Submission to 2020 Strategy from Forestry Assessment Companies*
Minister Smith has sought views on what policies and structures would best enhance the future
development of the agriculture, forestry, fishing and food industries, and has stated his belief that
new thinking and strategic direction is needed to deal with the current challenging and changing
environment.
This submission comes from the forestry assessment companies.
The forestry sector which has grown to be a significant land user, a significant employer and an area
of strategic importance, albeit not yet reaching the scale identified in the 1996 Strategic Plan.
Land has limited uses - building, development and infrastructure, production of food, production of
timber and other fibres, protection of water and air and recreation. In Ireland we have considerable
natural advantages in the production of grass, some tillage crops - and timber.
The soils that are best suited to production of timber, particularly soft woods, are generally seriously
disadvantaged in food production. Land is therefore our most vital natural resource; wood is
infinitely renewable; land, surplus to our agricultural requirements, is excellent for growing trees;
Ireland has an obligation to use it well; there is a cost - and a huge pay-off; we can create a land
based industry second only to grassland.
Potential outputs include:
Wood
Wood products
Paper packaging
Converted products
Woodfuel
Carbon sequestration/storage.
Given Ireland's track record in technology there are big opportunities in engineered and derived
products and forest cluster products and services. Our potential increase in supply fits neatly with
constraints in the UK domestic supply. Our processors have shown considerable skill in developing
export markets; this base can be developed to build on our natural growth advantage.
Forestry is and can be an economic driver, with tremendous value adding potential. But policy
makers need to learn from mistakes made in other primary sectors – there needs to be a focus on
productivity, quality and market requirements with a sense of scale.
There are valuable benefits in, for instance, climate change mitigation, water protection, amenity
and tourism spin offs – these are mainly the public goods area of forestry.
Because of the current lack of pricing and trading mechanisms, to adequately and transparently
reward such public goods it is not possible to build a forestry resource on privately owned land
unless that forestry is economically sustainable. Economic sustainability in this case is simple production of timber of types, volumes and / or quality that will be rewarded adequately by
processors en route to end users. Interestingly research shows that maximising the harvesting of
wood as a renewable resource produces the most sustainable improvement on the CO2 balance (FTP
April 2008).
The development of trading and pricing mechanisms to recycle funds that would otherwise be
spent abroad to secure carbon credits – in part to offset agricultural emissions must be a priority.
Since the emergence of the private sector as the major force in afforestation (in response to
incentives geared to deliver particular responses (e.g. broadleaves) policy has increasingly sought to
derive public goods from the private sector – ironically when - maybe even because - the State
owned forests (in Coillte) were being required to operate under a remit far more commercial than
that of the State Forest Service (arising from the 1988 Forestry Act). That is a contradiction inherent
in the implementation of Forestry Policy in Ireland.
Another is the promotion of afforestation, and related programmes, as Schemes that compete with
other land based Schemes, most of which are income subsidies. The focus of ownership of much
agricultural land has moved from production to justifying income support. This is not to argue
against income need but against the linkages that impede productive and strategic land use.
Given Ireland's island status, our position on the periphery of Europe and our long distance from
other continents, a high degree of self-sufficiency is strategically desirable - both with food and
fibre. There need be minimum conflict between the apparently competing land uses if we work to
optimise production on the best suited lands for each. This can be done in a way that is compatible
with the protection of the environment, provided that reasonable, informed and planned
approaches are used to determine that compatibility rather than the divisive, broad brush, crude
restrictions over the last ten years.
As we head into an era where transport costs are likely to increase significantly the merits of
increased self-sufficiency will become not just a strategic choice but an economic imperative. Even if
the world oil tanks are heading less rapidly to 'Empty' than the most pessimistic forecasters predict
there is still considerable urgency in ensuring that our land is used to the best economic effect.
In addition to a planting programme of at least 15,000 hectares p.a. there are two straight forward
and urgent requirements in the private forestry sector:
Continued Investment in forest roads to ensure early production, boost of timber supply
and also to increase production yields and thinning options, as well as deliver economic activity
and secure and add jobs. Such an investment makes the private forest economically sustainable.
The stop/go approach to funding is detrimental to jobs, market development and woodland
improvement.
2.
Continued investment in broadleaves capable of improvement so that some return can be
achieved, for the State and owners, on the large investment by private owners, encouraged by
directive State incentives. The recently introduced modest scheme needs to be put on a solid
footing.
1.
These two headline measures are required to ensure that the existing private forestry resource is
productive and sustainable. Any failure, or even delay, in making that commitment will result in
higher costs to the State in the long run through the loss of economic activity and the necessity for
income subsidies, whether paid for in forestry or elsewhere.
Wood is infinitely renewable. Land, surplus to our optimal agricultural requirements, is excellent
for growing trees. Anyone or any country that grows energy will be rich. Forestry uniquely
provides the opportunity to provide timber and energy – along with essential offsets for agricultural
emissions.. We need to keep a focus on this multi-purpose crop and not be distracted by short
rotation crops that won’t reach any significant scale compared to the well established forestry base.
