Farm Ireland

Saturday 23 March 2019

New forestry deal will honour premia

Reaction from the forestry industry has been positive.
Reaction from the forestry industry has been positive.
Darragh McCullough

Darragh McCullough

A new €262m forestry scheme has been rolled out until 2020, along with commitments to honour premium payments worth €220m beyond that date.

The programme includes 11 measures aimed at creating over 43,000ha of new private forestry over the next six years.

It is already a sector that equals the Irish beef industry in terms of its €2.3bn output.

The Minister of State with responsibility for forestry, Tom Hayes claimed the package was a vote of confidence in the sector.

"The new programme strikes a balance between meeting the needs of a growing export led processing sector and the need to maximise the environmental and social benefits that can be delivered by forestry and enjoyed by society," he added.

While the new premiums are 20pc higher than those in the previous programme when compared year on year, the premiums are paid out for 15 years, rather than 20 as had previously been the case.

This means that the gross premium payments over the lifetime of the most common new forestry - 10pc species diverse - will now be €7,650, rather than the €8,540 that was available through the previous scheme.

However, reaction from the forestry industry has been positive to the announcement.

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"We are quite encouraged by the scheme. In real terms, the value of the payments may not be that much lower when inflation is taken into account," said Donal Whelan of the Irish Timber Growers' Association.

Commenting on the recent changes in taxation that allow non-farmers to participate in the forestry schemes, Mr Whelan said he did not think that it would lead to large-scale investments in the sector.

"With less than 2pc of land changing hands every year there just isn't enough liquidity in the land market here to entice large investors into the sector," he said.

Despite huge volumes of wind-blown timber from the worst affected areas of the country hitting the market after violent storms last January, Mr Whelan said that prices in the sector were still at or above 10-year averages.

"Prices for pallet, stake- and pulp-wood were back by probably 20pc in the southwest where the damage was greatest, particularly from May and June on when this product really started to hit the market," he said.

Mr Whelan also said that he was very pleased to see the woodland improvement scheme being continued, with support for management plans, marketing, and producer groups all remaining steady.

While establishment grants have not increased by as much as some were hoping, there was a 5pc increase, with roadways receiving a bigger jump of 14pc to bring the grant to €40/m. This aid will be limited to 690km of new roads. Some €7m has also been made available to protect 2,000ha of Irish native woodlands, with a special measure for emergent native woodlands, which can now be conserved, enriched with suitable new planting and grown to high forest.

Minister Hayes met with the EU's Agriculture Commissioner, Phil Hogan, last week to progress approval for the scheme with the EU.

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