Sustainable development of organic agriculture: Strategies of Russia and its regions in context of the application of digital economy technologies

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Sustainable development of organic agriculture: Strategies of Russia and its regions in context of the application of digital economy technologies

organic agriculture digital economy

N. Yu. Nesterenko¹, N. V. Pakhomova¹, K. K. Richter^1,2

¹ St Petersburg State University,

7-9, Universitetskaya nab., St Petersburg, 199034, Russian Federation

² European University Viadrina,

59, GroЯe ScharrnstraЯe, Frankfurt (Oder), 15230, Germany

This paper analyzes the potential of organic agriculture to meet effectively the increasing demand for high-quality food, to increase its export potential, and to solve the country's import substitution problems. The article also reveals the importance of digital economy technologies for increasing the sustainability of organic production. Among the most significant are cloud computing and large databases that contribute to the development of precision farming, continuous online monitoring of the quality of various stages in technological chains, automation and robotization, etc. Following recommendations of the “Organic Agriculture 3.0” conception, the authors examine the appropriate environmental, economic, social, and institutional factors to elaborate complex development strategies for agriculture in Russia and its regions. A special environmental index is proposed to determine environmentally friendly regions that are mostly suitable for organic production. The authors discuss an economic indicator to assess the potential of unused agricultural land for organic farming. The proportion of unemployed working-age population in rural areas serves as a social indicator for the study. By analyzing these selected indicators, four groups of Russian regions with different conditions for developing organic agriculture are identified. With respect to varying potentials of the regions and the external institutional context, the authors qualify different regional competitive strategies and corresponding product niches. The study also provides guidelines for Russian agrarian and environmental policy to support effective development of organic production.

Keywords: sustainable development, digital economy technologies, organic agriculture 3.0, export potential, supply and demand for organic food, regional priorities, local food supply chains.

Устойчивое развитие органического сельского хозяйства: стратегии России и ее регионов в контексте применения технологий цифровой экономики

Н. Ю. Нестеренко¹, Н. В. Пахомова¹, К. К. Рихтер^1,2

¹ Санкт-Петербургский государственный университет,

Российская Федерация, 199034, Санкт-Петербург, Университетская наб., 7-9

² Европейский университет Виадрина,

Германия, 15230, Франкфурт (Одер), Гросе Шаррнштрассе, 59

В статье органическое сельское хозяйство анализируется с точки зрения его способности эффективно удовлетворять растущий спрос на высококачественные продукты питания, увеличивать экспортный потенциал и решать проблемы импортозамещения в стране. Специально рассматриваются экологические и климатические последствия интенсификации аграрного сектора экономики. Наряду с этим раскрывается важность технологий цифровой экономики для повышения устойчивости органического производства. К числу наиболее значимых в этом контексте относятся: облачные вычисления и большие базы данных, которые способствуют развитию точного земледелия; постоянный онлайн-мониторинг качества различных этапов технологических цепочек; автоматизация и роботизация как средство снижения возрастающего спроса на трудовые ресурсы для органического производства, в особенности в секторах с преобладанием ручного труда. Следуя рекомендациям концепции «Органическое сельское хозяйство 3.0», авторы изучают соответствующие экологические, экономические, социальные и институциональные факторы для разработки комплексных стратегий развития сельского хозяйства России и ее регионов. В статье применяется специальный экологический индекс, позволяющий выделить экологически чистые регионы, которые соответствуют требованиям органического производства. Экономический индекс предложено формировать с учетом оценки потенциала неиспользуемых сельскохозяйственных земель, годных для органического земледелия. В качестве социального индикатора используется показатель доли безработного населения трудоспособного возраста в сельской местности. На базе указанных индикаторов сформированы четыре группы регионов с различными условиями развития органического сельского хозяйства. С учетом наличия у регионов страны различных потенциалов для развития органического производства, а также принимая во внимание внешний институциональный контекст, авторы определяют региональные конкурентные стратегии и соответствующие им продуктовые ниши. В исследовании также приводятся рекомендации для российской аграрной и экологической политики, призванной полнее поддерживать эффективное развитие органического производства.

Ключевые слова: устойчивое развитие, технологии цифровой экономики, органическое сельское хозяйство 3.0, экспортный потенциал, спрос и предложение на органическое продовольствие, региональные приоритеты, местные цепочки поставок продовольствия.

Introduction

In Russia, in the search for new sources of sustainable economic growth and to increase the well-being of the population, while implementing import substitution and expansion of non-oil exports, increasing attention is paid to the potential of the agricultural sector. In 2018, Russia's agricultural exports grew by 19.4 %, reaching 25.8 bln doll. In 2024, according to official plans, it should increase to 45 bln doll. [Pertseva, 2019]. At the same time, both experts and representatives of official circles often focus on the traditional segment of agrarian production, with its inherent product specialization and organizational forms and domination by large-scale agro-business [Danshin, 2018; Klimova, 2017].

