SPEECH OF COMMISSIONER FISCHLER AT THE FIRST ERMA CONFERENCE, MARCH 1998

CROP DERIVED RENEWABLE RAW MATERIALS

What does the future hold?

This paper has been written to highlight the potential of the non-food crops industry and to suggest that a policy framework should be established which will enable its continued development.

"When we talk about agriculture as a supplier of raw materials for industry, particularly for energy production, this means above all an opportunity to replace non-renewable resources with renewable agricultural products"

Commissioner Fischler at the first ERMA conference March 1998.

Many valuable renewable resources can be derived from agricultural crops. Some sectors of the European chemicals and energy industries increasingly rely on vegetable oils, fibres, starch, cellulose and sugars derived from established and novel agricultural crops. Increasing the use of these renewable raw materials will help to reduce the consumption of finite resources of mineral origin and benefit the environment by reducing greenhouse gas emissions. It will also improve the overall carbon balance. It is imperative that non-food crops are available, and for this, a framework must be introduced which ensures that non-food crops are a viable option for agricultural businesses, processors and consumers.

Until recently the key driver for the growth of non-food crops was set-aside. Over the past 10 years there has been considerable public funding, coupled with private funding (running into millions of ECU) of projects which have improved the economic and environmental performance of non-food crops and their derivatives. The European Renewable Raw Materials Association (ERMA) estimate that 5% of arable land in Europe is used for producing crops for industrial markets. Set-aside has not been the only driver which has encouraged the development of non-food crops, but it has certainly boosted the speed with which the sector has developed.

However, the CAP reform proposals, published by the European Commission, ignore this successful development and have cast doubt over the future of set-aside. This doubt has been felt throughout the industry as further investment into plant, machinery and multiannual crops is now questioned This suggests that set-aside is an unsatisfactory basis for support, as the rate varies annually (this does not engender confidence, particularly when planting multiannual crops such as short rotation coppice), its long term future is uncertain. Agenda 2000 makes no provision for the development of non-food crops on land which is not eligible under the arable area payments scheme. Therefore, we urge you to consider a new support regime to provide long term, robust measures, which could qualify for WTO green-box status.

We urge a new approach to the development of a non-food crops industry, driven by a recognition of the economic, environmental and social benefits of this sector, rather than a dependence on set-aside production. The development of a robust industry which will deliver high-quality and 'tailor-made' raw materials for use by industry and the energy sector will clearly help the European Union to develop in a sustainable way. Non-food crops will make a strong contribution to the objective of sustainable development by creating employment and revenue opportunities in rural locations and by providing obvious environmental benefits (ie by reducing greenhouse gas emissions and increasing biodiversity in the rural landscape).

The CAP reform (Agenda 2000) fails to make specific provision for non-food crops. This means that it will not be profitable to plant new species for non-food use and biomass crops. If this is the case, the European Union's agricultural, chemical and biomass industry will lose the market share which it has built up over the past decade. Considerable investment will be wasted, or worse, handed to our third country competitors to capitalise on Europe's short-sightedness.

To ensure that Europe can continue to benefit from the industry which it has developed we urge that you consider the following:

A policy framework specifically designed for industrial and energy crop advancement in the long term which will:

i) allow non-food crops to compete with mainstream, supported crops;

ii) provide a level of support which reflects the range of environmental and social benefits associated with .non-food crop production;

iii) encourage a focused and co-ordinated approach between different departments within the European Commission; and

iv) encourage investment and growth, enhancing the competitive strength of the European Union in renewable production, research, technology and application.

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This document was developed in open discussion with representatives of the UK non-food crops industry, which includes breeders, growers, traders, processors and consumers. It can therefore be described as representing an industry view.

The paper is endorsed by the following organisations:

Seed Crushers' and Oil Processors' Association (SCOPA), The National Farmers' Union of England and Wales (NFU), Alternative Crop Technology Interaction Network (ACTIN), Home Grown Cereals Authority (HGCA), British Society of Plant Breeders (BSPB), United Kingdom Agricultural Supply Trade Association (Non-food crops committee) UKASTA.