EXPERIENCE OF FOREIGN PRACTICE IN THE PRICES FORMATION ON ECOLOGICAL PRODUCTION

EXPERIENCE OF FOREIGN PRACTICE IN THE PRICES FORMATION ON ECOLOGICAL PRODUCTION

S.M.Zhulega

It is distinguish such concepts as:

- Ecological (organic) production also can be named as biological production;

- Traditional production of agriculture.

Manufacture of ecological (organic) production is based on non-application of chemical fertilizers, herbicides, pesticides, chemical methods of the processing, genetically modified components. Traditional production is the production which has been grown up with application of chemical fertilizers, herbicides and others. [3]

Distinguishing of organic production from traditional in Europe and America has occurred approximately in one time in 1950^th. Products grown up in the ecological way at first were sold in the farmer markets, then on counters and now there were networks of organic supermarkets worldwide. [2]

In Russia sale of organic production is too small, as in our country there is a little information about such production and this information isn’t available to wide ranges of buyers. There is no certification of such goods that is the guarantor of safety of production for population health and environment. The European experience shows that certification for home producers will allow: - to increase a sales volume of the certificated enterprises; - to increase profit, at the expense of rise in prices for production; - To increase a sales volume of production protected by the Sign of the certification. [6]

In many countries there is a control over safety of production. It influences the formation of demand for these or those goods. The Russian market in comparison with European is badly developed in recognition by buyers of ecological production. For this purpose the European commission develops uniform marks for given production.

Organic agriculture requires more expenses (expensive technologies, a high share of manual skills, additional certification) and time than manufacture of traditional production with application of the chemicals, allowing to receive more output. Production received without application of chemicals is considered as "elite" in the modern world therefore cost of such production is considerably higher. [2]

Rise in prices for more quality production will allow receiving the additional profit. So in the countries of America and Europe sale of organic production has reached 10 %, considering that the prices for them are on 30-80 % more expensive than on traditional products. For example, in home market of Austria the price for organic production on the average are on 25—30 % higher than on traditional products of agriculture. The prices in Norway on some organic products are in 2 times higher than on traditional production of agriculture. [3] The basic markets, by the given kinds of the goods are Germany, Great Britain, France, the USA, Canada and Japan. Thus abroad ecologically (organic) products are in 1,5-3 times more expensively than traditional products as requirements to their manufacturers are rigid enough. Only after 3 years of special clearing, the earth on which it is planned to make ecologically (organic) production, receives the ecological certificate. [5]

Thus, the role of influence of concept «ecological safe production» on price formation grows. Ecological safety is the criterion of quality. Hence, at goods choice in the market criterion «safety of a product» for buyers will be more important than criterion «the low price».

The organic agriculture in developing countries creates new commercial possibilities. Demand for ecological products is the reason of creation of new export possibilities of trade as it is impossible to satisfy a stable demand for non-polluting production only at the expense of internal manufacturers. The export prices for ecological (organic) products are usually on 40 %-100 % higher than on traditional products. [4]

One of the important factors at goods choice is the price. On the sociological interrogation spent in one of big cities of Russia in 2008, it has been found out that:

- the majority of people are ready to spend money on buying of ecologically safe production to some extent. 72,8 % prefer to buy non-polluting production on 10 % more expensive;

- quantity of the respondents who are ready to buy the harmless goods on 30 % more expensive makes 17,9 %;

- 87 % of townspeople will prefer to buy production with ecological mark without price change, in the presence of such goods in shops. [5]

From this it follows that manufacture and realization of ecological agricultural production renders the least harm to environment. The reason for buying of ecologically safe production is not only care of the population of the health, but also care of environment ecology as the agriculture chemistry is not liquidated by the nature. However as foreign practice shows the prices for ecological production are considerably higher than on traditional production.

For the decision of the revealed problems we offer the following recommendations:

1. It is necessary for state to develop uniform legislative base of certification of ecological production using foreign experience in order to prevent the use of the name «ecological production» for the production of traditional manufacture.

2. After the certification of ecological production will be adjusted and marks «a non-polluting product» will appear. It is not excluded that the prices will grow on such goods, taking into account the experience of foreign countries. The state should develop the methodology of price control to the given kinds of production in order to prevent prices growth.

3. As the majority of the non-polluting lands is in territory of the Russian Federation, it is possible to suggest for foreign countries to lease our lands which are not used for manufacture of non-polluting production.