IFO have called on the Minister for Agriculture Charlie McConalogue to reverse current government policy that allows investment funds to draw down exchequer-funded forestry grants and premiums.
Speaking on behalf of the organisation, Nicholas Sweetman, chairperson, said “the outcry over the Coillte deal with Gresham House is a clear message that government should not allow state companies to be involved in any scheme to sell Irish Forestry to investment funds”.
Referring to comments made by Minister McConalogue at the Joint Oireachtas Agriculture Committee (Wed 25 Jan) confirming that “the deal is done” between Coillte and Gresham House, Mr Sweetman stated,
“this does not mean we have to stand by and watch tax-payer money be siphoned off by large investment funds”.
The ethos under which forestry premiums are paid is to cover the income foregone by farmers resulting from afforestation of agricultural land.
“They should go to farmers and the rural economy and must not be used by the state to encourage investment funds to purchase Irish land and forestry”.
“Since it has emerged that the new programme has not been officially sent to the EU commission for state aid approval it is not too late to remove the ability of investment funds to access these payments”.
The IFO also renewed its call for the premiums for broadleaf and native forests to be extended to 35 years for farmers.
Mandatory planting of broadleaves on all afforestation sites will be increased in the New Forestry Programme from 15% to 20% and is now restricted to native species. “Although this is beneficial for biodiversity and forest resilience, it reduces the economic viability of forestry for farmers.” “Broadleaf trees require more extensive management compared with conifers and any return on investment by a farmer is only seen by the next generation. The premium duration must reflect this and should be extended to 35 years”.
“If the government is serious about engaging farmers and delivering diverse forests, as outlined in the New Forestry Programme, then they must ensure that farmers and not large investment funds are looked after”.
Ban forestry payments for investment companies – IFO The IFO has said that the Government must support farmers, not investment funds, to deliver forestry targets.