Higher Grain Prices put Pressure on Biomass Competitiveness
05/04/07

Rising energy prices and growing government support have encouraged farmers to look closely at alternative non food and biomass crops in recent years. However, rising prices for grain, oilseeds and other commodities, supported in part by biofuel demand, make a shift away from conventional enterprises unattractive at present.

This is one of the findings contained in the report of a SEERAD-funded study carried out by SAC. The report, “Commercial viability of alternative non food crops and biomass on Scottish Farms” is published on the SAC website (see link on this page).

The objective of the study was to make an independent economic and agronomic assessment of the main alternative non food crops currently available in Scotland to help farmers with their cropping decisions.

Report author Julian Bell said;

“If plantings of willow Short Rotation Coppice for biomass are to increase significantly then the economics of the crop need to improve. It is not enough for willow to match the returns from arable cropping, it must offer potentially higher returns to outweigh the loss of marketing and cropping flexibility. There is also uncertainty over the yields that growers will be able to achieve in practice.“

The development of new wood fired power stations in Scotland has created demand for the production of willow Short Rotation Coppice (SRC) and plantings have started to rise, albeit from a low level.

Current woodchip contracts offer price security at index linked prices for the next 10 years and this may suit farm businesses seeking long term price security. However to gain wider appeal amongst farmers higher woodchip prices and also more flexible and transparent pricing arrangements linked to the energy or grain markets may be needed.

There may also be opportunities for farmers to boost returns from growing willow SRC by supplying a local heat market directly. Additional revenues may also be obtained through disposal fees for bio-solids and waste water.

The study also investigated the viability of growing conventional rapeseed and wheat for industrial markets along with growing fibre and speciality oilseed crops.

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