Revised forestry payments suggested

A REVISED farmer premium payment structure for forestry is recommended in a report published yesterday.

The economist Peter Bacon suggests that the farmer premium would be paid for 10 years rather than 20 years at present, with the annual payment level adjusted so that there would be no change in the value of the payments to growers.

At ten years, the study proposes that the State would acquire an option to purchase standing forest plantations and then sell these to institutional investors wishing to balance their long-term investment portfolios.

The price paid would maintain the return to growers at the same level as would be achieved if the trees were sold at full maturity.

An annual afforestation target of 20,000 hectares up to the year 2035 with a revised premium payment structure is supported by the report, which estimates the total funding requirement to be €6.9 billion in the period 2005-2054.

The report on Irish forestry strategy since 1996, and an appraisal of options for future policy, was commissioned by the Minister for Agriculture and Food, Joe Walsh.

However, the report also concludes that an alternative level of planting may be appropriate depending on the value given to the non-timber environmental benefits accruing from forestry.

An estimated 3,780 people are employed in forest crop establishment and harvesting and over 6,000 are employed in timber processing in Ireland.

The study concludes that, following the implementation of the CAP reform, sufficient land will become available to achieve the afforestation target to the year 2035.

The report recommends that payments should be indexed to changes in the value of other payments including REPS.

It also proposes that the value created by forestry in reducing the need for Ireland to purchase green credits in order to meet its Kyoto commitments should be ring-fenced to provide investment for the sector.