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Bidding to Balance Color with Quality

CIMMYT E-News, vol 2 no. 8, August 2005

auction1Experimental auctions in Kenya gauge farmer interest in vitamin A-enriched maize.

Kenyan farmers bid for color or quality in experimental auctions to determine how well maize with enriched vitamin A will catch on. Traditionally, East Africans prefer white maize, but vitamin A maize, being developed by CIMMYT and HarvestPlus, the CGIAR Biofortification Challenge Program, will be yellow because of the increased beta-carotene content. Will the nutritional value of the yellow maize overcome East Africans’ color bias?

CIMMYT researchers tried to answer this question in a series of novel experimental auctions held in Vihiga and Siaya, western Kenya. By giving consumers real money to bid for real maize meal, they hoped to properly estimate a customer’s willingness to pay for vitamin A-enriched maize. The highest bidders won the auction and exchanged their bag of maize for their choice of white, yellow, or white vitamin-enriched maize, after paying the money. By creating an active market, researchers found a way to determine how much demand there would be for maize with perhaps an unpopular color but superior quality.

The HarvestPlus Challenge Program, an international consortium of collaborative partners that includes CIMMYT, aims to produce new crop varieties to reduce micronutrient malnutrition, also known as “hidden hunger.” They are working to develop maize that will have higher levels of vitamin A available to those who eat it. Vitamin A deficiencies plague over 50 million people in sub-Saharan Africa and Latin America. According to HarvestPlus, this deficiency damages the eye and severely weakens the immune system.

auction2Determining how consumers will balance their desire for nutritionally superior maize while sacrificing the color to which they are accustomed sheds light on whether or not biofortified maize will be readily adopted. “Despite a need for this knowledge, very few consumer studies of the rural poor in sub-Saharan Africa have been done,” says Hugo De Groote, CIMMYT economist.

“The results from the maize auctions agree with our previous consumer surveys of city dwellers,” says fellow scientist Simon Kimenju, “The auction was very realistic—these prices are similar to those found in Kenyan markets and grocery stores.” Although the auction was found to be the most realistic compared to other methods, it was also more expensive and took more preparation and training time.

In addition to discovering an accurate way to gauge consumer preferences, researchers found another upside of the auctions: “The one-on-one interactive nature of the auctions, using real products, and real money makes it great fun for the participants!” exclaims De Groote.

A full paper on this topic was presented at the African Econometric Society Conference, Nairobi, Kenya, 6–8 July 2005. It is available in PDF form here (270 kb).

For further information, contact Simon Kimenju (s.kimenju@cgiar.org) or Hugo De Groote (h.degroote@cgiar.org).