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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

“Organic Crimea”

In Ukrainian supermarkets eco-products are regularly bought only by the customers making part of the group “Families with children with the income over 10,000 hryvnias per person per month.” Scientists suggest how to reduce the price and make it reasonable
25 September, 2013 - 17:07

If we go to an imaginary market of 2023, we can suppose that 90-95 percent of all food will be organic and the goods without corresponding certificates will be offered for bargain prices and not any self-respecting customer will buy it. The first parameter of the food to be checked when delivered to supermarkets will be the production technology and compliance with organic standards. The strictest and most respected part in the logistic structure will be Certification Centers that will comprise all existing forms of control and will check the food for compliance with the European quality standards and, first of all, compliance with the standards of organic origin. The centers will be numerous and it will be impossible to avoid or cheat on this control since it will be executed during all the production process till the product appears on the market…

Participants of the international conference “Organic Crimea” held by the Crimean Agro-Industrial College at the National University of Bio-Resources and Nature Exploitation believe that the situation will develop under this scenario. The conference was organized by the German Society for International Cooperation (GIZ), realizing the project “Development of the Organic Production in the Crimea,” the Crimean organization SLOW FOOD CRIMEA with the participation of farmers, agronomists, scientists, agrarians participating in projects aimed at forming in Ukraine the infrastructure of organic production and representatives of similar structures from Russia, Belarus, Germany, the Czech Republic, and Austria.

Now the picture in Ukrainian kitchens, markets, and supermarkets is slightly different. Ukrainian women first of all ask their husbands about the price of vegetables and meat and not about their organic origin; markets hardly ever offer organic food and separate supermarkets are making their first experiments in selling organic food and are not always satisfied with the results of their experiments.

Meanwhile, the situation with organic (or ecological) purity is depressing: the research showed that non-organic products consumers eat with vegetables, fruits, meat, and other products over three kilos of different chemicals – the third of them are not cleared from the organism and lead to allergies and various diseases. Thirty years ago 50 percent of Ukrainians suffered from this or that form of allergy and today 90 percent of Ukrainians have developed allergy to chemicals; forms of cancer, immunity system damages and other diseases, provoked by chemicals in food, used during its production: rests of pesticides, chemical fertilizers, and nitrates have become more widespread.

It is well-known that the market is mainly formed by the demand and disposal of goods. In response the amount of goods required by the demand and purchasing power is produced and offered on the market. Nevertheless, Ukrainian customers have not realized the importance of organic purity yet. Svitlana Zlobina, the expert from GIZ project in Sevastopol told that one of the supermarkets made an experiment. In a salesroom they placed two identical stands with goods, one of them had organic products on it which was clearly indicated on marking and advertisements, the other one had the same products, but not organic, for the same price. The experimenters supposed that customers would buy only organic products but it did not happen. Many customers just did not pay attention to the marking and it was calculated that people bought nearly the same number of goods from both stands.

Unfortunately, producers as well as retail chains, often face customers’ unawareness and catastrophically low demand for organic products which leads to many problems. Marketing experts’ research, done in one of the Ukrainian chain stores that had started selling organic products, showed that they are regularly bought by the customers making part of the group “Families with children with the income over 10,000 hryvnias per person per month.” It means that it is a very narrow niche that cannot ensure a mass demand. It is clear that imperfect mechanisms of organic goods pricing work towards this. According to the representative of the Czech Republic, in their country the price of organic goods can exceed the price of traditional goods by 15-20 percent, in rare cases and only in supermarkets it can make 100 percent. Svitlana Zlobina opines that in Ukraine the price for organic goods makes from 300 to 900 percent of mass retail price. For example, organic flour is sold for 16-17 hryvnias per kilo, a package of milk weighing 800 grams costs 18-27 hryvnias. Of course, many customers simply cannot afford it.

Obviously, in order to make the demand for organic goods wider than the narrow niche of customers with the income over 10,000 hryvnias per month it is necessary to reduce price to make it reasonable. To be able to do this scientists and marketing experts recommend creating collective trademarks for associations of producers who would be able to ensure manufacturing of many recognizable and actively advertised organic goods as only large economic output is able to provide acceptable profitability and reasonable prices. A lot depends on the regions where organic products are sold and on the level of people’s purchasing power in this or that region. For instance, a chain of supermarkets started selling organic products in several regions, in particular, in the Crimea and Kharkiv, however, the same range of organic products made 4,000 hryvnias a month in the Crimea whereas in Kharkiv it made 40,000.

In Sevastopol the participants of the project developed a holistic strategy of promotion and creating the system of production and selling of organic goods. The first eco-shop has already been opened there and it offers the produce of all the participants of the project. The shop also organizes sales during various events and presentations. The Regional Branch Program for the Development of Agro-Industrial Complex of Sevastopol region for 2013-18 comprises a section about organic production. Similar multisectoral structures aimed at implementing organic production have been created in Bakhchysarai raion in the Crimea; they are being developed based on the future science park in Dzhankoi raion and some other regions.

One of the Swiss chain stores started selling organic goods 10 years ago with 6 types of organic goods and today it offers 1,600 types of organic goods and product proposal is still growing. Thus, in the total Swiss turnover organic goods selling makes up to 9 percent and in Ukraine it is still very small. However, the existing timid germs of organic production (in the Crimea, for instance, it is ecological bread, dessert products, products from wild medical and essential-oil plants and some other) fuel confidence that the niche of these products, as well as the niche of their consumers will grow and achieve the world level in ten-year time.

By Mykola SEMENA, The Day, Simferopol
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