Forestry: Waiting for the EU green light to start

The 2014-2020 Forestry Programme has financial provision for an annual afforestation programme of 7,500 hectares.

William Merivale

January 19 2015 05:15 PM

The Forestry Programme 2014-2020 is now awaiting approval from the European Commission after the Government announced in December that it had approved the package.

A total of €110m was allocated for this year's forestry programme in Budget 2015.

The Department forecasts that over the new six-year Forestry Programme there will be sufficient funding to provide for an average annual afforestation programme of 7,500ha.

This is perhaps disappointingly unambitious given the proposed targets recommended by COFORD, the Department's own advisory body.

COFORD has recommended an annual afforestation programme of at least 15,000ha in order to achieve a viable forestry, wood energy and forest products industry, as well as maximising the benefits of forestry in climate change mitigation.

The new programme contains 11 measures.

Some of which are revisions of the measures contained in the outgoing programme, while others are completely new.

During the drafting stage there was much publicity given to the likelihood of reducing the premium payment period from 20 to 12 years.

This was due to new EU rules which limited the number of premium payments to 12 years.

The Department, however, decided to apply the EU's de minimis rule - an opt-out clause that states can apply on aid payments of less than €200,000 - to increase the premium payment period to 15 years.

Two-tier

The reduction by five years will still disappoint many, but it would appear that this is the best that the Department can offer given the new policy in Brussels.

Another fundamental change to the premium scheme is the abolition of the old two-tier system.

This has been replaced by a single rate of premium for farmers and non-farmers alike.

While some commentators are not happy about this, others have welcomed this move, arguing that it has the potential to incentivise non-farmers to plant trees under the new scheme.

The old two-tier system resulted in absurd anomalies in the market - both for planting land and established woodland.

A qualifying farmer could afford to pay more - both for bare land and established plantations - than a non-farmer, while achieving the same return.

This backfired on those farmers wishing to sell their forests during the premium period as it restricted the potential pool of buyers and tended to discourage non-farmers from investing in forestry.

The Department maintains that the revised afforestation grant and premium schemes are designed to increase forest cover and generate additional supplies of timber and wood biomass to meet demand from the wood processing and renewable energy sectors.

Grants and premium payments have been increased, with the largest increases in premium rates for areas of 8ha and above.

This is designed to encourage planting of larger areas which are more cost effective to manage and more profitable to harvest.

Two entirely new schemes have been included under this measure - agro-forestry and fast-rotation forestry for fibre production.

Agro-forestry

The grant rates and premiums for these are lower than for the other categories. So too are the premium periods which are proposed to be five to 10 years respectively.

The draft programme notes that there is little experience of agro-forestry in Ireland.

For the time being at least, the scheme will be targeted at silvopastoral systems that combine forestry with grazing and fodder production.

Under both of these schemes, once the land is planted it will be classified as forest land and the provisions of existing forest legislation will apply,.

This means a replanting obligation will attach to any felling licence granted.

The other ten measures in the new programme will be examined in a later article.

William Merivale is national secretary of PEFC Ireland and a forestry consultant based in Cork.

Email: william@cjandco.net wmerivale@ independent.ie