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Select Committee on Science and Technology First Report


7.1 When examining earlier work on non-food crops (paragraphs 2.7-2.15), we are struck by how much has changed since the Select Committee on the European Communities considered the subject in 1991 and, at the same time, how much has remained the same. The most notable changes since 1991 are increased public awareness of environmental issues and dramatic advances in biotechnology.

7.2 There have been considerable changes in public attitudes towards the environment since 1991. There is now greater concern about the implications of increased greenhouse gas emissions. There is an acceptance of the need for sustainability in all activities. In some other European countries, this recognition has already resulted in specific action by Government. In Germany, for example, policies to encourage the use of biodegradable and sustainable products are further advanced than in the United Kingdom (paragraph 6.7). In the USA, the Government has recently issued an executive order to accelerate the development of bio-based industries as sources of energy and chemicals[24].

7.3 There is also a general recognition and acceptance of the need to protect the countryside for its own sake, and the focus of agricultural and environmental policy has shifted markedly towards this objective since 1991. The reduction of CAP price support is under way (paragraph 1.4) and removal, long talked of, is at least a possibility over the horizon.

7.4 Improvements in conventional plant breeding are likely to result in substantial increases in the yield of many of the crops which we have considered; in addition, the changes made possible by genetic modification could enable entirely new industrial processes and products to be developed (paragraphs 3.31-3.34). We recognise there are many conflicting views on genetic modification, and our inquiry has not examined these controversies. But the development of a technology resulting in the production of industrial products from renewable sources might have significant environmental and social benefits that should, at least, be weighed against the issues raised by genetic modification.

7.5 Many other things are relatively unchanged since 1991. Despite rebounding substantially this year, oil prices have not yet provided a sufficient incentive for industry to substitute non-food agricultural products for oil-based ones[25]. The assumption that the use of agricultural products for industrial purposes will automatically be environmentally beneficial has still not been rigorously tested (paragraphs 6.9-6.11). Although reform of the CAP has begun, it continues to create artificial distortions and to inhibit innovation. Policy, such as it is, for non-food crops is still largely dependent on set aside (paragraphs 4.8-13), a side-effect of the CAP cereals policy. While set aside is retained under Agenda 2000, the reduction in non­crop­specific payments will narrow margins on oilseeds, including linseed (paragraph 5.14), while further policy proposals may result in a significant reduction in the area of fibre crops grown in the United Kingdom (paragraph 5.12).

7.6 Evidence presented by a wide range of researchers and processors indicates that non-food crops show considerable potential to meet environmental policy objectives and to create new businesses. Technology is enabling new products to be developed and new applications to be found for existing ones (Chapter 3). Products derived from non-food crops can increasingly compete with synthetic products in terms of performance and have the added advantage of being biodegradable or derived from renewable resources. The recommendations which follow concern factors which support or hinder the realisation of the potential of non-food crops.

Ministerial Responsibilities

7.7 The MAFF support programme for the growing of non-food crops, which seeks to encourage "crops with a significant agricultural impact in terms of hectares" (Q 2), is too narrowly focused on this objective. We can see the attraction of crops such as short rotation coppice (SRC) to a department intent on finding productive employment for farmers. But by devoting most of its effort to this work, MAFF policy is in danger of missing the potential that new scientific developments are bringing to the non-food crop sector. Meanwhile the overlap of departmental responsibilities helps to obscure the key question: whether energy crops can ever provide a cost-effective way of generating renewable energy. MAFF's Central Research Laboratory is undertaking much good work on these new developments and some of them, for example the replacement of fossil-fuel based feedstock for the chemical industry, could eventually result in significant land use too. But the high value niche products which could eventually lead to entirely new innovative industries will certainly not do so in the short term. Yet evidence from the private sector (paragraphs 5.16-21) demonstrates the potential for important developments, which Government ought to support at this stage.

7.8 Government responsibility for encouraging industrial innovation falls primarily on the Department of Trade and Industry (DTI), which is also responsible for renewable energy policy. But policy in this area involves also departments responsible for agriculture, the countryside, the environment, science and health; in short, a very wide spread of Government departments, made even wider by devolution. The key requirement, if there is to be "joined-up government" in this area, is that there should be a "champion" within Government pursuing an innovative approach to new industries based on non-food crops.

7.9 One mechanism for bringing together a wide spectrum of interests from industry, academia and Government is Foresight. We are encouraged to learn of the new Foresight task groups on the future of industrial crops (paragraph 2.17). This subject, which straddles many traditional divides between industry and agriculture, is ideally suited to the Foresight approach and we fully support their proposed work on the potential benefits, notably to the environment, of replacing fossil-based raw materials with crop derived products. We look forward to early results from this Foresight exercise. But however useful Foresight is, it is not a programme which leads directly to executive action by Government. What is required is a Minister within Government who can co­ordinate policy and carry programmes forward.

