Farm Ireland
Independent.ie

Tuesday 23 January 2018

Your questions answered on forestry - Eligibility, Basic Payment, maintenance and income issues

In the second part of his back to basic guide to forestry, Steven Meyen looks at eligibility, Basic Payment, maintenance and income issues

Timber sales at the end of a 33-year rotation should yield €7,000 to €9,000/ac at today’s prices
Timber sales at the end of a 33-year rotation should yield €7,000 to €9,000/ac at today’s prices
Steven Meyen

Steven Meyen

Q Is my land eligible for forestry grant aid?

A All land is not created equal.Many factors need to be assessed to determine grant eligibility. For instance, is the soil suitable for growing trees successfully? What about exposure, drainage? Are there environmental limitations such as Special Areas of Conservation, Special Protection Areas, Fresh Water Pearl Mussel, and so on? What about electricity lines? Various setback distances will apply dependent on voltage. Are there nearby houses as setback distances will have to be taken into account?

There is a simple rule of thumb regarding soil suitability - trees are like oversized grass: the better the land, the better it will grow grass and therefore the better it will grow trees. If the land grows grass very well and is very sheltered, then broadleaves can be considered. If it is poorish grass, then it will have to be conifers. If the land doesn't grow grass well then the land may be excluded from forestry grant aid.

Typical excluded areas include areas growing mainly heather, very exposed areas and areas that cannot be drained successfully.

This also means that you will have to be very careful when you are buying land with the clear intention of planting. Establish prior to purchase that the land in question will be eligible for forestry grant aid.

Q Can I also claim my BPS on it?

A Maybe. If the land is currently in receipt of Basic Payments Scheme (previously Single Farm Payment) then you may continue to be entitled to this payment on the same land if you continue to farm the remainder of the land.

Eligible land that was declared in an SPS application in 2008 and which was afforested in any year since 2009 (including this year) can continue to be eligible for a BPS payment provided it satisfies a number of conditions.

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One of the most important conditions is that applicants, who plant part of their holding from 2009 onwards, must retain at least 10pc of the eligible hectares declared in 2008 in an agricultural activity, subject to a minimum area of 3 hectares. This is in order to continue to be regarded as an active farmer for the purpose of retaining eligibility for BPS.

Q Can I return the land to grass afterwards?

A No. You are changing land use from agriculture to forestry and therefore the Forestry Act 2014 will apply. This means that after harvesting the timber, you will have a legal obligation to re-establish a forest. This obligation also applies to agro-forestry.

That is why it is essential to do your homework carefully prior to committing yourself. Forestry can be an excellent farm enterprise. However, it is a one way street: you need to check out all the pros and cons and see if such an enterprise suits you.

Q How much would you roughly get for a hectare of trees going on today's prices?

A That depends very much on the type of land, the type of trees planted and how well the trees have been looked after over the years. Conifers will take between 30 and 40 years to mature while broadleaves such as oak and beech will require a mere 100 years (plus)…

A typical commercial crop of Sitka spruce on the family farm will provide a young farmer with one of the best (the best?) pension funds available. For instance, a well-managed, 8-hectare (20 acres) forest of mainly Sitka spruce on reasonably fertile marginal land will provide a tax-free premium payment of €4,080 per year (€510/ha, €206/ac, GPC3) for the first fifteen years.

This is followed by regular income from timber sales (thinnings plus clearfell). At the end of a 33-year rotation, this farmer who may now be considering taking it a bit easier, can expect a typical income from timber sales of between €140,000 and €180,000 in today's money (€17,000-€22,000/ha, €7,000-€9,000/ac). That will allow this farmer to buy a decent pension.

Bear in mind, though, that although forestry can be financially very attractive, it is a long term commitment. This means that most profits will be realised after around 30 to 40 years in the case of conifers. Felling or selling the forest before financial maturity is likely to result in substantial opportunity cost in terms of potential returns!

Q How much maintenance is required?

A In comparison to other agricultural enterprises, forestry is not as labour-intensive. However, forests do require active management to become well established and to get the best returns.

In a young forest, focus is on vegetation control, satisfactory drainage, nutrient requirements, prevention of browsing damage and formative shaping in the case of broadleaves.

When a conifer forest is about ten years old, inspection paths are required so that the suitability for thinning can be assessed. Financial support is available to thin broadleaves.

You need to have a road and a felling licence in place for thinning to take place. Grant aid is available to assist in road building.

Once the first thinning has been done, mark the best trees or potential crop trees so that future management can focus on them. Consider high pruning these PCT trees. Consider subsequent thinning operations every three to five years until the final harvest.

Once the final harvest has taken place, then the forest will be re-established. And the cycle will recommence.

A wide variety of forestry consultants, companies and various contractors are available to assist you with the above tasks.

Q What kind of rules do I have to follow?

A You have to respect the Forestry Act 2014 (and all other legislation of course) and adhere to all relevant grant aid regulations. It is important to keep in mind that you, as the forest owner, have ultimate responsibility to the Forest Service (DAFM) for your forest.

It is a good idea to insurance against potential hazards such as fire and windblow to protect your investment.

Q How do I make a forestry grant application?

A Pre-planting applications are submitted to the Forest Service by a Registered Forester acting on your behalf, and technical approval may be issued following assessment. Establishment operations can begin only once subsequent financial approval has been obtained. The first instalment is then paid after planting, subject to adherence to scheme conditions and various environmental guidelines.

As it takes time for the application to be assessed, make sure to apply for planting approval early to catch the planting season, which normally runs between December and April.

Q Are all plantations inspected?

A The Forest Service Inspector will assess a sample of sites at pre-approval stage, post-planting stage and at year 4 stage; so do not assume that standards have been checked by a Departmental Inspector. However, you can request an inspection.

Prior to the payment of the second instalment grant at year 4, you, as the forest owner, must be satisfied that the forest has been maintained in accordance with best forest practice. Only if you are happy with your forest should you sign the relevant form (Form 3).

Q Would most people plant themselves or shop around to get a forestry contractor to plant for them?

A The majority of landowners will hire a Registered Forester to organise some or all of the establishment work. Most Registered Foresters establish and maintain forests under a four-year contract and usually request that the grants are mandated to them. Some landowners will organise the establishment work themselves.

No matter which option you choose, all the paperwork at pre-planting, post-planting and at the second instalment stage must be prepared by a Registered Forester working on your behalf.

Registered Foresters are professional foresters, either consultant foresters or attached to forestry companies. These foresters / forestry companies are registered with the Forest Service and carry professional indemnity insurance. A list of Registered Foresters is available from www.teagasc.ie/forestry.


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It may be helpful to seek references from existing forest owners when selecting a Registered Forester.

Steven Meyen is a Teagasc forestry advisor

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