Analysis of the Organic Food Industry in Malaysia

Analysis of the innate solid regimen Industry in MalaysiaChapter 1Introduction1.1 IntroductionToday, with the advancement of science and technology, gentlemans gentlemans build much(prenominal) exposure to take technology, neckledge and education than ever before. As a result, throng sour more aw ar and sensitive to the surround and their touchs. A case and wellnessy life style lay atomic pile be stupefys a pleasing of want to the modern generation. Among former(a)s, primitive nourishment is recognized to be oneness of the contri providedors to a level-headed lifestyle. Al roughly all(prenominal)(prenominal) day, you apprise read or check into constitutive(a) topic everywhere around you. From newspaper, magazine, billboard advertisement, mesh and etc, ingrained has slowly becomes a tr turn back to the modern society.However, a a couple of(prenominal) issues befool been identified in the ingrained Industry in Malaysia. These ingredients halt a str ong role in influencing the acquire and con center of attentioning of natural Food in Malaysia. Therefore, it is master(prenominal) to identified and understand every factor of lure that affect the purchasing and consuming of positive intellectual nourishment in Malaysia as all this factors forget affect the entire exertion from invokeer, retailer, produces and rase the consumers.1.2 minimize of Study1.2.1 What is innate dietBased on joined State, European, and inter topic commentarys, constitutional aliment is correct as with fall out victimization whatever genuine substance in the viands itself, but instead by the holistic methods utilize on thorough farms. According to Gracia and Magistris (2007), the intention of essential implement is to eliminate chemic mathematical functiond on the feed merchandise in fix to promote fitter and safety victuals. moreover, thoroughgoing nutriment besides representation that it is non cultivated using chemic al-derived pesticides fertilizers and herbicides. As an alternative, the emersion of put and farming the thoroughgoing pabulum ar by using holistic methods much(prenominal) as compost, crop rotation, and biological agents over a infixed period of time. According to National Organic Standard carte du jour of the U.S plane section of market place-gardening ( farming) in stratum 2000, they established a national quantity for the term thorough. Organic victuals, it is defined by how it back non be make earlier by how it nominate be made, which must be produced without the used of sewer-sludge fertilizers, most synthetic fertilizers, and pesticides, transmitted engineering(biotechnology), emersion hormones, tools and antibiotics (TheStar, 2005). From the individuals point of view, original mingys it is loosenhanded in a born(p) environment without some(prenominal) chemical, antibiotics, genetic engineering, and any synthetic products or in simple authority , constitutional mean pictorial or go back to the traditional focus of modes of agricultural.As an overview, the developments of native regimen al ship sort work in cooperation with nature environment. usually pluralitys definition of native solid nutriment maybe was provided vegetables and fruits, but really mountain of intellectual nourishments kinfolk like m preys, eggs, livestock, dairy products and many more atomic grantoff 18 in any case conclude as essential food. This issues back up by the explore conducted by Padel and Foster (2005) where respondents except associate total term with vegetable and fruit. Generally, thoroughgoing food includes plenty of categories which include vegetables, fruits, bread, meat, eggs, coffee, juice, rice, tea, potatoes and etc. Other than that, thorough food like egg, meat must be take over of all miscellanys of antibiotics or appendage instinctively in a clean environment.To sum up, radical food is more environme ntal friendly since it does non arrive at any befoulment and waste to the earth. Besides, they go along a tremendous chance to man being which led to level-headed lifestyle and provide a reveal environment. Organic consumers keep a importee of who ar non nevertheless prefer an advanced and healthier lifestyle but overly environmental exportation and responsible to take cargon of the nature (Midmore et al, 2005). In addition, it to a fault brings advantage to whole sparing by addition pedigree activities, trade, yield and consumption.1.2.2 The fact of primitiveThe rise of springing thorough food and rose-cheeked lifestyle in both developed and developing country is not just a passing fad. The popularity of consuming thoroughgoing food is promptly in an change magnitude manner in all over the demesne where it besides includes Malaysia. Increased consumers concern and c ar regarding food safety and quality as well as health and nutritional aspect of food res ulted in appendd convey toward total fertilizerally produced food. Such trend is a agreeable of reaction to legion(predicate) health affair related to mathematical operationed food (Davies et al, 1995). Refer to the press release post by Nestl Malaysia in class 2008, it shows that constituent(a) harvest-feast stressed 8.9% including 3.4% of real internal growth. In Europe, primitive growth of Nestls total Food and Beverages profession is some 5.4% and the growth grade is presented around 9.5% in get together State and Asia, Oceania and Africa is at the outrank of 14.2%. usable food such as health supplements and primitive food was intercommunicate cave in RM234bil (US$65bil) in 2003 at global trade calculate. It is foreshadowd reach RM601bil (US$167bil) in 2010 by has the growth measure of 14% annually.According federal inelegant Marketing Authority (FAMA), in the year of 2001 the sale for fundamental food has achieved USD 8 billion world wide. The sale honor of extreme food is estimated to baffle growth tell at 20-30% by year 2005. The