Processors' Willingness-to-Pay for Product Quality Certification. The Case of Infant Cereal Food Sector in Greater Accra Region

Abstract

There have been investments in the infant food sector in Ghana in recent times. This is as a result of the introduction of cereal foods fortified appropriately for children aged five and below aimed at eradicating or reducing malnutrition. However, competition from transnational and multinational companies with branded and certified products is hindering progress of local companies in the sector. This study seeks to assess local processors’ willingness to pay (WTP) for product quality certification as a quality assurance strategy to enhance their competitiveness. Certification operating as a quality assurance system is less expensive than brand strategy in terms of investment spending for SMEs. The factors that may influence processors’ WTP for product quality certification are also determined. Thirty five (35) infant cereal processors were interviewed in Accra and Tema. A logit analysis used on data collected via a structured questionnaire, show that local infant cereal food processors are willing to pay for certification but at lower cost than the stipulated amount of Gh₵530. They are willing to pay on the average 51.62% of this amount, that is, Gh₵273.57. Also 5.7% of sampled firms had zero willingness to pay amount. A tobit analysis also indicate education, annual income of the firm, firm age, access to loan, and scale of operation as significant factors influencing the amounts processors are willing to pay for product certification. The scale of operation, however, has a negative effect on WTP contrary to expectation. The study recommends that GSA, NBSSI, FDB and MOTI should consider other payment forms of product certification like installment payment so as to make it more convenient for processors to pay and entice even the smallest micro firm in this sector to ensure consistently high quality among these products, as this may go a long way to reducing malnutrition in children.