Ref. 26992-28ORGANIC farms in Wiltshire are struggling to compete with the buying power of the supermarket giants.

In the light of the controversy surrounding GM crops, naturally produced food has become more popular.

But this week, the Soil Association warned that these smaller businesses are facing inexorable decline.

It comes after the UK's first organic farm Rachel's Organic, in Aberystwyth which opened in the 1930s, announced that it has finalised a deal with US multi-national Dean Foods.

Latest figures show three out of four organic farms that went bust during the past financial year were small enterprises.

Now more are adopting the "can't beat them so let's join them" stance and signing deals with the supermarkets.

Eastbrook Farm, in Bishopstone, near Swindon, is one of Britain's 3,900 organic farms.

Last year it struck a deal with chains Morrison's and the Co-op.

The farm's managing director, Tim Finney, said the business, which became organic in 1986, would have sunk had it not signed the contracts.

He said: "We were one of the first farms to go organic and it has been rewarding. But a few years ago we realised we had to make a decision.

"The supermarkets have the buying power and the only way we could see ourselves surviving was to link up with them. In 1997 we signed a deal with Sainsburys and then last year added to that."

But Mr Finney insists the farm, which is owned by Helen Browning, is in the driving seat.

He said: "It is important small businesses retain their individuality and offer something unique. We ensure that our brand name is on all our products. This way we have influence on the way it's sold."

Although the firm, which last year recorded a sales turnover of £2.5 million, is expected to record an increase in profits, Mr Finney said: "Many people, who are not in this sector, think 'thank God I'm not in this line of business.' The margins are slim and it is difficult.

"The only answer is to keep moving forward and finding new ways to develop the business further."

But Sonia Oliver, the owner of Coleshill Organics, in Coleshill, near Highworth, refuses to bow to pressure from the bigger retailers.

"We sell directly to our customers and cut out the middle man," she said. "Supermarkets attach too much importance to cosmetic appeal. A lot of produce is wasted because it doesn't look good on the shelves.

"We leave funny-shaped carrots and they are sold to our customers packed in soil because it retains their flavour. Our customers like that and we won't change."

Patrick Holden, the director of the Soil Association, said: "Times are tough. Organic producers and their non-organic counterparts are increasingly being priced off the land a sort of silent cultural cleansing using the instrument of price."

Kevin Shoesmith