Text: Veronica Perova
Experts predict the growth of the Russian organic vegetable market
The market for organic vegetables in Russia is in its infancy: there are only 12 certified producers of these products in the country, most of the organic vegetables are still imported. However, the potential of this direction is huge - the demand for fresh and healthy organic vegetables is growing, and even during the pandemic, retail did not notice a drop in sales of this category of food products. Experts and market participants are confident that the growth of organic vegetable growing is just around the corner.
In January 2020, the Federal Law on Organic Production N 280-FZ entered into force in Russia, which launched several processes at once: the creation of a certification system in accordance with national, interstate and international standards, the appearance of a graphic sign and a unified register of organic producers on the website of the Ministry of Agriculture of the Russian Federation.
The document establishes the definition of organic products and regulates the norms for its production, storage, transportation, labeling and sale. According to experts, the emergence of the law will contribute to the development of organic production in Russia in general and vegetable growing in particular, as well as to increase the attractiveness of this segment for farmers.
Small market with great potential
Currently, the volume of the Russian market for organic products is small, most of it (about 80%) is imported from abroad.
According to the National Organic Union (NOS), at the moment in Russia, from 300 to 360 thousand hectares of land are certified for organic production. Some of them are conversion and certified lands for future projects. In turnover, there are only about 200-220 thousand hectares of land suitable for organic farming. At the same time, according to experts, there are 34 million hectares of fallow arable land in the country, which are suitable for organic agriculture.
Less than 1% of agricultural enterprises are engaged in the production of organic products in Russia, and until recently their number has practically not increased. However, now the situation has begun to change for the better, including in the fruit and vegetable production sector.
According to the executive director of the National Organic Union, Oleg Mironenko, out of 82 Russian certified organic producers, only 12 enterprises specialize in growing vegetables, mainly in the open field.
"Organic vegetable growing is not an easy direction, but it has quite a lot of potential," says Ksenia Firsova, leading expert of the organic certification body "Organic Expert", inspector-auditor for international organic standards EU / NOP in
Kiwa BCS Öko-Garantie GmbH (Germany). According to the expert, fresh organic products are interesting to Russian consumers, but its production - growing high-quality vegetables, protecting plants from pests and diseases with the means permitted in organic production, storing crops in proper conditions, logistics - requires farmers to take thoughtful, accurate and timely actions.
“Many organic vegetable growing farms are located in the Stavropol and Krasnodar Territories and the Voronezh Region, where you can grow vegetables without regard to natural conditions,” notes Oleg Mironenko. - In addition, steps are being taken in these regions to
providing support to the organic sector of agriculture from the local authorities ”. For example, the Voronezh Region subsidizes the certification process by 100% and the purchase of biofertilizers by 50%. Also, the issue of introducing additional
political and per hectare support for organic producers. At the same time, there is still no large-scale state support for the organic sector at the federal level in Russia, the executive director of the National Organic Union regrets.
Ksenia Firsova confirms that the possibility of obtaining a subsidy depends on the region, and recommends that farmers clarify the procedure for reimbursing the costs of organic certification at the regional ministry or department of agriculture. “The cost of issuing a certificate is calculated in audit days individually for each specific production,” the expert recalls.
“Farms located in the southern regions, as a rule, specialize in melons, cucumbers, tomatoes, and peas,” Oleg Mironenko continues to talk about market participants. - And companies in the Moscow, Leningrad and Kaluga regions mainly grow potatoes, carrots, beets, cabbage - the so-called borscht set. But the main crop for them is still potatoes. " Among the companies that grow organic vegetables, the expert names the "Biofarm of Kuban" in the south of the Krasnodar Territory, "Organic Around" in the Stavropol Territory, "Bolotovo", "Vasilki", "Ryabinka" in the Moscow Region and others.
Chairman of the Board of the Union of Organic Farming, member of the public council of the Ministry of Agriculture of the Russian Federation, Candidate of Pedagogical Sciences Sergei Korshunov notes that the Russian market for organic vegetables in open ground is now just being formed, while it is only hundreds of hectares of organic land. “At the same time, there are market participants who have been growing organic vegetables for many years,” says Sergey Korshunov. - For example, Biofarm of Kuban has been operating in the Krasnodar Territory since 2012. True, now the farm has concentrated on greenhouse vegetables and grows tomatoes, cucumbers, spinach in film greenhouses, as well as melons and gourds ”.
Another player on the market, a member of the Union of Organic Farming, is the Organic Around company, which produces grain, industrial crops, and open field vegetables and processes them in the Stavropol Territory. Sergey Korshunov emphasizes that in 2019
this company has received an international organic certificate.
