Organic food market in singapore: • Singapore: frequency of purchasing organic food 2019

Organic foods getting more popular in Singapore, Health News

SINGAPORE – After high-school teacher and author Andrew Hallam was treated for bone cancer here in 2009, he switched to eating mostly organic food.

The 42-year-old, who wrote the book Millionaire Teacher: Nine Rules Of Wealth That You Should Have Learnt In School, is happy to pay a premium for putting healthier food into his body.

“Is it worth spending 50 per cent more on groceries for the possibility of living longer? The question answers itself, I think,” says the Singapore-based Canadian, whose wife also joins him in having a mostly organic diet.

“I would rather eat organic and do without the latest iPhone or flashy car. Material things, studies have shown, don’t make people happier. But life’s experiences do. And the longer I live, the more I can experience and see.”

Whether other organic food enthusiasts think the same way or not, they are also buying up organic food in larger quantities.

Grown without the use of artificial fertilisers and pesticides, and through sustainable farming practices, organic food used to be the purview of small, independent operators catering to an upscale clientele. Now, you can find an abundance of such products in supermarket chains, shops and even wet markets.

Supermarket chain FairPrice carries more than 800 organic items, from fresh produce to household items, up from 200 in 1998.

Sales at FairPrice stores have grown steadily with a more than n30 per cent increase registered so far this year compared with the same period last year, said Mrs Mui-Kok Kah Wei, director of purchasing and merchandising at NTUC FairPrice Co-operative.

As people become more affluent, they are better able to choose what they eat.

Zenxin Organic Food, a major Malaysia-based producer of organic fresh produce sold mainly through Cold Storage and Market Place, has registered a year-on-year growth of more than 10 per cent since 2010.

Though director Tai Seng Yee says the organic market is still a niche one despite having existed for more than two decades, he feels this will change.

“We believe that more people will adopt healthier lifestyles in the near future and consuming produce free from chemicals, toxins and pesticides is one step towards a more health-conscious lifestyle,” he said.

UConsumers can also buy organic food products from speciality stores such as Brown Rice Paradise, Four Seasons Organic, The Organic Grocer and SuperNature.

Ms Linda Locke, marketing director of SuperNature, which has two physical stores here, said expatriates formed the basis of its clientele when it opened in 2001.

She said: “Over the years, more locals have also started to make organic food part of their dietary choice. We are also seeing more young parents adopting an organic lifestyle that starts with their babies and then becomes the norm for the whole family.”

SuperNature did well enough to be acquired by the Como group, the Singapore-based luxury hotel, retail and spa organisation, in 2007.

Indeed, the booming organic market elsewhere has long attracted the big boys. In the United States, major food corporations have bought up smaller organic food companies and now dominate the organic food industry.

Brands such as Kashi and Silk Soymilk are now owned respectively by US breakfast cereal maker Kellogg and US food and beverage company Dean Foods.

Organic food products are grown and processed using organic farming practices, which are meant to encourage soil and water conservation as well as reduce pollution.

Unlike conventional farmers, organic farmers avoid the use of chemicals, such as artificial fertilisers and pesticides. Natural fertilisers, such as compost or manure, are used instead and crops are rotated to develop fertile soil and reduce pest infestations and disease outbreaks. Some farmers even manage weeds manually.

Organic vegetables and food have less pesticide residue, are grown as naturally as possible and are governed by a set of strict guidelines to ensure the integrity and quality of produce, said Mr Bjorn Low, who owns Edible Gardens, a social enterprise that helps people grow their own food in Singapore.

“From a livestock point of view, organic-raised meats are humanely treated – that is, not kept in overcrowded conditions. They are fed natural and organic feed, and generally have less hormones and antibiotics pumped into them,” he said.

These more expensive farming methods are largely why organic food products cost more than conventional produce.

Organic fruit and vegetables may also spoil faster than conventional produce as they are not treated with waxes and preservatives. They also do not have food additives such as colouring and flavouring.

Many people think the premium they pay for organic food products are for safer, more nutritious food.

Ms Jocelyn Chia, a senior dietitian with the department of dietetics at the Singapore General Hospital, said people have the perception that such products could help in the prevention of cancer and the preservation of fertility.

Mr Hallam, for one, turned to organic products to keep carcinogens at bay.

“Of the pesticides and herbicides used in different countries, many are known to be carcinogenic,” he said.

The aim, he explained, is to give his body the “best possible odds against the disease”.

“At my funeral,” he said half-jokingly, “I want people to say, ‘My god, he was old!'”

NO DIRE NEED TO GO ORGANIC

A recent analysis by researchers from Stanford University of results of various studies did indeed find that organic food products were 30 per cent less likely to have pesticide residue though they were not 100 per cent free of the chemicals.

The researchers had reviewed data from 237 studies that compared either the health of people who ate organic or conventional food, or the nutrient and contaminant levels in the food themselves.

However, the analysis found there were no obvious health advantages to eating organic food, including organic meat. They said organic food was no more nutritious than conventional food.

Dietitians agree there is no need to eat only organic food as there is no strong evidence that its consumption is beneficial to health in relation to nutrient content or that the level of pesticide residue in food causes harmful outcomes.

There is also no need to start babies on organic food, said Ms Chia.

All imported and locally produced fruit and vegetables are regularly inspected by the Agri-Food & Veterinary Authority for excessive pesticides and chemical residue and are safe to eat, she said.

The US Food and Drug Administration has also said that approved waxes – which help to retain moisture in fruit and vegetables, inhibit growth of mould and enhance appearance – are safe to eat.

“As wax is indigestible, it will go through the body unabsorbed,” said Ms Chia.

Cancer patients should not get stressed over whether they should eat organic food.

“They don’t have to eat organic food,” said the senior dietitian at Parkway Cancer Centre, Ms Fahma Sunarja. “Just ensure that they remove the pesticides and fertilisers by washing fruit and vegetables under running tap water for several minutes.”

Or you can rinse the fruit or vegetables, soak them for 15 minutes and rinse them again to remove pesticide residue and dirt, said Ms Chia.

Perhaps the rationale for eating organic food is that you are paying for the reassurance and luxury of knowing the food has been handled with care, said Ms Vanitha Buthmanaban, a dietitian with the Youth Health Division at the Health Promotion Board.

Others want to encourage farming practices that do less harm to the environment and less destruction to the livelihoods of traditional farmers who cannot compete with giant commercial farms.

The quality of food does not depend on whether they are organically grown or not, said Ms Buthmanaban.

“The nutritional quality depends on the type of food, their freshness, storing methods and cooking methods,” she said.

“The most important consideration is not whether you are eating organic produce, but whether you are enjoying a healthy, balanced diet.”

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Organic Food in Singapore

Organic Food in Singapore

Summary

Organic Food in Singapore industry profile provides top-line qualitative and quantitative summary information including: market size (value 2015-19, and forecast to 2024). The profile also contains descriptions of the leading players including key financial metrics and analysis of competitive pressures within the market.

Key Highlights

  • Organic food is produce that has been independently certified to have been grown free of chemicals. Market values are taken at retail selling price (RSP). For the purposes of this report, eggs have been classified as part of the meat, fish and poultry segment.
  • The market had total revenues of $18.5m in 2019, representing a compound annual growth rate (CAGR) of 4.0% between 2015 and 2019.
  • The prepared food segment was the market’s most lucrative in 2019, with total revenues of 7.6m, equivalent to 39.9% of the market’s overall value.
  • Higher-earning consumers and expatriates account for a considerable proportion of the population, and are a major source of demand in the prepared food segment.

Scope

  • Save time carrying out entry-level research by identifying the size, growth, major segments, and leading players in the organic food market in Singapore
  • Use the Five Forces analysis to determine the competitive intensity and therefore attractiveness of the organic food market in Singapore
  • Leading company profiles reveal details of key organic food market players’ global operations and financial performance
  • Add weight to presentations and pitches by understanding the future growth prospects of the Singapore organic food market with five year forecasts

Reasons to Buy

  • What was the size of the Singapore organic food market by value in 2019?
  • What will be the size of the Singapore organic food market in 2024?
  • What factors are affecting the strength of competition in the Singapore organic food market?
  • How has the market performed over the last five years?
  • What are the main segments that make up Singapore’s organic food market?

1 Executive Summary
1. 1. Market value
1.2. Market value forecast
1.3. Category segmentation
1.4. Geography segmentation
1.5. Market rivalry
1.6. Competitive Landscape
2 Market Overview
2.1. Market definition
2.2. Market analysis
3 Market Data
3.1. Market value
4 Market Segmentation
4.1. Category segmentation
4.2. Geography segmentation
5 Market Outlook
5.1. Market value forecast
6 Five Forces Analysis
6.1. Summary
6.2. Buyer power
6.3. Supplier power
6.4. New entrants
6.5. Threat of substitutes
6.6. Degree of rivalry
7 Competitive Landscape
7.1. Who are the leading players?
7.2. Which players have been most successful in the recent past (1-3 years)?
8 Company Profiles
8.1. Chan Ah Beng
8.2. Zenxin Agri-Organic Food Sdn Bhd
8.3. SuperNature Pte Ltd
8. 4. NTUC Fairprice Co-operative Ltd.
9 Macroeconomic Indicators
9.1. Country data
10 Appendix
10.1. Methodology
10.2. Industry associations
10.3. Related MarketLine research
10.4. About MarketLine
List of Tables
Table 1: Singapore organic food market value: $ million, 2015-19
Table 2: Singapore organic food market category segmentation: $ million, 2019
Table 3: Singapore organic food market geography segmentation: $ million, 2019
Table 4: Singapore organic food market value forecast: $ million, 2019-24
Table 5: Chan Ah Beng: key facts
Table 6: Zenxin Agri-Organic Food Sdn Bhd: key facts
Table 7: Zenxin Agri-Organic Food Sdn Bhd: Key Employees
Table 8: SuperNature Pte Ltd: key facts
Table 9: SuperNature Pte Ltd: Key Employees
Table 10: NTUC Fairprice Co-operative Ltd.: key facts
Table 11: NTUC Fairprice Co-operative Ltd. : Key Employees
Table 12: Singapore size of population (million), 2015-19
Table 13: Singapore gdp (constant 2005 prices, $ billion), 2015-19
Table 14: Singapore gdp (current prices, $ billion), 2015-19
Table 15: Singapore inflation, 2015-19
Table 16: Singapore consumer price index (absolute), 2015-19
Table 17: Singapore exchange rate, 2015-19
List of Figures
Figure 1: Singapore organic food market value: $ million, 2015-19
Figure 2: Singapore organic food market category segmentation: % share, by value, 2019
Figure 3: Singapore organic food market geography segmentation: % share, by value, 2019
Figure 4: Singapore organic food market value forecast: $ million, 2019-24
Figure 5: Forces driving competition in the organic food market in Singapore, 2019
Figure 6: Drivers of buyer power in the organic food market in Singapore, 2019
Figure 7: Drivers of supplier power in the organic food market in Singapore, 2019
Figure 8: Factors influencing the likelihood of new entrants in the organic food market in Singapore, 2019
Figure 9: Factors influencing the threat of substitutes in the organic food market in Singapore, 2019
Figure 10: Drivers of degree of rivalry in the organic food market in Singapore, 2019

Organic Food Industry Trends in Singapore

(taken from a Channel NewsAsia Interview with Peter Lim, CEO of Nature’s Glory Singapore from Oct 6, 2009)

Considering the challenging economic environment, how has the organic food industry in Singapore weathered the storm?