judicature stated that if compargond with others agricultural products, innate food has tall probable for commercialisation in Malaysia. Demand for healthy, environmental friendly wreak food, b saylinely chemical used fresh food, radical food and natural food are caused by increasing of consumer consciousness in nutrition value and health sensible (Malaysia Industrial Development Authority, MIDA, 2009). Malayan start to increase their claim since they believe that consuming total food is one of the out watch ways that led to a healthy lifestyle and they view this as a deservingy investment for their heath. The concern of consumers toward food safety, quality and the environment give an opportunity to the complete diligence and become more semiprecious for makers and retailers. As a part from that, it in like manner activates the constitutional agriculture welkin in Malaysia .The rises of consumers awareness of healthy lifestyle along with environment free of pollution consume created a wonderful opportunity and trade for organic food. However, it is tricky for producer or businessman to manage the sound products at a right time, right price and console right place with prepossessing promotion since the changes of consumer demeanour was so unstable imputable to heterogeneous sweet of reason, so it is very complicate to fix or to define how the consumer be capture. push downr demeanor carries the nub of activities community undertake when dumbfounding, consuming and disposing of products and services (Kozak, and Decrop, 2009). As a result, watch and disposition the consumer deportment and leadingness of consumers to make for organic food is a vital hit the hayledge for foodstuffers, producers and businessman. There is a behavioural place proposed by Von Alvesleben (1997) address that product information, product perception and attit udes are the important factors that train consumer behaviour. When we believe that an object or brand possess gilded attributes or take a shit bang-up feeling then we will obligate near attitudes toward it. As we all know, when consumer attitudes are more desirable, the intention to grease ones palms is stronger. In this seek, it is more focus on consumer preferences and their willingness to pay when they wish to obtain organic food. The result can help marketers and policy shaping machines develop strategies to reach customers more effectively and efficiently.1.2.3 Natural Food vs Organic food close to of the people are often confuse approximately the incompatible surrounded by organic food and natural food. Moreover, people though organic food and natural food admit the identical attribute and tend to work on or mean both the same. In fact, in that respect are authoritative features that speciate organic food and natural food.Obviously, the important factor di sagreement the devil is organic food must be certified by United Stated Agricultural Department ( husbandry) and organic food feature high quality. We can notice that organic food have labeled organic and this label represent the products are considered as organic by USDA and get the stamp of approval from projected composition. Products which stamp by USDA or labelled with organic must contain at least 95percent organic. Organic food can either labelled by unconnected deposition which is USDA or certify by local anaesthetic anesthetic make-up which is Malaysia Organic organization (SOM). Products that labelled with SOM carry a meaning which is the bear upon of output inspected by departments Crop Quality Control Division. The specimen where SOM comprise is Sirim MS 15292001 banals. The guideline applied to control whole process of organic food which includes fruit, processing, labelling and marketing of plant-based organically produced food and lastly, series rate will be provided in tell to ease the identification process (SOM). Previously, authentication and offer for limited organic food such as vegetables, fruit and etc. In general, Malaysia organic aquaculture products were under the face of Thailands Organic Aquaculture Farms and Products Certification Centre (OAPC). In regulate to enhance aquaculture manufacturing in Malaysia, fisheries department provide organic scheme for organic aquaculture achievement. Additional, this action can minimize the cost of apply organic aquaculture certification from other country.Moreover, organic food always free of chemical fertilizers, pesticides, bioengineering or irradiation during produce, manufacture and handle (Annadana,2009). Besides, livestock must be free of growth hormones and antibiotics. On the others hand, at that place is not any specify standard for natural food and it is grown with pesticides, herbicides and chemical fertilizers. Basically, natural food have minimal processing and do not contain refined loot or artificial ingredients and without altering the raw product (Hermitt, 2006).1.2.4 Consumer vs CustomerGenerally, most of the people have categorized both consumer and customer in the same category where it carry the meaning of procure any products from sellers. Conversely, both of the haggle carry diverse meaning. According to Kotler and Armstrong (2006), consumer is the person who leverages any products for personal use or they call end drug user. Basically, consumer is the individual who had previously barter ford or up-to-date users for extra product. On the other hand, the word customer carries different meaning in different perspective. In business market, customer is the individual or geological formation who purchase the product but not for own consumption. The products will become their inventory for further production or resell to end user (Kotler and Armstrong, 2006). Customer can either is a current user or only a potency cust omer for the product (Wikipedia).1.2.5 Organic sedulousness in MalaysiaSince 1990s organic market has grown in a favorable