Economy hit for €58m by forest cuts
Updated information from the Forest Service was used by Dr Richard Moloney of the Centre for Applied Policy Studies at UCC, who was commissioned by COFORD, the National Council for Forestry Research and Development to assess the economic impact.
He said 1,350 full-time jobs must go, with the loss of €58m of economic activity. The setback is expected to put 25 forestry contractors and a number of plant nurseries out of business, with job losses of 150 in nurseries, 410 in other forestry companies and 790 indirectly connected job losses projected.
Even the Government itself will lose out on nearly 11m of tax revenues, predicts Dr Moloney.
Others in the forest industry say that with more than €45m pre-committed to premiums and other schemes, there is just €37.6m for planting in 2003, insufficient for even 14,000 hectares of planting.
They say forestry expenditure will be less in 2003 than in 1997.
According to Dr Richard Moloney's assessment, there could be ongoing loss of forestry premium income of 6m per year due to reduced planting in 2003.
He said planting will be reduced by between 8,500 and 11,000 hectares this year, due to the 26% reduction in the Forest Service budget.
Only 68% of the 2002 level of planting is expected.
As a result, materials usage in forestry will be reduced by €5m and the labour spend is set to fall by €20m in 2003.
It is expected that plant nurseries will have to lift and destroy 22m seedlings.
Dr Moloney has listed the expected sector expenditure cutback, totalling €29m, under the following headings: plants (€4.27m); planting (€2.7m); cultivation (€3.6m); fertilisation (€1.6m); fencing (€3.8m); VAT (€2.8m); premums (€3.6m); and overheads (€6.6m).
Forestry contractors have emphasised the danger of long-term damage to the industry. They say the infrastructure lost due to job losses and some companies going out of business cannot be rebuilt overnight.
Maintenance of existing forests could also suffer, if road construction already delayed pending approval of improved grants is postponed again.
The plight of many who legitimately expected adequate forestry funding in 2003 is also highlighted.
Worst hit may be nurseries with stocks built up over three years that cannot be used after this year, and forest contracting businesses with four-year contracts geared to targeted planting levels.
Also shocked by cuts are farmers who destocked ahead of anticipated planting, or who had built in planting ahead of their early retirement plans.
