The Soil Association is laying off up to 25 staff as part of a bid to save £600,000 a year.
The association, which campaigns for organic food, has suffered a sharp fall in income from donations this year.
Profits at its trading subsidiary, Soil Association Certification, which certifies organic goods, have also slumped.
According to the Bristol-based charity's 2009 organic market report, the organic market grew by only 1.7 per cent in 2008, compared with 25 per cent the previous year.
With consumer demand expected to contract further, management decided to introduce a "recession-linked cost-saving programme".
Roger Mortlock, general secretary of the association, said redundancies were a last resort.
"In setting budgets for the year ahead, we need to be mindful of the incredibly challenging funding environment we are operating in and ensure the long-term health of the organisation," he said.
"Our proposed restructuring, although painful for all those staff who are affected, will leave the organisation more financially secure going forward."
The association and its trading subsidiary currently employ 210 staff. Some employees whose positions are being merged will have to re-apply for jobs.
A spokeswoman said the charity had decided to set a "minimum risk budget" in anticipation of a continued downturn in income.
"The proposed restructuring is aimed at preventing losses in the forthcoming financial year," she said.
The association, which last year laid off 17 staff, is the latest charity to announce substantial job losses.
Earlier this month, Leonard Cheshire Disability said it was cutting 100 jobs in a bid to improve efficiency and save millions of pounds (Third Sector Online, 14 May).