Kazakhstan Goes Organic in Bid to Build Niche in Grains Market
(Bloomberg) -- Kazakhstan is tapping growing consumer demand for organic crops to help it better compete in the food-export market.
The country wants to use much of its vast uncultivated lands to grow soybeans and other non-genetically modified crops for markets such as China and the European Union, Agriculture Vice Minister Gulmira Isaeva said. By offering non-GMO and pesticide-free produce, it hopes to carve out a niche in a crops market dominated by giants such as Russia, Australia or the U.S.
As the world’s largest landlocked country, moving crops to top importers is pretty costly. So rather than trying to compete with low-cost growers, Kazakhstan aims to grow more organic crops that can be sold at a premium. There’s room for growth because about half of its farmland is uncultivated, and the country plans to boost non-GMO soybean output at least 10-fold in the next seven years, Isaeva said.
“We can use these hectares for starting ecological production,” Isaeva said in an interview in London. “It’s our advantage. We cannot compete by price with U.S., Australian and Canadian agricultural products, but we can be a competitor in the organic markets.”
The organic food market is worth more than $90 billion globally and has grown in Europe and the U.S. in recent years. More consumers are opting for healthier foods and ingredients grown sustainably without the overuse of pesticides and chemical fertilizers, which have raised health and environmental concerns. As demand rises faster than the amount of available land, there are concerns about new sources of supply, industry group IFOAM Organics International has said.
The former Soviet republic is targeting boosting soybean production as much as 15-fold to 3.9 million metric tons in the next seven years. The plan includes subsidizing farmer costs and building infrastructure and irrigation systems, Isaeva said. The organics expansion is also part of a broader strategy which includes developing the livestock sector and improving grain-export routes.
Kazakhstan hopes to export much of its produce to the EU, the second-biggest organic market worth about $35 billion, Isaeva said. China has also shown an interest in buying Kazakh soybeans, she said.
“We present Kazakhstan as an organic country, ecological country and therefore we want to be producing non-GMO, free from some chemical pesticides,” Isaeva said. “We want to use only natural means of production.”
Still, Kazakhstan’s organic industry is relatively small. Less than 1 percent of the country’s agricultural land is dedicated to organic cultivation, compared with almost 15 percent in Italy or about 7 percent in Portugal, according to a survey by the Research Institute of Organic Agriculture.
Other countries are also increasingly turning toward organic farming. Production is growing in Ukraine, where the number of organic-certified farms doubled in two years through 2016, according to the country’s Organic Federation. The nation, which exports everything from grains and pulses to wild berries and nuts, could become a leading supplier of organic grains, adviser Agritel said last month.
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