Statistics of Organic Food Production in Ukraine

Organic food production in Ukraine is not just an interesting topic, but extremely relevant considering the ongoing reformation process of the public and private sector in recent years. Development of agricultural such as organics was conducted nonlinearly and can be titled as relatively new for Ukraine. Ironically, this is not an exaggeration due to the fact that in the modern history Ukraine as a country exists only for 26 years; before it preceded more than 70 years of planned economy and totalitarianism of the Soviet government.

That is why, on the one hand this essay aims to describe the role and place of food industry and agriculture of the soviet Ukraine through the historical prism of food regime, and on the other hand, natural development of the organic sector of the independent state in the recent past and the present. This essay can be conditionally divided into two sections. In the first section will be described evolution of the agricultural law, why USSR did famine to Ukrainian people and its consequences, branded and processed products in the soviet Ukraine, the overall condition of Ukrainian agriculture during the period from 1960 till 1989. In the second section will be described first attempts of the ukrainian organic production, meaning of the so called communist heritage in the agricultural context, formation of new agricultural market in line with the formation of a new country, overall condition of the modern organic sector, ongoing problems, trends, trade and opportunities.

For better understanding of the overall condition of agriculture and organic sector of Ukraine we should start from the legislative foundations – the agricultural law in the period of the Soviet rule. The very first normative legal act of the Ukrainian Soviet government in the field of agricultural relations was Resolution of the Central Executive Committee of the USSR “On Agricultural Cooperatives” from August 22, 1924. To be noted that it was one of the most shattering laws in the history of Ukraine. According to it, communes of workers were now grouped under the title “cooperative associations” and acquired the status of a legal entity that could carry out credit operations, and they were created in order to manage agricultural production cooperatively on the basis of the application of more advanced technologies and means of production. From now on, workers of the cooperative associations (“Radgosps”) were equated to the workers of the industry with a normalized six-week working week, what seems to be good if combined with statements before, but none of them had the right to establish a private household. It means they could not have their own animals, poultry, gardens, etc. As follows, this resolution as a normative legal act laid the foundation for further differentiation of land tenure in the direction of state nationalization and socialization of land-property ownership of agricultural producers. Why it was shattering bad? Ukrainian agriculture entered the epoch of the “Kolgosp”.

It should be emphasized, that such form of land management was not typical for the traditional culture of the Ukrainian village. The so-called “tearing off from land” was painful and long process, and therefore the peasants often refused to go to work in the collective farms. Soviet regime often forced them to join cooperatives with help of military forces and regulatory restrictions. From now on, the borders of the land use of the collective farms could not change in case worker leave the collective farm, and by law the land was transferred to the kolgosp without return. Such measures were typical for still imperialistic Soviet Russia but not enough, so the next step was establishment on February 1, 1930 of the decree “On measures to strengthen the socialist restructuring of agriculture in conditions of continuous collectivization and in the fight against the kulaks”. It abolished the right to lease land by peasant farms in areas of continuous collectivization, use of hired labor was illegal, “kulaks” or “kurkul’s” were denied from rights to own land. The product of the soviet propaganda, “Kulak” was a disgraceful name of wealthy peasants, who in majority were not “buyers and moneylenders who earn money not with their own labor at the farm” how they were usually described, but small country businessmen who did not deal directly with the processing of land, but used hired labor or leased 'means of production' (animals, tools, machinery and facilities, etc.). Lately, peasants who refused to sell surpluses at the prices set by the soviet committee were also called “kulaks”. All kulaks were assigned to one of three categories:

• sentenced to death by the local secret political police;
• sent to Siberia, the Urals or Kazakhstan, after confiscation of their property;
• used in labor colonies within their own districts.

Thus, this policy led not just to the disappearance of a class hostile to the soviet government, but to extermination of educated and skillful agricultural managers which in turn later had consequences, and for organics also. They were among first to use new technologies in the village and Cottle in his paper “The Green Revolution and Soviet agriculture” wrote that “…very few skilled peasants remained, and as a result management of the farms was abysmally inefficient, considering around half a million administrators were assigned to deal with agriculture… inefficiencies came from the lack of incentives for kolhozniki to work... ”

Undoubtedly, we cannot say that the soviet Ukraine and USSR are the part of the Food Regime Theory periodization. Even so, still possible try to argue why it was like that and where is the place of the USSR on the timeline of Food Regime. What was named as “the culmination of colonialism” and “the rise of the nation state system” as part of the First Food Regime became an exact opposite of the processes that took place in the UkrSSR. Ukraine became a raw material colony for the empire of new time – USSR. Whereas Soviets declared themselves as “anti-capitalistic” state, after all agriculture became a pure capitalistic economic sector originated in the international trade and remained dependent on it, which was so characteristic for countries of the West.

