En­ergy scheme to fo­cus on ‘price cer­tainty’ for farm­ers

Irish Independent - Farming - - NEWS -

A Gov­ern­ment strate­gist for the pro­posed Re­new­able Heat In­cen­tive (RHI) scheme says the scheme will fo­cus on “price cer­tainty” rather than di­rect sup­ports to farmer grow­ers.

“We are open­ing up a mar­ket for biomass, where farm­ers are as­sured that if they grow the crop there will be a mar­ket for it,” said Frank Groome. Long-term con­tracts — up to 15 years — will be built into the scheme. “There is a bit of an onus on the farm­ers’ side to make a de­ci­sion and if they are willing to do that there will be as­sur­ance for them that there is a mar­ket there when they pro­duce the crop.”

How­ever, an eco­nomic anal­y­sis of biomass pro­duc­tion com­pared to other land use found it will re­quire sub­stan­tial in­crease in re­turns or state grant sup­port to make it vi­able on many farms.

Tea­gasc econ­o­mist Fiona Thorne com­pared biomass pro­duc­tion with conacre let­ting, ce­real grow­ing, and beef pro­duc­tion based on 2016 re­turns for each cat­e­gory.

Wil­low was based on a yield level of 7 t/ha DM in the first year, with 10t/ha DM each year af­ter that.

With­out an es­tab­lish­ment grant of €1,040, the gross mar­gin of wil­low was es­ti­mated at around €220/ha, or €310/ha with an es­tab­lish­ment grant.

Dr Thorne found that let­ting the land at the av­er­age 2016 re­turn of €282/ha would leave a loss of €78/ha if con­verted with­out grant aid and €34/ha with aid.

In the case of win­ter wheat, it was found biomass would not be eco­nom­i­cal as the crop re­turned more.

For beef fin­ish­ing farms there was a ben­e­fit of €250/ ha with grant aid and €150/ ha with­out grant aid for land con­verted to wil­low.

“Pur­posely we did not in­clude dairy farm­ing in the study, be­cause on av­er­age pro­duc­tion for the bot­tom one-third of dairy farm­ers, the in­come would far sur­pass what they would get from wil­low,” she said.

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