When assessing the traditional approach, scholars first notice that the agrarian sector misses an orientation to innovative products, processes, and high added value. Second, this approach does not take into account possibilities from the 4^th industrial revolution and digitalization. Third, the ecological impact of the growth of traditional agricultural production on other sectors of the economy remains out of serious analysis [Aganbegyan, Porfiryev, 2015; Porfiryev, 2015]. Usually, productivity growth is reached by increasing the use of mineral fertilizers, agricultural pest control chemicals, and other methods of large-scale industrial production. This increases pressure on the environment as well.

In this context, several authors pay attention to opportunities from organic agriculture for integrated solutions to these problems [Schulze et al., 2015; Altukhov, Nechaev, Porfiriev, 2013; Norse, 2012; Einfalt, Kazda, 2016; Nesterenko, Pakhomova, 2016]. In discussing their proposals, the term “organic agriculture” should be clarified. The International Federation of Organic Agriculture Movements (IFOAM) suggests the following definition: “The organic agriculture is a production system that sustains the health of soils, ecosystems and people. It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather than the use of inputs with adverse effects and combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good of life for all the parties involved”¹.

This integrated approach will promote achievement of environmental, economic, and socio-cultural goals. In the case of Russia, this means reorienting the country's agro-industrial complex to innovative products with high export potential and potentially steady global market demand. It also means that organic agriculture will help meet the demand of the Russian population for high-quality, ecologically clean food. Focusing on this agricultural model will also contribute to increasing the innovative potential of the country's economy. In this case we can talk about the use of the whole complex of innovations, including product technological, organizational, marketing, and social innovations. An example of technological innovation is resource-saving technologies that provide minimal and “zero” soil treatment (tillage). Digital technologies promise significant innovation potential for the sustainable development of organic agriculture. In this context cloud computing and large database technologies are among the most important contributors to the development of precision farming as a key component in the third wave of modern agricultural revolutions, which replaces the so-called green revolution IFOAM -- Organics International. URL: https://www.ifoam.bio/en/organic-landmarks/definition- organic-agriculture (accessed: 11.02.2020). “Precision agriculture is understood as application of precise and correct amount of inputs like water, fertilizer, pesticides etc. at the correct time to the crop for increasing its productivity and maximizing its yields” (Wikipedia. The Free Encyclopedia. URL: https://en.wikipedia.org/wiki/Precision_agriculture (accessed: 30.01.2020)).. In the same context the use of the industrial Internet and high-resolution satellite data allow organizing online monitoring of the quality of the interconnected technological chains of organic production. The use of digital technologies to organize organic farming also contributes to the transparency of business processes, which is especially important to maintain high product quality and consumer confidence in organic products.

The development of organic production and the increase in its export potential will also lead to a significant reduction of environmental stress and will also mitigate climate risks. Let us discuss some of these consequences in more detail, as they are often beyond the attention of economists.

In many countries, especially in recent years, agriculture has received considerable attention due to global interest in reducing environmental pollution and avoiding global climate change. This sector accounts for 24 % of the total burden on the environment in the form of greenhouse gas (GHG) emissions. In 2017, in Russia, the share of agriculture was 5.9 %, not including servicing branches and excluding LULUCF (Land Use, Land-Use Change and Forestry). While in Russia this share is relatively small, and although atmospheric emissions of agriculture decreased by 54 % in 2017 in comparison with 1990, this sector is still considered a source of some of the most dangerous GHGs United Nations Climate Change. URL: https://unfccc.int/documents?f%5B0%5D=document_ type%3A4145 (accessed: 1.05.2020).. These GHGs include methane (CH₄) and nitrous oxide (N₂O), whose negative climatic effects are many times higher than those of carbon dioxide. Not only GHG emissions, but also the production of mineral fertilizers is understood to have a negative ecological impact.

Measures to increase agricultural productivity over the last few years reveal questions in need of environmental policymaking. The growth of production, the increase of mineral fertilizer production, and the extension of export potential have been accompanied by increasing pressure on ecosystems. In 2018, according to National Report about the cadastre anthropogenic emissions from sources and absorption by scavengers greenhouse gases not regulated by the Montreal Protocol, emissions from production of ammonia and nitric acid, mostly used for mineral fertilizer production, amounted for 50 % of all GHG emissions in the chemical industry United Nations Climate Change. URL: https://unfccc.int/documents?f%5B0%5D=document_ type%3A4145 (accessed: 1.05.2020).. Nevertheless, agricultural productivity in Russia remains behind productivity of countries with comparable climatic conditions. For example, in 2017 in Russian yield of cereal was only 2.964 t/ha, compared with 4.043 t/ha in Canada and 4.200 t/ha in Poland The World Bank. Data.worldbank.org. URL: https://data.worldbank.org/indicator/AG.YLD.CREL. KG (accessed: 17.02.2020).. One of the main reasons for this lag is the limited use of mineral fertilizer. In 2016 Canadian consumption of fertilizer reached 87.6 kg/ha, versus 172.8 kg/ha in Poland and only 18.5 kg/ha in Russia (2016) The World Bank. Data.worldbank.org. URL: https://data.worldbank.org/indicator/AG.CON.FERT. ZS (accessed: 15.02.2020).. Overcoming this lag without appropriate environmental measures will be accompanied by an increase in the negative ecological consequences. One of such measures can be the development of organic agriculture, which is characterized by less negative environmental impact.

