Landowners react as forest premium is cut and costs increase

MANY landowners have scrapped afforestation plans after the Government cut the annual forestry premium by 8%, according to the Irish Timber Growers Association, which represents private woodland owners.

Forestry companies have warned that some landowners have sought legal advice, and may sue the government over the premium cut.

They warned also of a growing shortfall from the government’s target of 10,000 hectares planted annually. Last year, about 6,000 ha were planted, down from 6,900 ha in 2007, 8,000 ha in 2006 and 10,000 ha in 2005. Government policies on climate change, renewable energy, employment and timber production are threatened by the shortfall.

Meanwhile, the Revenue Commissioners have confirmed that “exempt source” income from woodlands will be subject to this year’s new 2% to 6% income levy, as well as coming within the new higher PRSI ceiling.

And forest owners face additional fire and wind-blow insurance bills. Up to 1,000 hectares are lost per year due to fire. Failure to repair the damaged plantations is considered a breach of contract by the Department of Agriculture, Fisheries and Food, and repayment of all grants and premiums is required. Up to now, the cost of forest repair was covered by the government’s Reconstitution Scheme, but this scheme has been greatly restricted.