Ukraine has the potential to become an organic agricultural powerhouse and, despite significant challenges, there are signs the sector is poised to take off.
While organics remain an underdeveloped and niche subsector in Ukraine, interest and demand are growing. Producers have made inroads into the market, and the government appears to have finally taken notice and put organics on its radar of priorities. More needs to be done to support the sector, but producers, activists and government officials agree things are looking up.
Enormous potential
Organic agriculture — and agriculture as a whole — in Ukraine has much going in its favor. With vast tracts of farmland, 30 percent of the world’s coveted black soil, relatively cheap labor and geographical proximity to the European Union–where organics are in high demand — Ukraine has competitive advantages that could and should make it a major organics producer.
Reliable statistics about organic production are hard to come by, but, according to the Organic Federation of Ukraine, there were 390 organic farms and 421,200 hectares of organic farmland in 2016. These numbers grew significantly in recent years, although just 1 percent of the country’s total farmland is currently organic.
Businesses operating in both domestic and export markets have noticed increased interest in organics. “We see that there are more and more producers applying for organic certification. We see increased interest from our clients,” said Claude Exbrayat, CEO of the organic distribution company Biologic.ua.
Olga Trofimtseva, deputy minister of agrarian policy and food for European Integration, said the demand for Ukrainian organic products is greater than the supply.
“Organic buyers are hunting around Ukraine trying to find even conventional farmers and convince them to convert to organics,” she said.
But despite growing interest, numerous challenges must be overcome before the sector can fully take off.
No law on organics
Ukraine does not currently have a law governing organics, leaving the door open for confusion among consumers and fraud among producers.
“As there is no law on organics, it means we cannot say what is organic,” Exbrayat said. “We have to refer to European law, which doesn’t apply in Ukraine. Therefore it is possible for some companies to use the term organic when they don’t comply to European standards.”
While the vast majority of organic producers — around 80 percent by some estimates — focus on export and seek EU certification, domestic sellers frequently make misleading or outright false claims, branding their products as “natural,” “eco” or “bio,” although it is unclear what, if anything, these labels mean.
The legal vacuum enables unfair competition from companies making empty claims and confuses consumers, who often do not distinguish meaningless buzzwords from certifications that carry weight, such as the Ukrainian Organic Standard or Euro-leaf.
Dmitriy Pokhyla, director of the cereal company Organic Life, said a lack of consumer awareness about organics is a key challenge. “Unfortunately there is not much culture of consuming organic products in Ukraine. People don’t know what it is and don’t believe in it. Every day we face a simple lack of belief from buyers.”
Many constraints
Economic factors limit the domestic market. Due to higher production costs, organics tend to be more expensive than conventional products, and many Ukrainians are either unwilling or simply unable to pay more.
“Because of the economic crisis, people don’t have much money, and only some parts of society can buy these products,” said Olena Stretovych, director of the dairy company Organic Milk.
Organic producers say buyers tend to be health-conscious young families with some expendable income.
“Our average customer is in the middle class, said Stretovych. “The problem is that in Ukraine there’s not so much of this middle class.”
Financial limitations also impact producers. Transitioning from conventional to organic production can take up to three years and requires upfront investment. During the transition period, profitability can fall, placing stress on small- and medium-sized businesses.
According to Exbrayat, more investment is needed to assist farmers switching to organic production. “Because of this lack of investment, they cannot plan three to five years ahead. They have to survive.”
While some government programs have been introduced — especially in the regions — to compensate producers making the switch, many farmers are unaware of these.
Trofimtseva conceded the government should do more to inform farmers about such programs but thinks there could also be a private solution with support from European buyers.
“We should propose some kind of instrument or mechanism to support farmers through this three year conversion period and maybe conclude a long term contract with them, which would give them a feeling of security that they will have buyers,” she said.
This transition period, along with generally higher variability in organic crop yields, can create supply-side issues, and producers often struggle to reliably provide the volumes needed by larger clients.
Svetlana Karatsuba, who runs Taratsivka farm in the Chernihiv region, said her farm tried in the past to sell to chains but struggled to produce enough volume.
This led to the idea of forming the Organic Cluster, an organization designed to allow small producers — currently 27 of them — to combine forces.
“We hope that by working together we can produce the volume needed and find places to sell,” Karatsuba says.
Distribution is particularly challenging for small producers, who by some estimates grow up to 90 percent of the fruit and vegetables sold in Ukraine. Organic produce spoils more quickly than conventional produce, requiring particularly efficient logistics.
“Domestic producers are mostly too small to manage with these logistical issues,” Exbrayat said. His company tries to assist small producers through its distribution center, but he says the challenge is immense.
“When you have 50 kilograms of product every day and are located 200 kilometers from a large city, the logistical issues are terrible,” he said.
Positive signs
Despite challenges, there are signs the organic sector is poised for growth.
Olena Berezovska, president of the Public Union of Certified Organic Producers, has noticed increased government support over the past year.
“We definitely feel a systemic change in the government,” she said. “If last year they just raised their hands and smiled, now they are taking concrete steps toward regulating the market.”
The agricultural ministry included developing organics in its “three-plus-five” goals for agricultural reform, and a law creating a regulatory framework is currently in parliament. Trofimtseva said she is “cautiously optimistic” and hopes the law will be put to a vote and approved in the next month.
“I’m quite sure that by the end of the year we’ll have a framework in the form of a law.”
The government is cooperating with organic associations to create educational materials aimed at consumers, and Trofimtseva hopes by the end of the year the ministry will have a database of organic producers operating in Ukraine, allowing it to keep tabs on the market.
Lack of information remains a key issue behind scandals involving products falsely labeled as organic, with high demand creating a temptation to fudge the facts to get the higher sale price for organics. In other cases, such as a recent scandal involving Ukrainian soybeans exported to the United States, false labels appear during transit through third countries.
Where to buy organic in Kyiv
- Look for products bearing Organic Standard or Euro-leaf certifications and be skeptical of uncertified products labeled as “natural,” “eco” or “bio.”
- Biologic.ua carries a thoroughly vetted selection of domestic and imported organic food and cosmetics. Online and at 22 Vozdvyzhenska.
- Natur Boutique carries a variety of organic products. Online and with several branches around the city, including 6 Kikvidze.
- Eco Chic has some certified organic products. Online with several branches, including in Besarabsky Market.
- Komora sells some certified organic products in their online shop.
- Good Wine stocks an assortment of organic products, including some produce. 9 Mechnykova.
- Glossary carries organic cosmetics and has an organic café, but make sure to clarify that all ingredients listed are organic. 40/2 Volodymyrska St.
- Auchan, Megamarket and Silpo all carry some organic products.
- FIBL, a Swiss project fostering development of organic agriculture in Ukraine, has a wealth of information on their website, including more comprehensive lists of organic producers and stores carrying organic products throughout the country.
