Organic Centre Wales will receive £2m to support the development of organic businesses in Wales over the next three years.
The money, from the Wales Rural Development Plan, will go to projects, including reducing energy use and the carbon footprint of organic supply chains.
Sue Fowler, OCW director, said funds would also be used to promote ethical and fair trading, and on providing consumer information, improving product quality, developing new markets and addressing technical problems.
“The organic land in Wales now approaches 10% of agricultural land area, which brings many biodiversity benefits. But, to ensure profitable businesses, we also need to inform customers what organic means.
“Recent market research confirms that those customers that understand the benefits of organic production are more likely to stay loyal, even in hard times.”
The funding would help the organic sector improve its environmental performance to meet consumers’ high expectations.
Many meetings had already been held to identify different elements that needed work. But success depended on the continued involvement of organic businesses.
A steering group would be set up to ensure the money was used in the most effective way and to respond to any changes affecting organic farming, Mrs Fowler added.
OCW would also recruit marketing expertise and appoint a field officer to deliver development projects.