New forestry programme approved by Government

http://www.farmersjournal.ie/new-forestry-programme-approved-by-government-171045/
By Donal Magner on 18 December 2014

Increases in afforestation grant aid and premiums welcomed while funding for roading designed to increase timber mobility.
Tom Hayes, Minister of State with responsibility for forestry, has announced the Government’s approval of the new Forestry Programme, covering the period 2015 to 2020.

The new programme “will involve total new spending of €262m and a further €220m in future commitments from 2020, mostly in relation to premium payments”, explained Minister Hayes.

The programme came under severe scrutiny by the Department of Public Expenditure and Reform before it was cleared and is currently being considered by the EU for final approval.

Although the programme is being funded by the Exchequer, Minister Hayes, recognising the importance of securing EU approval as soon as possible, met with the Commissioner for Agriculture and Rural Development (DG AGRI), Phil Hogan, last week.

“Following this meeting, I am confident that DG AGRI will do everything they can to progress Ireland’s application through the final stages of inter-service consultation,” he said.

Grants and premiums

Establishment grants have increased by 5% across all grant premium categories (GPCs) and a number of new GPCs have been introduced (Table 1).

Premiums are now “20% higher than those in the previous programme when compared year-on-year” (Table 2), although this claim has been contested by the IFA.

Roads will be supported at a rate of €40 per linear metre, representing a 14% increase over the previous rate, while the criteria for calculating the eligible area served by the proposed forest road has changed. Where 50% or greater of the area is due for harvesting within three years, the entire area can now be deemed eligible. For co-operative road building (joint applications), this can be extended to five years.

Forest road developments, which connect to existing forest road networks in public, State-owned or private forests, will be supported, even when the road extends outside the applicant’s land.

Reaction

While the reduction of the premium period from 20 to 15 years is seen as a retrograde step, most organisations acknowledge that the consultation period yielded a number of positive changes to the programme.

As a result, IFA Farm Forestry Committee chairman Michael Fleming welcomed the programme. “A lot of progress was made during the negotiations with the Department to increase grants premiums from the original proposals,” he claimed.

While the yearly forest premiums have improved, he said the Department’s claim that they have increased by 20% is incorrect because of the reduction of the premium period from 20 to 15 years.

“When discounted back to present value, the forest premiums actually show a small annual reduction,” but he acknowledged that “the front-loading of forest premiums over 15 years might be attractive to some farmers”.

He said the removal of the differential in premium rates between farmers and non-farmers has been a source of debate among IFA members, but “one of its benefits is that it opens up the Afforestation Scheme to farmers that were in the Early Retirement Scheme”.

Paddy Bruton, managing director of Forestry Services Ltd, welcomed the introduction of a single rate of income tax-free forest premiums for all landowners interested in planting.

“This will provide a financially attractive planting option for farmers who can continue to receive the Single Farm Payment – soon to be the Basic Payment Scheme – on planted land and also for non-active landowners including those who availed of the Early Retirement Scheme from farming,” he maintained.

“Forestry is now a viable option for such landowners, which will open up a previously untapped land bank to forestry.”

He said the increase in forest road grant aid, combined with the extension of eligibility criteria, is a positive move.

“These measures, along with the re-introduction of special construction works grant aid, will essentially help to bring more private timber to the marketplace.”

Paul Harvey, chairman of the Wood Marketing Federation, welcomed the programme, including the introduction of a realistic rate of €500/ha for erecting IS436 fencing stakes.

“Forest protection from stock is vital and I encourage farmers and contractors to specify IS436 stakes as this ensures greater service life compared with non-IS436 stakes,” he said.

The challenge now is “the seamless introduction of the schemes in early January, which is essential to ensure a viable forestry programme,” he said.