Page last updated at 14:31 GMT, Friday, 5 September 2008 15:31 UK

Is the organic party over?

By Dave Harvey
BBC Points West Business Correspondent

Tills at Better Foods organic supermarket, Bristol
Better Food supermarket's sales have levelled out

Every year at harvest time, Bristol hosts Europe's biggest organic festival. This year's festival, being held over the weekend, promises a bigger party than ever.

Sophie Grigson is cooking, there is a grow-your-own organic garden to play in, a cookery bus to inspire kids and the mother of all farmers markets.

Past years have attracted up to 100,000 people as the nation's foodies came out to play.

Organic farming is no longer a campaigning niche. It has become chic and mainstream. But as food bills soar and belts tighten, is the party over?

The figures are worrying enough for organic campaigners. Retail analyst TNS found that overall sales fell 8.1% during the three months to June compared with the same period a year earlier.

If it's a choice between your principles and starving, the principles go out the window
Ben Yearsley
The American organic chain 'WholeFoods Market' lost 10m on its UK operations last year, and is closing its Bristol store 'Fresh and Wild'.

"I'm afraid it's simple economics," says Ben Yearsley, an analyst at Bristol investment house Hargreaves Landsdown.

"People have got less money, their ordinary food shopping has gone through the roof; they're cutting out luxuries. And I'm afraid organic is a luxury."

Mr Yearsley points to the growth in discount stores like Aldi and Lidl, which now have 6% of the UK's food market.

Family meals

But it is not all gloom. Box schemes, delivering fresh organic vegetables to your muddy doorstep, are still growing.

And Bristol's Better Food supermarket, the largest organic store in the country, is holding up.

"Last year we grew, this year we've plateaued", says Better Food's founder, Phil Haughton.

"I won't pretend it's not hard. We have ordinary shoppers with middle to low incomes, and I have to help them shop organic, for less."

In store, shoppers are urged to buy dried beans and soak them at home, instead of a can which is four times the price.

Yesterday's unsold organic bread is free. And in October the Better Food Cafe's chef will run evening classes on how to feed a family for a week on 75, 100% organic.

"But the supermarkets are offering 'Feed your Family for a Fiver'," says Mr Yearsley. "If it's a choice between your principles and starving, the principles go out the window."

Natural fertiliser

Mr Haughton rejects the mass market passionately. "Sure, feed your family," he says, "but what about the growers in Kenya or Cornwall?

Organically raised pigs
Organically-raised pigs benefit as rising oil prices hit non-organic production

"How can they feed their families if we support this system of agriculture that worships the consumer? We just have to get used to paying the real cost of food."

It's a tough argument to win in hard times. But organic farmers may get some respite from, ironically, rising oil prices.

Conventional farmers use tonnes of nitrogen fertiliser, which is made from natural gas. As the price of oil and gas has soared, so nitrogen fertiliser has doubled in price.

"This is my fertiliser - a field of clover, and it's free," says Helen Browning who farms just west of Swindon, and is famous for her pigs.

She sells sausages to all the major supermarkets, but she raises wheat and barley too, mostly to feed her pigs, and then sows clover to feed the soil.

Oil price influence

In a little miracle of nature, clover harnesses nitrogen from the air and fixes it in the soil. And while it is doing that, Ms Browning grazes her pigs on it too.

"They love clover, the piglets play in it, and it makes them healthier too," she says. "It boosts their fatty acids and the meat is better for us as a result."

Clover is now looking like smart business. As conventional farmers' fertiliser bills rise, the gap between organic and non-organic farming will narrow.

At the Soil Association's head office in Bristol, they have calculated the impact on farm profits.

"Respectable experts have predicted oil at 109 ($200) a barrel by 2015," says the Soil Association's Policy Director Peter Melchett.

"And at that level, some organic farms are more profitable than non-organic competitors, and most are breaking even."

So the organic movement is caught in the two huge forces driving the world economy today. On the one hand soaring food prices are hitting consumers, who are in turn buying less organic.

On the other, the rising price of oil may, eventually, make organic farming competitive.

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