Charlie McConalogue (Donegal, Fianna Fail)
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198. To ask the Minister for Agriculture, Food and the Marine his views on concerns from an organisation (details supplied) that greater demand for land suitable for afforestation is driving up the price of land in some areas; and if his attention has been drawn to the way in which this can cause concern for young farmers dependent on access to lower priced land in view of the fact that they lack access to capital or credit. [26389/17]

Michael Creed (Cork North West, Fine Gael)
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I am aware of the recent increase in land prices. The value of land is of course governed by the laws of supply and demand and for those selling land this is, of course, a positive development. There are many reasons why lands are put up for sale which can include lands which are viewed as marginal for agriculture or indeed the restructuring of farm holdings following retirement, death or inheritance. There are also regional variations in terms of demand, supply and quality which influences the final price paid for land. Forestry may be one of many factors which can influence movements in land prices.

The market for farmland in Ireland is characterised by a low volume of land sales with relatively high prices and this is attributable to a number of factors, both social and economic. CSO data shows prices vary across regions and by land type. The recent Agri-taxation Review acknowledged that access to land is an issue and identified as a key policy objective to increase the mobility and the productive use of land. A number of measures to rebalance the rental sector in favour of long-term leasing have been introduced in recent years and are having a significant impact, especially among younger farmers and those seeking to expand. 

The perceived link between afforestation grants, premium rates and movement in land prices overlooks the complexity that exists within the land market. The investor portion of new planting is not significant although it is increasing. For farmers, forestry offers a viable alternative enterprise which allows them to diversify their income stream away from volatile agricultural markets and towards the more stable timber market and for this reason the supports offered by the State are very much welcomed.

Access to finance is a priority issue and earlier this year I introduced the “Agriculture Cashflow Support Loan Scheme”. Following the success of the Scheme, I met with the Chief Executives of the participating banks to discuss this and other issues relating to the agrifood sector, including access to finance for farmers.