Demand for Private Marketing Expertise by Organic Farmers: A Quantile Analysis Based on Counts

Article excerpt

We study the demand by organic farmers for technical advice using a quantile regression for the demand of organic farmers for consultations with private information providers. There is substantial heterogeneity in the impact of critical explanatory variables on consultations of organic farmer. Larger farm size has a positive effect on contacts, but the effect is absent for the highest number of consultations. Internet use has a positive marginal effect on visits to private information providers across each quantile, suggesting that expanded efforts to deliver programs through web-based resources are a useful investment for information providers.

Key Words: organic farming, technical assistance, quantile regression model, count data, internet access

JEL Classifications: C25, Q12, Q13, Q16

Marketing information is a necessity for organic farmers, but public sector sources are not used extensively by organic farmers for reasons ranging from lack of awareness of availability to lack of relevance of information provided. The U.S. Department of Agriculture (USDA) reported that market access and price issues are primary challenges for 10% of U.S. organic farmers (U.S. Department of Agriculture, 2010). Organic growers, particularly those operating smaller farms, need information on customer trends, prices, and novel market outlets to address market access limitations and pricing power (Kambara and Shelley, 2002; Middendorf, 2007). Interviews and farmer surveys have indicated that marketing is a major challenge for small and midsized organic farms and that lack of marketing and price information is not being addressed by Cooperative Extension and other public sources (Cantor and Strochlic, 2009).

Duram and Larson (2001) found that organic farmers are less likely than other farmers to use public information services, including extension consultants, than to consult private information sources such as talking with other farmers and reading materials provided by nongovernmental organizations. One reason is that government-funded research is not always attuned to the needs of organic farmers. Asked about the importance of 30 research topics funded by the USDA Sustainable Agriculture Research and Education (USDA-SARE) program, organic farmers highlighted a need for marketing information, a topic rated as relatively unimportant by researchers funded through the program. Cantor and Strochlic (2009) reported that more than 78% of small organic farmers surveyed in California believe that availability of low-cost private consulting to help with marketing is an important way to overcome marketing barriers.

Proponents of organic farming have decried the lack of organic marketing information and technical support available from government organizations. Organic farmers rely primarily on private sector providers when seeking information about organic markets and marketing issues. The Organic Farming Research Foundation (OFRF) national census of organic farmers indicated that private for-profit and nonprofit agricultural information providers are the most frequently consulted sources for marketing expertise by organic farmers in terms of both number and frequency of consultations (WaIz, 2004).

The most frequently consulted market information organizations were organic certification agencies (eight times per user per year), marketing cooperatives (10 times per year), and growers' associations (six times per year) (WaIz, 2004). Over one-third of growers used at least one of these information sources. Quality of the marketing information was rated on an integer scale of 1-4 with 1 being "never useful" and 4 being "very useful." Marketing cooperatives rated 3.1 in usefulness of contact, organic certifiers rated 3.0, and growers' associations rated 2.9. Organic growers from the Southern region reported the lowest usefulness ratings for organic certifiers and growers' associations across all the regions.

These results are particularly compelling when compared with percentages of use and ratings of the information provided by the USDA and state agriculture departments. …