This paper is devoted to a quantitative analysis of the introduction of perennial crop in a short-term supply model. The analysis provides assessment of impacts regarding land use and N-input demand. We show that a variation in yield or the subsidy amount of miscanthus leads to a significant change in land use and N-input.lignocellulosic perennial crop, bio-energy, mathematical linear programming, land use, N-input demand, Crop Production/Industries, Marketing,

Fradj, Nosra Ben

Jayet, Pierre-Alain

English

Research Papers in Economics

 
 
 
 
 
 
Impacts of promoting perennial crops in the French agriculture 
 
 
 
N. BEN FRADJ
1 and P.-A. JAYET
2 
1 E-mail: nbenfradj@grignon.inra.fr, UMR INRA-AgroParisTech, Grignon, France 
2 E-mail: jayet@grignon.inra.fr, UMR INRA-AgroParisTech, Grignon, France 
 
 
 
 
 
 
 
 
 
 
Paper prepared for presentation at the EAAE 2011 Congress 
Change and Uncertainty 
Challenges for Agriculture, 
Food and Natural Resources 
 
August 30 to September 2, 2011 
ETH Zurich, Zurich, Switzerland 
 
 
 
 
 
 
 
 
 
 
 
 
Copyright 2011 by [N. Ben Fradj and P.-A. Jayet].  All rights reserved.  Readers may 
make verbatim copies of this document for non-commercial purposes by any means, 
provided that this copyright notice appears on all such copies. Abstract
This paper is devoted to a quantitative analysis of the introduction of perennial crop in a
short-term supply model. The analysis provides assessment of impacts regarding land use and
N-input demand. We show that a variation in yield or the subsidy amount of miscanthus leads
to a signicant change in land use and N-input.
Keywords: lignocellulosic perennial crop; bio-energ; mathmatical linear programming; land
use; N-input demand;
1 Introduction
Originated from energy crops, biofuels are increasingly being considered as a sustainable energy
source when compared with fossil carbon sources. Interrelated factors have led to increased demand
for this green energy. Factors include increased energy demand due to resource depletion and insta-
bility in oil producing regions, recent technological breakthroughts in agriculture and concerns over
environmental impacts such as climate change (Hall et al., 2009). Biofuel development is in addition
driven by rural development, job creation (Kraeussl et al., 2004), increasing energy self-suciency
and improving competitiveness (EC, 1996, 1997). In Europe, conventional energy crops appear like
widely marketed productions, after Brazil and the USA. This expansion has been spurred by the
Kyoto Protocol signed in December 1997 and by the European energy policy. Neverthless, food
crops and residues from forestry and agriculture cannot provide all biomass needed to fulll the
high future demand. As a result, second generation biofuels originated from perennial biomass
crops has been developed. These crops are characterized by a high land use eeciency and their
production indicates a substantial reduction in GreenHouse Gas (GHG) emissions. Among others
these crops are annually harvested perennial crops like miscanthus.
Miscanthus (Miscanthus x Giganteus)1 is a perennial rhizomatous grass which has its origins in
the tropics and subtropics, but dierent species are found throughout a wide climatics range in East
Asia (Greef & Deuter, 1993). The remarkable adaptability of miscanthus to dierent environment
(Numata, 1974) makes it suitable for establishment and distribution under a range of European
and North American climatic conditions (Lewandowski et al., 2000). Physiologically, miscanthus,
like maize, is a C4 species, xing carbon by multiple metabolic path-ways with a high water use
eciency (Koshi et al., 1982; Moss et al., 1969). Miscanthus roots can penetrate to a depth of
around 2 meters, which can provide a good protection against soil erosion. Even though its high
biomass yield potential, this crop requires low input level and therefore involves decreasing risk
of ground water pollution by pesticides and nitrates. Miscanthus is generally harvested in early
spring, which allows for good combustion quality due to low water content in addition to the fact
that it contains low ash, N, chloride, potassium (Lewandowski et al., 2003).
According to the Renewable Energy Directive, the French government is committed to have
a mandotory 10% target of energy from renewable sources in transport by 2020 (EU, 2009). To
achieve this target, additional land should be allocated to crops required to produce biofuels. In-
deed, either marginal and grass lands will be used or existing cropland will be converted into
lands dedicated to biofuels. The introduction of lignocellulosic perennial crop i.e miscanthus in
farming systems may lead to two main eects: i) changes in land use regarding direct allocation
for miscanthus and re-allocation among other crops, and ii) changes in input demand and related
environmental impacts partcularily due to low N-needs. A variation in yield or subsidy levels of
miscanthus may alter these changes.
This paper aims to analyse the impact of the introduction of miscanthus on land use and N-input
demand. The annual agricultural supply model - AROPAj- used in our analysis cover the Euro-
pean Union by the way of a large set of representative farm groups. The model is improved by the
implementation of functions of dose-response linking the N-input and the crop yield. There is need
to compute the Net Present Value (NPV) of this crop. The determination of this value is based on
1Miscanthus x Giganteus is a steril hybrid between M. Sinensis and M. Sacchariorus.
2"the Faustmann" rule used in the case of perennial crop with annual harvest. A generic function
