Forestry growers suffer a €9m chop
Premiums take 8pc hit and are also liable for the new income levy
Forestry growers suffer
Forestry growers stand to lose more than €9m this year after confirmation that premium payments will be cut by 8pc and will also be liable for the new income levy.
The double blow will send shockwaves through the sector, which is already struggling to meet ambitious planting targets.
More than 16,000 private growers will be hit as the Department of Agriculture moves to reduce overall forestry spending. The cuts and levy could take as much as €500 from the average forestry premium payment of €4,000.
The reduction in forestry spending was flagged in the aftermath of last month's emergency budget, with the Department stating that total funding would fall from €125.5m to €118m.
The Government subsequently indicated that the decision to focus solely on premium cuts was being reconsidered and that possible savings from the capital spending element of the overall forestry budget were being examined.
This would have seen planting grants and payments for the building of forest roads being slashed. However, this option has now been ruled out by the Department and growers will take the hit as a consequence.
Hundreds of farmers will feel the impact of that decision this week when the Department releases premium payments that had been delayed for more than a month.
A Department spokeswoman admitted that the 8pc reduction will be imposed on the payments, which will be lodged to bank accounts tomorrow.
Industry sources have warned the decision to cut and tax, premium payments will deastate the sector. Plantings are already running well behind the 16,000ha-a-year target that was set by the Government.
It is estimated that less than 6,000ha will be planted this year. However, a total collapse in planting levels in 2010 is being predicted.
The reduction in forestry funding has serious implications for forestry employment. It is estimated that 18,000 people make a living from forestry and associated activities such as sawmills and nurseries. Many of these jobs are now under threat and industry officials claim that confidence in the sector will be totally eroded by the latest cuts.
Nurseries and companies involved in forestry planting are likely to be immediately affected, but there are also fears that the long-term viability of the sector will be undermined should planting levels fall further.
The impact of the premium reductions has been compounded by confirmation that the payments will be liable for the income levy.
The levy will take between 2pc and 5pc of gross disposable income from growers. The move will infuriate growers, many of whom opted to plant ground because the various forestry schemes were initially marketed as tax free.
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