Sales of organic food increased by more than 10 per cent in Britain over the past year - twice the rate of the ordinary grocery market - taking the value of the industry to £1.12bn.

Sales of organic food increased by more than 10 per cent in Britain over the past year - twice the rate of the ordinary grocery market - taking the value of the industry to £1.12bn.

According to the Soil Association, sales of organic produce are growing by more than £2m a week as more people spurn supermarkets in favour of farmers' markets and rural shops, which have seen a 16 per cent rise in customers.

But despite the increase in demand for their goods, it is estimated that two-thirds of all the crops grown by organic farmers in the UK are sold at or below the cost of production. In particular, the demand for organic milk has been badly overestimated, leading to a market glut. Much of the milk being sold as conventional in supermarkets is actually organic.

Organic Farmers & Growers, the certifying organisation, says 63 per cent of organic farmers rate their profitability as low or borderline.

Patrick Holden, director of the Soil Association, said: "If supermarket buyers pay their suppliers significantly less, the small, mixed family farms that are the bedrock of the organic movement can no longer afford to supply them."

Typical among the supermarket chains is Sainsbury's - Organic Supermarket of the Year - which launched its organics range in 1986. Although the proportion of organic food sold through supermarkets actually fell by 1 per cent last year, Sainsbury's now has more than 1,100 products in its range, the most popular being dairy and fresh produce. Organics is now Sainsbury's second-biggest sub-brand behind Taste the Difference. Sainsbury's says it sources 65 per cent of all organic food and drink from Britain.

While organic foods were initially a fad for a few consumers, it has now become more mainstream with an estimated 5 per cent of the population, especially women in the south-west of England, now committed buyers.

However, some suppliers say more could be done to encourage consumers to buy organic. Made in Scotland, a private concern jointly set up by Highlands and Islands Enterprise and Scottish Enterprise, claims public health would benefit if local producers were given more support.

"Small producers are suffering in this country because of the stranglehold of supermarkets, the rapid increase in imported food, new European food standards legislation and a government slow to recognise their contribution, and even slower to offer any support," said a company spokesman. "Without more recognition and support the smaller food producer will struggle to thrive. This could have a direct impact on consumer choice, traceability and even our future health," he said.

Kathleen Hardie , a director of Made in Scotland, says people need to be taught about the availability of fresh local produce. "I have seen supermarkets stocking blueberries imported from Poland when there were extremely good blueberries available at farms just down the road," she said. "People would rather have fresher local produce instead of products that have notched up hundreds or thousands of food miles and probably lost some of their taste and quality."

The Soil Association says a fifth of organic meat sold in the UK is imported, while potatoes, carrots, onions, apples and pears are still being imported even when in season here.