“We have been certified in accordance with EU regulations 837/2007, 889/2008,” confirms the head of the Organic Around farm, Ph.D. n. Amiran Zanilov. "We are going to get Russian certification this year." He said that since last year the assortment has been adjusted. Thus, the company abandoned the production of organic products, which had to be sold unprocessed, that is, from melons (melons and watermelons). In "Organic Around" they admit the resumption of work with these crops, but only after it becomes clear what can be produced from them and on what equipment, and also there are funds for its acquisition.
“At the same time, we expanded the area under tomatoes, pumpkins and started growing cucumbers,” said Amiran Zanilov. "We are also planning to start producing organic garlic and spices."
Organic outdoor vegetables are a seasonal commodity that is in high demand among the population, says Sergei Korshunov. “They differ favorably in their taste characteristics. People have missed tomato flavored tomatoes and are willing to pay a higher price for them,
just like other organic vegetables, ”he says.
According to Korshunov, manufacturers usually strive to enter the market of Moscow, St. Petersburg, and large metropolitan areas. They account for up to 90% of organic sales. “But people should eat healthy and natural products, especially fresh and seasonal, in all regions of Russia. Where he produced it, he sold it there, this is one of the main principles of organic matter. It is important that the supply chain is as short as possible, and that the products are fresh and natural, ”Sergei Korshunov is convinced.
At the same time, Amiran Zanilov draws attention to the fact that the share of logistics costs increases annually, which is associated with an increase in the cost of fuel, toll roads, etc. In addition, the reference only to the capital market in the long term entails the risk of shifting the balance of demand and
offers in a particular region. “Therefore, the strategy of our company is to enter regional markets. Fortunately, the pricing policy allows it, he explains. “Today, about 85% of our products are sold in the regions.” So, thanks to the assistance of the Chamber of Commerce and Industry of the Republic of North Ossetia-Alania, the products of "Organic Around" are sold in several dozen stores in North Ossetia.
The Organic Farming Union also supports the regionally oriented development strategy of Organic Around.
“We see that the entry of organics into regional markets is a new trend,” emphasizes Sergey Korshunov. The same trend, according to him, is being developed by the members of the Union of Organic Farming in Siberia. For example, IE Volkov a few years ago opened the Kalina-Malina project for the sale of farm products. He invites in principle to cooperation only Siberians and only farmers, not agricultural holdings. The project is successfully developing in 2020 as well. According to the expert, suppliers of Kalina-Malina, including vegetable producers, with the assistance of the Union this year
are going to apply for organic certification.
However, NOS executive director Oleg Mironenko adds a fly in the ointment to the conversation, recalling the sad trend this year associated with the coronavirus pandemic. “Due to the ban on the export of vegetables outside the regions in which they were produced, as well as the increase in the cost of production due to surges in the dollar (seeds, biological products, spare parts, etc. often have to be bought for foreign currency), some organic farms do not were able to sell the grown crop, - he recalls. “I had to face a choice: either to destroy vegetables intended for sale in other regions, or to sell them in local markets below the cost price”.
Continuing the conversation about trends, Sergei Korshunov also noted that special attention is now being paid to the development of the training system, the transfer of knowledge in the field of organic agriculture. So, the Union of Organic Farming, within the framework of the presidential grant, held free training in the production of organic tomatoes in the open field in the "Organic Around" company in August 2020. According to the expert, this farm has become a scientific and practical center, where economically feasible agricultural technologies for the production of organic vegetables are being worked out at a serious level. He also noted that the head of the farm, Ph.D. n. Amiran Zanilov is a well-known person in the organic movement and the author of scientific and methodological recommendations of the Ministry of Agriculture of the Russian Federation on organic agriculture, published in 2018.
Among the significant events for the organic community, Oleg Mironenko also named the start of a project for the production of seeds for organic vegetable growing on the basis of the “Bioferma Kuban” farm, in which the large seed company “Poisk” participates. “The project started in 2020
year. This is our first swallow in the field of creating domestic seeds for organic vegetable growing, ”- said the executive director of NOS with pride.
Value Added Product
As Oleg Mironenko said, in Russia, the marginality of organic vegetable growing is several times higher than in the traditional segment. “And, thanks to the development of technologies in this area, the production cost of organic vegetables is not much higher than in classical agriculture,” he adds.
