Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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In a recent press release the Minister of State, Deputy Tom Hayes, stated he had secured European Union approval for a forestry programme. The press release's highlights included €482 million of new investment in forestry, 44,000 ha of new forestry, 700 km of new forestry roads, 20% higher premium payments, 5% afforestation grants etc., as well as new species, with rotations of ten to 15 years.

Many people will welcome any improvement in our forestry programmes and the development of the sector to meet our 2020 EU targets. The scale of investment will have real impact on rural communities, particularly for those who farm marginal lands. It will provide them with the opportunity to come into the forestry sector, offering real options for landowners to generate alternative sources of income. This can only be a positive development. It will prove attractive to landowners not previously interested in forestry. I am concerned, however, that some landowners with good arable land may enter into forestry when their land could be put to better use.

The forestry sector contributes €2.3 billion to gross domestic product, GDP, annually, and employs up to 12,000 people. Hopefully, with these new investment enticements, it will increase the numbers employed in the sector. Does the Minister of State have any projections as to how many extra jobs will be created as a result?

The programme aims to plant 6,000 ha of new forestry in 2015 and increase this to 8,310 ha by 2020. Again, this is an ambitious target and one which I believe can be met. The Minister of State has warned that there will have to be a 20% increase in premium payments, 5% increase in afforestation grants and 14% increase in forest road grants. One would like to see larger increases for the latter two categories.

The same premium rate will be paid to farmers and non-farmers. What does that mean? I am concerned about speculators coming into the sector because of the tax breaks associated with it. Is the tax break the same for a farmer as for a non-farmer? Most farmers involved in afforestation programmes are usually outside the tax bracket because they have low incomes. Speculators coming into the sector could have an adverse effect.

I am not being negative about this programme. Any extra moneys coming into the Irish forestry sector from Europe are to be welcomed, as is any development that can generate jobs. However, there are concerns about this and I would appreciate it if the Minister could address these.

Tom Hayes (Tipperary South, Fine Gael)
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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.

Mattie McGrath (Tipperary South, Independent)
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Protect the Golden Vale.

Tom Hayes (Tipperary South, Fine Gael)
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New agroforestry and forestry for fibre measures have been added to the afforestation scheme. These new planting categories are targeted specifically at farmers, providing them with options for grazing livestock alongside forestry and, in the case of forestry for fibre, the option to harvest timber after ten to 15 years rather than 30 or 40 years as is the case with other types of forestry.

Restructuring forestry schemes so they present more attractive options for farmers in generating alternative sources of income has been an important aim of the Department. This was factored into the design of the programme from the outset.

Brian Walsh (Galway West, Independent)
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I am sorry to interrupt the Minister of State but he has run out of time.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I thank the Minister of State for his reply but, unfortunately, he did not get to the end of it.

The Government is hoping to provide funding for the establishment of 2,700 ha of native woodlands, a progressive development. The plan involves integrating these schemes into the main afforestation schemes, rather than they being stand-alone schemes. I take it that many of these native woodland schemes will be planted alongside commercial forestries.

Native species must also be planted alongside aquatic buffer zones in water quality sensitive areas, special areas of conservation and fishery sensitive areas. I assume the reason behind this is to improve biodiversity. Planting of native woodlands alongside mussel and oyster fisheries in enclosed bays will help overcome any concerns the EU may have about the protection of bird species and so forth, allowing traditional fishing in such areas continue. Will the Minister of State elaborate on this?

The new programme is to be welcomed and the Minister of State will find no opposition from Sinn Féin to it. However, will he elaborate on the competition between farmers and non-farmers in the scheme?

It would be of concern that arable land could be bought up by speculators and used for their commercial reasons. The knock-on effect would be to take more and more people away from isolated rural communities. That is something that would concern me, as I am sure it would the Minister of State.

Tom Hayes (Tipperary South, Fine Gael)
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The Deputy has raised a lot of issues. The broad thrust of why this new scheme was put forward and taken to Brussels was to encourage more people to get involved in forestry. Traditionally, farmers have been used to growing grass for feeding cattle, milk production or whatever the case may be, or indeed growing grain. There is real money in forestry and there is a real need for it from an environmental perspective and in respect of the issues the Deputy outlined. That is why the Government supported this. Job creation is another issue and there is no doubt that forestry is totally under the radar of public perception. There are more trucks drawing timber to sawmills than there are drawing cattle to factories in Ireland.

On my way to Dublin today, I called in to Mountrath in County Laois, where I saw at first hand 100 people employed under one company at three different sites, sawing and cutting timber and exporting it. Last week, I was at the Glennon Brothers plant in Fermoy. Glennons of Longford is a major company and one of the most successful in Ireland. It is exporting timber to the English market and there is huge demand for it. I could not put a specific figure on the number of jobs from forestry but if we can increase take-up on the new scheme, there will no doubt be a pro rata increase in jobs. There is planting, drainage, fencing, maintenance of the forestry and thinning. There is also a huge amount of work when the wood goes into the sawmills before it is exported as boards that can be put up in the building of a house or the construction of a bathroom or whatever. There is great potential there and we have a climate that is conducive to growing timber faster than in any other European country. That is what we are working towards.

The employment issue is particularly relevant in rural Ireland. I mentioned some places but there are many others. For example, in the village of Hollyford there was a creamery 25 or 30 years ago with two people working in it. Last week, I visited the sawmills employing 45 people in that small village. That is supporting rural Ireland. The farmer aspect is trying to target a civil servant or person working in Dublin who has inherited land down the country and is leasing it on the 11-month system. Forestry is ideal for those people, who are considered non-farmers as they have other jobs and might share the land with a brother and two sisters. It is also targeting the co-operative industry that has land out there, in order to bring in more people and to increase the hectarage of land we are producing on. I can give the Deputy more figures on that and I thank him for his honesty and sincerity.