Organic farmers have hit back at claims that consumer demand for organic food is dropping as a result of the credit crunch.

Peter Melchett, Soil Association policy director, said speculation in the national press that people had stopped buying organic food because it was seen as a luxury item was "completely untrue".

"This is still higher than other food sectors, which are expecting a 2-3% increase."

While growth in the organic market had slowed from recent years, market research company Mintel predicted a 10% increase in the market this year, Lord Melchett said.

Increased costs

Costs of organic production had increased, but these had stayed in line with conventional costs of production and there was no financial reason organic farmers would convert back to conventional farming, he added.

"All of us have to pay more for diesel but the main cost pressure on farms is fertiliser prices, which doesn't affect organic farms. And while organic feed costs have doubled, conventional feed has more than doubled."

Guy Watson, founder of Riverford organic box scheme, said his sales had increased by 10% in the past year.

"There's definitely been a slowdown, but it was inevitable as nothing carries on at that rate [30-50% over five years]. Our established customers are still interested in buying organic."

Markets

Rather than pulling out of organic production, Mr Watson said most of the 13 farmers who supply produce for the box scheme were looking to expand.

"They are committed to what they do and are looking to us to find other markets for them.

"The organic market hasn't had an uninterrupted line of growth. I have been doing this for 22 years and this is the third slow down, so I'm not going to panic."

Richard Hampton, Omsco sales and marketing director, said the economic situation had not altered consumer demand for organic dairy products.

However he said the number of farmers converting to organic had slowed as the return from conventional farming has increased, while cost and supplies of organic feed made organic production less attractive.

"We will be talking to customers to secure an increase so we can give organic dairy farmers the confidence that money will be there to cover rising feed costs."