The

1
Profitability comparison between short
rotation forestry and agricultural crops in
Piedmont Region, Italy. Filippo Brun, Angela
Mosso University of Torino, Dipartimento di
Economia e Ingegneria Agraria, Forestale e
ambientale, Via Leonardo da Vinci, 44 - I-10095
- Grugliasco (TO) Italy. e-mail
filippo.brun_at_unito.it angela.mosso_at_unito.it
15th European Biomass Conference and
Exhibition 07-11 May 2007 International Congress
Center, Berlin, Germany
2. Methodological aspects
1. Purposes
The BIOFIL project Study, experimentation and
feasibility analysis for biomass energy
production, from short cycle and very short cycle
tree crops is a research action in the field of
agricultural, biological and economic problems,
promoted by Piemonte Regional administration, in
North Italy. This 3 years research is focused on
technical and agronomical aspects of energy crop
systems, and main topics are the definition of
best practices in plantation, cultivation and
harvesting, together with logistic solutions and
economical, financial and marketing
evaluations. We have analysed the profitability
of short rotation forestry (SRF), assessing
incomes and costs of woodchip production, and
comparing them with traditional agricultural
outcomes.
Comparison SRF versus Maize crop
profitability For both cultivations following
outputs have been evaluated - production cost,
given by the sum of all costs, internal and
external - net income, obtained subtracting
external costs from the gross marketable
production (GMP) - profit, calculated
subtracting all production costs from the GMP
Results are reported to surface unit. Input
costs and revenues are real ones, with data
collected in December 2006. For SFR a Swedish
intensive model with biennial rotation has been
adopted, repeated 4 times, with high growth (15 -
20 T  has-1  year-1 of dry chips). The cork
cultivation describes an analogous situation,
with high productivity (13 T  has-1 of dry
grains). Public funding considered are - grants
for energetic cultivations for the SRF - grants
from rural policy (although still not defined in
Piemonte) for the SRF - grants for OGM-free for
the corn crops. The C.A.P. single farm payment
(Single Payment Scheme), which is present in both
processes and therefore not in a position to
modifying the relative convenience, has not be
considered
In detail, we have compared best models for SRF
(high intensive, very short cycle, high
production clones of poplar) versus high profit
corn crops (Zea mays ssp. mays) which are the
most widespread and profitable cultivation in
the Po plain. Results of this evaluation are
given from a private investor point of view, with
and without publics funding, considering the
state-of-the-art of common agricultural policy
grants.
Location of some experimental plantations in
Piemonte
4. Production cost of Poplar chips from SRF
Region Prices Production process duration Studied surface Land fertility class Labour Plantation density Main production Rural Development grant (Piemonte) Energy crops grant Wood chips PRICE Chips characteristics Piedmont watered plain December 2006 8 years (4 x biennial coppice cuttings) has 1,00 medium high family (internal) 8000 plants has -1 15-20 T has -1(dry mat.) 2450 has-1 45 has-1 47 T -1 (_at_ energy power plant) 45 humidity
The poplar coppice technique describes a Swedish
model and refers to real plantations realized
within the research, although reflecting
operating solutions which characterize Italian
poplar plantations.
3. Production costs of Maize grains
The table describes main characteristics of the
Maize production process. It refers to a real
situation, in a widespread and significant
productive context of west part of the Po plain,
in highly productive areas for maize. The crop
operations describe an intensive productive
technique which uses approximately 19 hours of
mechanical
Region Prices Production process duration Studied surface Land fertility class Labour Main production Secondary production Supplementary grant Piedmont watered plain December 2006 7 months has 1,00 medium high family (internal) 13 T  has-1 underground cornstalks 47   has-1
A remarkable aspect of this technique is that
planting, as well as cutting, chipping and
transport operations are normally made by outside
contractors. On the opposite, normal tending
operations as harrowing ad fertilizing are
directly executed by the farmer, using the
mechanic equipment which characterizes
agricultural farms
and manual work and which is consistent with the
obtained yields.
5. Maize economic results
The maize production cost reveals that the total
amount of the internal and external costs is
almost equivalent. This fact reflects the most
widespread conditions of Piemonte farms, where
labour, totality of the exercise and land
capitals, are given directly by the
entrepreneur. The production total cost is a
little lower than market prices (of December
2006). Notice that all the internal factors have
been correctly repaid, accordingly with market
prices. As a result, at that moment, maize was
able not only to cover all the production costs
(both internal and external), but also to produce
a profit of about 6 of the GMP (Remark that CAP
funding has not been considered).
6. SRF Results
The production cost of poplar chips (56 T-1)
is higher than (December 2006) prices
(47,5   T-1) All the costs have been added
financially, using a real interest rate (without
inflation effect) of 3, and refer to time 0"
which coincides with the farmers choice. It is
evident the large amount of external costs (73
of the total) due to the significant use of
outside contractors for all the cultural
operation not realizable by the farmer (as
planting and harvesting operations). The balance
of SRF shows that, considering the amount of
public funding (hypothetical grants of
7. Simulations
The Comparison between SRF and corn crops shows a
general higher profitability of the Maize, in a
significant way for the net income, a bit less
for the profit. The SRF are able to remunerate
the external costs, but only in presence of the
public funding. Considering also the internal
costs (land and labour benefits, interests for
farmers capitals) a negative profit is always
obtained. One of the reason is the large and
unavoidable use of external contractors for all
most expensive operations. This cost system could
change in relation with a more widespread
diffusion of SRF and with consequent economies
and integrations. However, these results are
strongly influenced by price trends, which in
recent years have shown large variations. In
order to check the stability of the results, some
simulations have been made in particular the
relative convenience of the Maize/SRF has been
assessed within the varying range of respective
the future PSR plus grants for energetic crops) a
positive annual net income is obtained, while the
profit turns out negative. In absence of grants,
the revenues are even unable to cover the
external costs. By the opposite, if the Single
Payment Scheme is added, (about 450
ha-1year-1) the profit becomes positive.
8. Conclusions
The first appraisals of Swedish SRF model and
poplar clones, has shown an insufficient
profitability poplar SRF appears unable to
compete with agricultural crops (maize), using
intensive techniques in highly productive areas.
Therefore future research activity will be
devoted to the study of less intensive
plantations. Moreover the American model (with 5
years rotations) will be studied, using also
Black Locust (Robinia pseudoacacia) in comparison
with traditional poplar cultivation and wheat
crops profitability. This will allows to face
with another critical aspect of this crops,
related to water consumption and high irrigation
costs.
prices, using two single levels for the maize
(the lower and the higher prices registered in
2006) and a wider range for the chips (from 44 to
54 T-1). At the higher prices (160 T-1),
maize convenience is out of discussion, whilst at
the lower (130) the SRF net income becomes higher
with prices over 50. Analogous appraisal is
carried out for the profit. T-1).