Seán Sherlock (Cork East, Labour)
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Question 67: To ask the Minister for Agriculture, Fisheries and Food the initiatives being undertaken by her Department to promote farmer participation in forestry in view of the new opportunities presented by the emerging wood energy sector; and if she will make a statement on the matter. [13061/08]

Mary Wallace (Meath East, Fianna Fail)
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I am fully aware of the opportunities presented by the emerging wood energy sector. Wood biomass is one of the most versatile of renewable energy sources and has the potential to play a major role in the supply of Ireland's energy in future. Solid biomass, mainly wood, is already the largest source of renewable energy in Ireland, accounting for 57% of Ireland's total renewable energy consumption in 2004.

A new capital grant scheme to support emerging enterprises in the wood chip supply sector was launched by our Department last year. Under the wood biomass harvesting machinery grant scheme, funding of €500,000 has already been approved to support the purchase of self-contained and self-propelled whole tree chippers. A second phase of this scheme was launched in late 2007, making an additional €600,000 in grant aid available. The additional wood energy harvesting capacity created by this support measure will have a significant impact in assisting developing enterprises in the wood chip supply sector.

Our Department is also supporting a number of pilot projects, such as producer group support, aimed at making more thinnings available to the local energy markets. Our Department also offers a comprehensive package of incentives and supports which promote farmer participation in forestry. Some €126 million will be expended by my Department specifically in the forestry sector this year.

The afforestation premium and grant scheme, for example, combines 100% grants for planting and attractive premiums of up to €574 per hectare payable for 20 years for farmers. Only last week my Department paid out over €52 million in the annual forestry premium payment to more than 10,000 forest owners, most of whom are farmers.

Under the forestry environment protection scheme, FEPS, a landowner will receive a FEPS premium of up to €200 for each hectare of woodland planted. The FEPS premium is payable for five years in addition to the existing afforestation scheme grants and premium available. Farmers can plant up to 50% of their land and still draw down the full single payment, as well as the forestry premium. Financial support is also available for the growing forest in the form of grants for forest roads to facilitate access and management operations, for shaping and pruning operations, and for reconstitution in certain circumstances.

Additional information not given on the floor of the House.

My Department engages in significant promotion of forestry to encourage farmer participation. Among the range of promotional activities supported are the joint national promotion campaign with IFIC and the RDS awards, which promote good forestry management. We also support a number of other projects which contribute to the sustainable development of forestry.

My Department, working in co-operation with COFORD, the National Council for Forest Research and Development, and Teagasc actively encourages the development of the wood-energy sector through a range of support measures aimed at creating an effective and efficient supply chain from the landowner-producer to the end user. Since 2006, COFORD has been managing the ForestEnergy programme. The programme includes a series of nationwide forest thinning and chipping demonstrations, workshops and trials aimed at those wishing to become involved in the wood biomass supply chain.

Funding is also provided to Teagasc, which plays an important role in the development of forestry through promotion, training and advice. Forestry advisers at Teagasc offices run a number of training courses, information evenings and field days and provide free and independent advice on all aspects of forestry to farmers.

My Department is working closely with other State agencies such as SEI and Enterprise Ireland in support of developing an increased biomass percentage of energy supply in Ireland.

Seán Sherlock (Cork East, Labour)
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I welcome the reply from the Minister of State and my response will be very brief. Does the FEPS encourage the growth of native woodland? Will the Minister of State potentially consider an additional premium for those farmers, landowners or forestry owners who wish to grow more forestry on the basis that it would reduce CO2 emissions for this country? Perhaps an additional premium could be given to those farmers who are not already growing forestry but who may potentially embark on growing it.

Mary Wallace (Meath East, Fianna Fail)
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Over the past couple of years, we have provided many incentives and much encouragement to farmers not already growing forestry to participate in the growing of forestry. That is one of the main reasons we introduced FEPS. We considered that many farmers involved in REPS would plant forestry except that the REPS payment was so attractive. FEPs looks to balance that position and we have noticed that many farmers involved in REPS are looking at forestry as an option in a REPS plan, which is very positive.

On the native woodland aspect, many of our schemes look to encourage the growing of native woodland. At this time, some 30% of what is being planted is native woodland.

It is important to mention that we have promotional schemes and the Deputy may have heard some of the advertisements currently on radio. We have a joint promotional scheme with IFIC and we also have the RDS awards, which promote good forestry management. That also involves native woodland and our actions are all about promoting both types.

Seán Sherlock (Cork East, Labour)
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I accept the Minister of State's answer but there is potential to give a further premium purely on the basis there is room to have carbon off-setting, for want of a better expression. There is major scope for the private sector to become involved in forestry. As I understand it, to date there is less than 20% involvement of the private sector in forestry and it is an area of agribusiness that has even more potential.

I am not convinced the €7,604 per hectare payment, the maximum, is adequate given that one would have to operate on large economies of scale in order to get some sort of a decent return. Many smaller forestry owners do not currently have the economies of scale to be able to thin back forests to allow for greater potential. The cost of thinning and maintenance would eat into the premium.

We are trying to make a case, in essence, for more grant aid or financial incentives to be provided. Will the Minister of State consider that?

Mary Wallace (Meath East, Fianna Fail)
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The amount of €7,604 referred to by the Deputy is probably the planting grant. If a person goes to plant a forest, the cost is covered. On top of this the person receives an annual premium of €573 per hectare and an additional €200 per hectare for FEPS.

I agree with the Deputy on growing forestry as it is important for people to maintain and thin them. If we do not do so, we will not have good timber at the end of the day. One of our chief promotional issues at the moment in encouraging farmers to go into forestry is to indicate they will get the 20-year premium, the planting grant at the beginning and income tax-free. We have brought in many schemes under the heading of thinning and maintenance, such as the high pruning of conifer scheme, which is important. There is also the shaping of broadleaves scheme and a forest road scheme, which helps to maintain forests.

There are two messages. The first is that the 20-year-old forest must be maintained and thinned, and wood energy must be reaped from it. We encourage farmers to do this. The second is that it is very worthwhile for farmers to consider forestry as a real option at this stage. Many REPS farmers are looking at it this year who would not have considered it before.