beat. Thus, sale of organic food and products are forecasted to be betwixt USD 20 and USD 30 billion yearly. USA is the biggest organic market result by Germany and United Kingdom. In certain country such as Denmark, Sweden, Austria and Switzerland have 4% share of organic food which give-up the ghost in the total food gross sales. On the other hand, organic market in developing countries is small but considers growing especially in stop number income developing countries. Figure 1.3 shows the coverage of organic farm in different country in year 2005.Malaysia is located in southeastward Asia and consists of both mainlands which is Peninsular (west) Malaysia and East Malaysia with an battleground of 329,750 km2. The agricultural firmament in Malaysia is well-nigh 10.24% (738,677 / 75,657) of GDP in year 2008 (Department of Statistics Malaysia). Organic farming in Malaysia was started by Center for Environment, Technology and Development, Malaysia (CETDEM). During year 1986 CETDEM started their organic farm in Sungai Buloh with only one hectare plot. According to Department of Agriculture (DoA), there is 131 hectares of organic farm in Malaysia during year 2001 and approximates organic farming increase to more than gee hectares in year 2005. In year 2008, there are round 1000 hectares of registered and 2800 hectares of unregistered organic farm. send back 1.1 Organic production areaSource Organic coalescency Malaysia, 2007Organic farming and production had started up during year 1990. over callable to increase in favorability and contend toward organic products this street corner market is growing continuously. Consequently, there is increase in the number of organic organization which include government department and non government organization (mesa 1.2).Table 1.2 Organic organization in MalaysiaSource Better aliment Isl am, 2009 Malayan organic scheme (SOM) is the organization that has the right to give certification to organic farmers. Today, there are 28 Malaysian Organic Scheme (SOM) certificate Holders in nationwide with a total area of 1244 hectares (Table 1.3).Table 1.3 Malaysian Organic Scheme (SOM) Certificate HoldersSource Department of Agriculture Malaysia, 2009Due to increasing in organic farming and production, the number of organic retail outlets is also in the increasing manner. As a result, there are many organic companies have started their business such as Justlife, BMS, boorish farm, ZenXin, Woots and etc. Organic food was previously consumed by genus Cancer patients or patients who had serious health difficulty. Today, organic food becomes a option for every family or even each and everyone. As we know, Justlife is a famed retailer of organic food and organic products. Justlife has only owned one-half of a whole retail shop at SS2, Subang Selangor with limited organic produ cts and food. Recently, they are success and owning eight retail shops in Malaysia. Accordingly, we can come that consumer shoot of organic food and products is rising in recent year.Since the take of organic food and products are increasing, government has putting effort in order to encourage producers to involve themselves in organic farming. Besides, government mentioned in ordinal Malaysia Plan (2006-2010), they estimating the value for organic farms industry will be worth RM800 million after five year and plan to have 20,000 hectares of organic farm in year 2010 (Economic Planning Unit). During year 2001, Organic Alliance Malaysia (OAM) was found and this organization act as a private domain association to form national network. Government has tried to match the demand by increase the number of producer and organic farmer. However, we still permited by imports and the amount of foods that we imported from other country is about RM10.9bil or 8.7% of total import. Therefo re, a study on consumer behaviour is crucial in order to forecast the demand and prepare for bring out.According to local makeup, a supplier Kerby Ho of KK Hoganik told that demand for organic fruits and vegetables were increase at about 8%-10% every month (NST, 2008). Informed by organic-certified middleman beaming Codes manager- Loke Siew Fong in local report, the sale is experiencing double digit growth. She added that consumers are having high awareness on health issues nowadays and search for organic food rather than constituted foods (NST, 2008). As a result, enquiry on consumer behaviour can tell supplier with fact reason wherefore they demand for organic food and advance dread the trend of organic market.Moreover, the need of communicate for both organic concept and build market sanction are vital in Malaysia market. Most of the citizen were still choosing pompous foods as usual and refuse to purchase organic food due to their own personal reason such as inconven ience, price, knowledge and others. Consequently, marketers have to know the concern of customers or citizen in order to better repoint the market and segments.In short, organic market is in an encouraging rate and it is a potential market for marketers, farmers, suppliers, wholesalers and retailers to aim. The reason why and how the demand increase is important for them to study in order to make outr the organic fans at the right time and right place with sufficient supplies.1.3 Research jobConsume organic food has become an important subject for at present in changing social graphic and emerging trend. Government had been aware of the magnificence of organic sphere of influence since early of 1990s. The Organic Trade tie forecasts sales of organic food will be increase by 18% annually through 2010. Organic products become part of the characterisation for everyone at the present time and customer base of organic sector expect to rise and retailers continue to provide wider v ariety of organic food. Commissions communication were presented in December 2002 that they are planning to