Farmers urged to branch out

Until very recently, trees, forestry and woodland management would have been dismissed by most farmers as at best irrelevant, and at worst a suspicious competitor. But times are changing. Government targets for woodland planting, and a new grant regime to encourage landowners to meet these targets, are making the establishment of new woodland an attractive proposition.

Indeed, now is the time for farmers to seriously consider their options regarding forestry and potentially make a real difference to their bottom line, protect capital values and access tax benefits.

For the establishment of new woodland, good design, sympathetic to the objectives of the farming business, is key.

Taking advantage of grants to establish woodland on poorer land can facilitate investment in capital works such as fencing – potentially on a costneutral basis.

Well thought out and well planned woodland and the resulting improvements in fencing could actually make a farm more easily managed and therefore more efficient.

In the long term, it is also important to look at the capital value of a holding.

In many cases this can be increased by establishing well sited, well designed commercial or amenity woodland on poorer land.

Long term balance sheet boosts are one thing, but profitability year on year is, understandably, the focus of most farmers.

The new grant regime provides an initial planting grant which often provides a substantial profit over and above planting costs, as well as a maintenance payment for five years.

There is also the opportunity, under the grant system, to continue to claim BPS payments on new woodlands, although the future of this aspect of funding remains unclear post-Brexit.

Commercially managed woodland also has attractive tax benefits and succession planning advantages, which I would urge farmers to seek advice on.

Making the most of woodlands on farm is not just about establishing new plantations and woods.

Management of existing woodland can also be a profitable venture.

Indeed, such is the demand for timber and firewood that proper management of farm-scale woodland can now provide a lucrative diversification for farming businesses.

Everything I have described above suggests some form of active participation by the farmer, either in establishing new plantations or in actively managing existing woodland.

For some, even with readily available advice, this hands-on approach may not appeal.

If that is the case, it might be worth considering the sale of land for planting.

There is currently high demand from investors looking to buy land to create new woodland.

Farmers with off-lying blocks of poor permanent pasture, for example, may find that such land is worth more to sell as potential planting land than it is as grazing land.

All this discussion on forestry and we haven’t even covered the subject of Christmas trees!

It’s still just early December, so perhaps I had better leave that for another day.

Now is the time for farmers to seriously consider their options regarding forestry and potentially make a real difference to their bottom line