Raising the question of the accelerated development of organic agriculture, specialists also draw attention to Russia's avorable opportunities for increasing the supply of organic food to the national and international markets. Russia possesses potentially significant areas for developing organic agriculture. According to the Russian agricultural census of 2016, 17628.8 thousand ha of agricultural land were not used for their intended purpose -- 12 % of all agricultural land in the country (142659.7 thousand ha) The Russian Federal Department of Statistics.URL: http://www.gks.ru/news/perepis2006/totals-osn. htm (accessed: 11.01.2020).. An important prerequisite, as we shown in detail below, may be the presence in several regions of high unemployment, which might provide a pool of labor for organic production (after requisite training).

In general, experts regard the potential demand for organic food as favorable, especially in the global market. The production of organic products currently forms a dynamically developing segment of world agriculture, with an annual increase in production of 10 % or more. Such dynamics are twice as high as the growth of the global food market. In 2017, the volume of production in this segment increased by 12 %, reaching 93 bln euro. By 2020, the global market for organic products is estimated to grow by 16 % compared to the current year and its volume will be 143 bln euro Rosbusinessconsulting.ru/ URL: https://www.rbc.ru/trends/green/5d656e9f9a79476e81356224 (accessed: 09.05.2020).. By 2025, the volume of consumption of organic products in the world will amount to 195.8 bln euro [Pertseva, 2019]. Compared to China, which is currently the world's leader in terms of organic arable land, Russia is geographically much closer to the largest market for organic products, European Union countries. The significance of this market is determined by the fact that the EU population is currently the global leader in consumption of organic food. In the EU, the share of organic products ranges from 0.2 to 9 % of the total food supply. Of course, for the active participation of Russian producers in foreign markets, it is necessary to overcome considerable obstacles, including the mutual recognition of national certificates for organic products.

Currently, the demand for organic products in Russia is growing faster than globally, by 23 % per year. However, the share of organic products in the country accounts for only 0,1 % of the total food market, and on average only 1 % of Russians buy organic fruits and vegetables [Prospects for the development..., 2019]. In absolute terms, the market volume is estimated at between 120 mln euro and 160 mln euro, while the share of domestic producers in this market is about 20 %. Less than 1 % of all agricultural enterprises in Russia are engaged in producing organic products. And Russia's share in the global organic market is only 0.15 %. This situation is mainly a consequence of the fact that 95 % of Russian investments in this sector are private. The state for all practical purposes does not participate in the development of this agricultural sector. Meanwhile, for organic production to become a stable segment of the national economy, it must occupy at least 10-15 % of the country's food market [Maksimova, 2018]. These data indicate that there is significant potential for increasing the volume of organic production of both to increase the export of agriculture products and to meet the growing demand for high-quality food from the Russia population. They also indicate the need for a more active involvement in the development of this sector of all stakeholders, including the Russian government.

The problem of developing organic production of agricultural products has been discussed by experts for several years [Schulze et al., 2015; Altukhov, Nechaev, Porfiriev, 2013; Norse, 2012; Einfalt, Kazda, 2016; Nesterenko, Artemova, 2018; Pakhomova, Nesterenko, Richter, 2017]. Representatives of the authorities have also joined this discussion in recent years. Positive changes are also taking place in the preparation and adoption of legislation. 01.01.2020 the Federal Law “On Organic Products and on Amendments to Certain Legislative Acts of the Russian Federation” entered into force, dated 03.08.2018 No. 280-FL Consultant Plus. URL: http://www.consultant.ru/document/cons_doc_LAW_304017/ (accessed:.. The legal basis for introducing organic principles in agricultural production is also formed by the following GOSTs of the Russian Federation: GOST R 56104-2014 “Organic food products. Terms and Definitions”; GOST R 57022-2016 “Organic Products. The order of the voluntary certification of organic production”. In addition, the International Standard adopted by the Eurasian Council for Standardization, Metrology and Certification (EACS) is applied in the Russian Federation -- GOST 33980-2016 “Organic Products. Rules of production, processing, labeling and implementation. NEQ CAC/GL32-1999”. The International Standard of Eurasian Economic Union (EAEU) is harmonized with the EU Council Regulation No. 834/2007 of June 28, 2007 “On Organic Production and Labeling of Organic Products”, as well as with the IFOAM basic standards. These standards form the regulatory basis for the production, identification and certification of organic products [Chukhlantsev, 2019]. At the same time, purposeful efforts are now needed to ensure international recognition of the standards adopted in Russia and in the EAEU.

