Farm Ireland
Independent.ie

Sunday 23 July 2017

Guaranteed contracts for miscanthus

Caitriona Murphy

Caitriona Murphy

Severe restrictions on credit availability for farmers growing miscanthus have prompted the introduction of a new annual payment contract for growers.

Quinns of Baltinglass are offering farmers a guaranteed payment of €100/ac per year, without any financial investment by the farmer.

The company is targeting an additional 1,000ac of miscanthus from new growers in 2010, in addition to its existing supply base of 3,000ac.

Funding

Paddy O'Toole from Quinns said the contracts were a response to the lack of bank funding for farmers who were interested in growing the energy crop.

"Potential growers were finding that banks would not approve funding," he explained.

"We were looking at the acreage of new growers as being little or nothing this year, which would have been a disaster.

"This contract means there is no financial investment by the grower and he has a guaranteed return from the crop."


Under the new contract, new growers would sign up for a period of between seven and 10 years for an acreage of 10-75ac.

The farmer would mandate his Department of Agriculture establishment grant, worth around €500/ac to Quinns of Baltinglass.

In return, Quinns will supply and plant the crop and provide the expertise for maintaining it.

The company will pay farmers an annual payment of €100/ac from year one to the last year of the contract, even though there would be no crop harvested for the first two years.

The €100/ac annual payment is expected to be linked to the consumer price index for the period of the contract.

The new contracts are open to farmers in the Leinster area and are only available for arable land.

Control

Teagasc bioenergy expert Barry Caslin said the contracts offered growers minimum risk, with no upfront costs and payment in the early years when the crop was not harvested.

He added that the contract compared favourably with renting out land or planting it under cereals.

"Cereal margins have been negative for the last two years, compared to the €100/ac being offered on contract," he said.

"Also, the farmer is still in control of his land, he's not leasing it out."

Irish Independent