Overview of Non-Food Markets

 Markets for fibre crops

The main fibre crops cultivated in the UK are hemp, flax, miscanthus and cereal straw. Production levels are limited by the availability of processing capacity. There are two types of plant fibres:

• Long (bast) fibres derived from crops such as hemp and flax are used in the textiles industry, for paper making and in biocomposites for the automotives industry. They can also be used in insulation materials. 
• Short fibres are derived from the woody core of hemp (shiv or hurd) or from cereal straw and miscanthus. These are used in construction biocomposites, strawboard, insulation materials or as animal bedding.

Fibre crops grown with an end-use contract in place are eligible to be grown on set-aside land in the UK. A Home Office licence is required for the cultivation of industrial hemp, however farmers can now grow hemp under a license obtained by their processor.

Fibre crops are grown for a wide range of markets across Europe. The largest market is in the automotive sector; fibres are used to manufacture biocomposites, used in car door panels and parcel shelves. The largest developing market for plant fibres is in the construction industry.

There is an opportunity to increase production of fibre crops in the UK. In particular, opportunities lie in establishing regional processing and manufacturing facilities. The transport of bulky raw materials across large distances brings increased costs and diminishes environmental benefits.

2.3 million tonnes of glass fibre are used worldwide per year; there is great potential for substitution with natural fibres, but cost and availability currently limit their market.

 Markets for carbohydrate (starch and sugar) crops

Starch is produced as an energy store by all plants, however those of interest are plants which store large amounts of starch. The key sources of plant-derived starch are mainstream crops: cereals, maize and potatoes. Certain crops store energy as simple sugars: sugar beet and sugar cane. The main starch/sugar-producing crops in the UK are wheat, potatoes and sugar beet; quota restrictions prevent the use of potato starch for non-food applications in the UK.

Starch has many potential applications and can replace petrochemical feedstocks in some industries. The major applications are bioethanol as a transport fuel, renewable polymers, adhesives, paper and board.

Starch for non-food applications, aside from bioethanol, constitutes 46% of total EU starch production, equating to 3.6 million tonnes per annum (2006). The total EU starch market is expected to rise to 12 million tonnes by 2010, increasing the market for non-food starch to 5.5 million tonnes per annum.

The main advantage of using plant-derived starch for production of renewable polymers and adhesives is that the end product is biodegradable and can therefore offer a solution to UK waste disposal issues.

The UK has the advantage of being an expert producer of these feedstocks, but problems can arise from their being commodity crops having to compete on the global market. There is currently little opportunity for adding value or increasing farm incomes through conversion of starch crops to an end product, although primary processing may be an option in the future through development of small-scale technology.

Crops grown for starch production, for a dedicated non-food use, are eligible to be grown on set-aside land in the UK; an end-use contract must be secured prior to planting

 Markets for biofuel crops

Transport biofuels are attracting high levels of interest, from growers, processors and end-users at present, mainly driven by Government targets and climate change.

In 2005 the Government announced the Renewable Transport Fuels Obligation (RTFO), which requires suppliers of fossil fuels to ensure that a specified percentage of the road fuels they supply in the UK is made up of renewable fuels. The target for 2009/10 is 3.25% by volume. Biofuels include both biodiesel derived from oilseed rape, and bioethanol derived from wheat and sugar beet in the UK; other feedstocks are also imported.

It is estimated that approximately 870,000 ha of oilseed rape and 500,000 ha of wheat would need to be grown for UK biofuel production by UK farmers in 2012 in order to meet the 5% transport fuel share stipulated in the RTFO (assuming a 50:50 market share between biodiesel and bioethanol).

There is significant potential for on-farm biodiesel production, with a range of technology available and markets established. Less potential exists for small-scale bioethanol production, mainly due to the cost, complexity and hazardous nature of the technology.

2^nd generation biofuels, whereby any biomass can be converted into fuel through pyrolysis and gasification, is likely to broaden the scope for UK feedstock supply. High biomass crops such as Miscanthus, short rotation coppice (SRC), maize, or cereal straw could be potential feedstocks. This is expected to broaden the geographical area suited to feedstock production; however large-scale production facilities will be required to make this process viable. There may be potential for adding value by primary processing, thus reducing the bulk of the material on-farm.

 Markets for energy crops

With increasing legislation and Government targets towards increased uptake and use of renewable energy, there is broad interest in this sector.

The UK has several targets for GHG emissions reductions and use of renewables:

• Kyoto Protocol: the UK must reduce greenhouse gas emissions to 12.5% less than emissions in 1990. This target must be reached by 2008-2012.
• National target: reduce emissions by 20% compared to 1990 levels by 2010.
• The Renewables Obligation: this sets renewable energy generation targets at 10% of total energy by 2010 and 15% by 2015-2016.

Key feedstocks for biomass energy generation in the UK are SRC willow and Miscanthus; crop areas are increasing steadily across the UK as fossil fuels and non-renewable energy sources become more expensive.

Energy crops can be grown for large or small-scale units.

• Large power generators are now co-firing with biomass, allowing them to claim Renewables Obligation Certificates (ROCs) for generation of renewable energy.
• Farmers can become energy and fuel suppliers for local power users, on a domestic or district-heating system. Large heat users, such as hospitals, leisure centres and schools are ideal outlets for biomass energy
• Installations of biomass boilers are becoming more frequent across the UK.

For farmers interested in planting SRC or Miscanthus, establishment grants are available. Further information is available on the Natural England website at www.naturalengland.org.uk/planning/grants-funding/energy-crops/default.htm

  Markets for oil crops

The industrial oils market is dominated by biodiesel. Other high volume applications are lubricant and surfactant production.

There are market opportunities for biodiesel, lubricant and surfactant production in the UK. The feedstocks are all mainstream commodity crops and producing feedstocks for these industries can provide a reliable income. On-farm processing of these crops is not generally profitable, although on-farm oil-extraction may be a means of adding value. There are situations in which on-farm production of oils and fuels can be profitable within a local market e.g. in more isolated rural communities. An added advantage is that the bulk of the product is reduced on-farm, reducing transport costs.

The most important crops for industrial oil production are oilseed rape and linseed. Both can be grown across the UK, the most favourable areas being the main arable areas along the East coast.

 Markets for speciality and pharmaceutical crops

The speciality sector covers a diverse range of crops and applications, but includes high value, low volume markets. Supplying these markets requires production to precise specifications and can be high risk, but the income generated can be high from a small land area.

Applications include pharmaceutical and medicinal extracts and preparations, essential oils, dyes, flavours and fragrances, cosmetics and nutraceuticals. The UK pharmaceuticals market employs over 60,000 people and generates £8 billion in manufacturers sales (2001 figures). The cosmetics market brings over £6 billion to the UK each year and the nutritional supplement market is worth almost £200 million.

These markets can be sensitive and production is regulated to prevent over-supply and market saturation. As the global supply is regulated there is limited potential for production for the global market; however significant opportunities exist for on-farm or co-operative extraction, process and manufacture and thus local marketing and retail of medium-value products such as essential oils and herbal extracts, through farmers markets or other speciality local outlets.

Good traceability and recording systems are in place in the UK. Such systems have not been implemented in other countries, so particularly in medicinal and pharmaceutical applications the UK is able to trace the origin, treatment and handling of particular batches and thus an appropriate supply can be ensured.

Examples of speciality crops include borage, camelina and echium, grown for their oil, or dill, foxglove and chamomile grown for high-value medicinal or herbal extracts.