Aflatoxins and Health Considerations in Consumer Food Choices in Ghana

1 Introduction

Peanut (Arachis hypogaea) is an important food crop produced and consumed across several countries (Nwokolo 1996). The peanut crop is a major source of protein in Ghana where it is predominantly grown in the northern regions (Atuahene-Amankwa, Hossain, and Assibi 1990). Food products commonly derived from peanuts include butter, confectionaries, oil, and cake. Figure 1 shows the trend of Ghana’s peanut production and trade over the past two decades. Generally, production of peanuts in the country has been rising with high domestic consumption and limited international trade.

Figure 1:

Peanut production trend in Ghana from 1993–2013.

Note: Production (left axis); trade (right axis). Source: Computed from Food and Agriculture Organization of the United Nations (2016)

In the developing world, peanut and many other basic food staples are extremely susceptible to mycotoxin contamination, especially aflatoxins (Jolly et al. 2006).^[1] Mycotoxins are produced by a group of fungi that contaminate food crops pre- and post-harvest. Mycotoxin-producing fungi flourish in conducive environmental conditions such as high temperature and humidity, insect infestation, as well as improper hygiene (Dohlman 2003). As a result, there is high incidence of the mycotoxin problem in the tropical and sub-tropical regions of the world. Several food supply chains are severely affected by the mycotoxin contamination problem. The widespread nature of mycotoxins contamination adversely affects the health and economic welfare of large populations across several developing countries. Available studies show strong association between aflatoxins exposure and a host of negative health outcomes (Wang et al. 2001; Turner et al. 2003; Williams et al. 2004; Lewis et al. 2005; Wu 2006; Liu and Wu 2010; Wu and Khlangwiset 2010). Serious disease burdens linked to aflatoxins and other harmful mycotoxins include liver cancers, mycotoxicosis (e. g. aflatoxicosis), kwashiorkor in young children, and suppression of human immune systems leading to onset of opportunistic diseases (Montesano, Hainaut, and Wild 1997; Wild and Hall 1999; and Dash et al. 2007). Among the notable groups of mycotoxins––namely aflatoxins, fumonisins, zearalenone, and ochratoxins––this study focuses on aflatoxins due to their toxicity to humans and farm animals (Park et al. 2002; Jolly et al. 2006).

Food safety concerns have grown rapidly in the past two decades, particularly among consumers in developed countries (Grunert 2005). The general public’s rising interest in food safety issues has stimulated extensive inquiries and policy discussions (Grunert 2005). On the policy front, regulatory agencies in developed countries have responded to the credible threat from aflatoxins by setting maximum permissible standards to protect public health. For instance, the United States (US) enforces its own aflatoxins standard set at 20 parts per billion (ppb), whereas the European Union (EU) imposes 4 ppb on food produced for direct human consumption (Otsuki et al., 2001). However, enforcing acceptable aflatoxin levels for food crops has been a contentious policy issue among international trading partners. The enforcement of unilateral (non-uniform) standards often leads to trade disputes in international markets. Also, the adoption of international standards in countries where there is absence of domestic aflatoxin regulations is a cause for concern. As one would expect, debate on enforcements of strict regulations by some countries as trade barriers has motivated numerous policy evaluation studies (Nguyen and Wilson 2009; Nogueira et al. 2008; Otsuki, Wilson, and Sewadeh 2001a; 2001b; Yue, Beghin, and Jensen 2006). The general conclusion in the literature is that food standards are economically harmful to suppliers across the developing world in terms of lost revenues. Conspicuously missing in the food standards discussions, however, is consumers’ valuation of quality assurance induced by standards enforcements. This paper contributes to the ongoing debate on food standards regulation by evaluating consumer preferences in the developing world, focusing on the case of Ghana in West Africa. The majority of existing research on consumer preferences for food safety issues is concentrated on the areas of genetically modified foods, and consumer interests in synthetic chemical residues in food products (Eom 1994; Jan, Fu, and Huang 2005; Kimenju and De Groote 2008; Lin et al. 2005; Lusk and Briggeman 2009; McCluskey et al. 2003; Wang, Mao, and Gale 2008). To the best of our knowledge, the contingent valuation literature is silent on consumer behavior towards the mycotoxins problem in spite of the central role of aflatoxins in global food safety discussions. It is critical, therefore, to evaluate consumers’ behavior (and attitudes) toward food safety and how preferences for aflatoxin-free foods are affected.

2 Theoretical Foundation

The paper analyzes consumer preferences for risky foods in a random utility framework. The primary assumption is that individuals make choices that maximize their utility in the face of limited budgets (Hanemann and Kanninen 1998; Lusk and Hudson 2004; De Groote and Kimenju 2008; Gallardo et al. 2009).

