Volume 2

Non-food crops / Select Committee on Science and Technology.

  • Great Britain. Parliament. House of Lords. Science and Technology Committee.
Date:
1999
Catalogue details

Licence: Open Government Licence

Credit: Non-food crops / Select Committee on Science and Technology. Source: Wellcome Collection.

    165/244 (page 157)
    Economic Viability The choice between oilfield and farmer’s field will increasingly become one of cost. Given attractive and consistently foreseeable costings, the scope for agriculturally-produced chemical feedstocks is large. However, this has to be put into a realistic context. Real economies of the open world must dictate the situation and not market distortions and/or uncontrollable subsidies. In the short to medium term, especially with the price of petroleum oil currently at low levels, there is little incentive for customers to switch from a petrochemical to a crop-based feedstock when the two alternative technological routes exist. If it is to be internationally competitive, the United Kingdom chemical industry must have access to agriculturally produced materials at prices as close as possible to world prices. This means continued reform of the CAP and, in particular, it means avoiding the high administrative costs levied on chemical companies for operating the necessary CAP-related schemes. Thanks partly to the refund system under the CAP for sugar and starch substrates, usage of both sugar and starch for chemical production in the European Union increased during the early nineties. However, although in 1998 the Commission reduced the abatement on per 100kg of sugar from 8.45 ECU to 6.45 ECU for a period of two years—a move welcomed by the CIA—the scheme still blunts the competitiveness of the United Kingdom chemical industry which remains unable to buy sugar at true world market prices. In summary therefore, it is an essential part of “real” economics for chemical companies to have access, with the minimum of barriers, to agricultural materials from the world market. It would be a very harmful development if, in seeking to develop greater non-food agricultural production in Europe, the authorities were to make access to world markets for the relevant materials more difficult. This point of course also applies with particular strength to agricultural products more easily and economically produced in climates other than that of Western Europe. Environmental Acceptability As part of the increasing priority being given to sustainability, a number of official schemes and proposals are being considered. The Chemical Industries Association is playing an active part in the sustainable development debate and recognises the valuable role which renewable agricultural resources will play in the future. However, it is also extremely important that any proposals do not cause severe market distortions. In assessing the scope for greater use of renewable resources, it is also essential that the entire environmental balance be considered, rather than just that part of the chain which offers the attractive features. 3. CONCLUSIONS The chemical industry has already begun to recognise the importance of non-food crops as an alternative and sustainable source of chemicals. This can be readily demonstrated by the conversion of oilseed crops to industrial grade oil and its subsequent transformation into other chemicals. The chemical industry has also begun to acknowledge the importance that these types of developments will play in transforming agriculture and enhancing United Kingdom competitiveness/technological prowess. However, there are a number of areas relating to policy issues which the CIA believes need to be properly addressed. These are outlined below: (i) the need for a predictable and secure access to agricultural feed-stocks; (ii) the continued reform of the CAP towards the availability of agricultural materials for the chemicals industry at world prices; (iii) clarification in CAP and in GATT/WTO on how to treat crops providing both food and non-food products; (iv) avoidance of market distortion for existing chemicals, and recognition of all environmental factors, especially when considering special schemes to promote renewable resources and issues concerning sustainability; (v) increased investment in R&D with a particular emphasis on product and process innovation which are market-driven and offer high specificity and added-value; (vi) increased dialogue and collaboration between Government and its agencies, industry, academe and the farming industry through initiatives such as Foresight, via pilot-scale demonstration projects and the LINK scheme; and (vii) adequate protection of intellectual property in new biotechnological product and process inventions. In summary, chemicals from crops offer an exciting possibility for the future success of the chemical industry. In turn, it is envisaged that this will contribute to an improvement in the overall quality of life in the United Kingdom.