Farmers have voiced concerns about a new €200 million Irish forestry fund which has been launched by a UK listed asset management company and is backed by the semi state agency Coillte.
London headquartered Gresham House confirmed last week that it has entered into an “operational management agreement” with the state forestry company Coillte to launch the new “Irish Strategic Forestry Fund”.
Jason Fleming, the farm forestry chair of the Irish Farmers’ Association (IFA) , said farmers are concerned about the launch of the fund, which has also been supported by the Ireland Strategic Investment Fund (ISIF). This is a sovereign development fund which is managed and controlled by the National Treasury Management Agency (NTMA).
Forestry fund
Gresham House has confirmed that the ISIF has invested €25 million in the Irish Strategic Forestry Fund to date.
According to the IFA farm forestry chair the “focus” of the state’s planting programme and exchequer spending should be on “farmer planting”.
Fleming said:
“This has the greatest positive impact on the economy, as the majority of the money generated from forest premiums and timber sales is spent locally, fuelling economic growth and supporting jobs and businesses in towns across Ireland”.
He highlighted concerns among farming communities that the new Coillte backed fund could potentially distort the land market.
According to Fleming a key feature in recent years has been “foreign investors coming in and buying land for forestry” which he said effectively distorted the land market and made it increasingly difficult for local farmers, particularly young farmers, to compete.
He said:
“The economic benefits when an investor plants or buys existing forests is significantly less as the majority of the money leaves the local economy.”
He also highlighted that both Irish and international investors will be able to access direct financial support via the new €1.3 billion Forestry Programme 2023 – 2017, which is subject to state-aid approval by the European Commission.
Fleming said the Department of Agriculture, Food and the Marine (DAFM) had previously outlined that under the programme 100% grant aid will be available to establish new forests and premiums of between €11,200 to €16,500 per hectare will be available over a 15-year term depending on the forest type established.
The IFA is worried is that farmers could actively have to compete against Irish and international investors to secure land.
“With already strong demand in the agricultural land market and limited supply, the new Irish Strategic Forestry Fund is likely to further increase the competition for land, which will result in more farmers being priced out of the market and unable to expand operations to future proof their businesses,” Fleming warned.