Tesco has announced plans to increase its sales of organic food to £1 billion by the year 2006.

The plans include the introduction of hundreds of new organic lines and price reductions on existing products. Annual sales of organics at the supermarket chain are currently £200 million from 1,000 lines; the UK market stands at £800m.

Tesco chief executive Terry Leahy said customer research following the foot and mouth crisis showed that people across the income groups were now buying organics.

However, despite calls from the National Farmer's Union for conversion assistance, the retailer said it would not give any financial aid to its growers.

NFU Scotland welcomed the targets, but pointed out the difficulties facing suppliers to the market. President Jim Walker said: 'In principle, this is a welcome move, but the practical difficulties that many farmers face in supplying this market should not be underestimated.

'Tesco says that around 80 per cent of their organic produce is supplied by imports. This highlights the difficulties faced by British organic producers. The gold plating of organic standards in this country puts British producers at an immediate competitive disadvantage, compounded by the high value of sterling.

'The yield from organic produce tends to be lower so farmers and growers need higher prices to make up for the lower volumes otherwise they will be left in an unsustainable position.

'Scotland's agriculture strategy aims to ensure that Scottish farmers are able to use organic standards which reflect Scottish conditions and avoid gold plating. These need to be put in place and we need a commitment from all our supermarkets to support British produce – otherwise more organic sales will just mean more imports.'

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