Margins on energy crops too small

The margin on renewable energy crops is still too close to the income that can be earned from letting land or growing conventional crops, the Tullamore conference heard.

Describing farmers as "risk averse", Dr Fiona Thorne, of the Teagasc Rural Economy and Development Programme, told the conference that a comparison between the income generated by energy crops and a variety of conventional farm income streams suggested that farmers might not make moves to growing renewables.

According to Dr Thorne, land rental delivers more than willow, while a €50/ha per annum advantage in growing miscanthus might be too small to tempt the landowner away from the level of rental income that is currently available.

Spring barley producers would gain, at most, €50/ha per year, while winter wheat producers would lose if they converted to biomass crops. Cereal prices would need to decrease by 10pc to make biomass more profitable across the board. However, Dr Thorne suggested that beef farmers could do well to consider their options, given that growing willow and micanthus would deliver respectively €135 and €185/ha per year more than beef at current prices. Even if beef prices were to increase by 10pc, it would be outperformed by biomass. In an interesting observation, it was revealed that cereal farmers, larger farmers and farmers with higher levels of education were more likely to covert to energy crops.

Get the latest news from the Farming Independent team 3 times a week.

Indo Farming

For Stories Like This and More
Download the Free Farming Independent App