Organic: Supply vs Demand

Despite rising solidly across Europe, the amount of land used for organic food production in the UK is falling, experiencing a decline of almost a fifth since 2010.

Slowly but surely, some organic farmers are moving to conventional methods to produce our food, citing unaffordable feed and fertiliser prices and vets bills as their reasons for the change of heart. The fewer UK farmers producing organic food, the less homegrown organic food there is for consumers to purchase – a situation which has led British supermarkets to sell organic food from as far afield as the US, Africa and Asia.

Despite this, UK sales of organic products are currently worth in excess of £1.86 billion, the highest level since 2009. Independent retailers alone saw a growth of 5.7 per cent in 2014. So what does this change of heart mean for us, and the future of organic food in Britain? Two experts share their views.

Peter Melchett, policy director at the Soil Association
Organic production has been down here since 2008, but with the market now growing strongly, the real problem we face is increasing demand with what is now lower UK supply. Defra secretary of state Liz Truss wants us to be more self-sufficient in UK farming, and we agree, but without real encouragement from the Government, the shortfall between UK organic farming’s supply of food and UK consumers’ demand for organic food will continue to widen – sucking in imports. The UK was the only major organic market in the world that saw declines in sales in the recession. Demand, sales and supply of organic have grown in the other key global markets (by size – the USA, Germany, China and then a host of other EU countries) from 2008 right through the recession, so other countries will step in to supply the UK if British farmers do not.

We desperately need government ministers like Liz Truss and George Eustice to see the need to grow organic production in the UK as part of delivering on their key agricultural policy for this Government, namely to ensure that a higher proportion of our food comes from UK production. We think that organic is an absolutely crucial part of that, particularly as the organic market is growing by 4 or 5 per cent, whereas non-organic food sales have actually been falling recently.

I don’t think the low level of subsidy is the one key reason why the amount of land in organic production in the UK has fallen recently, I think there are two key reasons. First, the fact that sales fell at the start of the recession in 2008, because the main multiple retailers took organic food off their shelves to make space for cheaper ranges as they focused on competing with Lidl and Aldi. Organic sales actually continued to grow in all the other main organic markets in the EU and in North America and China, so the market signals were completely different in the UK than in any other country with a significant organic market.

Second, as the Soil Association has been saying for many years, we get much less encouragement and non-financial support from the English government than is the case in other European countries, and the same tends to apply in Scotland and Wales too. So this is not just about money, but about the extent to which government ministers talk about the importance of organic food and farming, and public procurement encourages organic food purchases.

Roger Kerr, chief executive of Organic Farmers & Growers
At OF&G we work closely with the Organic Trade Board (OTB) and their research shows that the top reasons for people who buy organic food are organic’s proven environmental and nutritional benefits, high animal welfare and social responsibility. None of these drivers are going to change with the news that some farmers are leaving organic, so I don’t see people’s desire for organic products decreasing. In fact, the OTB has indicated that 45% of consumers intend to purchase more organic products in future. So you can see that there is huge potential for growth, but we would very much like to encourage a sensible view of the clear economic advantages for those food producers who are able to take on organic production.

In the organic sector we have been building more resilient and productive farming systems, greater biodiversity, high food quality and fair supply chains. We need to keep going and to keep improving, keep development of organic agriculture at the forefront of food production. To achieve this, we need legislators both in Europe and nationally to join us in helping enable the sector to really grow, to flourish and to help in collaboration with the wider industry to produce ever more environmentally sensitive, fresh food while making farmland and farm businesses more resilient and more a part of communities.