The economic crunch and uncertainties of the past one year have also affected some jobs and income in the upper middle and upper income groups. These are the people who could afford to buy and value the more expensive organic food.

The organic food industry in Singapore could have been seriously affected as people may tend to turn to the cheaper non-organic food. However, those who believe in organic food recognise they must remain healthy and productive to meet the job and business challenges of better times. But there are those who have no strong conviction on organic food and are swayed by recent questionable reports from the UK that organic food has no appreciable nutritional differences from conventional food. Overall, the organic food industry could have dropped by less than 10%.

What kind of growth as an organic food business you have experienced since inception? 

Nature’s Glory is among the pioneers since 18 years ago on organic food. Business was very slow as many did not appreciate the importance of organic food for better health. To most people, the organic food was 3 to 7 times more expensive than conventional food.

But over the last 5 years, people are more receptive and discerning to organic food primarily due to 3 basic reasons:

There was a growing worldwide organic movement and local Singapore media had also created more awareness. Second, degenerative and terminally ill diseases were on the rise in spite of medical advancements. Such diseases are traced to toxins and to potential dangers in pesticides, hormones, chemicals and genetic modifications. Third, price of organic food had generally fallen and Nature’s Glory played a key role to moderate the prices in its health mission

for the nation.

Growth over the last 5 years could be easily between 50 to 100% to some companies with many organic food players coming into the Singapore market. But this growth is really insignificant compared to the growth of conventional food.

For example in Australia, organic food over 20 years is only about 2% of the total market. If the total market is (say) $100 million, theorganic share of 2% is only $2 million. If organic business increases by 100%, the increase is only 2 million. But if the increase in conventional food is only 10%, the growth is almost $10 million compared to the 100% increase or $2 million in organic food.

A number of companies which came into the organic food industry in Singapore hoped for big increases in business but realised the domestic market here is very small and highly competitive, and shared by a number of companies.

What are your growth and expansion targets going forward?

Singapore depends mainly on the organic imports from traditional sources such as Japan, Australia, USA, Europe and New Zealand. It is expected that more Asian countries including China, Taiwan, India, South Korea and Asean may open up more organic farms to comply with international standards.

As such, they have more opportunities to explore potential markets to compete on quality, pricing and technology and earn organic integrity and public confidence and trust. As such, prices could become cheaper including reduced freight cost, with more people coming forward to support the organic movement for better health.

But big powers may persist to influence regulators and to swing consumers to believe that organic food is no different from conventional food. Even some studies could make us so confused that we lose our discerning power on the health benefits of organic food. Political powers elsewhere may influence legislators to dissuade the rising influence of the organic movement to protect their selfish conventional business at the expense of health.

Although within the organic food industry in Singapore, the market size may increase by 20% or more annually, because of more players coming into the small domestic market in Singapore compared to other countries of bigger population, the increase per company may not be substantial with the exception of a very few.

Also, the operational cost in Singapore is considerably high compared to neighbouring countries to have a meaningful return on investment.

Nature’s Glory positions the organic challenge as a health mission rather than a profit mission, with passion and personal touch.

Where do you mainly see demand coming from and what?

The demand for the organic food industry in Singapore will continue to come from the upper middle and upper income groups who are financially sufficient and better informed about organic health. They are the ones who can afford to invest in long term health. Those who are less financially off may turn to pesticide free produce but are not considered organic in the strict standards of organic discipline.

The second group are the degenerative and terminally ill people who turned to organic food as a last resort to restore their health.

The third group are the children where parents are prepared to sacrifice and save on themselves but invest on their children’s long term health welfare. Demand on organic fresh and dried products will increase, followed by organic toiletries, skin care and meats. The demand for organic meats will rise due to the concerns of genetic modifications and cloning, hormonal growth, antibiotics and chemicals.

What is it that you think attracts consumers to organic produce in Singapore?

There are at least 7 main reasons why consumers are attracted to organic

products:

  1. Organic products promote better health as conventional products have harmful toxins traced to pesticides, preservatives, additives and chemicals. Studies confirmed that many diseases including allergies, hypersensitivities and stress could be linked to these toxic elements including skin care products.
  1. They have generally more nutrients arising from organic and natural ingredients on the soil instead of using chemicals. Many independent tests have substantiated the higher nutrients.
  1. They have higher Qi or energy level which is one of the keys of organ optimum health against the invasion of pathogens and toxins. The produce has higher energy levels to defend itself and to benefit the humans. In contrast, conventional produce with a heavy dose of chemicals will generally weaken the produce and translate to our body.
  1. They have better, natural and original taste compared to conventional food as the latter uses the same chemical components for most produce.
  2. They do not have genetic modifications and studies confirmed that genetic  modifications contrary to nature, have the potentiality to lead to abnormal growth in our bodies. Most organic certifying bodies do not advocate GMO.
  1. They do not have hormones, chemicals and antibiotics as commonly found in animals that are raised conventionally. Even in these days, meats and dairy products could come from cloned animals and offered for public consumption in a variety of food preparations, and many are ignorant as no proper labels are required to state the truth.
  1. They promote an eco-balance system and environmental health for wildlife and humans. Organic cultivation does not pollute drinking water and the soil and for wildlife to grow with good balance. Environmental pollution will only lead to more global warming. The public must know that pesticide free produce is not organic food and cannot be claimed as such. 

Organic requires strict organic farming discipline in maintaining records, from seed, soil, storage, shelf, transit, water analysis and shelf life, all chemical free with no genetic modifications or cloning right from the seedlings. If the seeds are genetically modified and even if the crops are cultivated by organic farming, they are not deemed to be organic in strict integrity.

The best way to trust organic integrity is by way of respectable independent organic certifications that meet high international standards and not to compromise to governmental standards.

These are the best organic grocers in Singapore to shop at

We admit that even most neighbourhood supermarkets are stocked with a mind-boggling array of goods but sometimes all you want are honest produce and products that offer complete food traceability for a peace of mind.  

Each well-stocked with fine foods and specialty products that cater to even the most niche of allergies, these organic grocers in Singapore make it possible for anyone to whip up a worthy meal without worry, guilt, or anxiety. Besides, you’re not only living better, but also doing our planet a favour —these organic products play a massive part in resisting the use of pesticides and unethical farming. 

Whether you’re looking for the best cut of Australian beef or the fluffiest gluten-free bread, these are the best organic grocers in Singapore to make a grocery stop at. 

1

Scoop Wholefoods

Best described as the ultimate wonderland for health food nuts, Scoop Wholefoods has made its first foray out of Australia in Singapore, and specialises in retailing organic natural products by weight. This unique concept not only minimises food waste, but also allows you to get hands-on with your food.  

Here, you’ll find everything from a organic cold-pressed oils and vinegars, dried fruits, chocolates, and nuts that would be otherwise impossible to find locally. Those seeking gluten-free foods will find a selection that ranges from flours and pastas, while tea lovers will revel in the range of loose leaves and dried florals for unique blends.

The fun continues with the DIY nut churner (fresh peanut butter does exist), a Fermentary section for all your probiotic needs, and a DIY section to make your own soap bars and body scrubs. Fresh kombucha is also on tap here via local brand Fizzicle.

163 Tanglin Rd, #02-17/18 Tanglin Mall, Singapore 247933

sg.scoopwholefoods.com

2

Little Farms

Fresh, high-quality organic produce that are also sourced ethically isn’t something you come across here everyday, but Little Farms is looking to change the way people shop. The grocer stocks up on not only a range of gourmet products — plenty from Australia — but also fresh deli and bakery items at its adjourning cafe, many of which are gluten-free. 

Avo-toasts die-hards can now stock up on the best avocados from Australia, flown in by air instead of sea-freighted to ensure they’re picked at their best. On the meat front, expect antibiotic- and hormone-free choices, of which you can also enjoy in salads and sandwiches at the cafe. 

491 River Valley Road, Valley Point Shopping Centre, #01-20, Singapore 248371

littlefarms.com

3

Supernature

Supernature is established by the Como Group, so you can expect top-of-the-range products that span from fresh vegetables and meats, to children’s needs and wellness products. Like Little Farms, only the most ethically sourced organic produce are procured, all of which are delivered everyday for freshness. 

Besides a butchery that carry premium cuts of Australian and New Zealand free-range meats, the store is also a treasure trove for those with special dietary needs, offering a large range nut-, dairy-, gluten- and egg-free products.

583 Orchard Rd, Forum The Shopping Mall, B1-05/09, Singapore 238884

www.supernature.com.sg

4

The Organic Grocer

With a team that consists of experienced grocers who work closely with trusted farms and suppliers, The Organic Grocer have supplied people with only produce that boast sustainable farming practices that adhere to certification requirements. Here, you’ll find a good mix of wholesalers, as well as local and international brands which stock everything from produce to pantry staples.  

Those who seek a bit of spontaneity can order the grocer’s Value Boxes, which see a week’s worth of fruit and vegetables delivered to you, depending on the seasonality and region. 

203 Henderson Road, #05-03, Singapore 159546

theorganicgrocer.com

5

Brown Rice Paradise

Established in 1994, the store has been one of the pioneers in providing natural and organic food and household products in Singapore. Those looking for a bit of indulgence will find plenty of “junk health foods” (think energy bars, breakfast cereals and organic popcorn) from the U.S that are otherwise elusive elsewhere. 

The store also caters to those with skin sensitivities via a large range of specialty organic soaps and toiletries. 

163 Tanglin Road, #02-35 Tanglin Mall, Singapore 247933

www. mybrp.com.sg

 

Present and Trends – GreenNet

Organic Market in Singapore : Present and Trends

Singapore is an island country, with only 701 square kilometer land but with population of over 4.5 million. Singapore thus has little land for agriculture, currently less than  2,150 ha, or around 3% of the country’s land. Almost all foods must be imported, either within the region or as far away as Europe and North America.