of natural biomass is used to calculate the average miscanthus yield in a deterministic case. This
function is calibrated on few data available from the works of Miguez et al. (2008), Clifton-Brown
et al. (2007), and Christian et al. (2008), and adjusted to the average yield of a traditional annual
crop such as wheat, which is used as a control plant.
The paper is organised as follows. Section 2 decribes the modelling chain, specially the intro-
duction of the perennial activity in the static short term model dedicated to agricultural supply.
Section 3 presents results in term of land use in France and changes in environmental impacts in
northern France.
2 Methodology
2.1 The agricultural supply model
The AROPAj model, developed by INRA, is an annual mathematical programming model devoted
to the European agricultural supply. it belongs to a class of models based on a micro-economic
approach (Arni, 2001). It describes the annual supply choices of the European farmers in term
of surface allocation, animal production and on-farm consumption. Farmers are clustred into farm
groups according to the techno-economic orientations within each region, the economic size, and
the altitude class. Each farm group which is statiscally representative of the dierent production
systems is assumed to select the supply level and input demand in order to maximize the total gross
margin. The feasible production set is limited by several constraints: land endowment, animal
demography, livestock limit, animal feeding, and Common Agricultural Policy (CAP) requisites
including milk and sugar quotas. The AROPAj model has been used to study the successive
reforms of the CAP (Jayet & Labonne, 2005), i.e. Luxembourg reform in which many of the direct
payments that have been linked to production are decoupled and instead delivered through an
provided in the form of a area payment. Dierent model versions were developed among them are
the V2 covering the European Union (EU) - 15, and V3 version convering EU - 25. For France,
there are 157 farm group coverin the 22 French regions. Results in this paper are obtained from V2
for which "N-yield" functions are now available. In this version, the model represents a large part
of the used agricultural area devoted to "grandes cultures"(soft wheat, durum wheat, barley, corn,
rice, oats, rye, other cereals, rapeseed, sunower, soya, potatoes, sugar beet, peas, other proteins),
forages, grasslands, and major animal productions (bovine, goat and sheep herds, poultry and pigs).
2.2 Insertion of miscanthus in the model
For the introduction of miscanthus in the model, two main elements should be calculated: the
average yield Y  and the average Net Present Value V PN. A generic growth function is used to
calculate Y . This function is calibrated thanks to data provided by the works of Miguez et al.
(2008), Clifton-Brown et al. (2007), Christian et al. (2008) and agricultural experts. Due to the
lack of data at farm group level regarding perennial crops, we develop a two-step procedure to feed
the model with appropriate informations. The rst step is devoted to the selection of a continuous
time yield function, when the average yield is correlated to a control plant yield. The second step
is a computation step based on a simple dynamic approach aiming at computing of the rotation
duration, the average yield and discounted annual costs.
2.3 Recovery of perennial crop characteristics
2.3.1 Determination of the generic growth function: Y (t)
Basing on researchs of Miguez et al. (2008), Clifton-Brown et al. (2007) and Christian et al. (2008),
a model growth model for miscanthus was built. In this model, let a be the maximum biomass
yield, b the inection point in which biomass yield reaches a half of the maximum biomass yield, c
the spreading parameter, d the attenuation coecient.
3The model is given by the following equation:
Y (t) = [a=(1 + exp((b   t)=c)   a=(1 + exp((b)=c))]exp( dt) (1)
As shown in Figure 1, three phases are identied: a) installation phase where the yield increases,
b) maturity phase where the biomass reaches its maximum, and c) decline phase showing the
decrease of the miscanthus growth.
Figure 1: Miscanthus Growth Curve
2.3.2 From dynamic approach to static framework
To introduce miscanthus in the AROPAj, we needed to compute its yield level for each farm group.
However, miscanthus crop has been recently introduced in France and informations about yield
for the full rotation period (15-20 years) are therefore not available. Thus, we supposed that
miscanthus yield increases with the quality of the land, like wheat which is a traditionnal crop
presented for the majority of farm group into AROPAj. We proceed therefore to an adjustement of
the average regional yield of miscanthus to the average regional yield of a traditional crop presentend
in the four-fths of french farm groups. Regional miscanthus yield data are provided by the French
Biomass Project REGIX. Figure 2 which shows the signicant correlationship between miscanthus
and wheat.
Figure 2: Correlation between the average yield of miscanthus and the average yield of wheat.
42.3.3 Determination of the Net Present Value: V PN
We suppose that miscanthus plantations are typically grown as an even-aged monoculture. Prices
and costs rise at continuous time about 1.5% per year and the discount rate  is xed at 5% for
perennial grasses in France. Establishment cost (EC), paid o over T years (rotation) in an in-
nite sequence as established by Faustmann's criterion, happens in year zero. Fixed at 3000 e/ha,
the activities or operations that compose this cost are: rhizome purchase, planting, cultivation,
herbicides for a weed control. Production costs (PC) happen one year after the establishment and
