John Browne (Wexford, Fianna Fail)

I wish to share time with Deputies Callanan, Finneran, Moloney, Michael Moynihan, Wilkinson and Hoctor. The past year has been busy and fruitful for forestry. At the start of the year, we faced the prospect of a new rural development regulation which would have seriously damaged Ireland's afforestation programme. Negotiations were long and difficult and Ireland was frequently isolated in its position on forestry. Ultimately however, we achieved significant improvements to the text and while the final package is not everything we would want, it is a basis upon which to build. In addition to the more traditional support measures, there will be opportunities to benefit from a wide range of new measures included in this regulation for the first time, including measures aimed at innovation and technological improvement, amenity investment and agri-forestry. I look forward to the drafting of a new programme in the next few months, in consultation with the sector, which will guide the development of forestry to 2013.

This Government is committed to a long-term forestry strategy. It knows this requires investment and has provided the funds. Last year's allocation for forestry was the biggest financial package ever put together for the sector and this year it has been increased again. The total voted allocation for forestry in 2006 is €125 million, which is an 18% increase on the voted allocation last year. Moreover, I will assign a further €12 million to this area from my Department's capital carry-over. These funds will support the afforestation and premium schemes in addition to capital development work such as roads, reconstitution, native woodland development, amenity schemes and woodland improvement, as well as research and development.

Following the CAP reforms, I believe forestry represents a real alternative land use in Ireland, which will provide a sustainable source of income for rural communities and raw material for local industrial use, processing and energy. Research by the European Forest Institute has emphasised Ireland's competitive advantage in this regard, having one of the highest growth rates for a range of tree species in Europe. This enables faster returns on investment, in terms of both timber and carbon sequestration, than in most competing economies in Europe, and indeed worldwide.

Renewable energy has become a very relevant topic. There is great potential in Ireland for wood biomass to displace imported fossil fuels as a source of energy. I have made a start in the promotion of wood biomass by introducing a wood heating system to the Department's buildings at Johnstown Castle. This conversion is now underway.

My Department is funding a number of pilot projects in this area, including the development of a thinning protocol with the Forestry Development Association and an integrated forest-to-energy project in County Clare, which will become a model for the entire country. Teagasc will also organise a number of practical thinning field days during the coming year. However, one of the main obstacles to be overcome in terms of wood energy is the high cost of installing wood-fired boilers at a scale where they can strongly tilt market demand. Another challenge is to increase and maintain the supply of raw material, particularly wood chip.

If the wood energy market is to develop to its full potential, substantial investment will be required and with this in mind, a number of new initiatives have been announced. A new scheme to grant aid the installation of wood-fired boilers, especially by heavy heat users, has been launched and will operate under the aegis of the Department of Communications, Marine and Natural Resources. This new scheme was developed by the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, and me. It will create a network of real markets for wood chip countrywide. I also plan to seek EU approval to introduce a special scheme to support the major investment required for the purchase of biomass harvesters and chippers. A further scheme to grant aid the planting of willow and miscanthus grass as a short-rotation fuel source is also being drafted. The stimulation of new markets and creation of new harvesting capacity is good news for all involved in the sector. Recognising the important role which the sector itself can play in this area, I recently announced a second call for proposals from interested parties, which will look in particular for innovative proposals for the development and promotion of sustainable forestry.

Last night, the Minister for Agriculture and Food, Deputy Coughlan, gave a comprehensive update on developments regarding reform of the sugar regime. She explained why reform was inevitable and could not be deferred any longer, due to pressures both within the EU and internationally.

Having being personally involved at all stages of these negotiations, I can testify to the enormous difficulties we faced in achieving an acceptable outcome for Irish interests. Throughout this negotiating process, the Minister for Agriculture and Food, Deputy Coughlan, engaged with the stakeholders and had their backing for the stance we took in Brussels. Consequently, I support the amended motion, as ably proposed by the Minister last night.

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