United Kingdom-Organic slowdown.


Consumers throughout the UK in 2008 spent about £80 billion on food and drink: that figure looks set to be even higher in the current year, with the food price inflation running at well over 10 per cent.

During the past decade there has been a huge upsurge of interest in organic production, but sales of food and drink from this minority movement still only amounted to £2.1 billion last year – a modest increase of 1.7 per cent on the 2007 sum.

The credit crunch is having a noticeable impact on the organic sector, with many of the major outlets reporting a decline in sales as consumers become increasingly price conscious. That much was conceded yesterday in a major report published by the Soil Association, the umbrella organisation for the organic sector.

Peter Melchett, policy director of the Soil Association, said: "This has been a really difficult period for all in the retail sector, and organic sales have suffered along with the rest of the economy. But those consumers who are truly committed to organic products appear to be staying loyal. This shows the resilience of the organic market, which we believe will grow again once the economy picks up."

The report, however, shows that there has been a sharp fall in sales of certain organic products, including fruit, bread, soft drinks and prepared foodstuffs. But this is countered by claims that organic sales at farmers’ markets increased during 2008 by 18.6 per cent to a gross value of £23.7 million.

There are about 500 serious organic farmers in Scotland and many are feeling the pinch. A core problem is sourcing animal feeds that have been produced without the use of chemicals and fertilisers. The cost of these materials has put many businesses under severe pressure. The biggest difficulty is finding proteins, such as soya and maize glutten, that can be guaranteed as coming from crops that are not based on genetic modification technology.

The irony remains that GM crops require much less in the way of chemical inputs than those raised under a conventional regime, but the Soil Association has persistently refused to allow its members to use such products. There was a plea some months ago from a minority of organic producers for the Soil Association to allow them a "holiday" from the GM prohibition but still permit them to retain their certification status. This was rejected on the grounds that such a break would destroy the integrity of the entire system.

Arable farmers who grow organic cereals would have been the big losers in any relaxation of the rules. Their yields of cereals are appreciably lower than conventionally grown crops and it is argued that this requires an ex-farm price at least double that of typical barley or wheat.

Hugh Raven, the director of the Soil Association in Scotland, said: "Overall I would say that the current economic downturn is having a mixed effect. It is clear that those involved in the red meat and salmon sectors are having considerable problems with previous price premiums being difficult to sustain. But it is also true that those who have locked into specialist markets, such as selling boxes to order, are still doing well."