Consumer willingness to pay for commodities certified under Sri Lanka Good Agriculture Practices (SL-GAP)

Consumers in developing countries are increasingly concerned about the safety of the food that they consume resulting increased demand for safe foods. Agricultural supply chain, thus, need to be ready to cater to this growing demand. Estimates on consumer willingness to pay for safe food attributes are vital for policy makers to set up feasible food safety standards. This paper aims to evaluate how Sri Lankan urban consumers are concerned with the products certified under Sri Lanka Good Agriculture Practices (SL-GAP), which is a government-backed food safety management standard. A double bounded Contingent Valuation (CV) survey approach was employed to estimate the consumer willingness to pay for SL-GAP certified rice and tomato. Data was gathered from a survey carried out among 366 consumers in five urban districts in Sri Lanka for the estimation. The model for rice and tomato were jointly estimated using a multivariate probit model, which allowed error terms within and across commodities to be correlated. The estimated median values of willingness to pay for SL-GAP rice and tomato was 41.9% and 39.1% premium, respectively. The premium percentages further increased with prior consumer experience with products certified as organic.