Calls for level playing field in forestry industry

EQUAL rights for private forestry owners were sought yesterday by a leading asset management company.

IFS Asset Managers Limited (IFS) called upon the Government to provide forestry premiums for the same 20-year term as Irish farmers and at the same levels.

It claimed that private forestry owners are disadvantaged by receiving lower premiums and for a shorter term of just 15 years.

IFS, which is Ireland’s largest private forestry asset management company, has an Irish forestry portfolio of 18,000 acres with a current market value of €80 million, on behalf of 16,000 predominantly Irish investors.

It said private investors who have proved to be the backbone in supporting the Irish Government afforestation targets of 10,000 ha per annum are being penalised because of their pro-activeness.

“The actual afforestation level for 2008 is only likely to reach 6,000 ha. Moreover, IFS in particular has changed focus from purchasing bare land in recent years due to the high cost and inability to compete with farmers due to the current unfair dual system,” it said.

IFS director Paul Brosnan said the recent report to the Government by John Malone, the former Secretary General of the Department of Agriculture, suggests that the Government should review the distinction between support schemes paid to the farming and non-farming community.

“However, this does not go far enough and we are calling for any distinction to be removed in order to revitalise afforestation in Ireland,” he said.

Mr Brosnan said IFS has found in the past that Coillte has been less than prepared to help foster the growth of private forestry ownership.

He suggested it might be worthwhile looking at Coillte’s land-banks which have not yet been planted but which would fulfill a growing requirement for private investors.

Mr Brosnan said the rationale behind the Irish Forestry Funds (of which 23 have been launched to date) was to open up the market for forestry investment to the average person who is not a farmer or significant land-owner.

It was also aimed at enabling these modest investors to avail of the tax efficiencies from commercially managed Irish forestry. The average investment in the Irish Forestry Funds is approx €5,000.

The most recent fund to be launched is the 5th Forestry Growth Plan which offers a projected 8.2% compound annual rate of return over a 12 year period for a minimum investment of €750 for each share.