Organic Decline?

Radish

Most certainly organic

Recent reports suggest that all is not well with organic food production within the United Kingdom. Despite the trumpeting of various television personalities, the well publicised health benefits of organic produce and continuing questions being raised over food contamination, the domestic organic market is struggling.

Reports published at the start of 2013 have shown that the amount of land dedicated to raising organic produce has decreased, the number of organically reared livestock has fallen and the organic sales market has contracted; reinforcing a trend that has been common over the last five years.

Whilst the recent horse meat scandal helped to push up demand for organic food in the first quarter of this year, supporters of the organic movement have to hope that this trend continues over the coming months, as the following fact based assessment of the organic market (up to the beginning of 2013) makes rather depressing reading.

Market Decline

With decline in demand for organic produce, it is not surprising that the organic market as a whole has contracted and the most recent Soil Association Market Report details a total market share decline of some 1.5% in 2013; a decrease from a value of £1.67 billion at the start of 2012, to £1.64 billion.

Unfortunately this follows a similar trend established in previous years with a 3.7% decrease in market share in 2011 and a 5.9% decrease in 2010.

The reason? The Soil Association clearly points the finger of blame at the recession.

Middle income families (the largest element of the market and accounting for the greatest spending potential) have been hardest hit by the recent economic downturn and consequently, during 2012 their share of spending in the organic market fell by around 33%; when the purse strings tightened in middle income families, many turned away from more expensive organic produce.

As eluded to earlier the start of 2013 has provided a glimmer of hope as increasing numbers of consumers decide that slightly more expensive food may be worth paying for to be assured of its provenance and as a result first quarter sales of organic have increased by 8.4% in the wake of the horse meat scandal.

Less Land, Less Livestock

In light of this market contraction it is unsurprising that DEFRA’s 2012 Organic Statistic Report details a large decrease in the acreage of farmland dedicated to organic crop production and the number of animals being reared organically. If the demand for organic produce isn’t present, there is little incentive for farmers to dedicate time, money and land to growing organic crops or rearing organic livestock.

As a result, the end of 2012 saw a 7.4% reduction in the total acreage of UK farmland classified as organic compared to the previous year, with land dedicated to organic vegetable production dropping most significantly by 21.8%, but closely followed by land for cereal growth (8.8%) and other arable crops (10.4%).

The long term picture is none too healthy either, with conversion land  (land which must be managed organically for two years, before being approved as organic by the Soil Association) dropping by a worrying 12.4% in the UK, clearly signalling that fewer and fewer farmers are willing to commit to future organic production.

The organic livestock market is suffering too, as smaller numbers of animals are being brought up on organic feed and without the aid of artificial supplements.

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Once the most common organic meat purchase in the supermarkets, demand for organic chicken has fallen massively and resulted in a huge reduction in the number of organic birds being reared for meat and egg consumption, with end of year figures following a five year downward trend. In 2008 there were some 4.3 million organically raised birds in the UK but by the start of 2013 that number was down to just 2.4 million.

The organic pig market has been hit particularly hard, with animal numbers down from 53,000 in 2011 to just 35,000 by the end of 2012; a massive reduction of some 34%. This decline has undoubtedly been aided by many EU states steady refusal to impose agreed upon EU welfare standards in pig farming which UK farmers have embraced.

This has allowed some foreign producers to flood the domestic UK market with cheap pork that has been raised to much less exacting welfare standards and at a much lower cost compared to the UK equivalent. In a tough economic climate, consumers are being increasingly tempted by these cheaper offerings, totally undercutting the UK domestic conventional and, most significantly, organic pig markets.

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What’s next?

As someone who whole heartedly agrees with the principles of organic farming, one hopes that the current trend is a blip and can be reversed in the future when the economy recovers from the current recession.

When household budgets are tight, it is totally understandable that consumers will cut down their food bills by reducing the amount they spend on organic produce, or, like me, decide to grow it themselves!  In better economic times, disposable income will, for many, increase (we hope) and it is possible that demand for organic produce will rise once again.

However, an ever growing number of farmers do not share this confidence and are deciding to revert back – or convert – to ‘conventional’ farming in the wake of lower demand for organic goods.

In the long run this could turn out to be a common theme amongst current organic farmers who, in the face of increasing population size and ever spiralling demand for food, could find themselves under a great deal of political, popular and price pressure to farm conventionally; maximising crop production whilst simultaneously minimising the space and manpower required to do so. If global food supplies do become as short as some predict, there may not be the ‘luxury’ for large scale organic production within the UK.

It will certainly be interesting to see what happens over the next couple of months, years and decades in the UK organic food sector.

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