In 1930 Joseph Stalin gave an impetus to a new wave of collectivization in the USSR. A grain procurement law was adopted, according to which the collective farms were obliged to return from a quarter to a third of the collected grain to the state. Meanwhile, due to the Great Depression agricultural prices fell rapidly in the West. The Soviet Union was on the brink of an economic crisis, because nobody gave long-term loans. In order to earn a currency, it was decided to increase the volume of grain sales, particulary at the expense of the “breadbasket of Europe” - Ukraine. Against this background, ss a result of grain harvesting of 1931 in some rural areas of Ukraine began a famine resulting in the death of about 150 thousand peasants.

In 1932 Moscow adopted a resolution “On Seed Lending to Ukraine” but from “centralized resources within Ukraine”. In the simplest terms, the state took grain and then allowed the use of grain collected in Ukraine for the needs of Ukraine without use of external resources. On top of that, on August 7, 1932, a decree “On the protection of property of state enterprises, collective farms and cooperatives socialist property” by the Central Executive Committee of the USSR, better known in Ukrainian history as the “Law on Five Ears”. Theft of property of the collective farms was punishable by death penalty – shooting execution. By this law people were actually banned from owning food. At the same time, nobody canceled unreal plans for grain procurement. The Central Committee in Moscow approved the final grain harvesting plan for Ukraine - 260 million pounds, which was subject to “unconditional and full implementation” and “at all costs”. Reaction of the government was pretty the same as the reaction the British colonial government in India, which was entitled as “Late Victorian Holocaust” by Mike Devis. And if in the first case millions were killed by consequences of the Liberal Capitalism, in the case of Ukraine millions were killed by the quasi-economic form of communism.

1932-1933 are better know as the “Holodomor” ('to kill by starvation') - the genocide of the Ukrainian people, which led to millions of human losses in the countryside. It was caused not only by the food crisis (which could be possibly overcomed), but also aimed at suppressing the Ukrainian national liberation. According to estimates of the Institute of Demography and Social Studies Ukraine population losses are about 4. 5 million people. The leadership of the USSR rejected any assistance from abroad to starving in Ukraine. For example, at the appeal of the trade and credit organization of Galicia 'Centrospylka' to the Soviet consul with a proposal to allow one hundred thousand tons of grain to be sent to the hungry Soviet Ukraine, Moscow gave a categorical refusal.

Post WW2 time in the soviet Ukraine is more interesting in the context of the development of food industry with appearance of new technologies. Again, Ukraine and USSR are in in the timeframe of Food Regimes, but specifically for the Second Food Regime some considerable similarities, as well as differences can be followed up. The biggest postwar military–industrial complex was located on the territory of USSR and since there was no need for such a great amount of weapons, many factories have been reformatted for the needs of food industry and the brightest example is canned food – one of the few kinds of processed food with the biggest share of market.

It is a fact that the soviet canning was supported by US by US-land-lease shipments throughout the WW2 and american engineers were employed to build factories for food industry which were largely designed in US. For example, Krymskaya plant (Crimea, Ukraine) was installed by technicians from US. Plants under the Ministry of Food Industry produced an estimated 1,337 million cans in 1952. According to the report provided by CIA, soviet Ukraine specialized on the production of fruit and vegetable cans. The two largest canneries of the Soviet Union were the Krymskaya Canning Combine of Crimea region and the Stalin Gigantic Canning Plant of Kherson oblast. Despite overall modernization and development, which were also typical for the Second Food Regime, food industry in general remained backwards by US standards. Among the main reasons next four should be highlighted:

• Inefficient utilization of plant capacity;
• Lack of adequate refrigeration;
• Inadequate transportation;
• Unreliable sources of canning.

It should be mentioned that in contrast to the US processed foods and especially canned food that was consumed mainly by the inner market of consumers or exported to other countries, the canned products of USSR were “either stockpiled…or consumed to a lesser extent by a military. It is believed that the greatest share of Soviet canned food outputs goes into stockpiles”, stated in the report by CIA. It is not a secret that the army in USSR was a significant and numerous part of society and canned food represented a very important necessity for the ratio of armed forces. According to the population census of 1959, the number of the army on the territory of Ukraine was 810,000 of military personnel (not including fleet and secret services). Yes, the soviet army lived off land as much as possible in time of war, but as the tempo of destruction increased it was more difficult to live off the devastated territories and cans were the main source of food for all kinds of military.

