Bernard Durkan (Kildare North, Fine Gael)
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Question 380: To ask the Minister for Agriculture, Fisheries and Food the extent to which set-aside lands are being utilised to grow biofuel crops; and if he will make a statement on the matter. [19891/08]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The rate of obligatory set-aside has been set at 0% for the 2008 Single Payment Scheme. Therefore, a farmer with set-aside entitlements is not required to put any land into set-aside in order to draw down payments on set-aside entitlements. A farmer with set-aside entitlements must, however, declare sufficient hectares of land on his/her 2008 Single Payment Scheme application form that, under the provisions of the relevant EU Regulations, are eligible for set-aside.

Given that the closing date for the receipt of applications under the 2008 Single Payment Scheme was just last week, and bearing in mind that applicants have until 31 May 2008 to submit late applications, it will be some weeks before it becomes clear as to the number of hectares being utilised to grow bio-fuels in 2008. Furthermore, it is difficult to estimate the number of hectares which will be utilised to grow bio-fuels in 2008, largely because of the dramatic price increase during 2007 for crops such as oilseed and the decision on the reduction of compulsory set-aside for 2008 to 0%. While oilseed has been harvested for the production of pure plant oil and bio-diesel, it is currently attracting significantly higher prices when sold for food purposes.

With the change in the set-aside rules, farmers in 2008 have much greater freedom as to the use they will make of lands which previously they were required to set-aside i.e. farmers will have the option of growing energy crops on lands previously set-aside. Under the 2007 Energy Crops Scheme, 2,858 hectares of set-aside land was used to grow various eligible crops. In 2007, a new National Energy Premium of €80 per hectare and a new Bio-Energy Scheme to assist the development of the production of energy crops in Ireland was introduced. The €80 National payment supplements the EU Premium of €45 per hectare. The buoyant market for bio-fuels and the introduction of the €80 incentive contributed to an increase in the area devoted to oilseed rape, which is used to produce bio-fuels.

The Bio-Energy Scheme aims to encourage farmers to grow willow and miscanthus as a renewable source of energy. These crops have considerable potential for heat and electricity generation and my Department is aiding establishment with grants of up to €1,450 per hectare. The introduction of this Scheme has been well received by farmers with some 800 hectares planted so far. Sufficient funding has been provided in 2008 to support the planting of a further 1,600 hectares. As a further support measure, land planted with these energy crops can also benefit under the Single Payment Scheme, Disadvantaged Areas Scheme and REPS.