Demand for organic soars just as Defra cuts support for sustainable farming

Organic retail is on the rise according to Soil Association’s latest Organic Market report, which celebrates a 13th consecutive year of growth for organic retail. A surge in the market this year (up 7.3%, double what it was 10 years ago) has been driven by a strong year for independent (+9%) and major retail (+8%), with organic value and volume growth significantly outperforming non-organic. Fruit and veg enjoyed double-digit growth across salad, bananas, and carrots, which are entry-point items for new organic shoppers.  

The Organic Market Report highlighted Bridging the Gap pilot Give Peas a Chance, which is serving up organic local grown split pea in schools across Aberdeen City. Also highlighted in the report was consumer polling produced by UK Organic and the Organic Research Centre, with support from Bridging the Gap, which has helped give a picture of consumer behaviour and dispel myths about consumer interest in Organic. The report shows that seven out of ten consumers "intentionally" buy organic, with younger, lower, and middle-income households the most active organic shoppers. 

Big retailers dominate the market

The report looks at schemes like Tesco’s Clubcard which lock in shoppers with cheaper prices and deals in return for their consumer data. This has included a focus on organic produce. The report also found that while organic products had a modest average farmgate premium of 27%, this increased to a 70% average premium at RRP in the big retailers.

One of the reasons for this is retailer price-matching on non-organic goods disproportionately lowers their price and exaggerates the price difference between organic and non-organic products.

While local independent retailers have seen strong growth in organic this year, the big retailers continue to hold an overwhelming share of the organic market. This monopoly means that supermarkets have farmers locked into contracts that prevent them from getting a fair price for their produce.

Lack of government support for more organic production

Despite clear indications that shoppers increasingly seek out organic, growth in UK organic farmland remains largely static, with the percentage of organic land at just 3% of the country’s farmed area.

There is a huge opportunity to bridge the gap between the organic market and organic production. In December Sustain joined The Soil Association and NGOs in the environment sector to call for a Defra Organic Action Plan to ensure 10% of land is farmed organically, emphasizing the need for stronger policies and incentives to support organic farming for climate and biodiversity.

However Defra’s unexpected closure of the Sustainable Farming Incentive Scheme this week leaves farmers with nowhere to turn for support. This has come despite advice by the UK Climate Change Committee 7th budget calling for clear action on agriculture. Without policy to support growth in organic farmland the value for the UK is lost to the international markets.

What farmers are saying

Defra’s abrupt announcement this week has severely undermined farmers’ trust in the government. This comes off the back of dismal stats over 2024, which showed that farmer opinion of Defra is at a five year low. Farmers have mixed feelings about government funded grants with 40% feeling negative or extremely negative. 

The Bridging the Gap programme is using evidence from its pilots to call for key policy changes to make organic food accessible to everyone via farmer-focused supply chains. Read more about it here.