Perennial energy crops vs. durum wheat in low input lands: Economic analysis of a Greek case study

A key challenge internationally is the design of policies that will result in the substitution of conventional energy sources with renewable energy sources. The European Union has set a legally binding target of 20% final energy consumption from renewable sources by 2020 but not all EU countries have been successful in meeting interim targets towards that goal. On the other hand, even if interim goals have been achieved, economic, social, and environmental considerations might threaten a country's ability to meet the 2020 goal without jeopardising other key economic goals. This is the case, among other countries, of Greece, where decision-making is governed by the economic recession and the austerity measures implemented to counter the debt crisis. This article studies the potential of three perennial energy crops, miscanthus, arundo and poplar, to play such a role in the region of Karditsa, Greece. According to our results and considering the option of farm gate delivery, sample farms generate on average positive gross profits from all three energy crops. The highest is generated by arundo, followed by poplar and at a much lower level miscanthus. The present study shows that Arundo, under certain conditions, can partially replace durum wheat in low input lands, without distorting the food trade balance of the country. While this research does not focus on environmental issues, results suggest that substituting arundo for durum wheat can have a beneficial effect in nitrate-polluted regions since arundo requires far less fertilizers. The relevant policy mix is analysed, discussed and outlined as a nexus of interrelated incentives provided by policy makers and the market.