will be appealing to each T years until the innite. They correspond to variable costs and include
expenses made for fertilization, weed control, and harvest. They are xed at 400 e/ha/year. All
cost data are acquired by experts. We consider that the crop is harvested annually (several times)
in a rotation of T years. Indeed, Gross margin (GM) happens in every year during a rotation, after
the establishment year. At year t, its value is obtained by multiplying miscanthus yield harvested
at t (Y (t)) in tons of dry matter (tDM), by its price (P) xed by Bical Biomasse France (BBF) at
70 e/tDM, i.e., GR(t) = P  Y (t).
The NPV of miscanthus is obtained by maximizing the discounted prot innite sequence, at
time t = 1. Therefore, the discounted value of the net income is equal to
NPV (t) = ( EC +
T X
t=2
(GR(t)exp( )   PC exp( ))exp( t)=(1   exp( T)) (2)
where  is the ination rate.
3 Preliminary results and discussion
This section provides the impacts of the introduction of miscanthus in the AROPAj model, when
both the yield and the subsidy amount of miscanthus varied.
The yield and the subsidy of miscanthus varied from -10 to +30% around an average expected
yield equals to 11 tDM/ha 2 and from 0 to 250 e respectively.
Mapped examples of the dierent scenarios presented in gure 3 show that miscanthus can be
essentially located in the majority of seine basin regions. Thanks to its root system, miscanthus
crop could decrease the level of nitrates at the output of collection point, and the purication eort
for water companies could therefore decrease.
Figure 3: Miscanthus area for France for the scenarios: a) Baseline Y , b) increase in Y  by 20%.
Results show also that the variation of yield and subsidy amount of miscanthus leads to changes
in land use and N-input demand.
2The average expected yield is calculated by Faustmann rule for each farm-type
53.1 Impacts on land use
The modication of subsidy and yield levels changes signicantly the farmer income (Figure4). For
high levels of subsidy and yield, the total net margin increases by 4%.
Figure 4: Total net margin of french farm-type at dierent level of subsidy and yield
For low levels of yield, miscanthus is cultivated on small areas even if the subsidy amount
increases (Figure 5). Nevertheless, miscanthus areas increase by 5%, if subsidy and yield levels are
high. This expansion leads to considerable change in land allocation (Figure 6).
Figure 5: Miscanthus areas at dierent levels of subsidy and yield
As shown in Figure 5, the introduction of miscanthus in the farming system alters mainly the
areas dedicated for cereal crops. We notice a decrease by 3% in cereal areas four a high level of
subsidy with a yield level xed at 11 tDM/ha. Moreover, we observe a decrease in areas dedicated
for Agro industrial crops (by 2%) and corn, potato, grasslands and marginal areas (by 1%). The
decrease in grasslands induce a reduction in livestock unit if miscanthus is introduced with high
yield levels, which leads to an increase in farm consumption level (Figure 7).
6Figure 6: Changes in land allocation in France at dierent levels of subsidy and yields - results
given by AROPAj   model.
7Figure 7: Livestock Unit and farm consumption levels when subsidy and yield levels change.
3.2 Impacts on N-input demand in the north of France
Fertilizers are known to have negative environmental impact, which can be altered by the introduc-
tion of an environmentally friendly crop like miscanthus. Table 1 shows that the N-Input demand
decreases when yield levels increase. Moreover, lower N-Input levels are reached by subsidizing
this crop. This result is explained by the decrease in arable areas dedicated to crops which are
characterized by high N-input demand i.e cereal crops. Therefore, the decreased N-demand leads
to a reduction in N-losses (Figure8)
% Variation in Y N-Input demand (unite)
-10% 11046
0% 10920
10% 10861
20% 10253
30% 9993
Subsidy (Euros) N-Input demand (unite)
0 10920
50 10891
100 10631
150 10342
200 10147
Table 1: Impacts of Variation in subsidy and yield levels of miscanthus on N-Input demand
Figure 8: N-losses when subsidy and yield levels change.
8By way of conclusion, signicant expansion of cellulosic biofuel production will require more land
tocultivate dedicated energy crop (Song et al., 2010). Therefore, arable grasslands and marginal
areas are considered as potential areas for biomass production. Thus, the re-allocation of land
reduces the N-input demand and therefore the N-losses. Neverthless, Fischer et al. (2010) are shown
that arable land can be used for all types of biomass crop but grassland should only be considered
for producing herbaceous lignocellulosic feedstocks in order to respect environmental and Green
House Gas (GHG) concerns (Fischer et al., 2010). In addition to biofuels, these biomass crops
are also suitable for conversion to heat and electricity. Developing this options will create a more
diverse and increased production for lignocellulosic crops, and therefore more land for cultivating
perennial grasses. However, the substitution of annual crop lands into perennial lignocellulosic
energy plantations neeeds serious considerations beyond economic factors. Indeed, competition for
resources may increase prices of land in factor markets and may alter production costs and therefore
the competitive position of food and feed commodities produced (Fischer et al., 2010).
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Impacts of Promoting Perennial Crops in the French Agriculture

Impacts of Promoting Perennial Crops in the French Agriculture

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