Recession uproots organic farms
Given the expansion of supermarkets such as Aldi and Lidl and the profitability by Sainsbury’s, it is clear who the winners of the credit crunch are. However the losers are those who have experienced 15 consecutive years of extraordinary growth.
The Soil Association’s 2009 Organic Market Report said that although organic sales have risen by 1.7 percent due to the huge increases in food prices over the last year, organic sales would have had to have increased by over 6 percent in value.
This is in stark contrast to the period between 1996-2006, where there was 20 percent growth year-on-year across the decade.
Supermarkets have taken on an even larger chunk of organic sales and this has been made even worse by the fact that 90 percent of all organic fruit is imported into the UK.
With a shrinking market and tumbling margins it is increasingly tough for UK organic farmers.
Farmers markets are still healthy, although there has been a shift in consumer spending habits with more people spending on fresh organic foods to prepare at home with ready meal sales plummeting, according to the report.
The price of organic food has fallen, although the price drop has not been filtered onto customers at the supermarkets and this, in turn, has been the biggest killer for organic produce.