By Farmers Weekly staff

SHORTAGES of organic produce could cap further growth in the market, warns market analyst Datamonitor.

Restricted supplies are producing premiums of between 30% and 100% over conventional food.

These are too high and could reduce demand for produce, slowing down the growth in sales, it warns in its latest report, European Natural & Organic Food and Drinks.

The situation is exacerbated with retailer promotions of organic food generating more interest.

The UK already imports 70% of its supplies and that could increase unless more domestic produce is grown. This follows the boom in sales which rose by £194 million between 1995 and 1998 to reach £334m, says Datamonitor.

The Soil Associations director Patrick Holden suggests the government should do more to encourage more producers to switch to organic production.

The current £6m annual budget for the Organic Farming Scheme is “totally inadequate”, says Mr Holden.

He believes payments of £450/ha (£182/acre) for IACS-registered land in conversion should be extended after completion to guarantee incomes and encourage producers to make the switch.