EXPORTS AND CHANGING CONSUMER PREFERENCES CHALLENGE THE VIETNAMESE HORTICULTURAL SECTOR

Food systems are changing profoundly on a global scale. These developments have important implications for all stakeholders involved in food supply chains, including smallholder farmers in developing countries. In an empirical analysis, a dataset of 50 Vietnamese fruit and vegetable processing firms is employed. Logistic regression models show that the type of quality assurance program (QAP) differs between OECD and non-OECD markets. While the overall probability of exports at a given QAP status does not vary much at different levels of domestic sales, the relative probability of OECD versus non-OECD exports decreases exponentially, particularly for firms with international QAPs. Consumer demand elasticities for high-value horticultural products are estimated and demand projections are made based on a survey of 499 households in Vietnam’s two major cities. Disaggregated expenditure elasticities for fresh fruit and vegetables from emerging supply chains are significantly higher than the aggregate elasticity. Purchased quantities of fresh fruit and vegetables from modern retail outlets are projected to grow rapidly over the coming years. Growth is particularly high for products from modern retailers, but also for imports from non-neighbouring countries. Contingent valuation methods are used to estimate willingness-to-pay (WTP) for innovative horticultural products. By employing a mediation framework that explicitly considers consumer perceptions, the potential to gain a greater understanding of food attribute valuation and the underlying psychological process is explored. Based on models considering socio-demographic and media predictors, as well as consumer perceptions as mediators, the mean WTP for the food safety attribute is estimated to be 60% higher than the current market price. The results of these studies have important implications for the industry and for rural development strategies in poor countries.