Economic analysis of consumer behavior and agricultural products based on biodiversity conservation value

Biodiversity conservation is one of the important aspects of the multi-functionality of agriculture. Therefore, some consumers might be willing to pay a higher price for agricultural commodities that are produced in a way that conserves biodiversity. If so, an important question would be whether market-oriented policies to promote adding the value of biodiversity to agricultural products can be used to conserve biodiversity. Our study focuses on consumer reactions to "life brand" products that improve biodiversity. We also analyze how the biodiversity impact of agricultural products affects market price. We present a case study of the Japanese brand of rice labelled "Stork-raising rice" (Stork rice). Farmers in Toyooka use special, environmentally friendly agricultural practices with fewer chemicals. These practices have improved the food supply and the habitat of storks, and have restored stork populations in the city. Using a choice experiment, we analyzed whether agricultural products that improve biodiversity can achieve higher market prices. We expected a priori Stork rice consumers to show more environmental awareness than general consumers. However, the results showed that many respondents placed a greater importance on their health than on stork conservation. They were also more aware of agricultural practices than any environmental conservation measures in Toyooka. We also found that willingness to pay increased as awareness of biodiversity conservation increased. However, our experiment also showed that consumers who bought Stork rice because of a preference for reduced"pesticide or organic food, without the knowledge that stork populations had been revived because of changes in agricultural practice, may not be willing to buy expensive agricultural products that improve biodiversity conservation. The majority of agricultural product consumers in Japan are this type of consumer. This study showed that the promotion of biodiversity conservation by the production and sales of -life brand" agricultural products is difficult because of the non-excludability characteristic of their public goods. Therefore, government support and public activities are indispensable for biodiversity conservation.