We have a biomass resource – in our woodlands. We need an increased afforestation programme to
ensure scale and confidence for investment in downstream processing and utilisation. We need a
continued commitment rather than the stop/go/delay that has been a feature of forestry over the
last few years.
The cost of the forestry programme to the State is driven by competition with unproductive
agricultural subsidies. Arguably farm income supports should be divorced from maintenance of
agricultural land, thus ensuring that land use would be market guided and that productive
agriculture and productive forestry would be complementary rather than competing land uses.
Current prescriptive practices for afforestation should be reassessed so as to permit, indeed
encourage, market guided investment.
Investment Drivers for forestry include:
Employment
GDP / processing sector
Rural Development
Energy
Exploit existing private resource
Utilise “redundant” land
Environmental / public good
National Benefits
Employment – mainly rural
Security of fibre supply (and good for the environment – less transport)
Energy replacement – and renewable, proven technology
Carbon
Good value for money – sustainable land use with well chosen species
Public Good
Impediments
Lack of clarity for private investment
Security / continuity of supply – uncertainty re future planting, lack of data re existing
Other “schemes”
Land sterilisation
Lack of dynamic inventory related to industry / processing needs
Fragmentation (incomplete jigsaw)
Stop /go re support schemes
Too many “small time” projects, no overall framework
Age structure of ownership (similar issue in agriculture)
Requirements
Headline goals
Prioritisation (re land use)
Removal of entry barriers
Planning framework
Aggressive management of private (and Coillte) resource
User driven inventory
Clarity on carbon / public good value and trading / pricing mechanisms
In the absence of pricing mechanisms transfer environmental e.g. broadleaf requirements to the
public sector
Focussed / targeted / managed / afforestation programme
Forestry, if approached from the perspective of creating a renewable resource for economic and
environmental benefit (as opposed to being a scheme), can deliver sustainable jobs, strategic
benefits (import substitution – e.g. energy), and climate change mitigation – but only if positioned as
a major land use for 2020 and beyond. In particular a 2020 vision for Forestry, with specific goals,
needs to be an output of the 2020 deliberations.
While not proposing to comment in any detail on the “Irish Forestry Sector” background paper, we
note the comment that a critical factor in the failure to achieve planting targets was the 1999 EU
decision that Coillte was not entitled to forest premiums. Coillte was a purchaser of land, competing
with private capital for such land, and it is unlikely that that it’s withdrawal from the market led to
significant land suitable for forestry remaining unsold. In fact the main impact on planting targets
was the introduction of REPS which gave a more attractive option to farmers to retain land in low
production agriculture and the gradual introduction of various constraints and obstacles to planting,
thus reducing the land pool and the eligible owner pool as well as the gradual erosion of the return
necessary to drive investment so that private investors, even though entitled to non farmer
premiums, also effectively withdrew from afforestation during the last decade; capital went abroad.
Again this brief submission cannot address the stated Forestry Sector weaknesses in the background
document in detail. However it is worth commenting that:
The fragmentation of the private sector estate is due to State policy and design of State schemes;
The observation that growers tend to market their timber individually is, perhaps, a market factor,
but hardly a sectoral weakness;
the so-called lack of knowledge among farm forest owners must be put in the context of the aging
population – farmers tend to plant when older / retiring and there is a gradual transfer of ownership
to family successors (often living elsewhere and of better quality plantations to institutional / private
/ fund investors. the support costs currently being incurred in developing a small number of
producer groups could not be sustained across the 15,000 or so private woodland owners.
The knowledge base will, as in State forestry, reside primarily in the professional businesses who
service growers although it is accepted that decision making capacity by some private owners, and
investment making capacity by many, may be issues. Clear, consistent, continuous support policies
that encourage market participation and expansion are more important than ad hoc projects which,
almost by definition, focus on the small group of active owners rather than on the large resource
that is private woodlands.
That afforestation and forest management activities are allegedly over dependent on State support
needs to be put in context –
State policy has sought increasing public good services from private woodlands;
Forestry costs (to the State) are driven by competition from State funded schemes;
Annual expenditure on afforestation and management activities (excluding premiums) equates to,
for instance, about four days of annual DAF expenditure or about 1% of State capital investment.
The benefits to the State in various ways are substantial and significant and studies have shown that
these outweigh the costs.
Other specific action areas for forestry should include:
 Recycling of carbon tax;
 A dynamic private sector based inventory (as opposed to the estimates produced by various
studies);
 Certification;
 CPD for forestry professionals and operatives;
 Market development with a strategic focus – for instance does it make sense to direct forest
products to electricity generation? What are the best uses for residues?
 Public specification and procurement policy, particularly for energy and construction (to
positively favour home-grown renewable so as to enable market development);
*References to Coillte are not necessarily endorsed by Coillte.