Decoupling 'a powerful incentive for forestry'
He told the Oireachtas Joint Committee on Agriculture and Food that the supply of land for forestry will increase.
"For the past three years, the base for establishing a single payment was the output of the farmer", said Dr Bacon.
"For farmers to maximise that base, they had to lease land. They will not have to do so in the future. There are many views as to what should happen with this land. Consultants have taken one view and we have argued why we believe the land will go to afforestation, because the payments are stacked."
Dr Bacon was referring to the stacking mechanism introduced by Agriculture Minister Joe Walsh.
In a relevant example, a 100 hectares farmer in the More Severely Handicapped Area with 150 ewes, 30 suckler cows and weanlings sold without premium, qualifying for the high rate Extensification Premium, is on course to get decoupled entitlements of €140 per hectare, before deductions for the national reserve and modulation.
This farmer can plant 50 hectares of forestry, and apply to have entitlements consolidated on the remaining 50 hectares. The €390 per hectare tax-free forestry premium over 20 years will add €19,500 per year of income.
"There is huge uncertainty with regard to what happens to farming, and how people will respond to a single payment regime", said Dr Bacon.
But he told the Committee there is little doubt in the broad sector that the demand for land for agricultural use will diminish, because it is not required.
He said he has no doubt that, in the future, afforestation will take place on land that heretofore would not have been considered for forestry. "This is because of the far-reaching changes in CAP and, as members of the Committee will be aware, the trend is much more towards part-time agriculture. As a part-time income prop, forestry is easier to manage than dry stock cattle", said the consultant.
"I believe there will be a tendency for better quality land to go into timber." With EU policy shifting much more towards the quality of afforested estates and environmental benefits, he predicted a significantly higher proportion of broadleaf species, which inevitably require better quality land than some of the conifer species.
He described his radical proposal to ensure greater certainty about income flow from forestry, which has met with a largely hostile reaction from the forest sector.
He wants the 20 year forestry payments squeezed into 10 years. "A different market should be provided after 10 years, involving enhanced value. Allow in people who can value timber higher than any individual and let that process occur. The effect will be that certainty is assured in terms of the income stream", he told the Oireachtas Joint Committee.
"Lo and behold, the response from within the sector has been to claim it is a compulsory purchase order."
