Wheat growers in the UK are to be offered new fixed price contracts this season to supply Spanish bioethanol firm Abengoa.

The company, Europe’s largest bioethanol producer, hopes to secure up to 50,000t to test the market.

The tonnage will supply its new 600,000t a year factory in north-west Spain.

Longer term, Abengoa is looking to build a plant in the UK.

Head of cereal procurement, Ignacio Canaveral Ladron de Guevara, said the company would pay €93/t ex-farm for commercial wheat crops.

Growers would also receive the full €45/ha energy crop payment.

At current exchange rates, that works out at about £66-67/t, payable at harvest.

Contracts were also available for set-aside crops at €90/t, he added.

Farmers will be required to deliver the set regional yield per hectare for energy crop wheat, which is expected to be about 6t/ha (2.4t/acre) for energy crop contracts, less for set-aside deals.

They will be able to sell any surplus onto the open market.

Speaking at a press conference held in the NFU’s London offices this week, Mr de Guevara said: “For the first year we are looking to see how this works.

“The most important thing is to get farmers to understand the process.”

Matt Ware, the NFU’s London policy adviser, said a lot of cereal farmers were becoming more aware of biofuels as a potential market.

 “I think the renewable transport obligation might be the catalyst, that makes people dip their toes in.

“As a trade association we cannot endorse any one company, but we are more than happy to help,” he added.  

Mr de Guevara is planning a series of conferences for farmers in England’s main cereal growing areas.

Details will be advertised in the farming press.