Tom Hayes (Tipperary South, Fine Gael) | Oireachtas source

I thank Deputy Martin Ferris for the opportunity to explain to the House the new forestry programme. I also thank him for his positive response to what is a fine programme.

The Government sees significant potential for growth in the forestry sector. Already the industry contributes €2.3 billion per annum to GDP and employs approximately 12,000 people, both directly and indirectly. Overseas markets for Irish sawn wood and panel board products have expanded over the past several years despite the recession. Further growth of up to 20% can be expected by 2030 according to a recent United Nations Economic Commission for Europe-Food and Agriculture Organization study. Increasing EU targets for renewable energy also means there will be more demand for wood as fuel for domestic and industrial use.

Last month, the European Commission gave approval for state aid for the new forestry programme 2014 to 2020. This programme is fully Exchequer funded and will involve total spending of €482 million. The aim will be to establish 44,000 ha of new forests and to build almost 700 km of new forest roads. This is a substantial investment and a brave step by the Government in these difficult times.

The new programme introduces several important structural and design changes to some of the main schemes which would have operated under previous programmes. Under the afforestation scheme, for example, a new single rate of premium has been introduced for farmers and non-farmers and 20 annual premiums have been reduced to 15. To compensate for the reduction in the number of premium payments, the premium rates themselves have been increased by 20%. Grant rates for planting trees have also been increased by 5% across all planting categories. It is anticipated these changes will prove attractive to those landowners not previously interested in forestry.

The type of land we want to encourage to come into this forestry programme is marginal land which may not be productive for grass production, dairying or beef. We made this point in the announcement of the programme. Like the Deputy, I would not like to see good land that could produce dairy and milk being given over to forestry.

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