7.10 We have been unable to identify a co­ordinated approach across all relevant Government departments that might enable the potential of non-food crops to be realised. Some sectors, for example electricity from renewables, may be thought to have received undue attention, while there are no Government plans to nurture the diverse range of industries that could be based on non­food crops. While there is interest in particular areas or projects, there is little attempt to assess systematically the basis for future industrial applications. We have concluded that these nascent industries, which will develop from the synergy between biotechnology and the chemical industry, need to be given higher priority. Because they depend on the agricultural sector and cross many of the traditional departmental boundaries within Whitehall, we recommend that responsibility for assessing and exploiting the potential of non-food crops, and in particular their potential to form the basis for new innovative industries, be co-ordinated by an inter-departmental committee led by the Office of Science and Technology (OST).

7.11 This committee should be headed by the Minister for Science as an identifiable "champion". The Minister and the committee should publish a report annually on its progress.

7.12 The European Communities Committee, in their recent report on Electricity from Renewables[26], made a similar recommendation in the overlapping area of policy for renewable energy. They called for a "renewable energy agency with real teeth", to drive progress across the public sector towards the Government's targets; they also proposed an annual report. The Government rejected their recommendations, on the grounds of "cost and disruption", and because "energy policy covers a wide range of areas and involves a wide range of officials within government….It would be impossible for a single agency to successfully cover all of these areas"[27].

7.13 These arguments beg the very questions we pose. We do indeed seek to "disrupt" a situation which we regard as unsatisfactory; and we consider that the cost of doing so is outweighed by the opportunity cost of not doing so. It is precisely because no existing agency has the necessary remit to realise the opportunities which we have identified, that we call for a co-ordinating body. Our proposal for an inter-departmental committee is a modest one, which we hope will seize Ministers' imaginations: if it does not, we hope at least that they will be furnished with better reasons for rejecting it.

7.14 The problems we have identified with the treatment of non-food crops by the United Kingdom Government are also apparent in the European Commission (see paragraph 2.9 and Appendix 3). DG Agriculture concentrates on food production; it does not see its role as to develop new industrial sectors, even if they are based on agricultural products. Other DGs, Research, Environment and Energy, all have an interest, but we found little evidence of a co­ordinated approach on non-food crops. We recommend that the United Kingdom Government should make representations to the European Commission to establish a coherent European policy, with emphasis on the support of a co-ordinated research programme, in the context of the 6th Framework Programme which is now under discussion. The programme should address not only new crops but also the crop handling and processing necessary for future industries.

7.15 Although we see a need for better co-ordination within the Commission, we were impressed by the EU IENICA project and database which has been established at the MAFF Central Science Laboratory in York (paragraph 2.16 and Appendix 3). We recommend that this database be maintained and extended to include greater technical detail to assist decision-making by growers and manufacturers.

7.16 We can see that the ACTIN database has different objectives, is under different control, and meets different needs, but we were not convinced that there need be a separate and distinct database. An open database with full data on United Kingdom opportunities is likely to be of greater benefit than a smaller one accessible to United Kingdom members only. We recommend that detailed consideration should be given to subsuming the ACTIN database into IENICA.

Innovative Potential

7.17 Most commercially viable opportunities for expanding the non-food crop sector are in high value, low volume markets; essential plant oils, for example, command high prices, but are likely to remain niche market products. However, there may well be other high value, low volume markets for non­food crops that may lead to significant industries (paragraphs 3.31-3.32 and Box 1).

7.18 Many non-food crops have as yet benefited little from sophisticated plant breeding programmes. We were informed of the significant advances, especially in total yield and product quality, that could be achieved with these conventional methods (paragraph 3.34). Many witnesses indicated to us that the development of these new industries is not, therefore, entirely dependent on the use of genetic modification. However, genetic modification offers extended possibilities, especially in producing entirely new products in plants. We recognise the current concerns about the possible environmental impact of genetically modified crops; but, as we have noted throughout this report, non-food crops for industrial use may also offer significant environmental advantages. This highlights the need for carefully-controlled experimentation and evaluation, if such developments are to prove not merely scientifically possible and commercially viable but also publicly acceptable. The United Kingdom has a leading position in this field of research; and its applications for pharmaceuticals and other products may in the long term deliver benefits to the National Health Service. Whilst we are aware of the many competing claims on resources, we strongly support the case for research into applications of biotechnology, to enable the potential for new pharmaceutical and other products to be developed from plants to be evaluated.

7.19 The possibilities for using plant biochemistry to generate materials that could replace products synthesised from mineral oil are almost limitless. These could include commodities such as ready-made polymers, high purity fatty acids and specific starches as well as lower volume products for dyestuffs and cosmetics. We recommend that the DTI evaluate the industrial potential of these nascent technologies, and that they be assessed on the basis of their contribution to a new biotechnology industry rather than focusing purely on ways to increase farm diversification.

7.20 An advantage of encouraging small-scale projects for high value products are that they allow for the development of biotechnology, in which the United Kingdom is a world leader, and create a knowledge base about a wide range of novel crops. From such small projects major industries can develop. We recommend that DTI-funded research and development is increased so that the United Kingdom will be early to market with novel industrial products from plants.

