Seán Sherlock (Cork East, Labour) | Oireachtas source

I welcome the Minister of State to the House. I wish her well with the new forestry programme that has been devised. We appreciate that it is a draft programme. One certainly perceives there has been a tremendous amount of energy put into forestry, certainly in recent months. The premiums for the proposed forestry programme, across the forestry types the Minister of State has outlined, indicate a significant increase, on the face of it, for those who will plant and grow trees. That is to be welcomed.

I took possession of an interesting report by Auxilia Group entitled The Economics of Afforestation and Management in Ireland. It was commissioned and was published in 2022. I am sure the Minister of State will have had sight of it. The key person who drove it was Professor Cathal O'Donoghue, whose opinions on forestry policy matter. We take at face value his bona fides. He did what I would call in my awkward language a mapping exercise of the estimated total establishment cost by species in 2023. The report states on page 37 that the total establishment cost for a conifer plantation will be approximately €7,000 per hectare. For hard broadleaf, it is to be €10,551, and for soft broadleaf it is to be €9,631.

The table of forestry types has 12 categories, ranging from FT 1 to FT 12. These include native forests, forests for water, forests on public land, emergent forests, mixed high forests with conifers and 20% broadleaf, and mixed high forests with mainly spruce and 20% broadleaf. The proposed grant per hectare for a native forest is €6,744.

That includes hard broadleaf. The establishment costs are more than the premium devised in the new forestry programme. Therein lies the challenge. The proposed establishment grant for mixed high forest with mainly spruce and 20% broadleaf is €3,850. The analysis that Professor O'Donoghue and the Auxilia Group have done is based on real-time receipts they have been furnished with. They are the lived and true experience of forestry companies.

The true cost of establishment is far in excess of the proposed grant rate for establishment. Already there is a disincentive on the part of the forestry companies to be able to move into a position whereby they can meet the needs of the new forestry programme without incurring losses. In other words, it will not pay the forestry companies and contractors to become involved in the new programme because the financial metrics are such that it is too expensive for them to be able to do so.

If I was looking at this from the point of view of somebody who wanted to invest in forestry or had a land holding on which there was forestry, I would look at the premiums. For example, for native forest the figure is €1,103. I would consider that a very good premium per hectare if I was going to benefit from it. However, the nub of all of this is whether forestry companies, which established roads and land holdings, use forwarders and so on. I am no expert in this area but if they are telling us, and the research is bearing out what we are hearing on the ground, that the costs of establishment are far in excess of the grants that will be provided, then I would respectfully suggest that the Minister of State may already be on the back foot.

In that context, it is vitally important that she bring together all of the stakeholders. The establishment of a forestry development agency could bring all of the stakeholders together. We have such an agency for food, namely Bord Bia, or employment development, such as Enterprise Ireland and IDA Ireland. If the Minister of State created an agency to bring all of the stakeholders together, she would be able to work through a lot of these issues.

If Coillte is going to change the manner in which it operates such that it will be able to benefit from premiums, there may be a challenge for private forestry companies which may be sucked into operations devised by Coillte because of economies of scale. There are considerable worries about that within the private forestry sector.

Ash dieback needs a scheme. The Minister of State made reference to it, and I am glad she did so, but we need something more concrete than what we have heard heretofore regarding an ash dieback scheme. It has to be sorted. If we want confidence in the sector, we need to sort out the ash dieback scheme.

A forestry development agency will be the mechanism for the Minister of State and Government to succeed. For confidence to exist, we need to bring all of the stakeholders together. My wish is that the Minister of State moves forward and achieves what is necessary.

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