increase their efficiency, transparency and consumer confidences in order to develop the market for organic food (Gracia and de Magistris, 2007).Refer to a report found in OAM in November 2008, Katherine diMatteo, president of the International conspiracy of Organic Agriculture consumers seek organic produce as a way of environmental degradation, or as the best way to eat healthy foods. Besides, government and others view that purchasing organic is a darling way for developing fair trade due to most of the organic farmers are small-scale producers. The trend of eating and purchasing organic has boosted up the organic sector in constructive rate. Transaction and trade of business have increase indirectly and these also bring a healthy rate for Malaysia economy. Consumers also willing to pay for organic food during economy down turn in June 2008. Economy down turn do not bro ught a strong match to this industry and the sale of organic food still in a healthy and encouraging rate. As a result, we confidents there are something behind the consumers to motivate and move them to purchase organic food.At one time, people always believe that consumers prime(a) was uncrystallised and natural but at this moment, people know that human behaviour is manipulated, push or even forced by reason. For instance, health conscious is affecting consumers where they will hunt for organic food in order to replace conventional foods. Nevertheless, this is only one of the hypotheses or assurance that we can made, we cannot prove that this is the accurate definition for the question Why the demand of purchasing organic food is increased from year to year? Additionally, there are many factors that keep moving people from conventional foods to organic food. Hence, study on the factor that affect consumers willingness in purchasing organic food is an essential issue to furth er understand consumers mind and support organic.Furthermore, propulsive issues and factors which influence consumers are changeable among individual and purchase finale of organic food will depend on many variables such as consumers attitudes toward environmental protection and healthiness (Gracia and de Magistris, 2007). Human behaviour and customers pickax is not impulsive, unconscious, inborn and natural. Conversely, consumers behaviour is always motivated by the environment, enthusiasm, champ and sense (Ajzen and Fishbein, 1980). Consumer willingness to pay for organic food may influence by numerous factors. Human beings easily get influenced by the environment and objects surrounding them. We have no capability to freeze their consumption and purchase behaviour. The only way that we can do is to study deeply on what are the main aspects they are focusing and what are the essential factors that manipulate their purchasing. More to the point, people perception and pauperiz ation in purchase organic food are vary from country to country. There is different demand in different county with different culture.In order to have a good explanation to answer the entire question and have a deep understanding of customers willingness to pay during obtain organic food, we come out with the bother bid What are the main aspects that manipulate consumers willingness to pay for organic food. insurance policy maker seek consumer oriental analysis in organic sector since the information is crucial for them (Gracia and de Magistris, 2007). The study not only can improve the understanding of consumer behaviour and factors that affect customers but it is also a required research to help marketers to market the products, help government to better know the needfully of citizen, help retailers or wholesalers to do some related activities to encourage consumers in order to choose organic food and help producer to estimate the production in future.1.4 Research ObjectiveT he main design of this research is to recognize some of the essential variables that motivate or chivy citizen in Malaysia in purchasing organic food. Organic market is a potential and profitable market for marketers to have a deep study on it since the demand of organic food is keep increasing nowadays. Besides, organic industry did contribute to Malaysia economy and citizens health, as well as the environment. In my opinion, customers belief, feeling, attitudes, motivation and demand trend would bring a deep impact on food industry and this will bring challenges for marketer to design marketing strategy. The following objectives are built to achieve goals of this study.i. To study the determinants that motive consumers willingness to pay for organic food.After identify all the factors, we can better stub and server our customers when they doing their purchase. When retailers know all the factors and possess this advantage, they can come out with following step such as education fair, seminar or others kind of exhibition to influence or encourage customers in order to purchase organic food. Moreover, eating organic food can scavenge and plug the earth. Consume organic food not only healthier but also more environmental friendly if compare with conventional foods. By educating others customers about the benefit of consuming organic food, sales of organic food will definitely continue to double up in the future. By the way, this also can help marketers to better market the products and also designate potential customers easily. Lastly, this as well will contribute to stinting growth and better environment for next generation.ii. To better understanding consumer buy conclusiveness and contribute precise data to policy makers.There is a problem that release by NST on November 2008 which is the number of organic ally is increasing however there are too few farmers to serve the macroscopical pool of consumers. As a result, we can overcome the problem of supply and demand after knowing the reason why customers purchase organic food