Several important initiatives, including in connection with the preparation and adoption of Federal Law No. 280-FL, are being implemented at the level of the President of the Russian Federation and the Government of the Russian Federation. Thus, during the preparation of the Message to the Federal Assembly, the President, Vladimir Putin, instructed the preparation of measures necessary for the speedy creation and promotion of the Russian brand of environmentally friendly (organic) products to foreign markets. These measures are important for strengthening the export potential of Russian organic products. In the meantime, the country's organic brand is only being formed, and Russian exports not finished products, but mostly raw materials estimated at 10-12 mln euro per year [Labykin, 2019].

Along with the obstacles listed above, considerable restrictions in Russia also remain on the side of market demand, due to insufficient income of the main part of the population for consuming organic products. The price is usually higher for organic than traditional foods in developed countries by 30-50 %, while in Russia the price gap is 200-300 %. In this case, balancing supply and demand is most acute in the regional context because the supply of organic food comes mainly from regions with the most favorable conditions and resource potential for production, while demand for more expensive products is mainly concentrated in large cities. Until recently, it was presented mainly in the network retail premium segment [Nesterenko, Pakhomova, 2016; Nesterenko, Shagalkina, 2019; Arkhipova Kulagina, 2018].

Based on projects reported on this issue, published results, and unresolved problems, this paper will focus on development strategies for organic agriculture in Russia and in its regions, keeping in mind opportunities from digital technologies. The authors proceed from the fact that when determining strategic priorities for the development of organic farming, we should take into account the diversity of natural and climatic conditions, as well as discrepancies in the population's living standards in Russian regions. Regional differences in quality and areas of agricultural land, as well as availability of other resources, do not allow unified approaches and tools for developing this sector. Under these circumstances, it is more beneficial to concentrate on regional priorities and available production and social resources [Shcherbakova, 2017; Avilova, 2016; Grigorian, Kulagina, Sungatullina, 2016; Nesterenko, Pakhomova, 2016].

The emphasis on regions can be justified by another circumstance. In conditions of permanent delays in the adoption of federal legislation, Russian regions were forced to develop and implement appropriate measures on their own initiative. Examples include regional laws on organic farming developed in 2013-2014 in Ulyanovsk and Voronezh Regions, in Krasnodar Territory, and several others. Regional experiences in the development of organic agriculture is of interest and can serve as a basis for developing differentiated strategies in the regions. However, these regional laws and experiences were not based on an analysis of regional production and natural resources within the context of a strategy for sustainable development of agriculture in Russia as a whole.

For determining such a strategy for sustainable development of organic agriculture, identifying the main areas for the application of digital technologies is often recommended [Knoll, Czymmek, 2018]. We rely on in their study. Some publications examine the application of digital technology in agriculture in general [Skvortsov et al., 2018].

Our article will explore prospects for developing organic agriculture in Russia, with an emphasis on differentiated regional strategies. The main objectives of this paper are:

• to complete an analysis on ways to reduce environmental impacts of agricultural production and on prerequisites that Russia has for developing organic agriculture;

• to identify strategic priorities for developing organic agriculture in Russia, by considering contemporary approaches to sustainable agriculture and with an emphasis on the regional dimension;

• to set up areas of application of digital economy technologies and their opportunities for overcoming barriers to developing organic agriculture;

• to reveal regions that have environmental, social, and economic potential for a transition to a model of organic agriculture and to qualify different regional competitive strategies and corresponding product niches for organic agriculture development;

• to propose some recommendations for the modernization of Russian agrarian and environmental policy.

The environmental impact of Russian agriculture and preconditions for developing organic farming

As noted earlier, the environmental impact of Russian agriculture could be improved further by the implementation of the Governmental Program on the development of agriculture for 2013-2020, which implies an increase in agricultural production by more than 24 %. However, this program doesn't include directions stipulating the reduction of environmental impacts of increasing agricultural production. The development of the economy, including growth in agricultural production, can lead to a considerable rise in greenhouse gas emissions by 2020. For example, over the past ten years, cereals production in Russia has been growing at an average annual rate of more than 10 % per year. In 2017 cereal production reached 131.143 mln t The World Bank. Data.worldbank.org. URL: https://data.worldbank.org/indicator/AG.PRD.CREL. MT (accessed: 17.02.2020)., of which 36.19 mln t were exported The Statistics Portal for Market Data, Market Research and Market Studies. URL: https://www. statista.com/statistics/244263/exports-of-cereals-by-russia-2002-2013/ (accessed: 22.02.2020).. Grain exports are intended to compensate for the deficit in the federal budget caused by a decrease in export revenues from the sale of hydrocarbons.

