Coillte has said that it is engaging with the Irish Farmers’ Association (IFA) to support farmers with afforestation.
Representatives from the semi-state forestry agency appeared before the Joint Oireachtas Committee on Agriculture, Food and the Marine yesterday evening (Wednesday, March 1).
The chair of Coillte, Bernie Gray, outlined the background to Coillte’s agreement with the UK investment fund Gresham House to establish the Irish Strategic Forestry Fund, “in light of the recent concerns that have been expressed”.
She said that when Coillte appeared before the committee in December it was not possible to confirm details of the controversial €200 million fund as “it had not yet been finalised”.
Fund
The Irish Strategic Forestry Fund is a collaboration between Coillte, the Ireland Strategic Investment Fund (ISIF), which is state-owned, and Gresham House.
ISIF was described as the “cornerstone investor” with a €25 million investment.
The committee heard that Coillte wrote to the Minister for Agriculture, Food and the Marine, Charlie McConalogue on September 16, 2022 to inform him that the fund had been established on the previous day.
Gray added that there had been ongoing discussions with the Department of Agriculture, Food and the Marine (DAFM) on the possibility of establishing a forestry fund.
Coillte
Coillte’s strategy plan, which was launch in April 2022, outlined a target of creating 100,000ha of new forests by 2050, half of which will be native woodland. Gray said that this will cost an estimated €2 billion.
This is around 20% of the government’s national afforestation target of 450,000ha.
Gray said that this is “a very long-term target” which will “take many different initiatives to deliver”.
“Farmers as the largest landowners will be at the centre of delivering this national afforestation target,” she added.
“However, given the scale of the challenge, private forestry companies and Coillte will also need to play a role.”
Since being established in 1989, Coillte has created around 100,000ha of new forests.
However, since 2003 the agency has not been involved in afforestation at scale because “it was precluded from directly receiving afforestation premiums due to EU state aid rules”.
This has “negatively impacted” the agency’s ability to raise the necessary capital to plant forestry, Gray said.
She said that Coillte’s preferred option is to carry out direct afforestation itself.
In 2019, Coillte made a submission to the European Commission to change the state aid rules that preclude public bodies from receiving afforestation premiums.
“It was clear that any changes to state aid guidelines would be a very lengthy process, with no certainty of outcome. Therefore, in the near term we had to explore options other than directly buying land ourselves,” Gray said.
Coillte is reviewing recent changes to state aid guidelines and is engaging with the DAFM on the potential for public bodies to be able to access forestry premiums.
“However, it’s important to note that if the new guidelines mean Coillte will be able to access afforestation premiums, there remains the challenge in terms of the scale of capital required,” Gray said.
The chair of Coillte said that more discussion is needed on how Ireland will achieve its national afforestation target.
She said that the scale of the challenge would be immense and would “require clear policies and indeed tough decisions”.
“One of the key challenges is the availability of land which will be a critical enabler,” Gray said.
Afforestation
Gray also said that “the Irish Strategic Forestry Fund is just one of many initiatives that will be required to deliver Coillte’s afforestation ambitions”.
Coillte is currently working with Bord na Móna to naturally regenerated native woodland on cutaway bog which could result in over 1,500ha of new forests.
The committee heard that the not-for-profit body Nature Trust is working with organisations that want to provide funding for new native woodlands. Since being established in 2021, the trust has raised enough funds for 625ha of native woodlands.
Gray said that the creation of mixed woodland “is being realised by the Irish Strategic Forestry Fund”.
“The concept of forestry funds in Ireland is not new, with forestry funds actively operating in Ireland for the past 30 years.
“To put this in perspective, the total area of new forest planted through the Irish Strategic Forestry Fund will be approximately 3,500ha, with a target deployment period of five years.
“This equates to less than 1% of the state’s overall long-term target of 450,000ha,” she said.
Farmers
The committee heard that the government has asked Coillte to examine how it can work more closely with farmers, along with potentially acquiring land directly, which would be subject to state aid rules.
“We’re also in engagement with the IFA to see how we can support farmers, because it is clear when you look at the landholding in Ireland that farmers are the major landholders. We’re not.
“We have 7% of the land in Ireland but farmers have significantly more,” Gray said.
The Coillte chair agreed with Independent TD Michael Fitzmaurice that historic issues between the agency and farmers would need to be resolved and “a new relationship built”.
“We’re very conscious of that. The farmer partnership model that was in existence in the past was too fractured and was too complex,” Gray said.