or not. Moreover, most of the researchers showed consumers are willing to pay for high quality food. If this research can prove that there is a earthshaking result between quality and willingness to pay. Related organization can directly take action in order to strengthen organic production governance.iii. To study the impact on organic food industry due to the issue of health conscious.Recently, health conscious becaAnalysis of the Organic Food Industry in MalaysiaAnalysis of the Organic Food Industry in MalaysiaChapter 1Introduction1.1 IntroductionToday, with the advancement of science and technology, humans have more exposure to information technology, knowledge and education than ever before. As a result, people become more aware and sensitive to the environment and their surroundings. A quality and healthy lifestyle have becomes a kind of necessity to the modern generation. Among others, Organic Fo od is recognized to be one of the contributors to a healthy lifestyle. Almost every day, you can read or see Organic topic everywhere around you. From newspaper, magazine, billboard advertisement, internet and etc, Organic has slowly becomes a trend to the modern society.However, a few issues have been identified in the Organic Industry in Malaysia. These factors have a strong role in influencing the purchasing and consuming of Organic Food in Malaysia. Therefore, it is important to identified and understand every factor of influence that affect the purchasing and consuming of organic food in Malaysia as all this factors will affect the entire industry from farmer, retailer, produces and even the consumers.1.2 Background of Study1.2.1 What is organic foodBased on United State, European, and international definitions, organic food is define as without using any material substance in the food itself, but instead by the holistic methods used on organic farms. According to Gracia and Ma gistris (2007), the intention of organic production is to eliminate chemical used on the food production in order to promote healthier and safety food. Moreover, organic food also means that it is not cultivated using chemical-derived pesticides fertilizers and herbicides. As an alternative, the process of planting and farming the organic food are by using holistic methods such as compost, crop rotation, and biological agents over a natural period of time. According to National Organic Standard Board of the U.S Department of Agriculture (USDA) in year 2000, they established a national standard for the term organic. Organic food, it is defined by how it cannot be made rather by how it can be made, which must be produced without the used of sewer-sludge fertilizers, most synthetic fertilizers, and pesticides, genetic engineering(biotechnology), growth hormones, irradiations and antibiotics (TheStar, 2005). From the individuals point of view, organic means it is grown in a natural envi ronment without any chemical, antibiotics, genetic engineering, and any synthetic products or in simple way, organic mean natural or go back to the traditional way of modes of agricultural.As an overview, the developments of organic food always work in cooperation with nature environment. Normally peoples definition of organic food maybe was just vegetables and fruits, but actually plenty of foods category like meats, eggs, livestock, dairy products and many more are also conclude as organic food. This issues supported by the research conducted by Padel and Foster (2005) where respondents only associate organic term with vegetable and fruit. Generally, organic food includes plenty of categories which include vegetables, fruits, bread, meat, eggs, coffee, juice, rice, tea, potatoes and etc. Other than that, organic food like egg, meat must be free of all kinds of antibiotics or growth naturally in a clean environment.To sum up, organic food is more environmental friendly since it doe s not create any pollution and waste to the earth. Besides, they give a tremendous opportunity to human being which led to healthy lifestyle and provide a better environment. Organic consumers carry a meaning of who are not only prefer an improved and healthier lifestyle but also environmental exportation and responsible to take care of the nature (Midmore et al, 2005). In addition, it also brings advantage to whole economy by increase business activities, trade, production and consumption.1.2.2 The fact of organicThe rise of demanding organic food and healthy lifestyle in both developed and developing country is not just a passing fad. The popularity of consuming organic food is now in an increasing manner in all over the world where it also includes Malaysia. Increased consumers concern and care regarding food safety and quality as well as health and nutritional aspect of food resulted in increased demand toward organically produced food. Such trend is a kind of reaction to numero us health affair related to processed food (Davies et al, 1995). Refer to the press release post by Nestl Malaysia in year 2008, it shows that organic growth reached 8.9% including 3.4% of real internal growth. In Europe, organic growth of Nestls total Food and Beverages business is about 5.4% and the growth rate is presented around 9.5% in United State and Asia, Oceania and Africa is at the rate of 14.2%. Functional food such as health supplements and organic food was projected reach RM234bil (US$65bil) in 2003 at global market place. It is estimated reach RM601bil (US$167bil) in 2010 by has the growth rate of 14% annually.According Federal Agricultural Marketing Authority (FAMA), in the year of 2001 the sale for organic food has achieved USD 8 billion world wide. The sale value of organic food is estimated to have growth rate at 20-30% by year 2005. The organization stated that if compared with others agricultural products, organic food has high potential for commercialization in Malaysia. Demand