PRODUCTION AND MARKETS OF ORGANIC PRODUCTS IN BULGARIA PRODUCTION OF...

1.Production and markets of organic products in Bulgaria

Production of organic products in Bulgaria is still very small sector in country’s agriculture, although it slightly increased in the last years. In fact only 0.003% of cultivated areas are under organic production (corresponding to 0,22 % of the UAA). According to Agrienvironment Department in MAF, in 2003 the organic farming methods were applied to 8 364 ha and in 2007 the area with organic product production reached 9 377 ha from which 6 500 ha are certified and nearly 3 000 ha are in conversion. The certified areas for collection of wild berries, herbs and mushrooms are 242 700 ha. There are 12 green houses for organic production of fruits and vegetables with 206 440 square meters that corresponds to 20,64 ha certified agricultural area. Altogether 77 holdings produce organic plant production (56 are already certified and the rest 21 were in conversion. One of the organic holding is mixed – for plant and animal production. Currently four farms produce organic propagation material and seeds. Organic livestock farms breed in total more than 3 000 animals - cattle, sheep and goats (722 in 2003). One of these holdings is mixed and in conversion period. It breeds 294 sheep. In 2004 the number of certified apiaries was 258 with 23 508 bee families kept in compliance with organic production requirements. Another 11 apiaries with 375 bee families were in conversion period. Organic farming processing in Bulgaria currently (2007) includes: Drying of herbs, spices, seeds Processing of organic products, including cultivated herbs and spices, packing of fruit, vegetable and mixed vegetable-fruit foods with low content of sugar Bee honey and honey products processing Processing of cultivated and wild herbs Oil and cosmetic production through processing of essential crops in the distillery Milk processing for production of yoghurt with 2% and 3,6% fats, sour milk with 1,5% fats and condensed cream with 15% and 37% fats Freezing and drying of fruits and vegetables Distillation of essential rose and lavender oils Over 90% of the certified organic production in Bulgaria is exported, mainly to the West European countries (ethereal and herbal plants, vegetables, berries, honey). Bulgarian organic vegetables and herbs are sold and advertised sporadically on the local market (Biofest, vegetable market in Plovdiv -Agroecological Center and Ecofarm,etc). The country imported a few certified organic products. These include baby food “Hipp” and “Sunval” and coffee "Green Mountain Roaster". The market of organic products is one of the most dynamic in the world. For Bulgaria it is still new, poorly developed and studied. At this stage of development, the market for organic food in the country is defined as " nascent" (Dzhabarova 2007). Many reasons can be counted for the underdeveloped Bulgarian domestic market for organic products – relatively low disposable income of the population, highly specialized local organic production and processing which is nearly entirely targeted at foreign markets, etc. But obviously one of the main problem is not well structured supply chain of the organic products in Bulgaria. National Plan for Development of Organic Farming in Bulgaria describes three prevailing marketing channels. The first one is through farmers’ organizations – cooperatives or other legal entities. The union of several farmers allows them to gather sufficient supply quantities from their small-scale production units. The products marketed through this channel are dairy (milk, yoghurt and cream), herbs, spices, honey, jams, dried fruits and mushrooms. Such organizations rarely export directly. The only example for such an export at present is Bio Bulgaria that has managed to export organic mint and other herbs. Second channel is used by individual producers, normally registered as juridical bodies, who are able to offer sufficient quantities from their own production for export. These are companies that deal with production, processing and export of organic products. The production of each company is certified from different European certifying organizations, most often from the importing country. The technical consultations in the production are also done from the importing company. Normally producers from this group do not advertise their organic activity in Bulgaria. All of them consider that it is still early for offering organic products at the Bulgarian market, due to the economic status of the consumers. The third channel of marketing the Bulgarian organic products is through organizations that are buying produce from many agricultural producers and forming the necessary quantities in order to export them as a raw material or after processing. Usually most of these companies are specialized in wild berry or herb collection and processing/packing. Whatever the type of supply chain is, according to National Plan for Development of Organic Farming in Bulgaria, their main weakness is the lack of a developed domestic market. The National plan classifies major problems in the supply chain as follows: low variety of organic farming products, due to export orientation of organic farming. At the same time there are insufficient number of processing enterprises for organic farming products. Tax preferences or other supporting measures for organic farming processors are missing lack of specialized distribution networks insufficient quantity of organic farming production that could not satisfy the demands of large retailers usually the processing of the organic farming products takes place outside the production area, even outside the country there is no demand for organic farming products caused by lack of promotional strategy on the domestic market. Some quite unprofessional and partial attempts for promotion of organic farming products were made. The national logo for indication of organic farming products is not in use and is not recognizable no requests for marketing research or analysis for organic farming products information for the size of national market of products is missing information and literature about organic farming is insufficient low level of information spread among the society on protection of the environment no experience in diversification of selling methods like futures deals with organic farming products