Assessing the ecological load of agriculture in Russia and its dynamics, it should be noted that the increase in energy efficiency of agriculture in an important trend in this sector. Certain efforts to raise energy efficiency in agricultural production are being taken, especially for animal husbandry. The decline in energy intensity in this sector, and hence the reduction of GHG emissions, are linked to the transition of several technological processes to the use of energy resources produced by processing agricultural waste. For example, Belgorod Region possesses stations to produce biofuels from livestock waste, which simultaneously solves the problem of waste disposal of the largest livestock complexes.

We have already noted significant opportunities in the field of organic farming development; it is possible to talk about 17.6 mln ha suitable for organic farming. The objective of escalating agricultural production, specified by the Russian Government, focuses on the need for reclaiming this unutilized land. As a result, considerable investment in soil purification will accompany both organic agriculture and industrial production of agricultural products. Forest areas are also a potential reserve to develop organic production. In 2015 up to 8.3 % of all organic products in Russia were wild plants. In prospect, this niche can be developed by involving the population of rural areas and certification of these areas.

At the same time, experts rightly warn that advantages of developing organic agriculture should be promptly realized. So far, not only the volume of organic food production is extremely small in the country, but due to an underdeveloped certification system, products already produced cannot be recognized as organic either in the domestic or, especially, international markets. Several large foreign producers operating in Russia and intending to launch organic product lines, such as Danone, faced a shortage of raw materials. The situation is similar with network retail, which today is ready to allocate shelf space for organic products and to conduct independent PR campaigns. Entering international markets requires intensifying efforts to recognize Russian standards for organic products by IFOAM, whose standards are the basis for national standards in all countries [Labykin, 2019].

The success of developing organic production, experts note, is to a large extent related to the speed of measures being implemented, until the global market is saturated and organic products bring increased margins. Today, it is necessary to increase attention to producing organic food at all levels: both from the executive and legislative branches of power in the center and in the localities, and from agricultural producers. Among the most important goals today is developing strategies at the federal and regional levels for developing organic agriculture, justifying their priority areas, determining the amount and sources of funding, information, and consulting support measures, and so on.

Prerequisites for developing organic agriculture, as well as the role of this model of agricultural production in reducing the environmental burden, will be in the focus of the authors and further, including when detailing the strategy for the development of organic production in a regional context.

Research methodology and strategic priorities for developing organic agriculture in Russia

Solving the tasks facing Russia to ensure the dynamic and effective development of organic agricultural production requires a well-thought-out methodology. This is the subject of discussion in scholarly literature. Some authors focus on problems of low-carbon agriculture [Smith et al., 2007; Davidson, 2009; Long, Lee, Tebeest, 2011; Norse, 2012; De Moraes et al., 2017]. They consider organic agriculture a key direction for the transition to a low-carbon economy in the agricultural sector. According to [De Moraes et al., 2017], low-carbon agriculture is based on three principles: low carbon dioxide (CO₂) emissions from land use changes and best practices; high CO₂ mitigation through agricultural production systems based on best management practices; and high carbon sequestration potential with the adoption of integrated crop-livestock-forestry-systems.

This approach, with environmental goals as the highest priority and with viable means to achieve them, still seems too narrow. The concept of organic production 3.0 is more in line with modern integrated concepts of agricultural development. This concept was proposed by Strotdrees, which launched the idea of organic production 3.0 in 2011 [Strotdrees et al., 2011]. Arbenz defined Organic 3.0 as a modern, innovative agricultural system that holistically integrates ecology, economy, society, culture, and accountability into local and regional contexts [Arbenz, Gould, Stopes, 2017]. Altieri believed Organic 3.0 could have help solve tasks of climate change mitigation [Altieri et al., 2015]. The most important challenge for organic agriculture is to move from a purely agricultural perspective towards organic production as an agri-food system. Among the characteristics of this system are the following [Rahmann et al., 2017]:

1) production of healthy and safe food in volumes that can meet the needs of the growing population;

2) reduction of pollution and greenhouse gas emissions derived from food production, processing, trading, and consumption;

3) development of food chains driven by renewable energy and recycled nutrients;

4) adoption to climate change and mitigating greenhouse gas emissions;

5) protection of soils, water, air, biodiversity, and landscapes;

6) incorporation of current and emerging ethical systems, food habits, lifestyles and consumer needs.

It follows from these characteristics that Organic 3.0 includes the culture of innovation; continuous improvement towards best practices; diverse ways to ensure transparency and integrity; inclusive of wider sustainability interests; empowerment from the farm to the final customer; and true value and cost accounting.

