Timber sector has room for growth and jobs

Michael Fleming was elected IFA farm forestry chairman in April, representing private farm foresters who own 47% of Ireland’s afforested land.

He takes up office after significant timber industry development in recent years, which still leaves potential for enormous growth.

The wood processing sector as a whole is valued, directly and indirectly, at €2.2bn.

Most timber entering Irish sawmills is sourced from the State-owned Coillte forests, but this is slowly beginning to change. Predictions from COFORD suggest that by 2030 we will see a similar volume of timber produced by Coillte and privately-owned forests.

To reach this, however, we need to see continued afforestation and improved timber mobilisation.

* The last two years have seen recovery in prices for most agricultural commodities. What is the outlook for forestry as an investment option for farmers?

>>Forestry represents a sound investment, providing essential income for many farmers. The tax-free premium over 20 years has been a big incentive for farmers considering afforestation. The positive timber price at the moment has also helped to increase interest in forestry. While income is generated over the life of a rotation at periodic thinnings, it is in the clearfell, at year 35 to 40 for Sitka Spruce, when the return on investment is realised.

* High demand for timber and wood products is reflected in a strong price. Are this price and demand sustainable?

>>The wood and timber market is constantly evolving and growing in production capacity. It is a market created from predominantly marginal farm land. This marginal land can now generate in the region of €25,000 per hectare at clearfell. Thinnings are the other operations over the course of a forest rotation which yield income. There is some flexibility when it comes to the time of sale for this timber, within the window in which these operations can be carried out.

There is a thriving indigenous timber processing sector. Coolrain Sawmills and Munster Joinery are two prime examples visited recently by Minister Shane McEntee as part of a tour organised by IFA. These manufacturers are providing sustainable rural jobs and incomes, which are supporting local communities.

Another demand on the resource which is increasing steadily is the energy sector. We are all aware of the push towards renewable energy and sustainable energy production lately, with the introduction of the Renewable Energy Feed in Tariffs. Woody biomass has a fundamental role to play in Renewable Energy Directive targets for 2020. The biomass material needed for energy and heat should be supplied as much as possible from our national forest estate.

* What issues do you feel could impact on the sector’s ability to meet future demands?

>>The biggest concern I have is for the long-term sustainability of the sector. In 2009, COFORD produced a document, Forestry 2030, which stated that a 15,000 ha annual planting was required to maintain a sustainable industry, creating 490 direct jobs annually in the process. This 15,000 ha of afforestation would also be more favourable for the wood manufacturing sector. The current afforestation target is less than half this at 7,000 ha, and early indications suggest that we may not even reach this in 2012.

* What are the main reasons for decline in planting?

>>There is a vast number of farmers who still wish to avail of the afforestation programme. I would share the view of many in the industry when I say that the primary reason for the decline in annual afforestation is a change in forest service policy, particularly in relation to hen harrier designations and unenclosed areas. There are farmers who want to make use of the current afforestation programme, but current restrictions mean that their land does not qualify.

* What are the implications of these restrictions at present?

>>In my own county of Kerry, as with many western counties, the biggest bone of contention is the exclusion of lands as a result of the hen harrier and the reduced percentage of unenclosed land per afforestation application. Farmers cannot understand why land, which has a proven productive capability of yield class 14 and higher, is restricted on the basis that it is unenclosed. Yet, adjacent land is growing excellent quality timber.

Potential forests in areas with proven commercial production are now faced with restrictions, on what is insufficient scientific research. The hen harrier area covers 176,506 ha. The Slieve Bloom SPA area in the midlands is 21,793 ha, and no afforestation allowance has been given to date.

* Is afforestation restriction the only barrier to a more sustainable and profitable industry?

>>The first major private forest thinning estate has begun. While the resource is awaiting extraction to market, mobilisation issues have halted progress in some areas. The proposal for the introduction of bonds has already stalled numerous road applications. The proposal have arisen over fears about road damage caused by timber trucks. However, regulations regarding vehicle dimension and weight cover all timber vehicles within the supply chain.

All vehicles operating in the timber supply chain must comply with gross vehicle weight regulations. Forestry vehicles are no different from any other commodity vehicle in this respect.

The exaggerated perception of damaged roads by forestry vehicles in thinning operations needs to be addressed, and a national plan for mobilisation of the national resource is urgently needed.

* What is your outlook for the coming year?

>>The Government and the Department of Agriculture realise the value of forestry, nationally and to rural communities. This is displayed in their sustained funding for afforestation and related schemes.

The benefit of this industry can only be realised through sustainable afforestation, which can only be established through continued government support. Benefits are clear to see, including employment of 12,000, and massive potential for growth.


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