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UK organic farmers moving into food manufacturing space

In an effort to secure higher margins and greater financial security, organic farmers in the UK are said to be moving towards the food manufacturing sector.

Simon Crichton, organic agriculture relationship manager for Triodos Bank told Food Manufacture UK that a number of organic farmers who wish to set up their own processing facilities have presented attractive propositions to prospective lenders.

By manufacturing products such as organic ready meals and organic pies, farmers are able to generate higher margins and steady demand, rather than that of raw products such as organic lamb which has a tendency to fluctuate in demand.  

Crichton said that farmers were steering away from selling their produce straight to local processors and shops, and that by operating their own manufacturing facilities, farmers were able to cut out middle men and retain a higher profit.

“Farmers are looking to find their own way in the food manufacturing arena,” he said.

Anna Rosier, managing director of children’s organic food brand Organix echoed Crichton’s comments, adding that farmers’ knowledge of raw materials gives them a significant advantage in the food manufacturing sector.

“It seems the obvious next step for them”, said Rosier.

“Farmers want to diversify and not rely on a single source of income as they may have done historically.”

Similar to Australia, demand for organic products has continued to rise in the UK with recent figures from the UK Soil Association indicating a 2.8 percent rise in sales from £1.74 billion in 2012 to £1.79 billion in 2013.

According to Australian Organic’s biannual market report, organics is one of Australia’s top 5 growth industries. The report states that supermarkets are continuing to embrace organic foods as more than one in 20 Australian shoppers identify themselves as regular shoppers of organics.

 

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