In the last 10 years or so, some Singaporean consumers began to take interest in healthy food, especially those with family members suffering from serious illness, like cancer and heart diseases. These consumers believe that consuming organic foods help to improve the health and immunes. Another group of consumers is the the expatriates working in Singapore. These consumers are already having well-being lifestyle before coming to Singapore. This lifestyle consists of modern exercise like yoga, meditation, and health food consumption. Many middle and high income Singaporean also adopts this lifestyle, thus expanding markets for healthy organic foods. New generation of Singaporeans studying or living abroad has also taken similar lifestyle back to Singapore when they return home. The latest, but perhaps the biggest, group is the young families with children where parents buy organic products for their children with the belief that the children would grow up healthily. The recent food scares and new international diseases like SARS and bird flu further enforce the belief of healthy foods and lifestyle.

Organic Markets in Singapore
The organic market in Singapore began since early 1990s by health shops importing organic products for sale in their shops. These shops are specialty shops offering functional foods and foods supplements. Some of these shops are specialize in organic textiles and clothes made from organic cotton. In the last 4 – 5 years, supermarkets started to enter into organic markets, including large supermarket chains like NTUC FairPrice and Cold Storage. Currently, there are around 23 organic shops and 4 supermarket chains selling organic products. Also, some coffee shops and restaurants claim to offer organic menu but they seem not to be so successful.

The size of organic markets in Singapore is unclear. So far, there are at least 4 market researches that conduct study about Singaporean organic markets, i.e. USDA (market study in 2000), Agri-Food Trade Service (market study in 2002), Department of Primary Industries (market study in 2006) and Victoria State of Australia (market study in 2007). The following table show various estimates of market size.

Year Market Size Note Reference
2000 US$ 3. 5 million organic food market Stanton, Emms & Sia 2001
2002 S$ 8 milion not include organic non-food Converging Knowledge 2004
2006 CA$ 35 million organic food & beverage Agri-Food Trade Service 2008
2007 US$ 4.7 million organic market Department of Primary Industries 2007
2009 US$ 4.6 million organic market from industry survey by VItoon Panyakul (2010)

It is interesting to note that market estimates are quite consistent except the Agri-Food Trade Service (2008) which seems to be excessively higher than others, almost 10 time. From the industry survey at the end of 2009, the market seems to shrink slightly from 2007/08 level due to global economic recession. Therefore, the market is likely to be valued around USD 4.6 million.

Organic Trends in Singapore
With the openness of the country, Singaporeans have accepted modern way of life into its daily living. Though local traditions are maintained but only small part. The consumption trends in Singapore thus likely to follow western with increasing demands for quality and convenient products.

The implications of quality products here include cleanliness, safe, good taste, as well as having credible certification, and nice packaging. Convenience for consumption implies processed foods that can be consumed with little preparation and small packed size (as family size is quite small).

Interesting organic products for Singaporean markets include:

1) Organic fruits and vegetables
Market potentials are limited because there exist already various organic vegetable suppliers from within the region (e.g. Singapore, Malaysia, Indonesia and Thailand) as well as imported fresh vegetables from Australia and US. The markets for organic vegetables thus seem saturated compared with present demands.

The organic fruits appears to have a better opportunity, especially tropical fruits as supplies are still quite limited or the existing supplies are not high quality and limited diversity. Interesting tropical fruits are papaya, pineapple, water lemon, passion fruits, star fruits, pamelo, guava, longan and lychee. The first three perhaps are the highest demand as they are served in all hotel and restaurants.

From the interview with Singaporean importers, quality factors are of importance for the success of organic fruits in Singapore. Such quality factors include (a) the creditability of the organic certification for consumers and importer-distributor, preferably those with international recognized standards like IFOAM; (b) fruits that are picked when they almost ripen, not too young harvest, as eating quality is significantly different; and (c) the package with easy handling and good protection of the fruits both during transportation and retailing

2) Rice and grain
Similarly, this product groups are quite saturated already in the Singaporean organic market. It is interesting to note that more imports of wholegrain rather than white rice as the Singaporean markets seems to be more keen on healthy foods and the government is also promoting wholegrain rice as healthy food choice.

Other organic grains and cereals like barely and oat are also being imported by many traders and thus no longer interesting products as competition is high.

3) Processed foods
Processed foods seem to be the most interesting product category for Singaporean market at present as the demands are still very high. With the increasing need for convenience, Singaporean consumers would likely to demand more processed foods. Though there are already many imports of this food category but there are still many gaps, especially baby food products and other new innovate foods. Interesting products are ready to drink fruit juice, snacks, breakfast cereals, and infant baby foods. To capture the Singaporean markets, these foods must also be healthy and good taste.

4) Food supplements
Organic food supplements, either pro-biotic and pre-biotic, are the new trends for Singaporean consumers, similar to those happening in developed countries. There seems to be few products of this category currently sold in the markets and thus high market opportunities exist.

5) Cosmetic and body care products
This product category is an emerging trend in Singapore, especially those for women and children. Singaporean consumers believe that organic cosmetic and body cares are better quality and has low risk of irritation. Though these products are already quite wide range but the Singaporean importer-distributor  feel the existing products are designed for Westerner skin, not Asian skin, and thus market opportunities exist.

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    Organic Food Trend in Singapore

    The brand-new study by the Organic Display named The World of Organic Farming: Statistics & Emerging Patterns 2010 reported that the global natural sales reached $50.9 billion in 2008, double the $25 billion taped in 2003. Projected growth is between 20 and 30 percent, worldwide. Looking for the best organic food trend? Check this site best Italian restaurant Singapore.

    The organic food pattern, which began in the 70s as a response to the prevalent use of agrochemicals in food production is now a significant player in the food production and is not merely a niche anymore. The pattern incorporates customers, agricultural manufacturers, food suppliers, farmers, and affects even the financial market. Look no further and check this page, best places to eat in Singapore.

    Organic agriculture began as regional phenomena, people growing food mostly for themselves and their neighbors. This trend turned into increasing popularity of little local producers, which could produce healthy, fresh food on a small scale for an affordable price. Looking for the most food for your money? Check the best affordable restaurants in Singapore.

    A lot has changed because. In 2008, land farmed naturally on the planet totaled 35 million hectares. 1.4 million producers from 154 countries planted this acreage. The location of organic farming land increased all over the world by 9 percent compared with 2007. The bulk – 22 million hectares – were grassland. More than 8.2 million hectares were used for cropland. Practically 31 million hectares that are organic are wild collection locations and land for beekeeping. Looking for the most affordable Italian restaurant Singapore? Book your table now!

    The areas with the most prominent location of organically handled land are Oceania (12.1 million hectares in Australia, New Zealand, and surrounding island states), Europe (8. 2 million hectares), and Latin America (8.1 million hectares).

    Spire Research study and Consulting together with the S.P. Joint Center of Management, Singapore, published the results of their research study, which found that, from the small market in 2002 worth just about S $10,000, organic market grew to S$ 68 million in 2008. This growth pattern is anticipated to continue at the rate of 20 to 30 percent each year.

    Although the rate of organic food in Singapore is about 112 percent higher than the price of the same produce grown typically, this did not hinder the loyal organic consumers. When spoken with, they stated that the recession did not require them to change their practices. Their reason for picking organic food was the same as in the rest of the world: health safety, exceptional taste, environmental concern and fashion consciousness.

    The study found that the natural market in Singapore still includes high and middle-income locals and expatriates, and to continue growing to have to reach the mass market. The recommended step is to introduce government certification of local organic growers, to increase the self-confidence of buyers.

    According to the CNN, organic food continued appeal trend parallels other similar patterns, all related to the increased health issues of average customers: sluggish cooking, vegetarianism, flexitarians (primarily plant-based diet plan), locally grown food and functional foods (foods with added value like vitamins).

    The healthy consuming is not the only factor for the constant appeal of organic food. There is also an increased search for a healthier way of life, specifically amongst baby-boomers, who are reaching retirement age and searching for more meaningful existence. Numerous are choosing organic farming, to live and to feed themselves. For more related articles about organic food trends, check out this link Italian Food Singapore.

    90,000 How to find your place in the global organic trade? (APK-Inform: RESULTS No. 12 (66))

    Maria Makhnovets,

    consultant and expert in organic trade, head of the board of Ukrainian Organic Cluster

    The development of the organic market in Ukraine is significantly influenced by global trends. And we are talking here not only about food products, but also about cosmetics, textiles and home care products.The market for organic products has been growing steadily in the world over the past more than 15 years, thereby setting the pace for Ukraine.

    According to FIBL, in 2017, the European and international organic sector saw large areas and market growth. In Europe alone, organic sales grew by about 11%. In 2017, 14.6 million hectares were cultivated under organic farming in Europe (12.8 million hectares in the EU). The total organic area in Europe has grown by about 1 million hectares and by 0.8 million hectares in the EU. This means that the increase in acreage occurred by 7. 6% in Europe and 6.4% in the EU.Organic land accounts for 2.9% of total agricultural land in Europe and 7.2% in the EU.

    Number of manufacturers in 2017:

    90,020 90,021 Europe – 390 thousand (up 7%) 90,022
    90,021 EU – 300 thousand (4% growth) 90,022

    As in Europe, the positive organic trend continued globally. At the end of 2017, a total of 69.8 million hectares of agricultural land were cultivated organically. This is 20%, or 11.7 million hectares more than in 2016, and, therefore, represents the highest increase among others previously recorded.

    Globally, 1.4% of agricultural land is managed according to organic regulations, and in 14 countries this figure was just under 10% in 2017. In addition, the area of ​​agricultural land under organic production has increased on all continents.

    International retail sales in 2017 were $ 97 billion (approximately € 90 billion).

    For example, every fifth new food or drink on the German market is organic.

    According to the Organic Food and Beverage Federation (BÖLW), the organic food and beverage market grew by around 5.5% in 2018, bringing the total market to € 10.91 billion.

    It should be noted that most of the organic products produced in Ukraine are export-oriented, and the domestic market is developing slowly without proper support from the state.

    It is the EU market, together with Switzerland, that is important for Ukraine in the trade of organic products and occupies more than 80% of the share of organic exports.Geographically, it is the closest to us constantly developing “solvent neighbor”.

    As you know, Ukraine is currently on the 4th place in the TOP-5 suppliers of organic products in the EU. And if you look at the structure, to a greater extent these are raw materials for the feed and food industries.

