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Friday 20 October 2017

A premium opportunity: Why now is an ideal time for farmers to consider forestry

There are attractive incentives to plant forestry
There are attractive incentives to plant forestry
Steven Meyen

Steven Meyen

There has never been a better time for farmers to consider planting part of their holdings in forestry.

The Department of Agriculture's 2014-2020 Afforestation Grant and Premium Scheme aims to increase the area under forestry in Ireland from the 2015 base of 11pc (EU average is 38pc) to 18pc by 2020.

The Scheme envisages an extra 10,000ha of forestry being planted each year and this target is being driven by a combination of grants and annual premiums.

These premiums are especially attractive for farmers working marginal holdings and struggling with volatile prices in the livestock trade. There are also some specialist schemes, such as agro forestry, which appeal to farmers as an option to work alongside animals.

Earlier this year Teagasc ran a nationwide series of forestry advisory clinics which were very well attended by farmers. Based on the questions raised at the clinics, I have put together a two-part guide to getting started in forestry. This article will cover the basics of planting, grants and premiums and in the next issue I will deal with more specialist issues and questions.

Is there a minimum acreage that has to be planted to qualify for payments?

Yes, there is. The minimum area to be eligible is 0.1 ha -or a quarter of an acre in old money - if the land is suitable for broadleaves. The minimum area for conifers is one hectare, around 2.5 acres.

What grants are available?

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You will be receiving two types of grant when planting trees. First of all, a grant is available to establish your forest and to maintain it for the first four years. This is the Afforestation Grant. Secondly, a landowner is also entitled to an annual forestry payment. This payment is called the Afforestation Premium. See the adjoining table for more detail on the various rates.

These grants are administered by the Forest Service of the Department of Agriculture, Food and the Marine. Grant levels depend on tree species planted. Higher rates are available for planting broadleaves.

How much is the afforestation grant? How much does it cost to plant land?

Afforestation grant rates range from €2,165 to €5,750 per hectare. The rate is determined by the quality of the land, the type of trees that you wish to plant and the chosen Grant and Premium Category (GPC).

The grants generally cover most/all of the costs associated with the establishment and early management of the forest. However, keep in mind that small and/or multiple areas are more costly to develop.

The first instalment of the grant, 75pc of the total, is payable after planting and covers operations such as ground preparation, drainage, fencing and planting.

The second instalment, the remaining 25pc, is paid four years after planting, once the trees have become fully established and are free-growing. This payment covers maintenance works such as vegetation management and replacement of failures.

It is very important to consider carefully what you want from the trees on your farm. Below are a couple of typical scenarios I get asked all the time.

How much are these premium payments? How long does that go on for?

Annual premium payments range from €180/ha to a maximum of €635/ha. These payments are payable for a period ranging from five to 15 years.

I want to grow a tree crop on the farm with a decent financial return. What should I plant?

In that case, you should consider Grant and Premium Category (GPC) 3. The main species that will be planted is Sitka spruce. Sitka spruce grows fast and naturally straight - maturing in 30 to 40 years. That is very fast in forestry terms and way faster than in other parts of Europe. Sitka spruce is able to grow well in less than perfect conditions, Irish mills are geared up for it and it provides a very decent return at the end of the rotation.

GPC 3 will give you an annual forestry premium of €510 per hectare (or €206/acre) per year for a period of 15 years. This is the most common rate in Ireland.

I am not interested in commercial, fast-growing conifers. I want to create a woodland with a very high biodiversity value. What should I go for?

In that case, you should consider establishing a native woodland (GPC 9 & 10) - if the land and location are suitable for doing so. All trees planted will be of native origin and will over time develop into an ecologically rich haven for flora and fauna.

Focus is on native species, minimal site disturbance and long-term 'close-to-nature' management. It presents opportunities for planting in various environmentally sensitive areas such as Special Areas of Conservation (SACs) and Special Protection Areas (SPAs).

The forestry premium for creating a native woodland is €635/ha and is payable for a period of 15 years.

Are all forestry premium payments payable for 15 years?

No, shorter premium payments are also possible. For instance, if you decide to go for agro-forestry - that means farming conventionally while growing a timber crop in the same field - then the premium payment will be €260/ha for a period of five years.

The Forestry for Fibre option supports the growing of trees such as alder, eucalyptus and poplar to produce woody biomass over a very short period of time (eg 10 to 15 years). The premium payment is €180/ha for 10 years. Keep in mind that this scheme does not fund short rotation coppice or Christmas trees.

If you have any questions in relation to forestry, do send them to the Farming Independent at farming@independent.ie and I will do my best to answer them. Next week, I will also cover issues such as land eligibility, forestry and BPS payments, and how to make a grant application, etc.

Further detailed grant information is also available from www.teagasc.ie/forestry or discuss your options with your local Teagasc forestry adviser. This advisory service is objective, independent and free of charge and open to both Teagasc and non-Teagasc clients.


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