Martin Ferris (Kerry North, Sinn Fein)
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Question 7: To ask the Minister for Agriculture, Fisheries and Food her views on whether changes need to be made to conditions governing the use of agricultural land in order to encourage the growing of energy crops. [35173/07]

Mary Wallace (Meath East, Fianna Fail)
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Energy crops are defined under Article 88 of Council Regulation (EC) No 1782/2003 as crops supplied essentially for the production of the following energy products — products considered bio-fuels; and electric and thermal energy produced from biomass. Under the single payment scheme, in order for an applicant to draw down full payment in respect of the payment entitlements held, he or she is required to have an "eligible hectare" to accompany each entitlement. In this context an eligible hectare is land that is used for an agricultural activity and includes land used to grow cereals, oilseeds, short rotation coppice, miscanthus sinensis, protein crops, sugar beet, maize, fodder beet, turnips, mangolds, kale, grass for silage or hay or grazing, and agricultural land that is in set-aside.

The land must be maintained in good agricultural and environmental condition. In the case of each hectare declared, the eligible area excludes any inaccessible areas and any areas under buildings — farmyards; woods; rivers; streams; ponds; paths; farm roads; expanses of bare rock, dense scrub and bog lands that are unfit for grazing. Deductions are not required for fences, headlands, hedgerows or drains. All forage areas must be defined by a permanent boundary except in the case of commonage land. The definition of permanent boundaries includes hedgerows, ditches, open field drains, walls, banks, stockproof post and wire fences, rivers etc.

Practically all agricultural land is now eligible for single payment scheme payments, with the exception of land under permanent crops, forestry, or any land used for non-agricultural purposes such as golf courses etc. The permanent crops referred to are non-rotational crops — other than permanent pasture — that occupy the land for five years or longer and yield repeated harvests; notwithstanding the ineligibility of permanent crops, specific provision was made to include short rotation coppice and miscanthus sinensis as eligible under the single payment scheme.

Research undertaken by Teagasc indicates that the willingness of farmers to convert land to energy crops depends on a variety of circumstances including the efficiency and profitability of the farming enterprise and non-economic circumstances such as farm size and the age and education of farmers.

Additional information not given on the floor of the House.

Existing specialist tillage farmers are more likely to consider energy crop production due to the similarities that exist between the production of cereals and energy crops in terms of machinery, soil type and agronomy skills. In general, the production of energy crops will only be sustainable in the longer term if the economic returns are comparable to those offered by traditional crop enterprises.

To improve the profitability of growing energy crops in Ireland, I introduced a number of support measures in 2007. The measures include a new national energy crop premium of €80 per hectare to supplement the EU premium of up to €45 per hectare available under the EU energy crops scheme. In February 2007, I launched a new bioenergy scheme to provide establishment grants to farmers interested in planting willow and miscanthus for bioenergy, heat and electricity, purposes. Establishment grants are payments to cover part of the costs of establishing the crop. Aid is being provided at a rate of 50% of establishment costs, subject to a maximum of €1,450 per hectare. The second phase of the scheme was launched in December 2007 and I have provided sufficient funding to support the planting of 1,600 hectares in 2008. As a further support measure, areas planted with energy crops can qualify for the single farm payment. These incentives generated renewed interest among producers in growing energy crops in 2007 with some 8,000 hectares sown.

My Department is also supporting research into agri-energy projects, including energy crops, through the research stimulus fund programme. The programme facilitates research that supports sustainable and competitive agricultural production practices and polices and contributes to a scientific research capability in the agriculture sector. Under the 2005 and 2006 calls for proposals, five projects were selected that relate directly to biofuels and energy crops and received total grant assistance of €1.5 million. I significantly increased the allocation under the 2007 call for proposals, awarding some €5.3 million over the next four years to a further seven research projects. The research covers a broad range of bioenergy topics, including energy crop production.

The future outlook for energy crops depends on a number of factors, not least profitability at farm level. In the short term, the soaring world demand for grain is likely to lead to an increase in the area devoted to conventional cereal crops in Ireland and elsewhere in response to the current high grain prices. More long-term projections are difficult to forecast at this stage. Much will depend on the rate of development of production and consumption patterns for biofuels over the next number of years.