Preserved manufactured foods were not only the “bridging technology between simple preservation” but also a type of luxury. Luxury of all kinds was an ashamed term in the soviet Ukraine because the quasi-modesty was a matter of fashion. Strange to relate, but canning further supplied choice of luxury items such as crab meat, caviar, and salmon for export to the western countries and thereby provided so much needed foreign currency, which in turn was laso typical for newly created nation states of the Second Food Regime.

Decidedly, part of the production output was consumed by the civilian consumers. Canning furthers the state policy of substituting processed food products, sold only through state channels of distribution thus tightening state control of food distribution. In Ukrainian soviet republic every shop had a number and same assortment. Stores were named after the food group, which was sold there.

Branding in the soviet Ukraine was rather exception. On average, food was unbranded and divided by type. For example, products in the bread shop were named according to the content: “zhitniy khib” (eng. Rye) – bread made from rye flour, “pshenichniy khlib” (eng. Wheat) – bread made from wheat flour, etc. However, some foods had their own names: “Kyivskiy Tort” (eng. Kyiv Pie), candies “Korowka” (eng. Cow) and “Romashka” (eng. Chamomile), melted cheese “Druzhba”. But again, these names were not really brands and were used as categories, because same products were sold under the same name on the territory of the Soviet Union even if products mentioned above are originally from the soviet republic of Ukraine.

Intensification of the food production also took place. These measures were not so different from the West but it would be fair to say that Soviets had a time-log and all the processes were way slower in comparison. In the 1970s and 1980s, an active phase of the intensification of the agrarian industry began and was later called the 'offensive actions against nature'. As of 1980, 1222, 8 thousand hectares of irrigated lands and 1348, 5 thousand hectares of drained lands were put into operation. The process of agricultural chemistry intensification had grown substantially: in 1970, for each hectare of sown areas, 55 kg of active substance of mineral fertilizers were introduced, in 1980 it was around 109 kg, and their total consumption increased to 3400. 5 thousand tonnes - 2,1 times more in comparison to 1970. In contrast, during this period yields of major types of cultivated crops significantly declined: grain - from 2. 34 tons/hectare in 1970 to 2. 3 tons/hectare in 1980, sugar beet - from 2. 8 tons/hectare to 2. 7 tons/hectare, sunflower - from 1. 54 tons/hectare to 1. 34 tons/hectare, potatoes - from 9. 9 tons/hectare to 7. 7 tons/hectare. Huge capital investments from state budget were spent for irrigation and land reclamation works, on contrast, investments in the high-efficient and environmentally safe development of land were clearly not enough. Apotheosis of the misplaced use of resources was the decision to mobilize hundreds of thousands of migrants from other regions of Ukraine and Russia for work on irrigated land in the South of Ukraine, but tangible growth in agricultural output was not obtained. Compared to the achievements of agriculture in many developed countries, the agrarian sector of Ukraine lagged significantly behind the level of labor productivity. If we compare one person in agriculture of those days with one employed in the USA, the last could provide with food for about 130 people, then the one in Ukraine – only 13 people.

Symbolically to begin this part with the conclusion that there was no organic production in Ukraine at the beginning of the last century - it did not exist as a category. Indeed, the roots of organic production in Ukraine are found in the book “The New System of Agriculture” (1898) written by the ukrainian scientist and farmer Ivan Ovsinsky. He was the first in the world who expressed the opinion that mineral fertilizers are causing harm to the soil. For decades he has been practicing the techniques of minimal soil cultivation, which are known today as “new system of agriculture of Ovsinsky”. The conditional transition to the next regime was market with some embryos of Ukrainian organics, which unfortunately were later suppressed. With development of the methods of Ovsinsky and using modern principles of organic farming, Semen Antonets in 1977 founded the first organic farm in Ukraine (Mikhayliki village, Poltava region) with an area of 7. 000 hectares. The farm has become a participant of a large-scale experiment on seamless surface treatment of the land. It should be outright noticed got a lot of skepticism about such kind of cultivation among cooperative workers and land managers of agricultural enterprises. Antonets said: “Fine surface processing of the earth gives the farmer confidence in the crop, because the land is better protected from all sorts of troubles. With this system there is no senseless 'struggle' with nature, there is the possibility of farming in harmony with it”. The farm gradually switched to the use of organic fertilizers and seed crops - the natural methods of reproduction of soil fertility. Despite the fact that this farm was quite large and showed impressive results, its experience has not been replicated on other farms of Ukraine. It happened that organic production did not get much attention also when Ukraine became independent state and there some reasons.

