Dan Neville (Limerick West, Fine Gael)
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I thank the Ceann Comhairle for allowing me to raise this issue. The first crop of miscanthus grass in Ireland was harvested three weeks ago in Adare. An Adare company, JHM Crops Limited, was formed to promote miscanthus as a viable alternative crop. The first harvest came from the Hogan farm in Adare, County Limerick. JHM Crops Limited and Quinn's of Baltinglass have formed a relationship to jointly promote the growing of miscanthus in Ireland, as they have an exclusive agreement with Bical for their rhizome in Ireland.

They have identified the growing of miscanthus as an alternative farm enterprise and have established crops for rhizome and cane production. A feasibility study carried out by Dr. J.J. Leahy at the University of Limerick shows the project has excellent potential. Miscanthus is a low-input, high-yielding multipurpose crop, suitable for production across large areas of Ireland. The crop is undergoing much research in Europe, the United Kingdom and more recently, Ireland, as a renewable energy crop to produce heat and power. Miscanthus has other environmentally positive applications such as use for equine bedding or garden mulch. The establishment of more processing facilities to meet the needs of growers and end users is essential, providing an opportunity for farmers to maximise returns, especially in the early years.

I urge the Minister of State to review the supports given by the Government to miscanthus growers. The crop is supported through the energy crops scheme, which only provides €45 per acre to farmers. The benefits of the product are such that it deserves much greater support than that which is currently available.

Miscanthus is a woody perennial grass originating in South East Asia and is commonly known as elephant grass. The non-flowering forms are of interest agriculturally as they grow rapidly, have low nutrient requirements, produce high yields, suffer from no known pests or diseases and conventional agricultural machinery can be used to plant, maintain and harvest them.

Miscanthus is grown commercially as an energy crop for use in power generation. Commercial power generation projects using biomass crops such as miscanthus commenced some time ago in the United Kingdom and Europe, with more due to come on stream in the next number of years. Ireland is only now waking up to the potential of biomass power. JHM Crops Limited, in Adare, is committed to supplying crops for a similar market in Ireland.

The crop is propagated by rhizomes, will grow to three metres in height within three years of planting and remain viable for at least 25 years. As the plants are sterile, there is no danger of proliferation of the crop onto adjoining lands. The crop is perennial, with stems emerging from an underground rhizome complex annually, in March or April, reaching its maximum height of three metres towards the end of August. Cooler temperatures in autumn trigger senescence and translocation of reserves below ground. The crop is left in the field over winter during this phase. Leaf material falls to the ground, recycling nutrients and providing mulch which suppresses weed growth. By spring the cane is ready to harvest, typically using a forage harvester similar to that for maize. It can also be harvested using mower conditioner power prior to baling. Detailed information on the agronomy of miscanthus can be supplied.

Miscanthus differs from short rotation copices in that it provides an annual harvest and therefore an annual income for the grower. In Ireland, long-term arid harvestable yields from a mature crop will exceed seven tonnes per acre per year and will, in many cases, amount to eight or nine tonnes. Miscanthus has at least three end uses in the UK at present. It is a renewable energy source as baled miscanthus straw is used to generate electricity in purpose-built straw-fired power plants. Miscanthus straw, blended with sawdust or wood is pelletised to produce biomass fuel and miscanthus straw is used to make briquettes for use in domestic fuel.

It is also used to make equine, cattle and pet bedding, cat litter and chicken house bedding. It is used for garden mulch. Other possible uses are the manufacture of chipboard and plywood. I ask the Minister of State to review the low levels of support in place, in view of the opportunities for the State for a friendly energy production policy.

Mary Wallace (Meath, Fianna Fail)
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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.