The concept of organic production 3.0 needs some modernization in the context of the digital revolution. Several authors, studying the impact of the 4^th industrial revolution and related digital technologies on organic agriculture, have developed the concept of organic production 4.0. This concept deserves serious attention and will serve as the methodological basis for our subsequent analysis. F. J. Knoll and V. Czymmek, in this regard, note that “digitization makes it possible to collect, store, analyze, and communicate large amounts of data. By digitizing farms, a network of different sensors can analyze the nutrient content and the soil texture in real time. This information can be evaluated, and the plant distribution can be managed across all networked farms. This leads to the right field being used for the right plant at the right time” [Knoll, Czymmek, 2018, p. 17]. The use of digital technologies is not only the basis of the precision farming model, but also, as was noted earlier, contributes to the transparency of business processes, which is especially important to maintain high product quality and consumer confidence in organic products. In the following analysis, we will explore possible applications of digital technologies in organic production.

However, let us return to Organic 3.0. Among the characteristics noted earlier and tasks solved by Organic 3.0, it is important to focus on economic, social, and environmental objectives. It is easy to see that these goals are central to the contemporary concept of sustainable development.

Let us begin with the social dimension of sustainable development and organic agriculture. Agriculture, being the fundamental activity of humankind, is traditionally considered an economic activity with important social functions. It provides a significant part of the global population with jobs and income. The social dimension must also be considered when assessing economic efficiency of production and consumption of organic food, including the positive effects of environmentally friendly products on the health of the population, especially children. Furthermore, forcing the development of this sector can have a positive impact on the social situation in rural areas by involving local people in production processes and preserving a traditional way of life [Schulze et al., 2015; Nesterenko, Pakhomova, 2016].

At the same time, the social effects of organic production are not unambiguous. The industrial model of agrarian production provides significant improvement in working conditions and standards of well-being for rural workers in general. We cannot ignore numerous examples of violations of minimum wage laws by eco-farmers to ensure their price competitiveness with conventional farms Zeit ONLINE. URL: http://www.zeit.de/2016/13/landwirtschaft-oekobauer-mitarbeiter-ausbeute (accessed: 22.03.2020).. In this regard, it is worth paying attention to computerization and robotization, which have significant potential for reducing the need for workers, including those engaged in manual operations. Robotization of agriculture animal husbandry is currently gaining ground in domestic enterprises that use the organic production model and it can bring tangible effects through monitoring animal health, controlling the quality of milk, rational use of feed, etc. Computerization and robotization not only reduce costs and increase efficiency of animal husbandry, but also can help solve reduce shortages of skilled labor in rural areas [Skvortsov et al., 2018].

Comparison of the conventional and the organic agricultural models must consider the goal of increasing food production for growing populations and to raise living standards. In this context specialists pay attention to the higher economic efficiency of conventional agricultural production, including its higher productivity [Schulze et al., 2015; Schulz, 2012]. In Russia, agriculture faces challenges of growth in domestic demand for food as well. Moreover, as noted, Russian agriculture must increase its export potential by almost 80 % to cover budget revenues lost by declining raw material exports. In addition, the industrial model is characterized by moderate consumption of energy resources in comparison with organic production, if we consider the lower productivity and yield of the latter ATTRA Sustainable Agriculture. URL: https://attra.ncat.org/attra-pub/summaries/summary. php?pub=301 (accessed: 17.03.2020)..

At the same time, a comparison of economic efficiency of traditional and organic farming models is incomplete without considering opportunities available from precision farming methods. According to some estimates, the Green Revolution, with new methods of genetic modification, increased labor productivity and allowed each farmer to feed about 155 people. By 2050, the global population will reach about 9.6 bln, and food production must effectively double from current levels. With new technological advancements in the agricultural revolution of precision farming, each farmer will be able to feed 265 people on the same acreage Ernst & Young Global.URL: https://www.ey.com/en_gl/advisory/how-digital-agriculture-and-big- data-will-help-to-feed-a-growing-world (accessed: 14.01.2020)..

As for the ecological dimension, despite earlier beliefs, many studies have shown that organic agriculture does not have absolute environmental benefits [Schulze et al., 2015; Williams, Audsley, Sandars, 2006; Schulze, 2014]. For example, in the case of grazing cattle as required by organic agriculture, greenhouse gas emissions are higher than for stabling. Thus, ecological aspects of the problem require in-depth study. On the one hand, agriculture is one sector most vulnerable to adverse climate impact. Experts estimate that global food production could drop by 17 % for each degree of temperature rise because of extreme weather events (drought, flooding, etc.) Agricultural and Rural Convention. URL: http://www.arc2020.eu/2015/12/what-will-the-paris- agreement-mean-or-farming-food/ (accessed: 19.01.2020).. On the other hand, agriculture must reduce its burden on the environment in terms of greenhouse gas emissions as per decisions taken at the Paris conference. According to The Fourth Biennium Report of the Russian Federation, a share of GHG emissions from agriculture is 5,9 % (Figure 1). Simultaneously, this sector has a significant potential for reducing GHG emissions, for example, due to the use of precision farming, organic technologies, and so on. These conclusions are correct for Russia's agriculture as well.

