19 April 2002

Organics not a panacea…

NFU vice-president Michael Paske has called on industry analysts to help educate government that simply encouraging farmers to convert to organic status would not solve the industrys financial crisis.

Speaking at the Tesco Organic Masterclass seminar at Harper Adams University College, Salop, on Wednesday (Apr 17), Mr Paske said ministers had to be more aware of commercial pressures that have already started to eat away at organic premiums and reduce margins.

"Organics has been the buzz word and politicians have proffered it as the panacea to many of farmings problems. Both inside and outside DEFRA those same people need to be aware of the market forces that will affect farm incomes after conversion. Im not saying the (organic) bubble is about to burst, but the market has changed and we are already seeing some of the consequences."

Mr Paske referred to the dumping of organic milk and potatoes into conventional markets as demand and prices slump. His call followed the presentation of data collected by the Tesco Centre for Organic Agricultures Carlo Leifert that showed almost all organic gross margins had fallen recently – the only exception being organic cereals. &#42

that still enjoys demand for feed from the livestock sector.

Prof Leifert told delegates UK organic production would be less competitive that some other EU nations unless several factors changed. Government needed to increase subsidies in line with other EU nations, the £ would have to weaken against the k, and no additional legislative or certification burdens must be placed on growers.