Non-Food Crops and the CAP

7.21 By distorting the economics of land use, the Common Agricultural Policy continues to provide a disincentive to grow new crops or develop new markets. In addition, the way the set aside regime is applied can cause non-food crops to be grown on inappropriate land (paragraph 5.5). There are unlikely to be any further significant changes in the CAP until 2006, unless possibly through further agreements on international trade with our trading partners. Nonetheless, we believe that eventually there must be a substantial reform of the CAP. We urge the Government to use the intervening period to put in place the necessary United Kingdom research programmes to resolve the uncertainties over policy implementation and to prepare for the phased introduction of new technologies and the development of new industries.

Energy and Environmental Issues

7.22 Some of the policy issues which affect non-food crops have been discussed in Chapter 6. In some areas there are already Government targets and statements of intent, for example with respect to greenhouse gas emissions (paragraphs 6.2-6.5) and disposal of packaging (Box 7). However, as recently reported by the Select Committee on the European Communities[28], in the important case of electricity from renewables, it is hard to see the emissions targets being met by present policies. We share the concern expressed by that Committee when it considered electricity from renewables that "renewable energy is only one facet of the policies needed to tackle the broad-ranging environmental issues facing the United Kingdom, Europe and the world. It is unacceptable that the United Kingdom cannot deliver an integrated policy in the renewables industry". We recommend that the Government put in place as a matter of urgency more clearly defined policies to meet their environmental targets, particularly with respect to sustainability issues and the use of renewables. In doing so, they should recognise the possible contribution of non-food crops.

7.23 So far as energy crops are concerned, Project ARBRE (paragraphs 3.5, 5.3-5.7) seemed to be a well managed demonstration project (although the low rainfall areas of Yorkshire are not the immediately obvious area for growing willow). But until there is a firmer basis on which to judge the relative merits of alternative ways of meeting the United Kingdom's sustainability policy objectives, we are not convinced that similar demonstrations need to be repeated wholesale. A clearer statement of renewable energy policy is needed, and clarity as to the real cost of energy crops, before substantial investment is undertaken. Moreover, demonstration projects must not be allowed to pre-empt funds which could otherwise be used for more fundamental research into novel uses of non-food crops. We recommend that future proposed short rotation coppice demonstration projects for energy generation be assessed for priority by the proposed inter-departmental committee alongside alternative options for the financial support of innovative non-food crops.

Regulatory Restraints and Drivers

7.24 We are not convinced that the overall environmental and economic impacts of different courses of action are sufficiently well understood to generate effective legislation for meeting broad policy objectives. A narrowly focused approach by each department, working on its own agenda, for example DTI and MAFF addressing separately issues relating to energy crops, is unlikely to result in the best policy overall. A more systematic approach should be adopted to evaluate the alternative approaches and in particular the net benefits of products derived from non-food crops against other renewable and non-renewable alternatives (paragraph 6.9). We recommend that Government support further research, using techniques such as Life-Cycle Assessment, to assess the value of non-food crops in meeting their policy objectives. These assessments, with all the assumptions on which they rely, should be published.

7.25 International examples, such as the requirement to use recyclable materials in Germany and the impact this is having on its automobile industry, show how environmentally based legislation can open up new markets for non-food crops (paragraphs 3.27, 6.7). Regulations governing the use of packaging material in the United Kingdom set a hierarchy of objectives (Box 7). The way in which this is constructed, with land-fill as something of a last resort, tends to undervalue the advantages of biodegradable packaging, of which non-food crops can provide numerous sources, over non-biodegradable material. We urge the Government to raise the benefits of bio-degradable packaging in its hierarchy of objectives, and to recast the regulatory regime to encourage its use.

7.26 There is a presumption against industrial development in rural areas. New industries in the countryside will create predictable planning difficulties and the handling, processing and storage of crops for industry may create others that are not easily predicted. We have not examined these issues; but resolving planning problems can take time and it is essential that such problems are anticipated before they arise.

7.27 There are regulatory restraints on other aspects of these industries, and we believe that the Government should review these with a view to removing barriers to development. For example, the licensing arrangements for growing hemp for industrial purposes in the United Kingdom seem disproportionate (paragraph 5.12). They create difficulties here that growers elsewhere in Europe do not face. The slow repayment of deposits required by the EU support scheme creates further difficulties. We recommend that the growing of industrial hemp should be deregulated.

24   The President's New Executive Order on Bio-based Products and Bioenergy, 12 August 1999. Back

25   The most straightforward area for comparison is energy. The price of a barrel of Brent Crude was $10 in February 1999; by November it had risen to $26. According to British Biogen, speaking in May (Q 175), the cost of production of UK biomass was then $60 per tonne; at $40 per tonne, it would be competitive with oil at $10 a barrel. At the present oil price, wood is a cheaper fuel than oil. This, however, leaves out of account the capital cost of changeover. British Biogen hoped to achieve $40 per tonne in 5 - 10 years. To give another example, witnesses from DuPont's Cereals Innovation Centre told us in June that, at the oil price then prevailing, "You can forget about polymers from plants in economic terms" (Q 376). Back

26   Electricity from Renewables, 12th Report 1998-99, HL Paper 78, paragraphs 277 - 279 and 393. Back

27   Government response to the above, October 1999 - not yet in print. Back

28   Electricity from Renewables. Back

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