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20, Apr 2018 -

Timber prices continue to strengthen

Timber prices continue to strengthen

Jan_2018_-_Timber_UK_trends_-_Large.jpg

UK timber prices continue to strengthen with returns fast approaching those already available in mainland Europe. This trend reflects the many uses to which forestry products can now be put.

As a consequence, demand for land with established plantations in situ has never been higher. Also driving the market in this regard is the increasing complexity associated with the establishment of new private sector woodlands. In simple terms, it is more attractive to invest in a forestry enterprise that is already established than to start from scratch.

Across in GB, the market is specifically focussed to the sale of plantations which extend to 100 acres plus. However, there is growing recognition that much smaller scale enterprises, of the type more commonly found in Northern Ireland, are becoming of interest to investors. The criteria to be met include a well-managed site with good access. In such circumstances commercial woodlands down to 10 acres in size could soon become attractive to buyers.

Meanwhile, Forest Service will shortly confirm the details of the successful applicants under the current round of Forestry Expansion Scheme (FES) funding measures. Thankfully, there has been an encouraging level of interest shown in the scheme this time around.

So let’s hope that Forest Service gives a fair wind to as many of the applicants as possible. Tree planting rates in Northern Ireland remains well below the targets set a number of years ago.

The principles espoused by FES are extremely positive. But the scheme has a number of fundamental flaws. One of these is the timings built-in to the entire programme. Announcing the successful applications at the end of December gives forestry contractors very little time to get on with the required ground preparation and planting works, which must be completed by the end of the following Spring.

One way of getting around this problem is to bring the application period and site inspections forward by two months. Under these circumstances, Forest Service would be in a position to announce the successful projects at the end of October. This timetable would then give contractors the breathing space they need to get the required work completed in time.

Turning to the forestry development aspects that relate to Environmental Farming Scheme (EFS) and it’s hard not to conclude that matters are going from bad to worse. Almost half of the Premier Woodlands’ clients deemed eligible for the programme have decided not to go ahead with the envisaged planting activities. And this is purely on the back of the 18-month wait for the grant payments.

This is just far too long and is a matter which the Department of Agriculture, Environment and Rural Affairs (DAERA) must review immediately. The requirement for landowners to undertake an IT course and for them to set up an e mail account is a further deterrent, where the scheme is concerned. Most of the people applying for the scheme are over 70 years of age and would find matters of this nature quite challenging.

The other problem is that caused by Forest Service in drawing up the scheme. The current stipulation of a five hectare minimal holding size is far too limiting. This should have been set at three hectares, which is in line with the criteria used to define an ‘active farmer’ under the current CAP measures.

I am hearing that DAERA staff are disappointed with the level of uptake for the forestry element of EFS. As far as I am concerned they have only themselves to blame for this. Landowners were presented with far too many hoops to jump through, when it came to accessing the scheme.

Source: Farming Life

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