A €200 million forestry fund, launched by London-headquartered Gresham House and backed by Coillte, could result in” financial supports for forestry” leaving Ireland and going to “corporate investors”, a private forestry producer group has warned.
Irish Forest Owners said it believes that the Gresham House, Coillte-backed fund is “not in the best interest of rural Ireland”.
Nicholas Sweetman, chairperson of Irish Forest Owners, has now called on the Minister for Agriculture, Food and the Marine Charlie McConalogue to intervene to ensure that the “national investment in forestry stays with the people of Ireland” and forestry assets remain in “Irish hands”.
Irish Strategic Forestry Fund
Gresham House launched its Irish Strategic Forestry Fund last week. The London, UK-listed asset management company has put in place an “operational management agreement with Coillte” in relation to the fund.
According to Gresham House the new fund has already attracted €35 million from Irish investors, including a €25 million investment from the state-backed Ireland Strategic Investment Fund (ISIF) .
But the Irish Forest Owners claims the new fund has been established with the “clear purpose of evading the rules which prevent the payment of premia and grants to the semi-state company Coillte.”
Its chairperson added: “The financial supports for forestry in Ireland are paid from the National Exchequer, and instead of this money going to farmers and staying in the local economy, the forest premia and single farm payments associated with the land acquired for planting will leave the country and go to corporate investors.”
The group said that confidence among farmers in farm forestry has been “greatly damaged” in recent years and believes the establishment of the new fund could have a further negative impact on farmers.
Carbon credits
The Irish Forest Owners has also cautioned that no details have been released on who might own any carbon credits from any new forest that is developed by the fund.
Sweetman said the current lack of clarity could create a “dangerous precedent” because “carbon sequestered in our forests will be traded for financial gain by foreign investors”.
“We need to plant significant areas of land to meet our Climate Action obligations, but allowing a semi-state body like Coillte to promote selling land to outside investors in order that they can profit from Irish tax payer support for afforestation is absolutely not the way forward,” he said.
Instead the Irish Forest Owners want to see investment directed to “building a real and sustainable forest culture” by engaging farmers and landowners to “integrate forestry into every farming enterprise”.
According to Sweetnam, the Irish Forest Owners fear that the new Irish Strategic Forestry Fund will “reinforce the monopoly that Coillte has within the industry”.
Patrick Lawless, managing director, Gresham House, Ireland, has claimed the new fund will “create a platform for enhancing Ireland’s forestry sector, delivering real change and momentum and making a meaningful contribution to Ireland’s crucial afforestation ambitions”.
Imelda Hurley, chief executive of Coillte, has also said that there is “an urgent need for Ireland to meet stretching Climate Action targets and creating new forests is integral to the achievement of these targets”.
Separately, the Rural Ireland Organisation (RIO) has described the new forestry fund as “a disgraceful policy of privatisation of public forestry lands”.
Gerry Loftus, leader of the RIO, has also warned that the fund could have “have dire consequences for small farmers, the environment and rural Ireland in general”.