Fig. 1. GHG emission structure in Russia

Based on: United Nations Climate Change. URL: https://unfccc.int/documents? f%5B0%5D=document_type%3A4145 (accessed: 01.05.2020).

These mixed results allow us to conclude that it is beneficial to apply different models to agricultural development and to elaborate balanced strategies for Russia and its regions. This can be achieved addressing to the contemporary conception of sustainable development, including “European Initiative for Sustainable Development in Agriculture” with its goal of merging advantages of traditional industrial methods with requirements of organic agriculture. The concept of integrated farming, developed within the framework of this initiative, is directly oriented to tasks facing agricultural enterprises. This concept, while supplementing capabilities inherent in digital technologies, may be useful for Russian agricultural businesses. By this concept, integrating farming is a sustainable production system that allows farmers to optimize farm management, to raise further awareness, and continually to improve everyday practice to meet future environmental, economic, and social challenges and hence achieve parallel progress in all dimensions of sustainable development European Initiative for Sustainable Development in Agriculture. URL: http://sustainable-agriculture. org/integrated-farming/ (accessed: 10.02.2020)..

If summarized, “The European Initiative for Sustainable Development in Agriculture” demonstrates a holistic view of economic, ecological, and social challenges to society and a balanced way of development goals and strategies at the international, national, regional, and micro (business) levels. Based on this concept, it is possible to show that conventional agriculture has no negligible advantages compared to ecological agriculture, especially if the attention is drawn to the above-mentioned global task to supply the increasing world population with food and to provide for these people proper job quality and living conditions.

The development of a balanced and differentiated approach to agricultural production can also be observed when addressing the question of its place and role in softening global climate problems. In modern conditions agriculture needs to increase the volume of an agri-food production while managing climate change. In this context, attention should be paid to climate-optimized sustainable development of the industry. The main objectives of this concept are: steady increase in a productivity and a profitability of agriculture; adaptation and increased resilience to the climate change; and reduction and/or termination of greenhouse gas emissions where possible. Climate-optimized sustainable development is one of eleven corporate priority areas for resource mobilization within the framework of FAO's strategic objectives. It is consistent with the concept of sustainable nutrition and FAO's agriculture. And it supports FAO's goal to make agriculture and forestry, as well as fishing, more productive and sustainable AgroPraktik. URL: http://agropraktik.ru/blog/1005.html (accessed: 19.02.2020)..

As for Russia, the growth of agricultural production leads not only to higher greenhouse gas emissions, but also to a significant environmental burden in terms of soil quality, biodiversity, and other aspects. However, developing sustainable agriculture is more multilateral and includes a social dimension. It is not reasonable to ignore that in rural areas there are many social problems including unemployment, low level of education, and lack of young people. The long-term crisis in this sector in Russia has led to many young people migrating to the cities.

The formation of adequate institutional conditions for developing agriculture, primarily its organic model, is one strategic task. The Federal Law “On Organic Products and Amendments to Certain Legislative Acts of the Russian Federation”, adopted on 03.08.2018 and coming into force on 01.01.2020, No. 280-FL, requires a system of regulatory documents ensuring its practical implementation. Russia's national standard of organic agriculture (GOST R 56508-2015) approved by in June 2015, needs international acceptance, especially from the European Union. Under these circumstances, best international practices need to be applied along with the EU experience to coordinate agricultural and environmental policy, which is currently being adapted to targets of the Paris agreements. These documents include the Action Plan for the future of Organic Production in the European Union (European Commission Brussels, 24.03.2014. COM (2014) 179 final), which also contributes to objectives set out in the Europe 2030 Strategy. In line with this document, the Common Agricultural Policy and the 7^th Environment Action Program 2020 require attention. Note that in Russia there are no analogues to several of the above-mentioned documents, making it difficult to conduct an effective public agricultural policy based on the principles of sustainable development. However, the government draft plan of measures for ratifying the Paris Agreement and its implementation is now being developed, which we consider a positive signal. The Russian Ministry of Agriculture also takes part in elaborating the Action plan to reduce greenhouse gas emissions.

