Farm­ers should con­sider op­tions on forestry af­ter State’s aid vow

Irish Independent - Farming - - Farm Business - By Clare Min­nock

THE re­cent an­nounce­ment by Min­is­ter Tom Hayes that State aid will con­tinue un­der the forestry pro­gramme 2014-2020 has been widely wel­comed, par­tic­u­larly by farm­ers un­sure of where they stood.

But what sig­nif­i­cance does it re­ally hold?

Some people had been hold­ing off mak­ing the de­ci­sion to plant forestry be­cause of con­cerns about their fu­ture sin­gle farm pay­ment (SFP) en­ti­tle­ments on planted land.

Paddy Bru­ton, an agri­cul­tural ad­viser and di­rec­tor at Forestry Ser­vices Ltd and Cillin Hill Farm Ad­vi­sory, out­lined what ex­actly Govern­ment sup­port means to farm­ers.

“Farm­ers can now re­ceive the sin­gle farm pay­ment and the forestry pre­mium on the same land. This an­nounce­ment took all the doubt out and shows the im­por­tance of forestry,” Mr Bru­ton said.

This is also good news for people that have planted land since 2009, as they are now as­sured that they can con­tinue to re­ceive SFP on the land planted un­til 2020. What should farm­ers do? Most farms have some mar­ginal land which is more suited to forestry than any other farm­ing ac­tiv­ity, so given the an­nounce­ment by the min­is­ter, farm­ers should look at their farms ob­jec­tively and see if forestry is a good op­tion on sec­tions of their farm.

“Farm­ers get the ben­e­fit out of forestry the same as any other crop. That is clear now,” ex­plained Mr Bru­ton.

“A lot of farm­ers were not will­ing to plant be­cause of the doubt.

“The min­is­ter made the an­nounce­ment to en­tice people. This is sig­nif­i­cant at this time of year.”

Farm­ers con­sid­er­ing plant­ing forestry now need to en­sure that their SFP ap­pli­ca­tions are cor­rectly filled out to se­cure both pay­ments.

Ap­pli­cants who plant the land parcels in 2014 be­fore sub­mit­ting their SFP ap­pli­ca­tion should de­clare the land as ‘other’ in col­umn 9 and ‘forestry 2014’ in col­umn 10. The small print There are two com­po­nents to the Af­foresta­tion Scheme – the af­foresta­tion grant and the an­nual forestry pre­mium. The grants cover the cost of es­tab­lish­ing a plan­ta­tion and are payable in two in­stal­ments.

The grant rate is de­pen­dent on the species planted and ranges from €2,400 to €5,500 per hectare.

The an­nual forestry pre­mium is an in­come tax-free pre­mium payable for 20 years to farm­ers and 15 years for non-farm­ers. Re­cip­i­ents must pay PRSI and the USC on the pre­mium, but the ap­pli­cant re­mains the full owner of the land and tim­ber.

The rate of pre­mium paid is also de­pen­dent on species planted and ranges from €155 to €515 per hectare for farm­ers and €126 to €195 for non­farm­ers. Fu­ture earn­ings If farm­ers plant now, they are guar­an­teed pay­ments for 20 years. Cur­rent rates of grants will con­tinue to ap­ply to ap­pli­ca­tions ap­proved up to and in­clud­ing June 30, 2014.

How­ever, with CAP ne­go­ti­a­tions on­go­ing, there is a pos­si­bil­ity that there will be a re­duc­tion in pay­ment years from 20 to 12 in the fu­ture.

How­ever, it is be­lieved an in­creased rate per an­num will be con­sid­ered in that sce­nario. A new forestry pro­gramme will be in place from au­tumn of this year un­til 2020.

“If farm­ers plant in au­tumn 2014, they could well be fac­ing re­duced pay­ment years, depend­ing on CAP, but it may be at a higher rate. It’s a risk farm­ers have to weigh up.

A lot of farm­ers are de­cid­ing to plant now to be sure of the 20 years,” Mr Bru­ton said.

An­other po­ten­tial change fac­ing foresters is the grant cap on the for­est road scheme. Cur­rently, farm­ers can avail of up to 80pc grants at a max­i­mum of €35 per lin­ear me­tre.

How­ever, in the new ru­ral de­vel­op­ment pro­gramme, the sug­gested max grant to be paid will be 40pc.

There­fore, own­ers with crops ready to be thinned should pri­ori­tise se­cur­ing for­est road grant ap­proval im­me­di­ately, as the cur­rent rates will only ap­ply to ap­pli­ca­tions ap­proved up to and in­clud­ing June 30, 2014.

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