    Considering the fact that the bulk of imports to the EU from Ukraine are legumes, oilseeds and their processed products (sunflower meal or oil), we are highly dependent on fluctuations in European purchasing prices for organic raw materials.

    Today, the consequences of such fluctuations in the EU are felt by Ukrainian agrarians too sharply. According to exporters and importers, prices for organic crops have dropped almost to the level of conventional products, and there is almost no demand for some of the commodity items in the EU. Certain organic producers from Ukraine, in order to stay afloat, were forced to sell part of their products in the domestic regular market in 2019.

    What caused such price changes in the EU market?

    First of all , this is a targeted EU policy Common European Agricultural Policy (CAP) over the past 6 years to support organic production in member countries through subsidies per hectare, covering certification costs in some countries, advisory support and government purchases.

    This year, Felix Prinzzu Löwenstein, CEO of the German Federation of Organic Food Industry (BÖLW), noted that Common European Agricultural Policy (CAP) needs to be gradually restructured so that farmers pay for services they need from society and for which the market does not pays farmers. To this end, 70% of taxpayer money in the future will have to be paid to farmers who voluntarily do more for the environment, climate and biodiversity.

    Secondly , the increase in the area under the production of organic crops in the EU, which began a few years ago, and the competition from neighboring countries. All this created an excess of organic raw materials on the market. The market for organic sellers has turned into a market for buyers, where supply today significantly exceeds demand, and the number of countries – sources of organic supplies to the EU is increasing from year to year.

    According to estimates, the share of German organic lands increased by 109.863 thousand.ha (plus 8%) – up to about 1.5 million ha in 2018. 1,727 farms started organic farming last year. At the end of last year, according to BÖLW, almost 12% of farms were organic, with a total of 31,122 farms in Germany organic.

    Thirdly , the promotion of conscious consumption among the population by states and public organizations contributes to the development of the organic environment in the EU, that is, consume and use locally grown products in processing to the maximum, reduce carbon dioxide and methane emissions into the atmosphere and provide everyone a resident of affordable organic products (organiconeverytable). This means that a ready-to-eat Ukrainian organic product, when calculating all costs of production, delivery and marketing, is not always competitive in comparison with the European one.

    The very fact of price reduction for agricultural producers in the EU is obvious. In addition, each market tends to “overheat” with the subsequent balancing of yields, prices and, over time, equalization of supply and demand.

    Under such conditions, organic producers in the EU are not afraid of temporary price reductions, because they always have support from the state and a long-established positive image in sales markets in other countries.

    Organic farmers have not been associated with super-profits for a long time in European agrarians . This is the same business as traditional production, and on the other hand, it is an opportunity for the development of small and medium-sized local agribusiness at a level with large transnational holdings. It follows that, in order to be more protected from risks, to dictate their rules to the state and during price fluctuations to be flexible and adaptable to the new whims of consumers in the global market, such producers began to unite in cooperatives at the regional and national levels, cluster organizations began to work. This allows organic companies from the EU to occupy an important place in global trade today.

    But is there an opportunity for a Ukrainian organic producer to become a global player, and what markets should companies start exploring in the future, other than EU countries?

    The largest organic markets in the world should be considered (according to the FIBL, 2017 figures):

    1. USA – € 40.0 billion
    2. Germany – 10 billion euros
    3. France – 7.9 billion euros
    4. China – 7.6 billioneuro

    The USA is the largest organic market in the world and thus attracts Ukrainian organic exporters.

    According to the Organic Industry Survey 2019 (Organic Trade Association), the US organic market in 2018 for the first time crossed the $ 50 billion mark = $ 52.5 billion (sales).

    Organic food sales reached $ 47.9 billion. 5.7% of the food sold in the country is organic.Fruits and vegetables account for 36. 3% of all organic food sales. Organic fruits and vegetables account for about 15% of all fruit and vegetable products sold in the United States. The volumes of frozen, canned, dried vegetable and fruit products also increased. Sales of the second-largest organic category, dairy and eggs, were $ 6.5 billion in 2018. Although growth in the US dairy sector has slowed slightly for the second consecutive year, mainly due to changing trends in nutrition and diets (lactose free, etc.)etc.).

    Many millennials, which are today the main driver for the development of the organic market, have also switched from animal products to plant-based food and beverages. Experts say that in order to meet the needs of today’s consumers, innovation in the organic dairy sector and in the food industry in general is essential. So in 2018, the industry responded to consumer demand for higher protein dairy drinks, fuller-fat dairy products, new flavors and plant-based foods.The demand for vegetarian and vegan products, as well as products free of gluten, lactose, preservatives and genetically modified toxic substances, etc. growing every year.

    Despite the large numbers, which are an indicator of the development of the US market, experts note that the production of organic products in the US is still insufficient to meet all consumer demand, so the country is becoming more dependent on imports every year.

    Total imports of organic products in the USA in 2016, mln USD

    Product

    2011

    2012

    2013

    2014

    2015

    2016

    Annual dynamics

    Coffee

    526.1

    282.9

    253.3

    332.6

    344.5

    313.1

    -4.28%

    Soybeans

    41.8

    90.2

    110.2

    184.2

    240.2

    250.5

    40.63%

    Bananas

    258.8

    122.6

    198.4

    209.9

    11.49%

    Olive oil

    165.6

    148.6

    197.2

    191.8

    7.85%

    Corn

    36.6

    35.7

    112.7

    160.4

    111.09%

    Wine

    256

    121.5

    90.8

    87.1

    -28.55%

    Honey

    11.2

    13.2

    46.1

    47.5

    73.6

    64.83%

    Avocado

    17.2

    13.1

    18.9

    37.1

    45.1

    72.7

    42.83%

    Apples

    5.7

    12.1

    14.9

    29.8

    67.8

    63.7

    33.63%

    Sweet pepper

    8

    9.3

    18.1

    19.4

    25.1

    49.4

    n / a

    Sugar

    47.7

    n / a

    Almond

    16.7

    41.6

    58.7

    39.6

    31.77%

    Tea

    37.2

    34.8

    42.1

    31.4

    37.8

    39.6

    0.93%

    Blueberry

    2.9

    3.5

    6

    6.2

    8.4

    25.4

    n / a

    Rice

    24.4

    25.4

    30.1

    24.1

    24.4

    22.1

    -2.30%

    Mango

    100.7

    38.5

    28.8

    17.1

    -38.73%

    Pear

    3.7

    4

    6

    11.5

    21

    13.1

    n / a

    Wheat durum

    0.7

    9.5

    16

    16.7

    15.7

    12.7

    n / a

    Ginger

    9.6

    19

    12.2

    10.7

    0.16%

    Linseed oil

    2.4

    5.5

    6.9

    9

    67.41%

    Garlic

    1.4

    2.7

    2

    5

    n / a

    Barley

    0.8

    n / a

    Quince

    0.2

    0.1

    n / a

    TOTAL

    667.7

    496.3

    1 376.80

    1 274.80

    1 585.10

    1 714.40

    Source: USDA

    According to the GATS system, which takes into account the origin of goods and tracks certain positions of organic goods, for which separate nomenclature codes are allocated, since 2014, organic soybeans of Ukrainian origin have been consistently supplied to the United States, along with some supplies of organic durum wheat, barley, honey and flaxseed oil …But do not underestimate other commodity items, such as sunflower oil, which do not have a separate organic code in the US nomenclature.

    Since 2016, the situation has somewhat changed for some items, but not for soybeans. In 2018, almost 45 thousand tons of organic soybeans of Ukrainian origin were shipped to the United States.

    Today in Ukraine there are 52 organic enterprises certified according to NOP (National Organic Program – USDA) .Almost all of them are producers of organic raw materials, but not all of them are aware of the commodity prospects and restrictions in this market. Most often, it happens that it is foreign traders who resell organic products from Ukraine to the United States.

    Also recently, the US introduced a 25% import duty for more than 150 items originating from the EU.

    Among them it is possible to define such categories of goods as:

    – cheeses;

    – yoghurts;

    – meat;

    – biscuits and waffles;

    – juices, etc.d.

    It should be noted that goods from this list are subject to a zero import duty rate in the United States for goods from Ukraine.

    This means that Ukrainian organic products with added value may well take the place of goods from the EU.

    Competition, according to GATS, in the US Ukrainian market today is Canada, Argentina, China, India, Romania, Turkey and Serbia.

    Indeed, some data on imports of large volumes of organic corn and soybeans originating from small Serbia, which is mainly engaged in the cultivation of fruits and berries, is somewhat alarming and causes many questions and suspicions among the knowledgeable organic community.

    Several years ago, a scandal thundered all over the world regarding the import of large volumes of pseudo-organic corn and soybeans from Turkey originating from Ukraine, Russia, Kazakhstan, Moldova and Romania with forged documents. This scandal caused massive losses to the organic industry in the United States, and the perpetrators on both sides were severely punished, and Ukraine and the above countries began to adhere to additional control measures. Therefore, on the way to conquering the US market, one should come to terms with the fact that the path to conquering the US organic market will be thorny and buyers will treat Ukrainian organic producers with greater care.

    The next largest organic market (after Germany and France), with which the Ukrainian organic exporter is not sufficiently familiar, is the Chinese market.

    In view of the fact that the marginality of export of domestic organic raw materials to the countries of the European Union is gradually falling, Ukrainian producers must now look for alternative and more profitable sales markets. China may become one of the options for exporters.

    China is one of the three largest countries in the world in terms of the area of ​​cultivated organic products – over 3 million hectares (6/10 of the total area) and is one of the largest producers of organic agricultural products.The market for packaged organic food and beverages is almost $ 3 billion. Per capita spending on organic products is $ 2, while in Ukraine it is $ 0.68. And the greatest demand among the Chinese is organic milk – 71% of sales fall on this product.

    A few years ago, the PRC was generally not perceived as a strong competitor in this niche – no one thought that the area of ​​certified land would grow so rapidly. But the Chinese government has begun active work, including towards the transition of consumers to natural food, without chemicals.As of the end of last year, 6308 certified organic producers and 3865 organic processors were registered in the Celestial Empire. China is one of the largest producers of organic legumes – they now occupy about 330 thousand hectares, grain crops – 900 thousand hectares, and organic fruits – 22 thousand hectares. The production of organic aquaculture is growing (in 2016 – 620 thousand metric tons), and over the years the industry has grown by as much as 49%.

    Almost all organic products are exported: according to the latest data, there are 1,198 organically certified exporters and 66 importers in the country.

