PR - Testing The Economic Viability Of Energy Crop Production In Competition With Alternative Land Uses

Work conducted for the UK government in 2005, by Cambridge University and the Scottish Agricultural College, concluded that energy crops were not competitive as an alternative to conventional arable crops. The present study used partial budgets to explore whether this conclusion could be challenged under different scenarios. This proved that they could be competitive against alternative land uses (set aside and grazing livestock) and even against arable crops, if the arable work was undertaken by contractors. However further analysis showed that even under these circumstances the viability of energy crops was reliant on support from public funds to compensate for market failure. It was barely viable without an establishment grant and could only be justified as an alternative to set-aside if all subsidy support was withdrawn.

Key words: energy crops; partial budgets; economic viability