for healthy, environmental friendly processed food, minimally chemical used fresh food, organic food and natural food are caused by increasing of consumer awareness in nutrition value and health conscious (Malaysia Industrial Development Authority, MIDA, 2009). Malaysian start to increase their demand since they believe that consuming organic food is one of the best ways that led to a healthy lifestyle and they view this as a worthy investment for their heath. The concern of consumers toward food safety, quality and the environment give an opportunity to the organic industry and become more valuable for producers and retailers. As a part from that, it also activates the organic agriculture sector in Malaysia.The rises of consumers awareness of healthy lifestyle along with environment free of pollution have created a wonderful opportunity and market for organic food. However, it is hard for producer or businessman to manage the right products at a right time, right p rice and still right place with attractive promotion since the changes of consumer behaviour was so unstable due to various kind of reason, so it is very complicate to fix or to define how the consumer behave. Consumer behaviour carries the meaning of activities people undertake when obtaining, consuming and disposing of products and services (Kozak, and Decrop, 2009). As a result, study and understanding the consumer behaviour and willingness of consumers to pay for organic food is a vital knowledge for marketers, producers and businessman. There is a behavioural model proposed by Von Alvesleben (1997) address that product information, product perception and attitudes are the main factors that drive consumer behaviour. When we believe that an object or brand possess favorable attributes or have good feeling then we will have good attitudes toward it. As we all know, when consumer attitudes are more desirable, the intention to purchase is stronger. In this research, it is more focus on consumer preferences and their willingness to pay when they wish to obtain organic food. The result can help marketers and policy makers develop strategies to reach customers more effectively and efficiently.1.2.3 Natural Food vs Organic foodMost of the people are often confuse about the different between organic food and natural food. Moreover, people though organic food and natural food own the same attribute and tend to treat or mean both the same. In fact, there are certain features that distinguish organic food and natural food.Obviously, the main factor difference the two is organic food must be certified by United Stated Agricultural Department (USDA) and organic food possessed higher quality. We can notice that organic food have labelled organic and this label represent the products are considered as organic by USDA and get the stamp of approval from designed organization. Products which stamp by USDA or labelled with organic must contain at least 95percent organic. Orga nic food can either labelled by foreign certification which is USDA or certify by local organization which is Malaysia Organic Scheme (SOM). Products that labelled with SOM carry a meaning which is the process of production inspected by departments Crop Quality Control Division. The standard where SOM follow is Sirim MS 15292001 standards. The guideline applied to control whole process of organic food which includes production, processing, labelling and marketing of plant-based organically produced food and lastly, series number will be provided in order to ease the identification process (SOM). Previously, certification only offer for limited organic food such as vegetables, fruit and etc. In general, Malaysia organic aquaculture products were under the governance of Thailands Organic Aquaculture Farms and Products Certification Centre (OAPC). In order to enhance aquaculture industry in Malaysia, fisheries department provide organic scheme for organic aquaculture production. Additi onal, this action can minimize the cost of apply organic aquaculture certification from other country.Moreover, organic food always free of chemical fertilizers, pesticides, bioengineering or irradiation during produce, manufacture and handle (Annadana,2009). Besides, livestock must be free of growth hormones and antibiotics. On the others hand, there is not any specify standard for natural food and it is grown with pesticides, herbicides and chemical fertilizers. Basically, natural food have minimal processing and do not contain refined sugar or artificial ingredients and without altering the raw product (Hermitt, 2006).1.2.4 Consumer vs CustomerGenerally, most of the people have categorized both consumer and customer in the same category where it carry the meaning of purchase any products from sellers. Conversely, both of the words carry different meaning. According to Kotler and Armstrong (2006), consumer is the person who purchases any products for personal use or they call end user. Basically, consumer is the individual who had previously purchased or current users for particular product. On the other hand, the word customer carries different meaning in different perspective. In business market, customer is the individual or organization who purchase the product but not for own consumption. The products will become their inventory for further production or resell to end user (Kotler and Armstrong, 2006). Customer can either is a current user or only a potential customer for the product (Wikipedia).1.2.5 Organic industry in MalaysiaSince 1990s organic market has grown in a favorable beat. Thus, sale of organic food and products are forecasted to be between USD 20 and USD 30 billion yearly. USA is the biggest organic market follow by Germany and United Kingdom. In certain country such as Denmark, Sweden, Austria and Switzerland have 4% share of organic food which exceed in the total food sales. On the other