    In the near future, these numbers will at least double. China is actively expanding its organic markets – it works for North America and Japan, EU countries, etc. Among the most popular organic products from China are honey, soybean powder and meal, beans, sesame seeds, walnuts, pumpkin seeds, as well as various vegetables and fruits, poultry and aquaculture.

    Dairy products and eggs are the most popular among the people of China. The segment of sales of baby food is actively growing.

    Chinese consumers rely more on overseas organic products than those grown or produced in China. And in this context, they are somewhat similar to Ukrainian consumers. Best of all, the Chinese buy organics from the EU, Australia, USA or New Zealand.

    Therefore, Ukrainian organic producers in this market should consider a few tips:

    • In addition to the country of origin, it is important to indicate all available international standards according to which your products are certified.
    • It is important to pay attention to product packaging – it should be simple, understandable for them and interesting at the same time. There is a very large selection of goods in China, therefore, in order to buy your products, you will have to be creative and work hard.
    • Putting a product on the shelf is not enough – it is worth constantly working on marketing, promotion, advertising on the Internet and local social networks.
    • The image, quality and reputation of the exporter must be impeccable, and deliveries to the PRC must be cyclical.
    • The product must meet all the requirements of this country for quality and safety. The product must have a long shelf life.
    • Chinese buyers are sensitive to the cost of an organic product – it must be competitive.
    • The costs of import and customs clearance are quite significant, so it is important to check how these costs will increase the value of the product on the shelf in China.
    • Try yourself in online trading. Most organic products are sold through supermarkets and hypermarkets.Internet commerce and e-comerce are actively developing.
    • Distributors are generally regional, not national, and it is important to find someone who has a good reputation and can really help you. This is a real challenge, because the reputation of Ukraine as a supplier of organic products has not been formed there, and therefore it can be difficult to come to an agreement.

    List of products that may be of interest to the Chinese market: food for children and oatmeal, dairy products, snacks and functional foods, alcoholic and non-alcoholic beverages, healthy and vegetarian food, innovative products that are new to the Chinese consumer, products according to traditional recipes , processed finished goods for expats, vegetable oil, cereals needed for processing, fruits and vegetables non-traditional for China, pet food.

    The next market after China is the Canadian market, about which I wrote earlier for APK-Inform .

    During this time, some manufacturers have passed COR (Canadian Organic Regime) certification and can supply organic products to Canada. At the moment, organic trade between Ukraine and Canada is slowed down by the lack of knowledge by Ukrainian organic exporters of most of the general requirements for the export of food products to Canada, restrictions by the Canadian Food Inspection Agency, long distances, a weak image of organic products originating from Ukraine, a rather poor network of contacts and unsettled relations with potential importers in this market.

    Canada may be interested in the following categories of organic products:

    • Juices and drinks, jams, marshmallows, honey
    • Dried and frozen vegetables
    • Sauces, ketchups
    • Vegetable oil extract
    • Ready-made cereals and pasta
    • Dairy crackers, snacks and pastries
    • Corn and soybean
    • Frozen berries

    Another undervalued market for Ukrainian organic suppliers, in my opinion, is the Middle East market.

    The organic food and beverage market is expected to reach $ 18.42 billion by 2022, showing a 14.4% CAGR growth since 2015. Growth is seen in various sectors such as retail, wholesale and HoReCa.

    The growth in consumption of natural and healthy food and beverages has been significant, driven by a 60% increase in retail shelf space over the past 5 years. The UAE recorded an astonishing 200% increase in purchases as of 2016.

    The Middle East has the fastest growing demand for food and beverages, driven by an ever-growing population.

    Estimated imports of food from the Persian Gulf countries by 2020 will amount to $ 53.1 billion, with most of them importing about 70-90% of food from everywhere.

    The population is mainly composed of immigrants from countries with a history of healthy lifestyles and culinary traditions. They are moving towards healthier, natural and chemical-free foods.The UAE in this direction is the business center of the region, since 2019 it has seen an increase in competition to promote healthy food for young people, encouraging retail chains to purchase more and more natural and organic FMCG products.

    In addition to the above-mentioned markets, Ukrainian Organic Cluster compiled a list of markets that may be of interest to a Ukrainian organic producer to find their niche in the global organic trade.

    Challenges of the present to conquer new markets

    • Lack of consolidation of organic players and unwillingness of competitors to conquer the markets together.
    • Minimum government support for small and medium organic farmers.
    • Focusing on the export of mostly organic raw materials to the EU market, which dictates its own prices and rules of the game.
    • Low awareness and purchasing power in the domestic market for finished organic product.
    • Slow growth of the middle class.
    • “Expensive” money to invest in new technologies and cover risks in new markets.
    • Unaware of new products, markets, consumer needs and the export success story of agricultural producers in the traditional industry.
    • Few competent sales specialists in organic enterprises.
    • Provision of services and consulting in the organic sector at a low level.
    • Low willingness of the organic business to systematically operate in new markets and invest in expansion.
    • Science in agro is divorced from the realities of the organic sector.
    • The MadeinUkraine brand still does not have the desired value for the foreign buyer and consumer.

    To stay up-to-date with the latest organic developments, follow us on Facebook @organicoopproducts and follow us.

    Ukrainian Organic Cluster is a platform for local and global development of organic business in Ukraine.

    New markets and interesting business insights are ahead! Moving Organic Together!

    90,000 When the organic market will flourish in Russia

    Photo: David Williams / Bloomberg

    The market for organic products in Russia and the world is growing many times faster than the rest of the food retail.Despite the high risks, this direction is already profitable, and subsequently the market volume will only grow.

    World practice

    By 2020, the global market for organic products will grow by 16% and amount to € 143 billion, according to the study “Prospects for the development of organic agriculture in Russia” by SBS Consulting analysts. According to them, the growth in consumption of organic products is twice the growth rate of the food market as a whole.

    The principle of organic farming implies fertilizing the land, controlling weeds and pests using exclusively natural substances and methods. Organic farming also implies the rejection of the cultivation of genetically modified species.
    The leader among countries in the consumption of organic products – the United States – occupies about 43% of the market. The top five also includes Germany (11%), France (9%), China (8%) and Canada (3%). These countries account for more than 70% of the organic market in the world.

    The EU countries are considered to be the leaders in terms of per capita consumption. It is here that people tend to add healthy foods to their diet and are ready to pay extra for it – a similar product produced in the traditional way is 30-40% cheaper. According to SBS Consulting experts, consumption is still far from saturation, this market will grow, as the cost of organic products will decrease.
    Until 2010, the main factor limiting the development of the market was the low rate of land commissioning for organic farming – they simply did not exist.By 2017, already 1.4% of all world arable land was given to organic farming. In a number of countries, the share of such land reaches 10% of all farmland.

    Organic market in Russia

    The demand for organic products in Russia is several times higher than the supply. Thanks to this, a high premium to the price is maintained: in Russia it reaches 300%. The main consumers of organic products are the well-to-do strata of the population who are ready to overpay for “healthy food”. Therefore, all participants in the chain – from farmers and importers to retail chains – remain in profit due to the high margin.

    Subsequently, the authors of the study assure that the premium to the cost will decrease due to the growth of domestic production, the normalization of legislation and an increase in citizens’ awareness of organic products. In the future, the markup to the cost of products produced in the traditional way will drop to the level of developed countries (about 15-50%).

    In general, the demand for organic products in Russia is growing faster than the global demand – by 23% per year. Despite these rates, the share of organic products in Russia so far accounts for only 0.1% of the country’s entire food market.As noted in a study by SBS Consulting, only 1% of Russians buy organic fruits and vegetables. Experts expect this share to grow in the future.

    Advantages of organic farming in Russia:

    • organic products have a high margin;
    • low cost of labor resources, thanks to which domestic producers can be highly competitive in international markets;
    • a large number of inexpensive fertilizers are presented in Russia;
    • logistically, Russia is much closer to the European market than China;
    • Russia has a high export potential – now every third manufacturer is an exporter.

    What is holding back the development of organic farming in our country:

    • high risks associated with the dependence of the crop on natural conditions;
    • 90,021 mass demand for more expensive products is localized only in developed countries;

    • the need for investments, special equipment and personnel skills;
    • lack of seeds and planting materials. In Russia, the share of imported seeds for organic matter is 30–90%;
    • 90,021 shortage of qualified personnel;

    • weak support from the state.
    • 90 025 90 000 Organic – are Russian fields a berry? The volume of the domestic market for organic products is estimated at $ 250 million already in 2020 – Agroinvestor Magazine – Agroinvestor

      Shutterstock

      From the beginning of the year, the federal law on organic agriculture came into force. The document is aimed at creating conditions for sustainable development of eco-production in Russia.So far, the segment is not expanding at the fastest pace. The author of this article will tell about the prospects of the organic sector in the country

      From January 1, 2020, a new regulation came into force for the production of organic products. And in October 2019, the appearance in Russia of a special “green” brand was announced, under which food with improved environmental characteristics will be sold. The Ministry of Agriculture expects that by 2024 such goods will account for up to 15% of all agricultural exports.

      Spectacular Green Horizons

      It is no coincidence that such close attention to “green” agriculture on the part of the state. The world market for organic products has been showing stable growth for several years. Now, according to the International Federation of Ecological Agricultural Movement, it is estimated at almost $ 100 billion, and by 2024, according to forecasts, its size will reach more than $ 200 billion. 91,229

      The volume of the domestic market for organic food, according to the Organic Union, may reach $ 250 million in 2020.The prospects for export development are also impressive. The fact is that the demand in the “green” segment in the world is growing faster than the increase in the area of ​​suitable land. For example, for this reason, the European Union imports up to 50% of consumed organic products, which in monetary terms amounts to $ 20 billion.

      Another reason is the high added value of such food. For example, according to the Numbeo project, organic meat and vegetables in Germany are 1.5 times more expensive than traditional ones, and 2.6 times more expensive for confectionery.In Russia, the price difference for many items is even more impressive. For example, the price of organic vegetables can be three times higher than products grown in a traditional way. Therefore, the development of organic agriculture is a direct path to increasing tax revenues through VAT and increasing exports in monetary terms. First of all, it is possible to start developing the sector with the most popular categories of organic products, for the production of which favorable conditions have been created in Russia: meat, milk, vegetables, wild plants, confectionery.

      In addition, the development of organic farming can reform related sectors of the economy. Thus, the chemical industry will face the challenge of producing suitable fertilizers. In agrology, there will be a demand for new directions due to the expansion of the geography of sales markets, as well as for new services – now, for example, no port in Russia is suitable for storing and transporting organic goods. At the same time, the European rules of state regulation on the labeling and control of organic agriculture impose high requirements on the traceability of such products and their separate storage.

