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Producer Confidence Vital To Organic Growth Return

A leading organic supplier has warned the sector’s anticipated return to growth in 2011 is being undermined by constant pressure on farm margins.

Ian Proctor, managing director of Hi Peak Organic Feeds believes the supply of home produced high quality organic food to supermarkets will be under threat unless a greater proportion of consumer-spend is channelled back to the farmer.

“A growing unease among many organic producers about farm-gate prices is creating uncertainty. Organic farmers must be confident that income covers costs-of-production with sufficient remaining to deliver a sustainable business,” said Mr Proctor.

“Losing home producers to greater imports is a possibility. There must be greater awareness among retailers as a whole about what constitutes a realistic income for their suppliers. If our organic producers are pushed too far there can be no guarantee that British organic food will be available to meet demand.

“In the case of organic milk, low prices ensue despite rising commodity feed prices with few – if any – herds entering conversion. And failure of prices to reflect rising production costs also risks compromising production standards.

“A return to sustainable growth requires confidence throughout the supply chain. Those who claim we need to move beyond the narrow debate of who is getting what margin are missing the point. If some in the supply chain receive insufficient margin for long enough, eventually they will cease to be part of the supply chain,” he added.