The UK organic beef sector's days are numbered if supermarkets and processors do not start paying farmers enough to cover the cost of production, claims the Soil Association.

The association has called on supermarkets to increase organic beef prices paid by at least 10%, to increase volumes of British beef and offer long-term supply contracts to organic beef farmers.

The warning come in a report published last week claiming organic beef producers are being short-changed by processors and some key supermarkets, who are increasing their volumes of imported organic beef.

The report, 'Where's the beef?', claims organic producers made a loss of around 40p/kg on beef sold in 2006. It adds that the proportion of organic red meat from UK producers sold through UK supermarkets fell from 85% to 79% in 2005, the latest year for which reliable data is available.

"Unless we implement some of the changes suggested in the report, there won't be a UK organic beef sector," said Phil Stocker, the Soil Association's head of food and farming.

However, Stuart Roberts, director of the British Meat Processors Association, said the prices demanded were unrealistic. "A 40p/kg increase in the price of organic beef would face consumer resistance," he said. "Organic is only ever going to be a niche market, albeit an important one."

Last year Tesco created the Organic Beef Farmers Association to encourage more farmers into organic production. "The majority of the organic beef we sell is British," said a Tesco spokeswoman. "We remain committed to fair prices for both shoppers and suppliers. But we source a small amount of organic beef from South America to guarantee availability."

A spokeswoman for Sainsbury's said: "We are 100% British on all of our organic meat."