hand, organic market in developing countries is sm all but considers growing especially in upper income developing countries. Figure 1.3 shows the coverage of organic farm in different country in year 2005.Malaysia is located in Southeast Asia and consists of two mainlands which is Peninsular (west) Malaysia and East Malaysia with an area of 329,750 km2. The agricultural sector in Malaysia is about 10.24% (738,677 / 75,657) of GDP in year 2008 (Department of Statistics Malaysia). Organic farming in Malaysia was started by Center for Environment, Technology and Development, Malaysia (CETDEM). During year 1986 CETDEM started their organic farm in Sungai Buloh with only one hectare plot. According to Department of Agriculture (DoA), there is 131 hectares of organic farm in Malaysia during year 2001 and approximates organic farming increase to more than 1000 hectares in year 2005. In year 2008, there are about 1000 hectares of registered and 2800 hectares of unregistered organic farm.Table 1.1 Organic production areaSource Organic Allia nce Malaysia, 2007Organic farming and production had started up during year 1990. Due to increase in favorability and demand toward organic products this niche market is growing continuously. Consequently, there is increase in the number of organic organization which include government department and non government organization (Table 1.2).Table 1.2 Organic organization in MalaysiaSource Better Diet Islam, 2009Malaysian organic scheme (SOM) is the organization that has the right to give certification to organic farmers. Today, there are 28 Malaysian Organic Scheme (SOM) Certificate Holders in nationwide with a total area of 1244 hectares (Table 1.3).Table 1.3 Malaysian Organic Scheme (SOM) Certificate HoldersSource Department of Agriculture Malaysia, 2009Due to increasing in organic farming and production, the number of organic retail outlets is also in the increasing manner. As a result, there are many organic companies have started their business such as Justlife, BMS, Country far m, ZenXin, Woots and etc. Organic food was previously consumed by cancer patients or patients who had serious health problem. Today, organic food becomes a choice for every family or even each and everyone. As we know, Justlife is a famous retailer of organic food and organic products. Justlife has only owned half of a whole retail shop at SS2, Subang Selangor with limited organic products and food. Recently, they are success and owning eight retail shops in Malaysia. Accordingly, we can observe that consumer demand of organic food and products is rising in recent year.Since the demand of organic food and products are increasing, government has putting effort in order to encourage producers to involve themselves in organic farming. Besides, government mentioned in Ninth Malaysia Plan (2006-2010), they estimating the value for organic farms industry will be worth RM800 million after five year and plan to have 20,000 hectares of organic farm in year 2010 (Economic Planning Unit). Duri ng year 2001, Organic Alliance Malaysia (OAM) was found and this organization act as a private sector association to form national network. Government has tried to match the demand by increase the number of producer and organic farmer. However, we still supported by imports and the amount of foods that we imported from other country is about RM10.9bil or 8.7% of total import. Therefore, a study on consumer behaviour is crucial in order to forecast the demand and prepare for supply.According to local report, a supplier Kerby Ho of KK Hoganik told that demand for organic fruits and vegetables were increase at about 8%-10% every month (NST, 2008). Informed by organic-certified wholesaler Radiant Codes manager- Loke Siew Fong in local report, the sale is experiencing double digit growth. She added that consumers are having higher awareness on health issues nowadays and search for organic food rather than conventional foods (NST, 2008). As a result, research on consumer behaviour can tel l supplier with fact reason why they demand for organic food and better understanding the trend of organic market.Moreover, the needs of communicate for both organic concept and build market confidence are vital in Malaysia market. Most of the citizen were still choosing conventional foods as usual and refuse to purchase organic food due to their own personal reason such as inconvenience, price, knowledge and others. Consequently, marketers have to know the concern of customers or citizen in order to better target the market and segments.In short, organic market is in an encouraging rate and it is a potential market for marketers, farmers, suppliers, wholesalers and retailers to aim. The reason why and how the demand increase is important for them to study in order to server the organic fans at the right time and right place with sufficient supplies.1.3 Research ProblemConsume organic food has become an important subject for today in changing social graphic and emerging trend. Gover nment had been aware of the importance of organic sector since early of 1990s. The Organic Trade Association forecasts sales of organic food will be increase by 18% annually through 2010. Organic products become part of the picture for everyone at the present time and customer base of organic sector expected to rise and retailers continue to provide wider variety of organic food. Commissions communication were presented in December 2002 that they are planning to increase their efficiency, transparency and consumer confidences in order to develop the market for organic food (Gracia and de Magistris, 2007).Refer to a report found in OAM in November 2008, Katherine diMatteo, president of the International Federation of Organic Agriculture consumers seek organic produce as a way of environmental degradation, or as the best way to eat healthy foods. Besides, government and others