3 Consumer Valuation Survey in Ghana

The data used in this study were collected in a survey carried out in Ghana from May through July, 2012. Contingent valuation (CV) questionnaires were administered in face-to-face interviews with selected peanut consumers across the country. All activities in this valuation study––namely literature review, survey design, interviewer training, pretesting of questionnaires, and the actual field survey implementation––were carefully executed in accordance with best practices in the literature (Portney 1994; Carson et al. 2003; McCluskey et al. 2003; Gallardo et al. 2009). For instance, interviewers explained to respondents that researchers have found evidence showing strong association between aflatoxin exposure and health problems such as aflatoxicosis, immune system suppression, and liver cancer. Prior to the interviews, enumerators explained to respondents the goal of the study. Concise descriptions of the peanut aflatoxin issue and potential introduction of government regulation policy were presented to survey participants using market information scripts. Furthermore, survey participants were briefed on potential benefits of consuming peanut with zero or reduced aflatoxin contamination. Survey respondents were then offered the choice to vote either ‘in favor’ of or ‘against’ potential aflatoxin regulation policy in Ghana that would ensure availability of aflatoxin-free peanuts in local markets but at higher prices. Consumers who voted ‘in favor’ of aflatoxin regulation enforcement were subsequently asked to state the maximum price they would be willing to pay for aflatoxin-free peanuts. Thus, willingness to pay (WTP) was solicited through a combination of referendum format and open-ended elicitation questions where consumers state maximum amounts they are willing to pay relative to existing prices in their own local markets. The novelty in this study is that rather than using random bids in the follow-up elicitation questions, we asked respondents to use existing local prices (exogenously determined by local markets) as references (lower-bounds) for their own stated maximum WTP amounts. Using existing prices as anchors allowed for possible local and regional (spatial) heterogeneity in the reference prices used by respondents to state their maximum willingness to pay. Because peanut is an important food crop widely consumed in various forms in Ghana, the use of CV methodology in this study is legitimate.^[3] Previous research shows that CV methods yield useful information on preferences when survey respondents are familiar with the goods and services presented to them in experimental markets (Cummings et al. 1986; Whitehead et al. 1995; Wedgwood and Sansom 2003).

Preceding the choice (voting) task and as part of the market information, respondents were shown printed photographs of three peanut samples labelled as follows: ‘Sample A’, ‘Sample B’, and ‘Sample C’. Sample ‘A’ had a high proportion of moldy, broken and shriveled kernels plus other foreign materials; Sample ‘B’ consisted of moderately sorted peanuts showing a lower percentage of broken/shriveled kernels; and Sample ‘C’ contained clean and well-sorted peanuts showing no moldy, broken or shriveled kernels. This means Sample A would possess the highest probability of aflatoxin contamination, while Sample C would have the least likelihood of contamination. Respondents were then asked if they would vote for aflatoxin regulations that will ensure availability of aflatoxin-free peanuts (such as Sample C) in local markets but at higher retail prices. The survey participants were frequently prompted to make objective choices in the context of their own unique preferences, limited budgets, and food expenditure patterns. In addition to demographic and socioeconomic characteristics, the survey gathered information on important factors that possibly influence consumers’ food purchase decisions. Survey participants were asked to indicate the single most important factor considered in their household food transactions–– namely prices and food safety concerns. Questions were also asked about any adverse health experiences in the past that respondents attributed to their peanut consumption.

A sample of 652 peanut consumers was randomly selected to participate in the survey. Participants were purposively sampled from five out of ten administrative regions in Ghana, namely Ashanti, Brong Ahafo, Western, Central, and Eastern (see Table 1). Capital cities of the regions were selected since urban centers are prominent destination markets for peanuts produced in the northern part of the country. Table 1 shows proportional samples of consumers in the selected regions. Regions with large populations are weighted more given their importance as peanut markets. Sub-metropolitan areas within each capital city were identified and peanut consumers chosen from those areas. A total of 68 areas were covered. Figure 2 shows geographical distribution of the survey regions and corresponding capital cities.

Figure 2:

Map of Ghana showing distribution of study areas.

Source: Adapted from Owusu (2005).

4 Empirical Estimation of Willingness to Pay

In this study, we estimate a random utility model consistent with the choice problem facing consumers. Although consumers know their preferences with certainty, investigators and econometricians perceive individual utility functions as consisting of systematic and random/unobservable components (Hanemann 1984; Hanemann and Kanninen 1998). Therefore, we state a peanut consumer’s utility as follows;

where y is the individual’s income, z is a vector of the respondent’s socioeconomic and/or demographic characteristics, e is the random error term and i represents the consumer. Consumer utility is directly unobservable, hence probability of utility maximization is often obtained from observed behavior. With a utility maximization objective, consumers would be willing to pay more for a new product if they believe that the proposed change (such as the introduction of aflatoxin-free peanut) will increase or retain their existing utility (Hanemann 1984; Hanemann and Kanninen 1998). The preceding assumption is expressed below in probabilities;

where Pi is the probability of a consumer’s willingness to pay a bid price of Bi for the new product; Ui1 is the final utility after acquiring the new product; Ui0 is the initial utility before buying the new product; yiis the consumer’s income; zi is a vector of the individual’s socio-demographic information; and ei1 is the random component after obtaining the new product, while ei0 is the random term for the case without the new product. Notice that the bid price is paid directly from the consumer’s income. Therefore, consumers will only vote ‘in favor’ of the regulation and agree to pay a bid price when their willingness to pay equals or exceeds the offered price for aflatoxin-free peanut.

