Price Determinant Factors of Internet-Direct Selling by Rice Producing Agricultural Corporations: Evidence from Hokkaido

Abstract

Hokkaido has been known as a cheap and low-quality rice producing area due to its cold weather. But the recent and continuing development of good-quality rice varieties is changing the old image of Hokkaido rice. The ways in which agricultural corporations are taking advantage of this emerging opportunity has not been explored, despite its importance in terms of food production and exploring a new market, which we understand to be a sixth industry activity. This paper investigated the factors determining price in the internet-direct selling of rice, focusing on two emerging varieties of rice there. The price determinant model revealed that in central Hokkaido, contest winners and the use of internet shopping sites raised the price, while simultaneous selling of the two varieties reduced it. Therefore, while it is important to build the capacity of internet-direct selling, the quality production of rice will be more important for the future.