      Russia has good chances to take a part of the world market for environmentally friendly products. The reason for this looks somewhat phenomenal and lies in the relative lag of the industry in previous periods. Moderate agricultural intensity, limited use of fertilizers – all this contributes to a faster transition to “green” production. Now the area of ​​unused but suitable for organic farming arable land, according to various estimates, in Russia is 10-12 million hectares.The amount of pesticides and fertilizers used in our country, according to FAOSTAT estimates, is on average 16 and 8 times less, respectively, than in the EU. In addition, in Russia, at the legislative level, there is a ban on the production of GMOs.

      Despite all the described advantages and a gradual increase in the amount of land transferred to organic “rails” in Russia, their current share in the total land bank of the country does not yet exceed 0.3%. The fact is that this direction fell into a kind of “poverty trap”.The process of converting traditional agriculture to organic is quite lengthy. It takes two years for land conversion. This is followed by the year in which the trial crop will be grown. And only in the fourth year from the start of the project, the first commercial volume for sale will be collected. Only a very successful and desperate farmer can decide on such an experiment without a guarantee of support from the state. At the same time, for the regulator, the step towards organic production is not easy – in Russia they are accustomed to quick victories.

      The long transition process dictates the need to act now if the country plans to take its place in the global organic market and make this category significant in the structure of Russian exports by 2024. According to the forecast of the National Organic Union, the potential for the development of export of eco-products from Russia is estimated at $ 15 billion by 2025-2030.

      How to get on organic “rails”?

      There are two models for the development of the organic production sector.For example, in the United States, the market is divided between large corporations, while in Europe, China, India, the sector is dominated by small forms of business. The first option is more stable and suitable for meeting mass demand, while the second is more credible among local consumers.

      Russia should consider a combined model. Small farms could cover the needs of the domestic market. In addition, this is a good opportunity to solve such complex development tasks as improving the standard of living and employment in rural areas through the involvement of small farmers, the development of rural and ecotourism, improving the health of the population through ensuring access to healthy food, reducing the negative impact on the environment and preserving natural heritage.

      There is no need for long-term and expensive government programs to support small farmers; it is enough to help them move to a more automated and efficient work format. This can be facilitated, for example, by the creation of an electronic platform for trade in products, which will shorten the path from manufacturer to consumer, getting rid of unnecessary intermediaries and, consequently, reducing costs.

      If we talk about the entry of Russian organic products into foreign markets, then this is a more complex and complex task, which could be better handled by large companies with well-oiled processes or cooperatives of small farmers united under a single brand.To attract big business and create economic prerequisites for investment in this area, more significant government support will be required through incentives, subsidies or guarantees. At the same time, the organic sector, due to its high added value and steadily growing demand, stands out favorably against the background of other industries in that projects in it are economically considered outside the investment period, and the volume of investments is determined for a clear period required for land conversion. Bringing farmers to a sustainable level of development, the state invests only for a certain finite period of time, and then the company can operate independently.

      “Responsible consumption” is one of the incentives for organic market growth

      Vladimir Shaforostov. Partner of the practice of agro-industrial complex of the company “NEO Center”

      The market for organic products is indeed growing at a faster rate than the traditional one all over the world.And our country also has significant potential. The keynote of green fashion is intuitive: people want to eat healthy and safe food. Research and consumer surveys conducted by Fibl & IFOAM-Organics International, Nielsen and GfK confirm this and show the same thing: the organic and eco markets are growing at double-digit rates. But it is worth noting that this growth is noted far from everywhere, but mainly in countries with high payment demand (in Central Europe, Scandinavian countries, USA, Australia), and the target audience of this market is millennials.
      Why is it that consumers are so interested in organic food? The global trends that we are seeing in the evolution of the approach to food production and consumption are related to the consequences of population growth and the need to meet the need for carbohydrates and proteins. An attempt to increase production volumes led to the emergence of more intensive technologies in agriculture: the active use of fertilizers, GMO seeds, productive and environmentally resistant plants, growth hormones, antibiotics, increased mechanization (and consumption of hydrocarbons).The development of agricultural technologies has made it possible to significantly increase production volumes, reduce costs and make food products more accessible to a wide group of people. At the same time, there is an increase in health problems. These are obesity, cancer, diabetes mellitus, heart and vascular problems, antibiotic resistance and many others. If we add global environmental problems here, then an unpleasant picture emerges: in an attempt to feed himself, a person has poisoned himself.
      This existential digression is necessary to explain what lies behind the concept of “responsible consumption”.At its core, it is a responsible consumer choice in favor of the products of manufacturing companies adhering to the principles of sustainable development, that is, taking social and environmental responsibility for their production activities. So what is the connection between “responsible consumption” and the growth of the organic market? The answer is obvious: it’s a matter of trust, and consumer trust is about loyalty and repeat sales. Interestingly, the demand for products with improved environmental properties is more resistant to various external shocks.These products may be more expensive or sold at the market price, but it is for them that the consumer comes to the point of sale, giving preference to this manufacturer.
      Now in Russia about 1 million hectares are occupied by organic farming and there are 100-120 certified producers. So far, the domestic market for organic products is only tenths of a percent of the entire food market. World indicators are a thousand times higher. However, I am confident that the development of technologies for organic agriculture will lead to a decrease in the price of such products and an increase in market capacity in the next few years.

      Russia is still at the very beginning of the development of the organic production sector. In some regions, compensation has been introduced for part of the costs of certification and the purchase of special biological products. Nevertheless, the use of additional tools to support manufacturers can significantly increase the attractiveness of investments in this area.For example, it can be marketing promotion of organic products, sponsoring scientific research on the benefits of organic products for health and the environment, subsidizing loans, preferential insurance, reducing the tax burden for manufacturers of such products, etc.

      In matters of support, Russia can also be guided by the experience of the leading countries. For example, the European Union, in addition to helping with marketing promotion, also sponsors scientific research on the health and environmental benefits of organic products.In India, clusters for the development of organic agriculture have been formed with the provision of land and other support. Brazil subsidizes loans, preferential insurance and reduces the tax burden on organic producers.

      Efforts to develop the organic sector could have a multiplier effect on the entire industry. First, the export of such foodstuffs in the world today is fragmented, and Russia really has every chance of becoming one of the key players in a new, emerging niche.If all the issues slowing down the development of the sector are resolved, then organic agriculture can become an item of significant income. But so far the overwhelming majority of agricultural producers adhere to the traditional, more understandable and does not require investment of finance and time, farming. Secondly, the country’s image as a producer of organic products will increase the confidence of the discerning global consumer in other categories of goods in the Russian agro-industrial complex.

      Russia accounts for 1% of organic imports to the EU countries

      Sergey Korshunov.Chairman of the Board of the Union of Organic Agriculture

      Although the organic movement in Russia is only gaining momentum, domestic agricultural producers have already achieved some success in the global market. For example, according to statistics from the European Commission, our country is among the top 21 suppliers of organic goods to the European Union. Russia accounts for 1% of the total imports of such products to the region. It should be noted that our neighbors – Ukraine and Kazakhstan – surpass us in terms of supplies to the EU, occupying, respectively, 8% and 1.5% of total imports.
      Nevertheless, Russia is dynamically increasing its export of organic products. In recent years, it has more than doubled, which is ahead of the overall growth of the organic food market in the EU countries, which for the same period amounted to only 8%. Russian manufacturers certainly have the potential to increase their share in the international market; demand still exceeds supply. There is a need for a state policy in the field of development of organic agriculture, measures of economic support for farms.
      Still, organic agriculture is a new direction for Russia, which is just beginning to develop. Now the number of manufacturers of such products in our country is less than 100, and it is almost not growing. For comparison, in Italy there are 42 thousand, in India – 547 thousand. At the same time, in order to meet the existing demand for Russian organic food, it is necessary to increase the number of producers by 200 annually.
      development of eco-agriculture in Russia.They do not understand and fear him. Although, developing this direction, Russia is solving environmental, social and economic problems. At the same time, this sector, being a modern, knowledge-intensive business, provides an opportunity for the development of a dozen more service industries.
      The world market for organic products has already exceeded € 90 billion and is growing by 10-15% annually. But there is also a factor holding back growth – a lack of farmland. It is due to the fact that Russia has such resources (more than 20 million hectares have not received agricultural chemicals for a long time), it could become the leader in organic production in the world.

      The author is a senior manager of the competence center in the agro-industrial complex KPMG in Russia and the CIS. The article was written specifically for Agroinvestor.

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      90,000 Newcomer to Organic Farming – USDA and European Commission Guide

      Newcomer to Organic Farming – USDA and European Commission Guide

      Products labeled “organic” have become commonplace in stores, surprising only by the price.Its quantity and sales are growing, farmers regard it as a new source of high income, because organics are well bought in the EU and the USA.

      If you are interested in the direction of organic agriculture, but you do not know where to start, our guide will acquaint you with the basic requirements and regulations applicable in the key organic markets – the USA and the EU.

      Brief overview of the largest organic markets – USA and Western Europe: “green” is fashionable

      The largest volume of organic products is produced and consumed in the countries of North America and Western Europe: they account for more than 90% of the total turnover.In the United States, the organic food market in 2015 showed an increase of 10.6%, close to $ 40 billion.

      In Europe, the EU organic food market grew by 7.6% in 2014 and was valued at € 24 billion.

      The most active consumers in the Eurozone are Germany, with a market share of 30%, and France, with 18%, while they have to import part of their products from other regions. Organic berries, nuts, rare types of grain are imported from Ukraine. The bulk of the production goes to the EU countries, as well as to the USA and Japan.

      In the EU countries, about 10-20% of all agricultural land is devoted to biological products, while in Ukraine the area of ​​land for growing organic products is only 1% of the total agricultural land area.

      Development of organic agriculture in the EU countries

      The growing popularity of organic products in the EU and the USA is quite understandable – such products are considered useful, safe for health, they are available to the majority of the population.Moreover, in developed countries it is customary to take care of the ecology, natural resources and future generations.

      Organic agriculture and organic products: understanding the definitions

      Organic agriculture is based on the principle of sustainable development – it is an integrated approach to the development of agriculture and animal husbandry, contributing to the restoration of resources, improving the ecological balance and preserving biodiversity.

