Optimal management of perennial energy crops by farming systems in France: A supply-side economic analysis

This paper aims at analysing the sensitivity of supply of a perennial energy crop, i.e. Miscanthus x Giganteus, in France, to yield and economic parameters. We use a decision-making method over natural resources, commonly applied in sustainable forest management, to evaluate the economic potential of the crop at plot level. The method allows us to determine the optimal rotation period (ORP) and the net present value (NPV) of Miscanthus in different farming system types when growth function is accounted for in a non-stochastic way as well as when it is governed by a random process. The short-term agricultural supply model, AROPAj, is used to highlight the competitiveness of Miscanthus regarding other crops within the 157 French farm groups portrayed in the model. We also detail the impact assessment regarding NPV and ORP, land use, Nitrogen (N) fertiliser demand and losses. We find that yields, price, renewal cycle costs and the discount rate may interact with yield randomization and significantly affect the future profitability of Miscanthus. As a result of our economic optimization, and in contrast to the common view of Miscanthus grown on marginal land, this crop could be profitable on the most productive land, generally devoted to food crops. For a price contracted at €70 tons of dry matter and fixed rotation cost given at €3000 per hectare, farming systems are predicted to grow Miscanthus on more favourable areas when its yield potential is high, thus leading to a substantial decrease in N input levels and losses.