Emerging Markets for GM Foods:

An Indian Perspective on
Consumer Understanding and Willingness to Pay
Satish Y. Deodhar (IIM-A)
Sankar Ganesh (IIM-A)
Wen Chern (OSU)

Motivation
GM inevitability seems to come from:

Population growth
Productivity plateau
Rapid technological advances, and
Freer agricultural trade

India - late entrant in the GM Crop cultivation

Today 5th largest area in GM crops (ISAAA)
Technology adoption & welfare gains issues
have been addressed
E.g. Gupta and Chandak (2005)
Neilsen and Anderson (2000)

Food Crops
Commercial production of food crops not
allowed in India at this time
(Bt) cottonseed oil cooking medium
Corn imports are at zero duty (GM corn?)
Need to understand consumers opinion
Implications of allowing GM food crops
GM Crop regulation, labelling, extension activity
Avoid KFC experience!

Product Choice
Cottonseed oil
Popular cooking medium
Quite likely Bt cottonseeds being pressed for oil

Golden Rice
Staple food
Holds promise to alleviate nutrition deficiency

GM fed Chicken
The most common and popular non-vegetarian
food

Survey Design
City of Ahmedabad
A representative group of town and city people
12 to 15 households from 43 wards of the city
Total size of 602 responses

Questionnaire put on web

Answers sought from students, professors,
businesspersons and scientists
Total size of 110 responses

Questions on
Knowledge, perception, and acceptability
Socio-economic and demographic profile
Choice between GM and non-GM in CV format

Random Utility Approach

Uij = u (Zj, Dj, gij)
Uij = Vij + gij
V0j = a0 + b0 Zj + c0 (dj Pgmj)
j
V1j = a1
+ b1 Zj + c1 (dj Pngmj)

I* = a + bZj c(Pngmj Pgmj) + gj

Z
E[WTPngmj WTPgmj ] = a/c + b/c E[Zj]

A Representative Characteristics
Table 4.1(a): Income Distribution of the Respondents
City Survey
Particulars

Num
ber

Percentage

Internet Survey
Number

Percentage

Yearly total household income ( Rs)

<50000

147

24.58

3.64

50000 to <1 lakh

266

44.48

8.18

1 lakh to < 2.5 lakhs

149

24.92

31

28.18

2.5 lakhs to < 5 lakhs

33

5.52

37

33.64

5 lakhs to < 10 lakhs

0.50

20

18.18

8.18

110

100

10 lakhs
Total

598*

* 4 respondents did not reveal their income

100

Some Observations
More than 90% of city respondents do not
know what GM is all about
About 85% of internet respondents know
somewhat or nothing about GM foods
After giving pros and cons of GM food, more
than 70% of city respondents willing to buy
GM foods.
Almost all want mandatory labelling, but only
about 30 percent willing to pay for it !
Ethics and religion matter much more to city
respondents than internet respondents

Ceteris Paribus
If governments regulatory performance is
considered excellent or good, the chances of
choosing non-GM food do not increase
Likelihood of GM food consumption
increases as one moves from very-poor to
middle income categories
Being in joint family and female increase the
likelihood of choosing non-GM food
As GM prices decrease relative to non-GM,
chances of choosing GM increase
Based on expected WTP, consumers are
willing to pay a premium of about 19.5% for
golden rice, 16% for GM oil, and less-than 1%
for non-GM fed chicken

Implications
Majority of the middle class may just be
willing to buy GM foods.
Labelling issue will be important until
consumer apprehensions about GM persist
Information extension activity by consumer
forums, ministries and firms may be
necessary
(Perceived) consumer confidence in
regulatory mechanism may be critical in
acceptance of GM foods