Mary Wallace (Meath, Fianna Fail)

I welcome the opportunity to comment on this matter. There is renewed interest in the potential of energy crops, including miscanthus and short rotation coppice, having regard to environmental considerations and the increasing cost of fossil fuels. In this context, the Department is working closely with the Department of Communications, Marine and Natural Resources, which is responsible for overall energy policy.

From an agricultural perspective the cultivation of energy crops specifically for bioenergy purposes represents an opportunity to generate new income and diversify the rural economy. The reformed Common Agricultural Policy allows farmers to concentrate on producing to meet market requirements. This new freedom to farm opens the possibility for farmers to explore alternative farm enterprises such as energy crops.

Miscanthus, as the Deputy stated, is also known as elephant grass and is not grown to any great extent on a commercial basis in Ireland. However, recently some producers have explored the possibilities for growing miscanthus as a feedstock for bioenergy purposes. I am delighted to hear the first harvest has come in on the farm concerned. I met the farmer some weeks ago. As Deputy Neville stated, miscanthus has three possible fuel markets, commercial boilers in baled or chopped form, stoves and small boilers in pelleted form and power stations in baled form.

Support to farmers for the growing of energy crops may only be granted in accordance with EU regulations. At present, such support is provided by way of the energy crops scheme introduced by Council Regulation (EC) 1782/2003 and is administered by our Department. Under this scheme, energy crops may qualify for aid of €45 per hectare provided they are intended primarily for use in the production of biofuels and electric and thermal energy produced from biomass. The aid is granted in respect of areas where production is covered by a contract between the farmer and the processor, except in the case of processing undertaken by the farmers on his or her own holding. The aid is payable in addition to the single payment. In Ireland, the only crop sown under this scheme in 2005 was oilseed rape, except for a small amount of willow. Miscanthus is among the non-food crops that may be grown on setaside land to activate setaside entitlements under the single farm payment.

As part of the EU strategy for biofuels, it is intended to review the operation of the energy crops scheme during the coming year. We do not believe that the €45 per hectare available under the energy crops scheme is sufficiently attractive in itself to stimulate the growing of crops for energy. At the February Council of Agriculture Ministers meeting, the Minister for Agriculture and Food, Deputy Coughlan, called for a review of the premium. The European Commission has undertaken to review the operation of the scheme and has indicated it would probably present proposals for revision. The Department has also received a number of proposals for the introduction of establishment grants for miscanthus and these are being considered.

Meanwhile, Teagasc is conducting research into the potential use of miscanthus and other arable crops and residues as heating fuels. Last year, our Department began providing direct funding, on a competitive basis, to support priority research projects in relation to biofuels. This funding is channelled through the Department's research stimulus fund programme. Three of the projects selected under the 2005 call for proposals directly relate to biofuel and energy crops and received total grant assistance of €900,000. The funding available under the programme has now been substantially increased and a further call for projects was recently advertised in the national press. This call also includes the non-food uses of agricultural land.

The potential contribution of agriculture to the development of bioenergy is recognised in the Department's action plan in response to the AgriVision 2015 report. The Department will work towards the achievement of the actions on biofuels and bioenergy detailed in that action plan. In this context the Department will continue to work closely with the Department of Communications Marine and Natural Resources. I thank the Deputy for raising the issue and giving me an opportunity to clarify the matter.

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