Farm Ireland
Independent.ie

Tuesday 21 November 2017

Planting trees makes sense on many levels

Planting trees makes sense on many levels
Planting trees makes sense on many levels

Joe Barry jbarry@ independent.ie

It is widely believed that you can't buck the markets.

History, despite some notable exceptions, proves this to be true, but the other great financial truism is that demand creates supply.

Timber and wood products of all kinds are in demand right now but how long will this last?

Unless we have some world-transforming discovery that will deliver a cheap, environmentally friendly form of fuel, the price of timber for fuel should at least hold.

But there are many imponderables to consider.

The Russian economy is again in serious trouble. Inflation there is in double figures and the rouble is falling in value against other world currencies.

The economic sanctions from the US are hurting and while oil remains relatively cheap, they cannot boost revenues by selling more of it.

One commodity that they have in abundance is timber and their forests are vast.

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Will they start exporting more trees to Europe? Already we import tanker loads of wood chip from as far afield as Canada and with the changes in fuel use taking place here, we are using it in ever larger quantities.

It seems far-fetched to think that wood chip might replace oil as the fuel that drives our economy, but just look at the facts.

Each year we use it more and more for home heating, electricity generation, and the supply of heat and power to hospitals and other large institutions.

Burning wood is carbon neutral and economical to use relative to the cost of oil or coal.

The use of coal in cities is largely banned given the pollution it causes and it is both dirty to use and expensive.

I understand that where non-smokeless fuels are banned, some unscrupulous homeowners are purchasing standard coal outside the cities and burning it at night to avoid detection.

But, in general, more people are abandoning open fires. Driven by simple economics, they are purchasing wood burning stoves instead.

It is obvious we should grow more trees and aim to become self-sufficient. Forests don't attract the protests from local groups that wind farms do and, overall, they are of huge economic and environmental benefit.

Collapse

The scary part, of course, is that if economic collapse was to occur in any country it could lead to war with all the associsated disastrous consequences.

There are also the threats to world economies from Islamic militants and the economic migration of thousands of jobless from poorer countries in tandem with the huge annual increases in world population.

We constantly hear how farming technology will keep improving and there will be no problem feeding all these future generations, but what happens if they cannot afford to pay for the food they need?

Like all Irish citizens born after 1945, I belong to a generation who have never lived through the horror of war.

We can only pray that those who come after us will be as lucky.

It was interesting to read recently how close Ireland was to needing a bailout in the early 1980s.

Fortunately, appropriate action was taken then, but we suffered a further decade of recession because of high taxation, high interest rates and a stagnating economy.

Homeowners these days are finding it hard to meet mortgage payments, yet the interest rates they are charged are a fraction of those we paid in the awful '80s.

Not only were we screwed for interest, but inflation was raging.

Compare this to the present where interest rates are low, inflation is negligible and lots of small businesses are starting up all over Ireland on the back of the current economic revival.

You just could not do this in the 1980s. I well remember paying 22pc interest on my overdraft then which meant that it was a real struggle just to stand still.

So count your blessings and pray that high inflation and consequent higher interest rates do not kick in anytime soon.

Having said all that, governments world-wide are frantically doing everything in their power right now to avoid deflation and generate the supposedly ideal level of 2pc annual inflation.

But if inflation kicks in, it's very hard to control at any level.

We are also currently enjoying one of the highest standards of living ever, yet we are told we are enduring an era of austerity.

Like me, are you a bit confused?

For now all I can do is keep planting trees. If the worst happens at least I can keep the house warm.

 

Commodity price prediction is  a game for economic quacks

Anyone who tries to forecast the economic future or the forward price of any commodity is foolhardy in the extreme. It is pure guesswork and there are so many imponderables that economic history is strewn with famous names of billionaires and so called experts who have failed abjectly to get even the simple stuff right. The sensible approach is to not even try, but rather recall the wise old saying "If it looks like a duck, walks like a duck and quacks like a duck, then it probably is a duck."

Indo Farming