As an example, the executive director of the National Organic Union cites the experience of Krasnodar. There are costs today
for the production of organic vegetables is only 30-40% higher than for the cultivation of traditional products. And selling them, as the expert assures, can be more expensive: there is a demand for organic vegetables, and the established prices are higher than for ordinary vegetables.
Also, according to him, the experience of the company "Bioferma Kuban" is interesting. “It turned out that the cost of growing organic cherry tomatoes in film greenhouses can be equal to the cost of growing classic varieties of this crop using industrial technology,” said
Oleg Mironenko. “Maybe this ratio can be preserved when growing tomatoes in the open field.”
Amiran Zanilov emphasizes that the production of organic products, first of all, should be considered as a socially oriented business, the main goal of which is to make a profit. “For farmers who are able to get a product with a higher added value due to environmental parameters, growing organic vegetables will be economically profitable,” he is convinced.
In turn, Sergey Korshunov draws attention to the fact that the marginality of the production of organic vegetables depends on the sales channels. Normal, according to him, is considered a profitability of 30%.
Currently, mainly imported organic products are presented on the green shelves of premium chain stores (for example, Azbuka Vkusa), recalls Amiran Zanilov. “If our company can sell similar vegetables of our own production
(with Evrolistk) at a price 5-6 times cheaper than imported ones, the profitability can reach 80-100%, "says the head of Organic Around.
According to Oleg Mironenko, now most of the stores that have a shelf with organic products complain about the lack of vegetables and fruits and are ready to buy them from certified domestic agricultural producers. He said that before the coronavirus pandemic, consumer
The demand for organic vegetables was growing steadily, and even during the period of self-isolation, retail chains did not report a sharp drop in sales of this product category, despite the decline in household income. “The problem is that there are no vegetables themselves,” stressed Oleg Mironenko and lamented that the expansion of areas for the production of organic vegetables is not happening as quickly as we would like.
At the same time, experts and market participants expect that in the coming years the number of certified vegetable farms in Russia will actively grow.
How to get a certificate?
Ksenia Firsova, Leading Specialist of the Organic Expert Company, spoke in detail about the certification procedure and the requirements for farms. “According to the Federal Law“ On Organic Products ”, enterprises that have passed the certification procedure for their production have the right to use a single“ organic ”mark and the word“ organic ”on their packaging,” says the specialist. - Certification is carried out according to the standard GOST 33980-2016 “Organic products. Rules for production, processing, labeling and sale ”in an accredited certification body”.
Ksenia Firsova explained that the standard imposes certain requirements on crop farms: maintaining soil fertility (for example, the presence of crop rotation), the use of fertilizers and plant protection products (only permitted substances can be used). There are special requirements for seed and planting material. In addition, in plant growing, organics are prohibited from growing in hydroponics. “The conditions for collection, packaging, transportation, storage of organic products are also legally fixed,” the specialist adds. “For example, it needs to be produced, stored and transported separately from non-organic goods. Manufacturers must refuse packaging that can lead to product and environmental contamination, including polyvinyl chloride. "
It is important, in her opinion, to consolidate the concept of the transition period - this is a certain period of time during which the requirements established for organic production are applied, but the products cannot yet be recognized as organic. "For sown areas (in
including for the cultivation of vegetable crops) the duration of the transition period is at least two years prior to sowing, ”Ksenia Firsova emphasized.
To date, three certification bodies are accredited in Russia. Their scope of accreditation and official contact details can be found in the register of the Federal Accreditation Agency, Firsova notes. “Unfortunately, we have to talk about this separately, as cases have become known when
the fraudsters offered their services on behalf of a well-known certifier, ostensibly as a branch that did not exist in reality, ”she adds. If a Russian manufacturer plans to supply its organic products abroad, then he cannot do without an international certificate, the specialist reminds.
With an eye on export
International certification opens the way for enterprises to enter international markets, continues Ksenia Firsova. “At the same time, they decide what kind of certification is required, based on the potential sales market, since the standards are different in different countries. In Russia, the most widespread international certification is in accordance with EU or US standards, she notes, “certification for Japan and China is less common”.
Before starting the certification process, the "Organic Expert" specialist advises you to familiarize yourself with the standard (they all have their own differences) and choose a certification body. “For example, according to the European organic standard in Russia, about 15 foreign certification companies have the right to carry out this procedure, of which no more than half are actively working,” she clarified.
According to Firsova, the procedure itself does not differ significantly from the Russian one, but there are difficulties. So, communication with the certifier and documentation will be in English. In addition, there are a number of features associated with the export of organic products, for example,
registration of the so-called transaction certificates for each batch. “However, if you immediately understand all the intricacies of certification, unforeseen difficulties can be avoided,” she assures.