In 1991 Ukraine has become an independent sovereign republic. First of all, the time of Ukraine as part of USSR left a difficult legacy: a bloated bureaucracy, a large army, numerous enterprises of the military-industrial complex, depleted soils, and a difficult ecological situation. Yet in the first place among them was the food problem. Lack of food security has become one of the main reasons for the growth of socio-economic tension in the Ukrainian society. To overcome this situation, an agrarian reform was needed. In 1992, the Verkhovna Rada of Ukraine (eng. Parliament of Ukraine) adopted a new Resolution “On accelerating land reform and privatization of land”. The path of reforming the agricultural market (or better to say “creation of market”) in Ukraine, if compared with other states of Central and Eastern Europe, was largely unique - agricultural transformations were carried out in five directions:

• economic reform - transformation of collective farms and state farms into private-market structures;
• land reform - to protect the property rights of the peasants for land;
• formation of the agricultural market in place of the old plan-distribution system of product sales;
• financial stabilization - open the way for investments;
• social development - create self-governing territorial communities with normal conditions for life and work.

Together with transformations mentioned above, in the same period, so called restoration of organic production began now in the independent Ukraine. As was mentioned before, some farms during the soviet time were practicing soil-preservative “biological methods of agriculture”. However, ecology at all had never been a major factor for the food production in the former soviet Ukrainian area of industry. According to the various reports of the international organizations, Ukraine has all components for successful practicing of safe and stable organic agriculture as a result of relatively low levels of pesticide and fertilizer use (if compared to the West) in the 70s and 80s, fertile soils, and advantageous geographical location in terms of trade. As outlined in UNEP’s comprehensive assessment of Ukrainian region (sub-region “East Europe”), organic agriculture offers specific opportunities to Ukrainian agriculture:

• to revitalize depressive rural areas and improve functionality of the ecosystem;
• creation of new businesses;
• revitalization of the labor market in the rural areas;
• climate change mitigation.

In detailed summary of “The present state, challenges and strategy discussions” written by Viktor Vovk and Mykhaylo Kapshtyk can be found examples of what was a real booster for the development of organics in late 1990s and early 2000s. Important role was played by international organizations in cooperation with local agricultural institutions and the brightest example is Switzerland. In November 1997 of a group of specialists from various scientific and educational institutions from Ukraine had a training on organic and biodynamical farms in Switzerland. Next year, trainings were held for producers from Ukraine on issues of certification, production, marketing and processing of organic production, organization of training and extension in the area of organic agricultural production with the participation of Swiss specialists. Due to a massive conversion from conventional to organic production in countries of Europe and demand for organic products was steadily increasing in 90s that influenced the establishment of the first certified organic farms in Ukraine. As a result, many individual farmers and representatives of large conventional food production facilities joined certification process to organic agricultural production. For example, Ukrainian farm company 'Ukragrofin' as part of a joint project with the participation of Swiss partners, in 2000 was certified as organic production. Today it exports organic grain to the Netherlands, Germany and other countries (Milovanov, 2010). However, organic conversion process of many farms has been delayed due to not enough developed production marketing chains and the absence of the system of state support and stimulation of organic agricultural production. First discussions on the necessity of the development of the national strategy in the area of organic agriculture in Ukraine started at the end of 1990s again with the help of the Institute of Organic Agriculture of Switzerland.

Ukraine, having considerable potential for the production of organic agricultural products, its exports, consumption in the domestic market, has achieved some results in developing its own organic production. According to the official IFOAM statistical survey in 2002 there were only 31 registered organic farms in Ukraine. In 2003-2004 several farms of different sizes in Vinnytsia, Ternopil’, Kyiv and Luhans’k regions have been converted to organic farming as a pilot project based on technical assistance provided by the Swiss Cooperation Office within the Eco-Lan project:

