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  • Nov 10th, 2005
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Demand in Germany for biofuel is soaring due to high oil prices and farmers stand to reap windfall profits from grain sold for energy use, Germany's deputy Agriculture Minister said on Wednesday. "I think the farmers of today are going to become the oil sheiks of tomorrow," Alexander Mueller told Reuters.

Mueller presented a German government study about using rapeseed food oil - the same as used for frying chips or baking cakes - as tractor fuel.

The study presented at the Agritechnica farming show concluded its use was technically simple and farmers faced only relatively minor conversion costs.

The dramatic rise in fuel prices this year means German production of biodiesel fuel, made from rapeseed oil, is increasingly sold out, Mueller told a meeting to present the research report.

"Large trucking companies are increasingly placing orders for biodiesel but there are also growing signs that (untreated) cold pressed rapeseed oil is being used by them, although this is still a niche market," Mueller said.

Speaking to Reuters on the sidelines of the meeting, Mueller said this year's explosion in oil prices opened "enormous new perspectives" for farmers to produce biofuels.

He saw huge potential for production of biodiesel, rapeseed oil, biomass liquid fuels, biogas and specialist biofuels and raw materials for the chemical industry.

"Rapeseed oil is one sector of this and I want to see the whole spectrum expanded to reduce our dependency on crude oil," he said. "With rising oil prices these products have become competitive."

He hoped the study presented would encourage German farmers to convert tractors to run on unrefined rapeseed oil. The report had been commissioned to provide farmers with technical details how vehicles react to pure rapeseed fuel.

Germany was cooperating with US-based tractor maker Deere & Co to produce a tractor to run on pure rapeoil and hoped other manufacturers would follow.

Demand from road transport companies was strong as trucks could be converted easily to operate with two fuel tanks, one for conventional diesel and one for rapeseed oil.

Asked if biofuel production could provide a new market for European Union farmers as the World Trade Organisation reduces export subsidies used to remove Europe's huge overproduction of farm products, he said:

"We are standing before the next round of world trade talks in Hong Kong, market access for food will be one of the central points."

"Production of biofuels and renewable raw materials can become a second pillar for the agricultural economy along with production of food." "We need a strategic decision for the next decade and the political side must provide the framework for expansion.""This is not only the case in Europe, it also applies to the US and to the Third World, where oilseeds could help reduce the huge burden of high oil prices on developing countries."

With oil prices staying high, prospects for Germany's biofuels sector are good, he said.

"We need new investment in production of biodiesel," he said. "There is a production shortage."

"There are indications of increasing rapeseed sowings across Europe to meet biofuel demand, this is one of the most expansive farming sectors that we have."
Copyright Reuters, 2005


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