Sustainable development of agriculture involves achieving a balance between supply and demand for agricultural products, as briefly noted -- especially for organic production. Regarding the magnitude and structure of effective demand for organic products, several articles have focused on obtaining more accurate estimates of these parameters. They analyze such problems as willingness to pay the extra price for organic food, differences in the perception of local and foreign organic products, trust as a factor of choice, and the like. The organic food consumer's focus on local products is related not only with trust in local production processes, but also a willingness to support local producers. In Russia's case, this thesis is confirmed by [Shcherbakova, 2017] using the case of the Komi Republic. Consumers are more likely to buy organic products because of trust in production processes, including those in terms of environmental quality in a region. The consumer's willingness to pay a premium for organic products was researched in surveys conducted in Russian regions [Honkanen, Frewer 2009; Popova et al. 2010; Kravchenko, Stetsyuk, Kuripko, 2019; Scherbakova, 2017; Komarova, Beresneva, 2019]. Data indicate a willingness to purchase more expensive environmentally friendly products. However, it is worth noting that this is a characteristic of consumers with high earnings. For consumers with an average or below-average incomes, growth in demand for organic products will rely on more active social policy. Among priority measures in this area is reducing sharp differentiation in incomes (we recall that the Gini coefficient for incomes is about 14 in Russia), as well as pension reform.

Analyzing the task of balancing supply and demand for organic products, one should also turn to new opportunities from the active development of digital platforms in the economy, including in its agricultural segment. Digital platforms can perform various functions facilitating market transactions between different business entities [Richter, Pakhomova, 2018]. They facilitate the promotion of organic food by organizing networking between producers and consumers, reducing the number of intermediaries due to the spread of direct sales from the manufacturer. Digital platforms can combine manufacturers from different regions with minimal transaction costs, which is important for organic products, the production of which is often localized in some regions, and demand can be formed in completely different ones. It is necessary to pay attention to the fact that these opportunities are realized in practice. So, since 2016, the largest Russian digital platform PROD. CENTER has been functioning, which is focused on producers and buyers of agricultural products. Based on this platform, various products of livestock breeding and crop production, as well as poultry, fish, vegetables, and fruits, are traded. Another example is the Foofza digital logistics platform, which brings together more than 100 small and medium-sized farmers and greenhouse complexes throughout Russia, making it possible to directly connect manufacturers with wholesale buyers: restaurants, cafes, hotels, small shops. All these circumstances are important to keep in mind when analyzing the sustainable development of organic agriculture in a regional context.

Selection of regions corresponding to environmental, social, and economic parameters for the transition to the model of organic agriculture

Russia is characterized by a great diversity of geographic and cultural landscapes, which creates many opportunities and risks for sustainable development of agriculture. The geographic location of Russian regions and diversity of landscapes and climatic conditions require the development of differentiated strategies. To differentiate the regions while choosing priority organic clusters, we distinguish the following consumer parameters: the quality of the environment in a region, availability of unutilized agricultural land, and availability of labor force. Geographical proximity to large cities with high living standards is relevant only for those segments of organic agriculture in which perishable products are produced.

The main goal of this section of our study is to identify promising regions for developing organic agriculture, which not only possess the production resources of the required quality, but also where the level of environmental pollution is relatively low. We have analyzed the transition to organic agriculture by implementing internationally known methods for various Russian regions. Below we briefly describe this method. The authors identified factors contributing to the development of organic agriculture and regions that have the greatest potential for this task. Differentiation of the development of organic farming should be based on existing opportunities and barriers related to the environmental situation in the regions, the availability of production resources, and the possibilities of its support from the regional authorities.

As for production, the drivers of transition to organic farming are the availability of unutilized agricultural land and the number of unemployed people in rural regions. In addition, it is necessary to consider the impact of an environmental situation in the regions on the quality of organic products. To assess the quality of the environment in the regions, we also used data from an integrated environmental index calculated by the Russian non-governmental organization “Green Patrol”¹⁸. This index is formed by integrating the parameters that characterize the level of atmospheric pollution, the level of water pollution, the degree of soil degradation, protected natural territories, biodiversity, and climate changes.

In the first stage of our research, we assess the ecological situation in Russia's regions and select regions where the quality of the environment corresponds to or exceeds the average level in Russia using data from NGO “Green patrol”. The ecological rating of Russian regions is carried out because of generalization of information from various sources, including social media, authorities, public and expert organizations, economic entities and initiative groups of citizens. The scores obtained by rating are relative, and they depend on the indicators reached by all rating participants in the reporting period. Thus, the positions of a specific region in the index may differ from period to period with constant indicators due to changes in the indicators of other regions. Below we consider the indicators used in rating in detail:

• atmosphere -- an indicator that reflects the level of air pollution in the Russian regions (more precisely, in subjects of the Russian Federation); this indicator also considers emergencies associated with pollutant emissions, modernization of gas treatment facilities, etc.;

• water resources -- an indicator shows the state of natural waters (seas, rivers, lakes, groundwater, etc.), the quality of drinking water in the regions. This indicator also shows the quality of treated wastewater discharged into water bodies, construction and modernization of treatment facilities, etc.;

• land resources -- an indicator demonstrates the state of land resources in subjects of the Russian Federation, processes of soil degradation and reclamation, and application of environmentally friendly technologies for land use;