      The priority of organic farming is to restore or improve the fertility of the soil, following the rule: only in healthy soil can healthy plants grow.For this, organic fertilizers are applied, crop rotation is observed, and the land is carefully cultivated. It is forbidden to apply synthetic fertilizers to the soil, although the regulations of the European Union allow this possibility – in exceptional cases, if there are no suitable alternatives, and only after careful analysis. There is a list of acceptable inorganic compounds, each of which has been rigorously tested. The US has banned the use of sewage sludge as fertilizer. Instead of spraying plants with chemicals, the farmer selects varieties that are resistant to diseases and adapted to the conditions of the given climate.And the fight against harmful insects consists in maintaining the population of their natural enemies or using pheromone traps. Genetically modified organisms are prohibited for use in organic agriculture, as well as pre-sowing irradiation of seeds.

      In organic farming, there are also eligibility criteria: feed must be organic, the use of hormones and growth stimulants is prohibited, animals must be kept free-range, the farmer must take care of their health and their specific behavioral needs.The use of antibiotics is prohibited, so it is important to select disease-resistant breeds.

      Organic products are products intended for use by humans or pets, obtained as a result of certified organic production from organic raw materials, in compliance with established standards: restrictions on the use of food additives, bans on synthetic colors and flavor enhancers. It is important that the products are processed on a separate line, without mixing with traditional raw materials.Compliance control takes place at every stage of production.

      Illustration of criteria for meeting different food categories with the definition of “organic”

      Economics of organic farming using the example of crops in the United States: profitable, but requires significant investments

      The most popular crops were corn and soybeans – between 2011 and 2014, their acreage increased by 24% and 3%, respectively. Until 2009, organic wheat showed the greatest growth, but already in 2011-14, the area under crops decreased by 3%.

      Despite the growing consumer interest in organic food, the area under organic cereals is only 1% of the total. One of the reasons farmers are reluctant to reorganize organically is the lack of awareness of costs, incomes and productivity for farms that opt ​​for organic farming.

      Research conducted in the USA in 2006-2014 revealed the key theses of organic farming economics:

      • crop yields in organic farming are lower than in traditional farming: for corn by 26 c / ha, for wheat – 6 c / ha, for soybeans – 8 c / ha.This is due to the use of less effective methods of weed control and the ban on the use of GMOs;
      • , the level of costs for organic production is higher than for traditional production, since savings due to chemical fertilizers and protective equipment are offset by increased spending on fuel, equipment maintenance and labor costs at a lower yield level. Additional costs for growing organic crops average $ 205- $ 242 per hectare for corn, $ 135.8- $ 153 per hectare for wheat and $ 261.7- $ 308.6 per hectare for soybeans;

      Comparison of the costs of growing cereals using the traditional method and using organic methods

      • the level of profitability is higher for organic corn and soybeans, for wheat this indicator depends on its purpose: in the case of use as feed, the cost of growing exceeds the income received.The net income from growing organic crops, compared to traditional methods, is much higher for soybeans – $ 126- $ 163 per hectare and for corn – $ 54- $ 101 per hectare. For wheat, this indicator has a negative value: – $ 22 – $ 5 per hectare.

      Comparative graph of the cost of organically grown corn for human and livestock production versus conventionally grown corn

      The significant economic gain from growing organic corn and soybeans explains the increased acreage, as opposed to organic wheat, which costs more than net income to produce, forcing farmers to stop growing.

      Organic – 95% Green Ingredients: USDA and EC Requirements

      By purchasing products marked as organic, the consumer wants to be sure that the product was grown and manufactured in compliance with all mandatory standards and regulations. In the world, there are two most respected organizations that set the rules for organic agriculture: the USDA – the US Department of Agriculture, and the European Commission.

      According to the rules of both organizations, a product can be labeled as organic if at least 95% of its ingredients meet the required standards.The remaining 5% should be included in the list of allowed compounds. If the product contains only organic ingredients, the label “100% organic” is used. If the product was produced using organic elements (their volume must be at least 70%), the sign “produced using organic ingredients” is put – you can specify up to three ingredients.

      Organic products are labeled with a special logo and an indication of the certifying authority.Below are the approved USDA and EC organic product logos.

      What steps do you need to take to get organic certification?

      In order to be able to grow, sell, market and label their product as organic, a grower must obtain an organic certification for their product. In the United States, the National Organic Program (NOP) under the USDA is responsible for certification of growers. You can find out more about the certification procedure on the USDA website.

      The essence of the procedure: a farmer or producer, after paying the necessary fees, submits an application to an agency accredited with the USDA, providing them with the following information:

      • a detailed description of the activity for which the certificate must be obtained;
      • 90,021 data on the substances that were used on the specified plot of land over the past 3 years. Important: if substances prohibited for use in organic agriculture were used on the site, you need to wait 3 years from the date of their use.During this transitional period, products cannot be defined as organic;

      • list of organic products that were grown, fed or produced on the declared site;
      • A systemic organic plan detailing the planned agricultural practices and the substances to be used.

      First, an agency staff member checks that the submitted data is USDA compliant, and then the auditor conducts an on-site inspection.Based on the results, a certificate is issued – with further annual re-certification.

      According to an agreement signed in 2012 between the European Union and the United States, the requirements for certification of organic products in these regions are standardized on one sample.
      In the European Union, the rules and requirements for organic production and certification are defined by Council Regulation EC 834/2007 and Commission Regulation EC 889/2008. EU legislation ensures that the term “organic” has the same meaning for consumers and producers throughout the Eurozone.Legislation concerning organic products is developed with the participation of the EU Member States, through advisory and technical committees and expert bodies. Key points relate to regulations for organic farming, organic livestock and organic production, as well as the use of renewable resources, labeling rules and international trade in organic products.

      In Ukraine, the support program for organic producers is still in the process of being formed.Therefore, we will consider programs that are already working in countries with a developed market for organic products and whose experience can be used by the Ministry of Agrarian Policy and Food of Ukraine.

      Support programs for organic producers in the US and EU

      America is the largest market for organic agricultural products, so the development and support of the sector participants is very serious here. The USDA has established many direct and indirect support programs for organic producers.

      We have identified those programs that are important for the farmer.

      An organic initiative from the Environmental Quality Improvement Program (EQIP) of the Natural Resources Conservation Service (NRCS) provides financial and technical assistance in the planning and implementation of organic farming practices. Financial assistance to certified organic producers is up to $ 20,000 per year and must not exceed $ 80,000 over six years.

      The Farmers Service Agency (FSA) through an extensive network of local branches provides farmers and agricultural companies with access to loans and credit guarantees, environmental and environmental programs:

      • Incentive Transition Program: designed to motivate farmers who are retired or unable to manage their farming to transfer their land to the Land Conservation Program (CRP) or to grow organic farming on it in exchange for paying annual rent;
      • 90,021 microcredits: direct loans for small-scale agribusiness, including organic farming.Microcredits are characterized by a faster application process and the minimum required set of documents.

      Special programs have been developed in the following areas: research and education, data collection and risk management analysis; information, consulting and marketing support for organic agriculture market participants.

      In the EU, subsidies are aimed at stimulating the development of territories involved in the cultivation of organic products.For example, according to the New Common Agricultural Policy (CAP), all EU member states are required to allocate 30% of the budget for agricultural development programs to finance farmers applying sustainable agricultural practices.

      Support for organic production in the EU

      Creating an organic product is a painstaking and costly business that requires understanding and patience, because the invested funds take a long time to return. But it pays off – products labeled as organic cost more and demand outstrips supply.The list of organic products, in addition to the obvious meat, milk, fresh vegetables and fruits, includes baby food, wine, confectionery and bread, cereals, juices, canned vegetables and fruits, ready meals – an entrepreneurial person will definitely find his own niche where he can succeed.

      90,000 Organic fashion threatens fertilizers

      “Many people are now trying to take care of their health and eat right. They buy vegetables and fruits grown without chemicals, meat of animals and poultry, which were fed with natural feed, without antibiotics, growth stimulants “- with these words, Prime Minister Dmitry Medvedev began a government meeting on Thursday (quoted by www.government.ru). At this meeting, the ministers approved a bill on the production of organic products for submission to the State Duma. The law should describe national organic product standards.

      On the same day, one of the world’s largest producers of mineral fertilizers, Phosagro, issued Eurobonds, and in its prospectus indicated the development of the organic market as one of the risks for the company. By 2050, the world’s population will reach 9.6 billion people, the holding wrote in a report for 2016.feeding a growing population will require a 60% increase in agricultural production. But Phosagro’s sales may be affected by the development of the organic market, the latest prospectus says.

      Organic farming uses manure and other organic materials as fertilizers, Phosagro explains. The regions where this type of agriculture is developing most actively – the European Union and the United States – are the markets where Phosagro can sell its products with good profitability.If organic farming becomes more common in Russia or in one of the company’s main export markets, the demand for fertilizers may decrease, which will affect the financial and operating results, the document says. Uralkali warned about the same risk in 2015. Fertilizer production is one of the most efficient businesses in Russia. Thus, the profitability of Phosagro in 2015 was 43%, in 2016 it decreased to 39%, and in the first nine months of 2017 it was 28% due to a difficult market environment.

      “All the information that we considered necessary to include in the description of this and other risk factors is contained in the prospectus,” a Phosagro spokesman said, adding that the company had written about such a risk earlier. A representative of Uralkali did not respond to the request.

      According to the International Federation of Organic Agriculture Movements, by the end of 2015, 50.9 million hectares in the world were under organic farming. The leader is Australia (22.7 million hectares), followed by Argentina and the United States (about 2 million hectares).The global organic market has grown since the early 21st century. more than 5 times to $ 81.6 billion (data at the end of 2015) and, according to forecasts, will grow by 15% annually.

      In large agricultural regions – Europe, the USA, China – there is a trend towards the biologization of agriculture, says the chairman of the Union of Organic Agriculture Sergey Korshunov: this is not organic yet, but already the desire to reduce the load on the soil. Europe is tightening the requirements for both the fertilizers themselves and the rates of their application, he said.

      For large agricultural producers, the use of chemical fertilizers has no alternative, but there is a tendency to use cleaner fertilizers without such impurities as cadmium, said Konstantin Yuminov, an analyst at Raiffeisenbank. So, last fall, the European Parliament approved restrictions on the content of cadmium in phosphate fertilizers. This plays into the hands of Russian suppliers – Phosagro, Akron and Eurochem. In Russia, an apatite concentrate (phosphorus raw material) of volcanic origin with a low content of impurities is mined.If there is a risk of developing organic farming for Phosagro, then on the horizon of 10-20 years, Yuminov estimates.

