2001. (Web publication).
• Willingness-to-Pay a Premium for Nonbiotech Foods and Willingness-to-Accept a Discount for Biotech Foods. Poster Presentation at Annual Meeting of American Agricultural Economics Association, Long Beach, CA. July, 2002. Selected as one of Finalists for Award.

Others

• Office of Public Affairs at Southern Illinois University Carbondale wrote an article based on the research results from this project. The article was distributed to news agencies across the nation.
• The article was published in ILLINOIS AGRINEWS, a weekly newspaper serving farm and rural communities in September 20, 2002.
• An article about this project was also featured in Aug. 18, 2002 in Southern Illinoisan, regional daily newspaper covering the Southern Illinois.
• Summary of the research results were briefed to Illinois legislators including Ag. Committee Chairman when they visited college of agricultural sciences at SIUC in Sept. 2002.