The 2014 Market Report from organic farming organisation the Soil Association has revealed a growth in organic sales for the first time in four years.

image expired

Prior to its release on Thursday, the Association had hinted that the Organic sector would return to growth. The last market report, published last year in the immediate wake of the horsemeat scandal, revealed that a slow decline appeared to have reversed during the first few months of 2013.

The sector took a major hit in 2008, coinciding with the onset of recession in Britain. In contrast to most other EU states, sales of organic products continued to fall in the UK until last year. Some exponents of organic farming blamed supermarkets for the drop in organic sales; they claimed that organic products were the first to be replaced with low-cost items when the economic downturn caused large retailers to panic.

Patterns observed in the organic sector appear to have borne out their suspicions, at least in part. Direct and online selling, veg box deliveries and sales through independent retailers are all major sources of trade for organic products. Sales from independent retailers increased 7 percent over the period (or by almost £10 million each week).  

On the other hand, organic sales in supermarkets increased by 1.2 in 2013, though leading retailers Sainsbury's and Waitrose reported increases well above this level.

Over the year, overall sales of organic products increased by 2.8 percent compared to 2012 levels. Organic groceries pushed slightly ahead of overall grocery sales, which saw a 2. 1 percent increase. The organic market is now worth £1.79billion in the UK, according to the 2014 market report.

The Soil Association said the positive trend looks set to continue, with organic sales for the first four weeks of 2014 seeing growth of 2.5 percent, outperforming overall grocery sales, which were down -3.2 percent.

Land area falls, though sales increase

However, despite the positive market report, Defra figures show that the number of producers and organic land area continued to decline in the year to December 2012. The numbers of organic producers and processors also fell by 6.3 percent to 6,487.

Currently around 3.5 percent (606,000 hectares) of the agricultural land area in the UK is organic and the 2014 Organic Market report shows that up to a third (34 percent) of farmers are considering switching to farming organically within the next five years. However, only those who go organic by the end of July 2014 will be eligible for OELS (Organic Entry Level Stewardship) funding from Natural England. The NELMS (New Environmental Land Management Scheme) scheme will replace OELS funding but agreements will not start until January 2016 – leaving a gap where there will be no funding available for those wanting to switch to organic farming.

Emma Hockridge, head of policy at the Soil Association, commented on Thursday, "We are advising producers who are considering going organic to do so by the end of July 2014, or they will not receive support payments until the new 'NELMS' scheme is open in January 2016. Payments will continue as usual to farmers already in OELS and other agri-environment schemes until their agreements expire.

"It is not possible to say yet how the new NELMs scheme will measure up for organic farmers, compared to the existing scheme. We advise anyone thinking about going organic to carefully consider their own individual circumstances and the market conditions, as well as making sure they seek advice.

"UK organic farmers currently receive the lowest payments across the whole of the EU. We are urging the Government to urgently redress this balance and ensure organic farmers in the UK are adequately supported in the new Common Agricultural Policy."

Rob Sexton, CEO of Certification with the organic organisation, added, "2013 has seen a decline in the amount of agricultural land in the UK that is organic and we know that many farmers are concerned about the profitability of organic. We have strong evidence to show that organic farming systems are more profitable than non-organic and we know that demand for organic is increasing amongst consumers. A serious injection of producer confidence is needed, in the shape of increased commitment from retailers and policy makers to help support existing organic farmers and grow the market in future, ensuring organic supply can meet increasing consumer demand."