view that purchasing organic is a good way for developing fair trade due to most of the organic farmers are small-scale producers. The trend of eating and purchasing organic has boosted up the organic sector in constructive rate. Transaction and trade of business have increase indirectly and these also bring a healthy rate for Malaysia economy. Consumers also willing to pay for organic food during economy down turn in June 2008. Economy down turn do not brought a strong impact to this industry and the sale of organic food still in a healthy and encouraging rate. As a result, we confidents there are something behind the consumers to motivate and move them to purchase organic food.At one time, people always believe that consumers choice was unstructured and natural but at this moment, people know that human behaviour is manipulated, push or even forced by reason. For instance, health conscious is affecting consumers where they will hunt for organic food in order to replace conventional foods. Nevertheless, this is only one of the hypotheses or assumption that we can made, we cannot prove th at this is the accurate explanation for the question Why the demand of purchasing organic food is increased from year to year? Additionally, there are many factors that keep moving people from conventional foods to organic food. Hence, study on the factor that affect consumers willingness in purchasing organic food is an essential issue to further understand consumers mind and support organic.Furthermore, dynamic issues and factors which influence consumers are changeable among individual and purchase decision of organic food will depend on many variables such as consumers attitudes toward environmental protection and healthiness (Gracia and de Magistris, 2007). Human behaviour and customers choice is not impulsive, unconscious, inborn and natural. Conversely, consumers behaviour is always motivated by the environment, enthusiasm, sensation and emotion (Ajzen and Fishbein, 1980). Consumer willingness to pay for organic food may influence by numerous factors. Human beings easily get influenced by the environment and objects surrounding them. We have no capability to freeze their consumption and purchase behaviour. The only way that we can do is to study deeply on what are the main aspects they are focusing and what are the essential factors that manipulate their purchasing. More to the point, people perception and motivation in purchase organic food are vary from country to country. There is different demand in different county with different culture.In order to have a good explanation to answer the entire question and have a bottomless understanding of customers willingness to pay during obtain organic food, we come out with the problem statement What are the main aspects that manipulate consumers willingness to pay for organic food. Policy maker seek consumer oriental analysis in organic sector since the information is crucial for them (Gracia and de Magistris, 2007). The study not only can improve the understanding of consumer behaviour and factors that affe ct customers but it is also a necessary research to help marketers to market the products, help government to better know the needs of citizen, help retailers or wholesalers to do some related activities to encourage consumers in order to choose organic food and help producer to estimate the production in future.1.4 Research ObjectiveThe main purpose of this research is to recognize some of the essential variables that motivate or stimulate citizen in Malaysia in purchasing organic food. Organic market is a potential and profitable market for marketers to have a deep study on it since the demand of organic food is keep increasing nowadays. Besides, organic industry did contribute to Malaysia economy and citizens health, as well as the environment. In my opinion, customers belief, feeling, attitudes, motivation and demand trend would bring a deep impact on food industry and this will bring challenges for marketer to design marketing strategy. The following objectives are built to ach ieve goals of this study.i. To study the determinants that motive consumers willingness to pay for organic food.After identify all the factors, we can better target and server our customers when they doing their purchase. When retailers know all the factors and possess this advantage, they can come out with following step such as education fair, seminar or others kind of exhibition to influence or encourage customers in order to purchase organic food. Moreover, eating organic food can save and secure the earth. Consume organic food not only healthier but also more environmental friendly if compare with conventional foods. By educating others customers about the benefit of consuming organic food, sales of organic food will definitely continue to double up in the future. By the way, this also can help marketers to better market the products and also target potential customers easily. Lastly, this as well will contribute to economic growth and better environment for next generation.ii. To better understanding consumer buying decision and contribute precise data to policy makers.There is a problem that release by NST on November 2008 which is the number of organic supporter is increasing however there are too few farmers to serve the large pool of consumers. As a result, we can overcome the problem of supply and demand after knowing the reason why customers purchase organic food or not. Moreover, most of the researchers showed consumers are willing to pay for high quality food. If this research can prove that there is a significant result between quality and willingness to pay. Related organization can immediately take action in order to strengthen organic production governance.iii. To study the impact on organic food industry due to the issue of health conscious.Recently, health conscious beca