According to Sergei Korshunov, the volume of supplies of all organic products from Russia at the end of 2019 is estimated at 9 million euros. This is mainly the raw material export of grain, legumes and oilseeds, as well as wild plants. In his opinion, pumpkin and garlic have the greatest potential for export among organic vegetables.
According to Amiran Zanilov, at the moment there is a great demand for raw materials on the world market, which Russian farms cannot fully satisfy due to small production volumes.
In addition, from the point of view of Oleg Mironenko, it makes no sense for domestic enterprises to export vegetables and conquer foreign markets, because the domestic market for organic products has not yet been filled in the country. “Selling vegetables in Russia is now as profitable as supplying them abroad - the price range does not differ much,” the expert says. “In addition, we must take into account that there are already countries that occupy a confident position in the global supply of organic vegetables. Italy is in first place, followed by Spain and Ukraine. "
In theory, the country should be interested in the sale of processed vegetables with added value. However, in Russia, there are virtually no projects for deep processing of fruit and vegetable products, says Oleg Mironenko. “You can grow vegetables or fruits, but turn them into stews, compotes, jams or dried fruits and at the same time keep the final product organic is difficult: there is practically nowhere to do it,” the expert explained.
Despite the difficulties, the company "Organic Around" is currently working on the export of organic processed products (mainly vegetable oil). Preliminary negotiations are underway. “A business mission to Italy organized by the Fund for Small Business Support of the Stavropol Territory, unfortunately, failed due to the spread of the coronavirus,” notes Amiran Zanilov.
Pain points and long-term trends
Now among manufacturers, the interest in certification is growing steadily. Ksenia Firsova connects this with the general development of the topic of organic production in Russia: the entry into force of the law on organic products, the existence of subsidy programs, educational programs, and building up export potential. Since the whole chain is certified in organic production, then, in her opinion, the development of the organic sector can proceed like an avalanche.
“Retail requires companies to confirm organic claims on packaging, so processing plants go in search of organic raw materials,” explains Ksenia Firsova. “Livestock requires organic fodder, plant growing requires organic fertilizers and seeds, biological products for plant protection.” As a reference point, we have the world experience of the organic movement, which shows how developed, voluminous and successful the system of organic agriculture can be, the specialist notes.
Of course, the organic market in Russia is still underdeveloped, and the entire infrastructure for its support is underdeveloped, Oleg Mironenko draws attention. “Biofertilizers and biological products for growing vegetables, organic seeds are required,” the expert lists. "These areas are just beginning to develop." Despite these gaps, the Russian organic market is striving for growth and development.
By the way
Interestingly, not all vegetable crops (for example, carrots, beets, cabbage) can be protected with biological products. Therefore, today active work is underway aimed at developing new hybrids with resistance to pests.
The most pressing issue is the protection of vegetable crops (for example, cabbage) from pests such as moths, thrips and aphids, to a lesser extent - from
weeds and diseases. So, if, on average, one chemical treatment is used to protect cabbage from diseases and one or two - from weeds, then the amount
chemical treatments against pests (such as moths and thrips) can reach eight to nine.
According to industry experts, an incentive for the development of the organic market may be the availability of financial instruments and preferential credit programs aimed at equipping farms with the necessary equipment and technology. An important success factor is also the availability of specialized workforce and staff development programs.
Amiran Zanilov confirms: for further growth in organic vegetable growing, technologies are needed to achieve the cost of raw materials slightly higher than in traditional production. In particular, we are talking about the introduction of resource-saving technologies into organic production, as well as the development of a system for protecting vegetable crops from weeds, pests and diseases. Moreover,
it is important to actively cover the topic of organic matter with the involvement of specialists from the field of biology and medicine. “But the most important change, which I personally expect, is the inclusion of organic products in the nutrition of preschoolers and primary school students,” said the head of Organic Around. - This will be the main investment in the human potential of the country! "
In the coming years, as Sergei Korshunov assures, the growth of the Russian organic agricultural market is expected, in particular in the segment of vegetables. “Fresh seasonal vegetables are a guarantee of health and strong immunity, people are now paying increased attention to useful products and strengthening the body. So organic vegetables is a long trend! " - the expert promises.
“You can talk a lot about problems, you can even write a big study about it, but consumers already need organic vegetables today. And in rather difficult conditions, our producers are trying to grow them. It is only necessary to support domestic enterprises in this difficult matter, ”concludes Oleg Mironenko.