Formation and development of organic products market in new economic conditions: regional aspects

Due to the issued by the President of the Russian Federation edict concerning limitation on import of some kinds of agricultural goods, primary products and foods from the countries supporting sanctions against Russia, the cardinal change of the institutional structure of the Russian food market becomes unavoidable. The issue of domestic substitution of import is becoming ever more relevant in the current conditions; as a consequence, the improvement of quality and safety of agricultural goods is expected. The experts consider the organic agriculture to be one of the most promising areas for development in Russia. For the present the development level of the mentioned sector is behind the showings of the European countries, though according to the analysts’ opinions, the Russia could already occupy 15-20% of global market of organic products. Creation of competitive market of national organic products needs vigorous support of government provided to agricultural producers. So far the development of the organic market was hampered by various issues, such as: lack of appropriate legislative basis and national certification system, insufficient awareness of population, poor diversity of marketing outlets. The draft bill on organic agriculture has more restrictions than incentives for agricultural producers. As a result, there became popular the issuing of laws by regional authorities, which aimed at the accelerating of formation of competitive organic producers. For instance, the law “On production of organic agricultural goods in the Krasnodar Territory" stipulates for such measures as building of national voluntary certification body, increase of farm enterprises and small businesses. Besides the suggested activity, the authors discuss the state support, including direct subsidies and subventions to producers, financing of researches, government contracts for organic goods for kindergartens, schools and hospitals, development of guidance and outsourcing services market, formation of special marketing service, and expansion of marketing outlets for organic products.