Many European Union farmers will opt to grow more grains after sweeping reforms to sugar policy were agreed last week although some may seek to tap into surging biofuels demand and plant rapeseed, industry sources said this week.
The EU struck a deal last week to cut sugar support prices by more than a third, a move which is expected to lead to a significant reduction in production and plantings.
"This (sugar reform) means 900,000 hectares of sugar beet in the EU should disappear with most of that area converted into grains," Pascal Hurbault, spokesman for the French wheat growers association AGPB told Reuters.
"This will lead the EU to produce at least four million tonnes of grain more by 2012," he said, adding the estimates were put together in meetings held at the European Commission ahead of the final EU reform announcement last week.
Rapeseed, which can be used to produce biodiesel, could be an alternative for some farmers with consumption of biofuels expected to soar over the next few years boosted by government incentives aimed at reducing emissions of greenhouse gases.
Grains can also be used to produce biofuels.
Jim O'Mahony of the Irish Agriculture and Food Development Authority said rapeseed and spring wheat were possible alternatives in Ireland, adding the country's last remaining sugar beet processing facility could eventually be converted for processing of biofuels.
Poland is also set to turn to wheat and rapeseed.
"We will likely see a rise in the area planted with grains, probably as soon as next year, though it is virtually impossible to estimate now by how much," said Wieslaw Lopaciuk, grain market specialist at the Institute for Agricultural Economics.
"Sugar beet plantings will be replaced with wheat and possibly by rapeseed, the production of which is even more profitable," he said.
ITALIAN ETHANOL: In Italy, farmers are likely to grow wheat and maize after sugar output cuts under EU reforms, a sugar growers' group said on Tuesday.
Carlo Biasco, director-general of the National Sugar Beet Growers' Association (ANB), told Reuters sugar factories in Italy could eventually be converted to produce ethanol derived from beet or grain to meet future domestic demand for biofuel.
Guy Gagen, chief arable adviser for Britain's National Farmers Union, said sugar beet was the most profitable crop for many growers and they would likely to turn to the second most profitable, wheat.
"I think there will be a slight increase in rapeseed but the most marked effect in wheat. They (farmers) are looking for something profitable to replace beet," he said.
Some may also opt to quit farming completely.
"I'm sure there will be some individuals that decide that without the sugar beet crop it is difficult to continue farming," Gagen said.
Most Swedish sugar beet farmers would continue to grow the crop but some in lower yielding areas which are also further away from processing plants such as Oland, Gotland and Kalmar may have to look at other crops, said Patrick Eklov of the Swedish Board of Agriculture.
In Gotland, an island south east of Stockholm, "they will have some problems in finding alternative crops," Eklov said.