Organic products in the context of their competitiveness

Diliana Mitova

Abstract: In its policy, the EU has repeatedly focused on organic farming as a way to achieve sustainable development. Reform of the Common Agricultural Policy also comes from the idea that we should encourage quality rather than quantity, stimulating the organic sector and other environmentally friendly methods of agricultural processing. The aim of this paper is to demonstrate the competitiveness of Bulgarian organic products on foreign and domestic market against foreign organic products; their weaker competitiveness on domestic market compared to conventional products; and issues affecting the competitiveness of organic farming as an agricultural system. It is generally accepted that the products are competitive when produced with higher quality at lower production costs than competitors. Opinion of the author is that although the competitiveness of products is associated primarily with the economic aspect of the analysis, the factors that influence to increase or decrease the competitiveness of organic products have social and environmental conditionality. Important role in enhancing the competitiveness of the Bulgarian organic products at home and international markets play a number of objective and subjective factors: increasing the area of crops grown organically at home and then - the amount of organic products; expanding range of organic crops as a guarantee to diversify the range of the proposed organic products; tendency to significantly increase the consumption of organic foods in the world; level of awareness of consumers, channels of realization, the prices of organic products, diversifying the range and quality of organic products, the state policy on organic farming. Areas occupied by organic farming in Bulgaria are growing and has the potential to expand as the basis for future increases in the amount of organic products. The number and type of crops grown organically also increased. The range of organic products offered in our country and the international market expands and diversifies. National and international market opportunities for Bulgarian organic products are not yet fully defined. Based on the meager statistics and marketing surveys it can be argued that the Bulgarian organic products have great potential for export to European markets. Data shows that in Bulgaria between 80% and 95% of organic production is exported, mainly to European market. The majority of exporters believe that in general Bulgarian organic products are competitive in foreign markets because: they are not inferior in quality to foreign products; because of lower prices, lower cost, and strict fulfillment of the requirements. However, demand for organic products on the domestic market is not great. Organic farmers claim that in general on the Bulgarian market consumption of organic products is very low comparatively to conventional one. Channels for the realization of organic products at home should be extended and enriched with new ones, which provide better opportunity for the producers to protect the price of organic products. Expectations are optimistic about the future with a view to increasing production and consumption of organic foods. Guaranty of this is the large number of potential users. Penetration of organic products on the market is relatively small, as show research, opportunities for development in the future are ahead, but nevertheless Bulgarian organic products increase their competitiveness comparatively to the foreign ones. Serious problem for the competitiveness and reputation of organic products is unfair competition of many conventional products on the shelves bearing the logo “bio”, “eco”, “from the clean area”. To ensure effective market supervision for preventing counterfeits and imitations of organic products is necessary to develop a system to ensure reliability and safety of organic products. Another factor with strong impact on shrinking consumption is the price of organic products. The majority of organic products are from percentages to two times more expensive than conventional alternatives. Excessively high prices for some organic products would also distanced consumers from the organic market. Price perceptions; however, is largely conditioned by the perception of product quality. When comparing between the Bulgarian and imported organic products, most of Bulgarian organic farmers believe that the Bulgarian organic products are of better quality than imported products. The views of Bulgarian consumers are that Bulgarian organic food is both offered at lower prices and higher quality than their imported counterparts. Most consumers expect organic products to cost more than conventional products. However, prices that potential users are ready to pay are closer to those of conventional prices rather than actual prices paid from current users of organic products. This means that regardless of the effects of other factors (awareness, accessibility, etc.) price could prove a serious obstacle to expanding the market share of organic products in the near future.

Keywords: competitiveness; consumer demand; market; organic farming; organic products; prices; quality; sales

Date published: 2018-01-29