In this blog we address the possible implications of the Common Agricultural Policy (CAP) reform process on the woody energy crops industry. Our response is based on the outcome of the latest vote of the Agriculture and Rural Development Committee at the European Parliament on 23/01/2013.
RURAL DEVELOPMENT REGULATION
ARTICLE 18: Investment in Physical Assets
This article is likely to include support for measures that:
- improve the overall performance and sustainability of the agricultural holding, including its resource efficiency and greenhouse gas balance,
- concern infrastructure related to the development, modernisation or adaptation of agriculture. This includes the supply and saving of energy and water and the collective management of land and water
It is imperative that article 18 covers costs related to the establishment and management of energy crops. There is a great opportunity here for the European Parliament to encourage growers to plant short rotation coppice (SRC), short rotation forestry (SRF) and energy grasses (e.g. miscanthus) for wider environmental benefits e.g. flood reduction, erosion control, reduction of pollution from agricultural land in nitrate vulnerable zones (NVZs), set up biosecurity corridors and alleviate climate change. Our report: Why we need energy crops in the SW details the many benefits of growing these crops. For instance by growing 66,000 hectares of energy crops in the south west of England (3.5% of agricultural land) would reduce carbon emissions from agricultural food production by 25%.
Our view is that if the planting of SRC is encouraged to provide multiple benefits then an annual payment as well as establishment grant should be paid to farmers. This would be similar to article 23 that deals with the creation of woodland. Over the last decade many growers have been put off planting these crops as they must wait 4-7 years for the investment to be paid back. We would argue that there is a fundamental need for an interim payment in the first six years that would help reduce the up-front risk and financial burden of these crops.
ARTICLE 23: Afforestation and the creation of woodland
This article is likely to support:
- costs of establishment of woodlands and an annual premium per hectare to cover the costs of maintenance, including early and late cleanings, for a maximum period of fifteen years.
It is unlikely that SRC will be covered by this article although there might be an opportunity to support the costs of establishment of fast growing trees. We would welcome any initiative that supports the planting of high yielding, single stemmed trees grown over a rotation of 10-15 years for biomass and fibre production. Poplar (Populus spp.) and willow (Salix spp.) and exotics such as Eucalyptus, Nothofagus and Robinia show tremendous potential and should be supported. However, we feel that fast growing trees that have additional biodiversity and environmental benefits should also be rewarded with annual payments. Without such inducements it is unlikely that sufficient growers will take the long term financial risk on this land use option. If we cannot encourage our own land owners to plant trees for bioenergy purposes then we will be reliant on imports of biomass in order to help meet our renewable energy and climate change targets. The UK is already a net importer of fossil fuels so we should be focusing on ways to maximize indigenous and secure supply of biomass for the future.
ARTICLE 21: Basic services and village renewal in rural areas
ARTICLE 27: Investments in improved forestry technologies and in processing, mobilising and marketing of forest products
Both of these articles are likely to support infrastructure. Article 27 suggests that incentives will be provided to SMEs for processing and marketing, mobilizing and adding value to forest products. We would encourage this to be widened to make sure that energy crops infrastructure is covered. One of the main barriers to the take up of energy crops is the lack of machinery to plant, harvest and process the crops.
Ideally, there should be a dedicated grant scheme for energy crops infrastructure and processing projects. Based on our findings in the SW of England around £1.53 million of funding is required from 2014-2020 to be able to plant and harvest 3,000 hectares per year and process 40,000 tonnes of biomass per year. Our view is that grants for initial infrastructure projects should be up to 75% of the capital costs.
As energy crops will ultimately make up the majority of biomass produced in the EU we think that it is imperative that infrastructure projects receive targeted support during the 2014-2020 period.
DIRECT PAYMENTS REGULATION
ARTICLE 30: Crop diversification
This article states:
- Where the arable land of the farmer covers between 10 and 30 hectares, cultivation on the arable land shall consist of at least two different crops. None of those crops shall cover more than 80% of the arable land.
- Where the arable land of the farmer covers more than 30 hectares, cultivation on the arable land shall consist of at least three different crops. The main crop shall not cover more than 75% of the arable land and the two main crops together shall not cover more than 95% of the arable land.
Dedicated energy crops are eligible as one of the 2-3 required crops and this may therefore be a constructive solution for farmers to meet the diversification requirement. It is essential for the energy crops industry and the long term sustainable production of indigenous biomass that national authorities push for SRC and miscanthus to remain as eligible crop diversification options.
ARTICLE 32: Ecological focus area
This article states that:
- Where the arable land covers more than 10 hectares, farmers shall ensure, during the first year of implementation of the present regulation, that at least 3% of their eligible hectares, excluding areas under permanent grassland and permanent pasture and permanent crops, is ecological focus area such as land left fallow, terraces, landscape features including hedgerows, ditches, stonewalls, in field trees, ponds, land planted with nitrogen-fixing crops, buffer strips and afforested areas. Farmers may apply this measure to their entire holding.
The Agriculture and Rural Development Committees have reduced the requirements regarding the area to be set aside from 7% to 3%. Our understanding is that previous proposals suggested that SRC could be planted as part of this set aside area but this option has been removed from the latest proposal. We feel this is a backward step considering the environmental and biodiversity benefits of SRC. At least 12 priority bird species covered by Biodiversity Action Plans (BAPs) in the UK are frequently found in and around energy crop plantations and surveys suggest that there are significantly more birds in SRC compared to improved grassland and arable controls,. In addition, 25 species of butterflies have been found in and around SRC plantations and numbers were found to increase by up to 130% compared to land previously used for arable crops.
There is however some suggestion the land set aside for ecological focus may include fast growing trees. This is to be encouraged but we hope there is an opportunity for the European Parliament to reevaluate the biodiversity benefits of SRC so that these crops are also covered.
ARTICLE 38: General rules (coupled support)
In the amended article, SRC has been taken off the list and replaced by the generic statement “live trees”. We are concerned that as SRC willow are fast growing shrubby trees managed as coppice and typically planted on arable land that they may not fit in with this definition. Similarly, we are concerned that miscanthus and other energy grasses are not considered worthy of coupled support. We would like to see both SRC and miscanthus named as individual crops in Annex 1 to the Treaty.
Director, Crops for Energy Ltd
21 February 2013
 Why we need energy crops in the South West. Main report in support of the position paper. Crops for Energy June 2012. http://www.crops4energy.co.uk/files/pdfs/WhyWeNeedEnergyCropsintheSW-Main_Report.pdf
 The Effects on Flora and Fauna of Converting Grassland to Short Rotation Coppice. Four year study involving wildlife monitoring of commercial SRC plantations planted on grassland and grassland control plots. DTI Technology Programme: New and Renewable Energy Contract Number B/W2/00738/00/00. http://webarchive.nationalarchives.gov.uk/+/http://www.berr.gov.uk/files/file30621.pdf
 Parry B (2005) Ode to Energy Crops. The Biologist Volume 53 No. 1.