      The main inhibiting factor in the growth of organic agriculture in the world is the lack of suitable land, which gives great prospects for Russia, where more than 20 million hectares of land have not received agrochemicals for more than three years, the Union of Organic Agriculture estimates. But in Russia, the market for organic products may appear no earlier than in 2-3 years, says Korshunov. According to the union, the market for organic products in Russia is $ 120 million, as organic certified 2% of the land (246,000 hectares).In such large markets as wheat, corn, soybeans, chemical fertilizers have no alternatives, Yuminov emphasizes.

      Producers of organic fertilizers – livestock and poultry enterprises – are now unable to meet more than 1% of the needs of agricultural enterprises in fertilizers and plant growth stimulants, says an interlocutor in one of the large companies – producers of mineral fertilizers. Without the addition of minerals, organic fertilizers will not bring a significant effect – the share of nutrients in them on average does not exceed 20%, and the composition of nutrients is not balanced, the source said.The desire to abandon the use of mineral fertilizers is rather a tribute to the fashion for the philosophy of a “clean planet”, but in fact an unrealizable scenario: the population, especially in developing countries, is growing very quickly, products that survived without the use of chemicals will be too expensive, so the importance of mineral fertilizers will only grow …

      90 000 27% OF AGRICULTURAL PRODUCERS ARE READY TO TRANSFER TO ORGANIC AGRICULTURE

      All-Russian research of the organic agriculture market was carried out by the Union of Organic Agriculture in cooperation with the Ministry of Agriculture of the Russian Federation, Federal State Budgetary Institution “Rosselkhoztsentr” and social development of rural areas – All-Russian Research Institute of Agricultural Economics, All-Russian Research Institute of Phytopathology, All-Russian Research Institute of Biological Plant Protection, Skolkovo Foundation, RISS, Ecological Union (St. Petersburg), Siberian Organic Products.

      The purpose of the study is to determine the quantitative and qualitative indicators of the development of the organic agriculture market, points of growth, strengths and weaknesses, risks, directions for development. Provide competent explanations on highly specialized issues.

      The study was conducted from March 2017 to April 2018 by the method of questionnaires, in-depth expert interviews; data from more than 100 specialized events were also used.

      Main findings of the study.

      The market for organic products in Russia is 120 million US dollars, including imported organic products, 0.12% of agricultural land (246 thousand hectares) is certified as organic according to international standards. There are 70 certified organic agricultural producers in Russia. According to international standards – 53 farms, according to Russian – 17 farms. Of these, plant growing – 20 farms, animal husbandry – 5 farms, wild plants – 14 farms, alcohol production – 1 enterprise, processing – 2 enterprises.

      Markets for the sale of organic products for a certified domestic producer:

      In organic agriculture in Russia there is a formed export market for organic agricultural raw materials, there is a steady growth in demand in this market and it far exceeds supply. All EU countries and the USA are ready to buy Russian products. There are orders and competition between foreign traders. The transition to organic farming technologies on a pre-contract basis for specific orders can be carried out within 1-3 years.This market has established rules of the game that are difficult to follow, but possible. There are “guides” with many years of experience, under whose guidance you can go the path of transition to organic farming technologies with minimal risks. The potential of the organic market for the EU countries is estimated at 130 million US dollars, the global market for organic products – 290 million US dollars. The risk of this market is the deterioration of the political situation. The limiting factor is that this is only a market for agricultural raw materials, with processed products and finished products, we are not expected and accepted in this market.The main competitors are Ukraine, Kazakhstan, Russia.

      Currently, 16 certified manufacturers export their products to the EU countries. Basically, these are grains and oilseeds. One farm exports essential oils.

      Despite the fact that the domestic market of Russia is in its infancy, the majority of participants in the real sector see the future in it. Practice shows that producers of organic B2C products are economically successful here.In-demand products: groceries, fresh natural local products that can compete with foreign ones, and are better in quality. The driving force of the domestic market will be the formation of demand, which today is virtually absent in the low purchasing power of Russians, their poor awareness of the benefits of organic products. But at the moment, the segment of buyers of certified organic products is formed only in small specialized stores, federal chains do not see the need for such products, continuing to exploit the trends of “natural” and “farm”.

      Problems and solutions.

      For the development of organic agriculture, agricultural producers most of all need knowledge, investment and stable demand. The industry today is closed and poorly understood by both potential participants and investors. The key factors for the development of the domestic market is the adoption of the federal law on organic agriculture, which will establish uniform rules of the game, cleanse the market from falsification, clarify the concept of “organic”, protect labeling, and introduce a single logo.Also, an important role will be played by the establishment of direct exchange of information between producers and consumers, openness, transparency and the formation of understanding and trust in organic products.

      However, at the moment, mass production of certified organic products for the domestic market is only a dream. If it is impossible to get a margin premium, there is no government support during the transition period, a low technological level, a high cost of international certification – only enthusiasts or companies initially focused on the export of organic agricultural raw materials enter this market.

      Adoption and enactment of the law “On production and circulation of organic products” will create a new segment of organic agricultural producers – companies that comply with Russian legislation, but at the same time are not recognized at the international level (lack of mutual recognition of control and certification systems).

      From the point of view of international legislation, such enterprises can be identified as biologized, i.e. partially using the principles and technologies of organic farming in production.And it is precisely in the increase in the number of such companies that we see today the maximum prospects for the development of OCX in the next two or three years.

      Biologization of agriculture does not contradict organic agriculture, but is its support and testing ground, an opportunity for enlightenment, improving the culture of production, increasing fertility. Someone will be able to simply reduce the pesticide load, the amount of antibiotics and growth hormones used, increase the efficiency of their economy, and this will be a significant result for both the producer and the consumer of his products.And it will be even better if he nevertheless reaches the standards of organic agriculture, receives a certificate and an award for the status of “organic”. And will sell all its value-added products. However, this requires openness, transparency, consumer education, as well as the legal status of organic products fixed by the state.

      The potential of organic products in the domestic market is estimated at 2-10% of the food market, the level of implementation of agricultural biologization can potentially reach 50-80%.The introduction of organic agriculture and the biologization of agriculture will provide up to 70% of the healthy lifestyle of Russians through high-quality healthy food and a safe environment. Organic agriculture develops and promotes import substitution in more than ten related industries.

      Prospective organic agriculture is considered by 38 agricultural universities in Russia.

      Scientific research work on organic agriculture was carried out in 3 universities on an area of ​​more than 1 hectare.For the coming years, research work on organic agriculture is planned in 2 universities.

      24 universities are interested in including lectures of practitioners in the field of organic agriculture in the general training programs.

      In order to meet the demand for organic products, it is necessary to transfer at least 200-300 agricultural producers to organic agriculture every year. The necessary conditions are agricultural technologies, training, certification, sales.The potential for market growth will come from the number of agricultural producers who have switched to organic farming. Therefore, the Union of Organic Agriculture analyzed data on potential organic producers, their farming methods, resource potential, motivation and expectations.

      27% of agricultural producers are ready to switch to organic farming with guaranteed sales. On the domestic market, 59% of producers expressed their readiness to work on biologized principles.

      The ability to sell your products with a 30% mark-up is the most significant incentive for the transition to organic farming. It was indicated by 27% of agricultural producers. The next most important incentives – health of the population were indicated by 24% and contribution to the improvement of the ecological situation – by 22%. It is indicative that their own health is an argument for only 15% of agricultural producers and a humane attitude towards animals for 7%.

      Most modern agricultural producers note the influence of climatic factors on the efficiency of farms (26%).In second place are sales problems (13%), diseases and pests (13%). Obviously, agricultural producers do not use the potential of agrobiotechnology in their activities, while they have been proven to increase the efficiency of agricultural production by 10-40%, increase soil fertility, reduce climatic stresses by 10-30%, and improve the quality characteristics of products. Those. meet the needs of manufacturers.

      The largest number of technologies and agricultural practices is associated with the use of biological products (21%), organic fertilizers (18%), green manure (12.5%), microbiological fertilizers (11%).66% of manufacturers are ready to test biological products and biofertilizers on their farms.

      It is significant that the overwhelming majority of agricultural producers (92%) consider their products ecological, while they also use agrochemicals. 55% of them do not have confirmation of the environmental friendliness of products. 42% of agricultural producers are familiar with Russian standards, 13.5% – with international ones. Russian manufacturers are characterized by a high level of understanding of the importance of the environmental component. 99.5% of producers are concerned with the tasks of maintaining and restoring soil fertility and 100% are concerned with environmental problems.

      Most agricultural producers consider their level of competence to be sufficient (60%), yet they are still ready for training. Agricultural producers show the greatest interest in knowledge about biological plant protection (23%), biologized fertilization system (20%). Marketing and distribution of products attracts 17% and 15% are interested in organic certification.

      The main assistance that agricultural producers expect for the development of organic agriculture is subsidies from the state (57%).Help from the Union of Organic Agriculture is needed for 31% of producers. These are mainly consultations and the opportunity to learn from practical experience. Most agricultural producers do not have a crop rotation – 33%. Of course, this affects the phytosanitary state of farms and soil fertility

      In order to make the organic agriculture industry understandable and transparent, the Organic Farming Union has created a unified register of certified producers, which is freely available on the Organic Farming Union website www.soz.bio Also, the Union of Organic Agriculture has created and posted on its website in the public domain a list of production means that are allowed for use in organic agriculture.

      Coordination Council for Organic Agriculture

      Organic agriculture and agricultural biologization are interdisciplinary fields of agriculture. For effective interaction of various parties, the Union of Organic Agriculture announces the creation of the Coordination Council for organic agriculture and biologization of agriculture in Russia and invites everyone to cooperate.

      90,000 Organic products: definition, certification, benefits of organic products

      Pros and cons of organic products

      Bioproducts are rich in nutrients, have a bright taste and rich aroma. These are the same
      natural
      products as they were before the development of the chemical industry are real, tasty and healthy.

      Organic
      food is the only way to get vitamins, proteins, necessary for human health,
      carbohydrates and
      mineral salts, as well as protect the body from synthetics, formaldehydes, carcinogens and others
      harmful
      components that are contained in products of the modern food industry.

      In natural products you are not
      you will find glossy beauty and impeccable uniformity, like sparkling fruits on the shelves
      hypermarkets.
      Calibrated by gene mutations, shiny thanks to preservative glazing,
      industrial
      vegetables do not lose their presentation for several months. The quality of such fruits is low: they are nothing
      not
      smell, have a mild taste, contain nitrates and pesticides.

      Organic products less
      even, of different sizes, sometimes with a flaw or with a wormhole – the way nature creates them.
      Availability
      organic vegetables and fruits are limited by natural seasonality. Such berries and greens wither faster and
      have
      short shelf life. Unlike “empty” vegetables, it is a valuable source of vitamins and
      microelements.

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