Sustainable Land Use in Ukraine that was launched in January 2003. Most organic farms are located in Odessa, Kherson, Kyiv, Poltava, Vinnytsia, Transcarpathian, Lviv, Ternopil, and Zhytomyr regions. Ukrainian certified organic farms are of various sizes - range from several hectares to several thousand hectares of arable land. As of 2016 there were already 360 certified organic farms, and the total area of certified organic agricultural land amounted to 411,200 hectares. It is about 1% of the total agricultural land in Ukraine. If we compare this number with total organically farmed area in Poland it is uamounted to 657, 902 hectares with 24,800 organic producers. It means that despite bigger land bank and the same climatic conditions Ukraine is still behind its neighbors. Studies of the Federation of the Organic Movement of Ukraine show that the modern domestic consumer market for organic products in Ukraine began to develop from the beginning of the 2000s, amounting to 400 thousand euros in 2006, and in 2016 - to 21. 2 million million euro. At the same time, Ukraine occupies the first place in the Eastern European region regarding the certified area of organic arable land, specializing mainly in the production of cereals, leguminous plants and oilseeds. Next paragraphs are more in detail about main product groups of Ukrainian organics such as:

• oilseeds, cereals and dried pulses;
• fruits, berries and nuts;
• herbs and honey.

Ukraine is ranked sixth in global acreage of organic oilseeds and eighth in global acreage of organic wheat. Corn is Ukraine’s most important cereal and major part of it is exported in countries of the EU. On the one hand, Ukraine has capacity and expertise to further develop organic production of oilseeds and cereals whicn in turn provide possibilities for additional exports thoughout the world. This might be an opportunity for Ukraine to create new organic supply chains. Current prices for organic oilseeds, dried pulses and cereals are offering premiums that can fully compensate for the on-farm cost of converting to organic production. On the other hand, high domination of monocultures affects the quality of soils even if they are produced in accordance to the rules of organic production.

Another example of successful implementation of organic technologies can be tracked in the production of dried apples. Unfortunately, there are some bottlenecks. As it was correctly mentioned in the report by UNEP, on the mature markets consumer prefer brands that they know and trust, as a result it is difficult to export organic fruit products in the form of finished “labeled” products from Ukraine. Thus, Ukraine’s fruit organic production mostly supplies unbranded semi-finished products which later finally processed and labeled in the country of consumption. For example, ukrainian juice industry already sends a considerable amount of its products to the EU (64 per cent of the country’s total juice exports in 2013), but there is potential to further broaden the range of traded fruit juice varieties. On the basis of the foregoing it can be concluded that the inner market for organic fruits is relatively small and export of “raw” material is a necessity.

The production of organic herbs, herb-contend products and honey is usually associated with high profits and positive impact on the local environment. Certified organic herbs (as well as beeswax) are not only used in organically labelled food products and cosmetics, but also in pharmaceutical products as well as some non-organic teas. Situation is pretty the same is compared to fruits: around 80 % of the country’s honey is exported in the EU as non-branded Semi-finished product. Howsoever, last year was opened “Beehive standard” – the biggest honey production facility in Ukraine. Currently, they are in the process of certification for “True Source Certified” and “EU Organic Farming”. The core principle of their work is to collect honey from local beekeepers, which previously met all the standards, and put the final product in the world market of honey.

In conclusion we can say a few things on political willingness. Firstly, development of the organic production is still a matter of trend due to the fact that only 1% of agricultural land is under organic processing. However, the Federation of Organic movement of Ukraine holds out hope for a new law “On the production and turnover of organic agricultural products and raw materials” according to which in the state there is an intensification and revival of the development of the organic sector, as well as the impossibility of the existence of such a phenomenon as “pseudo-organic”. Secondly, it should be noted that while relevant sub-legislation has not been developed in Ukraine, domestic producers are undergoing a process of organic certification of their production in accordance with current international standards, most often, these are the norms of the European Union.

In addition, in the “State Program of the Development of Village” (period until 2015) was declared to bring the share of organic production in the total gross agricultural output to 10%, which, of course, was not achieved due to lack of political willingness and absence of the inner market for organics. In the “Strategy for the development of the agriculture for the period up to 2020”, which was approved by the Cabinet of Ministers of Ukraine, among the priority directions for achieving strategic goals and providing food security of the state was mentioned promotion of the development of organic agriculture, especially among small and medium-sized farms.

Ukrainian organics, as well as agriculture is full of opportunities. Historical perspective showed that the process of its development was conducted nonlinearly and often flowed under gravity of the common sense. Communism regime damaged not so much ukrainian land as people and their minds: people who could think and manage the land were simply exterminated. However, the times of independence have caused positive adjustments and today an increase in production capacities can be easily seen.

However, one should ask the right question: what is the real place of organics in Ukraine? Is it a real nation state or still the supplier of raw unprocessed products as it was before in case of USSR and now in case of the European Union? Examples of political willingness have been described above, but they are useless if the domestic market is not shaped by the consumer and producers will begin to produce organics not because it is a trendy or profitable - but because it is correct thing to do.