The Irish Forest Owners (IFO) has called for a ban on forestry scheme payments being made to investment companies, in the wake of Coillte’s controversial partnership with UK asset management company Gresham House.
The group has asked Minister for Agriculture, Food and the Marine Charlie McConalogue to reverse current policy, whereby these companies can draw down exchequer-funded forest grants and premiums.
The IFO is a network of private forestry producer groups aimed at developing private and private forestry ownership in Ireland.
It’s chairperson, Nicholas Sweetman, commented: “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 forestry to investment funds.”
Minister McConalogue has said that the deal between Coillte and Gresham House is effectively done and cannot be cancelled at this point.
However, Sweetman said: “This does not mean we have to stand by and watch taxpayer money be siphoned off by large investment funds.”
According to the IFO, the rationale behind forestry premiums is to cover the income foregone by farmers.
“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 Forestry Programme has not been officially sent to the European Commission for state aid approval, it is not too late to remove the ability of investment funds to access these payments,” Sweetman added.
The organisation has also renewed its call for the premiums for broadleaf and native forests to be extended to 35 years for farmers.
In the new Forestry Programme, the mandatory planting of broadleaves on all afforestation sites will be increased in the from 15% to 20%, and will be restricted to native species.
“Although this is beneficial for biodiversity and forest resilience, it reduces the economic viability of forestry for farmers.”
Sweetman commented: “Broadleaf trees require more extensive management compared with conifers and any return on investment by a farmer is only seen by the next generation.”
He added: “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,” the IFO chairperson said.