It's interesting that Centaur and Bioethanol Ltd, the backers of a multi-million pound biofuels plant planned for Humberside, have significantly sweetened their contract to try and tempt a few more arable farmers to get their project off the ground.

So, good news there. But their argument that, unless farmers sign up to these contracts, few plants will actually get built and those that do will import grain from our old friend, Brazil, is equally valid. Pre-Christmas feed wheat prices of nearly £100/t have clearly turned arable farmers' heads. But, as grain traders love to tell us, prices can - and will - go down as quickly as they rose, as the international grain market is now in a state of unprecedented volatility.

With that in mind, some of these biofuels contracts look pretty reasonable. Centaur and Bioethanol Ltd say they'll pay a price £23/t better than the six year average for feed wheat - which no-one wil need reminding is just £64/t. There will also be starch premiums available for the best quality wheat, and the chance to lock in a proportion of a farmer's tonnage on an assured contract at a reasonable price - those closest to Immingham will £90.75/t for wheat in 2008/2009 and up to £98 in 2012/2013.

Perhaps arable farmers are hoping more biofuels entreprenuers will raise their contract rates on the back of last autumn's better wheat prices. No one likes to commit any sort of tonnage, and then miss out on spectacular price rallies. But it seems the big risk is that unless farmers take a long term view, and want to grow a potentially very valuable market for their crops, the UK biofuels industry could become the biggest chance British Farming PLC ever had, but never took.

To view the original story, and read what Centaur and Bioethanol Ltd have to say, click here