Consumer Preference and Potential Demand for Organic Products:
A Case Study in Makassar, South Sulawesi, Indonesia

Abstract

In recent years, concerns have arisen about the degradation of soil and water because of intensive applications of chemicals and fertilizers on farms in developing countries. Conversion to organic farming could increase the use of local resources while at the same time decreasing chemical inputs. Organic farming could also increase food safety levels for consumers and produce higher value crops and reduce expenses for farmers. However, a crucial factor in developing a supply of organic goods is to determine whether there is enough market demand for organic products. The aim of this study was to identify consumer preferences and potential demand for organic produce, specifically red onions and potatoes, in typical local markets with the goal of helping to establish sustainable organic farming in the Enrekang Municipality in the eastern part of Indonesia, as well as other agricultural areas. One hundred consumers were interviewed at supermarkets and downtown markets in Makassar, the capital city of South Sulawesi, Indonesia. The results show that respondents who have higher family income and higher educational levels are more likely to purchase organic products. Respondents with children and older respondents also were more likely to purchase organic products. Consumers expressed a greater willingness to purchase organic products at lower relative prices and a reduced willingness at higher relative prices. The promotion of organic products at affordable prices is therefore a crucial factor in expanding consumer demand. It may be possible to encourage sustainable organic agriculture in developing countries by adopting strategies such as integrated pest management through the utilization of local resources to realize lower production costs and by improving market efficiency by employing direct retail marketing.