Farmers supported Arnika’s idea to unite in an organic cooperative

Agri-industrial group Arnika initiates the establishment of a grain organic cooperative that will unite medium and small enterprises and farms that grow organic products.

This information was announced by Oleg Maksak, the Managing Director of Arnika, on the Field Day "Legumes — Peculiarities of Growing in Organic Agriculture". The event was held on July 20 on the O.P. Don facilities in Teplik village, Vinnytsia region.

Applying organic technology to cultivate 15.7 thousand hectares of land, Arnika is the largest operator of the organic market in Ukraine and has extensive experience in production and export activities. According to Oleg Maksak, the company is ready to share their competencies with those farms that will join the organic cooperative. Therefore, organic technology refuses the usage of chemical processing agents, and requires a number of special procedures that are necessary to obtain and confirm the organic status. Arnika has experienced staff who can help meet the stringent European and world requirements for organic products.

"There are still many problems for an average farmer. For example, warehouses and dry cleaning equipment must meet strict certification requirements that differ from the general rules. Special procedures for packaging and labeling of organic products, the formation of commodity export batches, sampling and analysis for product safety, shipment and document circulation have been established. The cost of a single analysis in a certified European laboratory is about €700 per batch. Consequently, the smaller the lot of goods — the higher is the cost. And one can stumble upon unscrupulous traders who either impose their conditions, or post factum, unfairly accuse the supplier of non-compliance of the products with the declared parameters. And this is only some of the risks and expenses in organic export business," Oleg Maksak said.

Small farms can not cope on their own, thus, the partnership with agriholding consolidates efforts. Farmers provide land resource and organic products, meanwhile Arnika helps in the following:

• organic certification (EU, Switzerland, USA, Canada) and documentation;
• integrated agronomic support (selection of crops, seeds and crop rotation, organic agrotechnology, plant protection, etc.);
• construction or upgrading of warehouses and dry cleaning equipment in accordance with organic standards;
• consolidated commodity export consignments;
• establishing cooperation with reliable foreign traders and processors;
• execution of export procedures;
• use of own logistics infrastructure;
• defending the interests of the cooperative members, etc.

According to Andrei Pilipchenko, the founder of Arnika, if 5-10 enterprises with at least 1 thousand hectares of land assets form the cooperative, the project will acquire a guaranteed economic meaning. Farmers who are ready to join the cooperative and switch from traditional technology to organic, in 2 years of the conversion period will receive at least UAH 5-8 thousand of additional profit per hectare. A long-term partnership with Arnika will make the cooperative association a powerful player from Ukraine in the European and world organic markets.

On the Field Day event, it was suggested to establish a pilot center for such cooperative association on the basis of the О.P. Don farm.

"This is not just an interesting idea. This is an urgent necessity. We do not manage to sell our organic products and can not cope with various risks. That is why I strongly supported Arnika's proposal straight ahead,” comments Aleksei Don, the owner of the farm.

The farmers were enthusiastic about the idea of partnership with the agricultural company.

In particular, Yuri Mikhailov, the owner of Rumava from Kharkov region, believes that over the past decades Ukrainian entrepreneurs have tried the "taste of independence", but at the same time enough time has passed to understand that they are competing with the global agricultural companies.

"In order to compete, we need to unite. Such cooperative is one of the best opportunities for farmers, especially if the interests of all parties are taken into account," said Yuri Mikhailov.

He is sure that synergy effect of the cooperative will make it possible to reduce risks, increase revenues, become more competitive.

Let us remind that recently Arnika exported 30 tons of hemp seed to the US.