As the search continues for alternatives to fossil fuels to power our cars and homes, Emma Pinch looks at how farmers are turning their attention to biofuels.

Out on his tractor harvesting wheat this week, Arthur Hill will cut a common figure in rural Shropshire.

But what few people will guess is that the ordinary-looking crop he's reaping is pure green gold.

The yield of his 100-acre harvest will help provide a substitute for that most precious and destructive of 21st century commodities - oil.

Mr Hill, from Much Wenlock, is one of the first farmers in the Midlands to sign a contract to supply wheat to produce the country's first home-grown and produced petrol substitute - bioethanol.

The end result makes its production practically alchemy.

Fermenting low-grade wheat into ethanol can help tackle global warming - it produces around 60 per cent less carbon dioxide than petrol - reduce dependency on the Middle East for fuel, and create more jobs in the countryside.

Even Texas-born George W Bush is a convert. This year the US President used his State of the Union address to condemn his country's "addiction" to oil and launch a campaign to get fuel from plants instead. "We are," he promised, "on the threshold of incredible advances."

By 2010 the Renewable Transport Fuel Obligation requires five per cent of fuel in Britain - petrol or diesel - to be biofuel.

And, with that in mind, industry has started signing the first contracts with farmers to make sure the grain is forthcoming.

Mr Hill, a farmer for more than 30 years, has grown the wheat on the ten per cent of his land that he is required to 'set aside' for non-food crops to qualify for the single payment scheme, aimed at tackling over-production.

"It was a commercial decision," he said. "I'm convinced that arable farms have a bright future because of the fuel scarcity issue."

At present only about 0.1 per cent of the Midlands countryside is dedicated to the production of biofuels, compared to the five per cent aim of 2010.

Guy Gaden, chief arable advisor at the NFU, said both manufacturers and farmers were being cautious and relying on the other to pledge support. "Farmers are still going into it gently, primarily because the processing industry is still small," he said. "The industry wants the money in factories to make the fuel. There needs to be a bit of give and take.

"From the farmer's perspective, wheat for ethanol is not as profitable as the highest quality wheat for bread.

"What they are offering is security for two to three years ahead."

Key to the widespread take-up of biofuels is the Government showing a more robust commitment to it, according to car makers and grain refinery manufacturers, in the shape of better tax incentives.

But despite an EU directive that the UK would meet two per cent of its transport needs using biofuels by 2005, it managed just 0.3 per cent - the worst level in Europe.

In Brazil, ethanol from its sugar cane provides more than 40 per cent of its motor fuel, proving it need not be just a niche market.

"To make biofuel more attractive to producers and consumers, the Government needs to do better than the current 20p tax rebate per litre," said Nick Maskery, spokesman for Bioenergy West Midlands, a networking group for regional producers of bioenergy.

"If you are going to use that to produce oilseed rape, a 20p incentive won't do that. The cost of producing a crop of oilseed rape is relatively expensive and it is going up.

"The average consumer doesn't care where his fuel comes from. The way I see it,

it's very tight to make a profit on it when it is selling at £1 per litre."

Arthur Hill agrees. He feels privileged that farmers, maligned for over-production and doubtful stewardship of the countryside, are now able to do their bit to improve the environment.

"It is a sustainable and renewable resource and I'm pleased to be part of the process," he said. "The commitment of the Government has to make this work."