16/7/06 (Bangkok Post)  -  Many private business operators in Thailand are cashing in on the alternative-fuel fad by selling jatropha seedlings, the seeds of which are used as a raw material for biofuel refining, to farmers at inflated prices and with little awareness of policy or demand, say experts.

Many of these business operators, including biodiesel producers, have the support of local politicians and claim that their jatropha seedlings offer higher yields than those from the Department of Agricultural Extension (DAE).

These firms also promise to buy back all jatropha seeds from farmers at a guaranteed price of at least four baht per kilogramme.

Phichai Tinsuntisook, the chairman of the Federation of Thai Industries' renewable energy industry club, said farmers should not necessarily trust these promises as they are not legal or state deals.

A source in the energy industry said policy risk should also be also taken into account. Although the Agriculture Ministry has a policy to expand jatropha plantations to two million rai by 2008 from around 30,000 rai currently, the Energy Ministry remains unclear on the plan to utilise jatropha for biodiesel production. Currently, it is focusing on promoting biodiesel made from plentiful palm oil.

Mr Phichai said jatropha seeds from existing plantations were expected to enter the market in early 2007.

Initially, local demand is expected to outpace supply as it is currently more profitable to sell seedlings for around five to seven baht each, as opposed to seeds at four baht per kg.

Mr Phichai said jatropha seeds were worth more than four baht per kg, since the residue after crushing could be used as fuel for renewable energy.

Heat generated for one kilogramme of jatropha residue is about 5,000 kilocalories, while husk in the same quantity offers only 3,000 kilocalories.

He said the value of jatropha-seed residue should be at least one baht per kg, with the cost of the byproduct included into the current price of seeds. However, he said biodiesel producers could not be trusted to educate farmers on the true value of the seeds because farmers would then demand higher prices. Therefore, it should be up to the DAE to reveal the facts to farmers, he added.

Jatropha was first promoted as an energy crop in 1979 when Thailand faced its second oil crisis. At that time, the DAE set up a five-rai demonstration jatropha plantation in Tak Fa in Nakhon Sawan province. The policy lost momentum when oil prices dropped, only to be resurrected last year.

Surak Saingam, the director of the Agricultural Engineering Operating Center in Tak Fa, said farmers in Nakhon Sawan were now aware of jatropha's importance as an energy crop, but few people would enlarge their plantations until the future of this industry became clearer.