Consumers willing to pay a premium for sustainably produced rice, a new study shows

In a study recently published in Food Policy, a leading international journal in agricultural economics, researchers from the International Rice Research Institute, Hue University, and Ghent University tested urban Vietnamese consumers’ response to sustainable production labels in rice.

Through behavioral market experiments, they elicited consumers’ willingness to pay for rice produced and labeled under the national sustainable production standard “VietGAP” in a supermarket in Can Tho City in the Mekong River Delta. The researchers also examined the conditions that make consumers willing to pay more for certified-sustainable rice. They found that consumers were willing to pay price premiums of 9% for certified sustainably produced rice on top of the price of regular rice. These premiums even further increased up to 33% when they were informed about what the label on sustainably-produced products mean and where exactly the rice was produced. Consumers that consider themselves as environment- and health-conscious tended to be most responsive to sustainable production labels. 

As one of the world’s leading producers and exporters of rice, there is a pressing need for Vietnam to promote sustainable rice farming. According to IRRI senior economist Matty Demont, “the Mekong River Delta is facing severe environmental challenges due to overuse of agrichemicals in rice production. Recent food safety concerns may have fueled Vietnamese consumers’ demand for certification of sustainable production practices in agriculture.” 

IRRI purposely engages with global agricultural research institutions, agri-food businesses, the public sector, and civil society organizations to inform policies and establish benchmarks to transform food production and marketing. This is part of setting sustainable rice standards through the United Nations Environment-convened Sustainable Rice Platform. 

The study also outlines promising pathways for Vietnamese policy makers in their ongoing restructuring of the domestic rice sector to improving its sustainability, reputation and quality competitiveness in international markets.

The article is open access and can be downloaded free of charge here. The research has been financed with grants received from the Ghent University Special Research Fund and the Swiss Agency for Development and Cooperation (SDC) through the Closing Rice Yield Gaps in Asia with Reduced Environmental Footprint (CORIGAP) Project.

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