With the random utility method providing structure, we estimate probability of voting ‘in favor’ of the aflatoxin regulation using logistic regression model. In the logistic model, we express probability of voting ‘in favor’ as a function of existing prices, relevant socioeconomic factors, and characteristics demonstrating consumer concern for food safety. In addition to the logistic model, we estimate a quantile regression model expressing consumers’ stated maximum willingness to pay as a function of existing prices, relevant socioeconomic factors, and characteristics showing concern for food safety. Quantile regression models are appropriate for estimating open-ended contingent valuation data given that distributions of maximum willingness to pay are often skewed (see O’Garra and Mourato 2007; Champonnois and Chanel 2016). Aside from being robust against outliers, quantile regression also offers the opportunity to evaluate impacts of relevant covariates on the distribution of maximum willingness to pay.

5 Results and Discussion

6 Conclusion and Policy Relevance

A hot area of debate around mycotoxins (particularly aflatoxins) and food safety is the enforcement of appropriate regulatory standards that would not be welfare decreasing for market participants. Against this background, the primary objective of this paper was to study consumer preferences for aflatoxin-free peanuts, and how food safety concerns impact willingness to pay price premiums for aflatoxin-free peanuts. We implemented a contingent valuation survey in Ghana from May through July, 2012. The survey data was analyzed using a random utility maximization framework in the context of ‘risky’ foods. Logistic and quantile regression models were estimated to determine probability of consumer willingness to pay, and how important socioeconomic and food safety factors influence people's preferences.

Survey results indicate that any efforts to introduce and enforce aflatoxins regulation in Ghana would receive strong support from consumers. Relative to prevailing market prices for ordinary peanuts, the majority of survey participants offered to pay substantial price premiums for aflatoxin-free peanuts. We find that most consumers in Ghana prioritize food safety above prices in their market transactions. Further, model results indicate heterogeneity in willingness-to-pay between individuals who selected food safety as the paramount factor in their purchase decisions, and those who indicated price was the most important determinant.

Also, individuals who exhibit the following socio-demographic characteristics are more likely to pay price premiums for safer food products: persons aged 33 years and below, members of high-income households, as well as people from small households. In addition, we found some evidence suggesting that gender and formal education influence consumer preferences for aflatoxin-free peanuts ––females and people with advanced formal education are less willing to support aflatoxin regulations that would ensure availability of aflatoxin-free peanuts on local markets. Moreover, we have shown evidence of spatial disparity among consumers from different geographical regions in Ghana as far as preferences for quality aflatoxin-free peanuts are concerned. We also show that the population is segmented along the distribution of willingness to pay; underscoring the need for targeted policies and marketing strategies for peanut and other food industries affected by aflatoxins and other mycotoxins.

The findings from this study have valuable implications for policymakers as well as food suppliers in Ghana and other developing countries with similar socioeconomic structure, especially in Sub-Saharan Africa. First, prior to implementation of domestic aflatoxin regulations, food suppliers could take advantage of the expressed demand for aflatoxin-free peanuts by differentiating their produce to meet consumers’ safety needs. Peanuts offered for sale in local markets can be differentiated into grades through effective aflatoxin-reduction strategies such as proper drying, sorting of clean kernels, and applying sanitary food handling practices. Grading of peanuts would attract premium prices from consumers who value safe foods for themselves and their households and are willing to compensate producers for investments in supplying aflatoxin-free foods. Second, this study helps inform policymakers in Ghana as the country prepares to introduce and enforce food aflatoxin standards through its regulatory authority (the Ghana Standards Authority and the Ghana Food and Drugs Authority). Before introducing aflatoxin regulations, policy makers must consider educating the population about aflatoxins contamination and the need for people to avoid contaminated foods as they are known to cause serious illnesses. If the population is well informed about aflatoxins contamination, consumers would be willing to pay price premiums to incentivize food suppliers to invest in aflatoxin-minimization efforts along supply chains. Finally, the information and policy implications of this study are relevant for major food staples such as maize, processed cassava, and yam products/chips in Africa that are susceptible to the aflatoxins contamination problem.