Putin ordered the government to establish new brands of organic products that would be protected by law. This means producers could be subject to tough penalties if they violate organic standards.
“I can assure you, everything would be great on foreign markets [with exports], where there are no clean [organic products] left,” Putin stressed.
Overall sales of organic food in Russia reached €160 million in 2017, according to estimates from Russia’s Ministry of Agriculture. This is one of the fastest-growing niches in the Russian food industry. By 2025, organic food sales are expected to reach €5bn as Russians are increasingly expressing interest in healthier products, the Ministry said.
Speaking at a press conference in 2018, Russian Prime Minister Dmitry Medvedev forecast that Russia could command a 25% stake in organic food sales on the global market by establishing large-scale exports to other countries.
Up to 27% of agricultural producers, including meat producers in Russia, are ready to shift to manufacturing organic products, Russia’s Union of Organic Farming has estimated. In 2018, Russia’s organic meat production amounted to 6.7 million tonnes (t) of poultry, 4.8 million t of pork and 2.8 million t of beef in live weight.
There are several thousand meat producers in Russia, and only 70 agricultural companies in the country registered to produce organic products, according to the Union of Organic Farming. As of now, almost all organic products in Russia, including meat, are imported.
In accordance with a recently adopted federal law on organic farming, all meat producers in the country certified to manufacture organic meat could be eligible for state aid.
The wrong country
The production costs for organic meat are higher than conventional meat, so people with low incomes in Russia would not be able to afford it, commented Sergey Yushin, chairman of the National Meat Association of Russia. The organic market is developing in countries like France, Italy or Germany, where the purchasing power of the local population is high, he added.
In 2017, several opinion polls showed that more than 50% of Russian citizens were saving money on food. This meant people were not able to purchase enough food, or food with sufficient quality on a regular basis.
It would be necessary to adopt standards on organic feed, because farmers could not produce organic meat without organic feed, Yushin added.
“The majority of Russian consumers still don't trust ‘organic’ claims and it will take a lot of time to educate them about what the ‘real organic’ means and how this claim transforms into a commitment from the supplier’s side,” Albert Davleyev, president of the Russian consulting agency Agrifood Strategies told GlobalMeatNews.
“But the key constraint is the price. The costs of producing organic products are usually at least two to three times higher than those of regular ones. Therefore, even middlemen and retailers’ mark-ups won’t be a critical factor. But with the deteriorating purchasing power of most Russians, the target consumer group for organic products will be shrinking as long as the recession continues,” Davleyev added.
On the other hand, Russia had some good opportunities to export organic meat. Target markets could include China, Japan, South Korea, as well as other south-east Asian, Middle Eastern and European countries, according to Davleyev.