Committee Reports::Report No. 15 - Forestry and Forest-Based Industries::08 May, 1985::Report

1.The Joint Committee in its examination of the development of Community policy regarding forestry and forest-based industries considered the following documents:-

-Communication from the Commission to the Council on a Community action programme regarding forestry and forest-based industries with a proposal for a Council Resolution concerning objectives and lines of action for Community policy regarding forestry and forest-based industries [COM (83) 222 final].

-Council Regulation (EEC) No. 1820/80 for the stimulation of agricultural development in the less-favoured areas of the West of Ireland insofar as it deals with forestry.

Acknowledgements

2.The documents were examined for the Joint Committee by its Sub-Committee on Agricultural and Fisheries Matters under the Chairmanship of Deputy Joe Walsh. The Joint Committee is indebted to Deputy Walsh and his Sub-Committee for their work.

3.The Sub-Committee had discussions with representatives of the Irish Timber Council, the Department of Fisheries and Forestry and representatives of Woodfab Ltd. It also took into consideration written submissions from the Society of Irish Foresters, Irish Co-operative Organisation Society, Professor Padraic Joyce, Professor of Forestry, University College, Dublin and Dr. Rory Harrington.

4.After oil, forest products represent the single biggest import category of the European Economic Community. It is one of the largest items on Europe’s Balance of Payments “blacklist” accounting for over 11,000 million ECU per annum. (Eurostat, September 1983). This situation will hardly change on the occasion of the next Community enlargement since Portugal will then be the only Member State with a net production surplus in timber. Given this situation it is perhaps rather surprising that the Community has no real forestry policy. The reasons for this state of affairs were identified in an IDA report “Developing the Irish Timber Industry for the 80s” as follows:-

(1)Unlike agriculture, forestry was not covered by the Treaty of Rome, it is therefore difficult for the EEC Commission to implement a full forestry policy.

(2)Difficulties in obtaining agreement on means of support for forest development.

(3)Difficulty in obtaining a consensus on an industrial development strategy for the industry.

(4)Problems in altering the situation where concessions on timber imports is used as a bargaining situation in trade negotiations with timber exporting countries.

5.The IDA Report concludes that because of these factors it was considered unlikely that any timber industry development strategy would be agreed and implemented by the EEC within the coming decade. This view is borne out by the fact that the Council Working Party on Economic Questions in its discussions on the Communication under consideration found three delegations (Germany, Denmark and the UK) had reservations about the Commission proposal and did not see the need at present to implement a Community action programme in this field.

6.These delegations could not endorse all aspects of the Commission’s analysis; they thought, inter alia, that forestry and the various forest-based industries faced specific problems, differing greatly from one industry to another and often arising from causes outside those industries. In their view, the necessity of the overall approach as proposed by the Commission was not immediately obvious.

7.These delegations also raised the question of the legal basis for a Community initiative in this field, and it was their view that existing instruments and measures were adequate to address the problems in those industries. However, most delegations concurred with the Commission’s analysis and were prepared to support a compromise Resolution.

8.Although a Community policy on forestry is therefore at the very early stage of its development the Joint Committee feels that now is not an inappropriate time to consider the attempts being made in this area. This is especially so as there has been a very disappointing response to the forestry element of the “Western Package” (Regulation 1820/80) which was specifically designed to stimulate the development of forestry in the Western regions. In order that Ireland might derive the full benefit from a future Community forestry policy the Joint Committee considers it a worthwhile exercise to consider the Commission’s initiative, forestry and forest-based industries in Ireland to-day. Indeed Mr. J.W.H. Hall, representative of the European Commission, in a talk to the “Workshop on Investment in Irish Forestry - New Horizons” in June, 1984 went as far as to say that “Regulation 1820/80 is seen by the Commission as a test case for forestry as a large scale aid to northern European regions as well as a possible way in which to redress the agricultural surpluses”. Its application can and must succeed”.

B Consideration of Commission Communication on Forestry and Forest-Based Industries

9.The Commission Communication consists of an analysis of the economic situation in forestry and forest-based industries and a proposal founded on this analysis for a Community approach to assist those sectors. The latter consists of a draft Council Resolution concerning objectives and lines of action for a Community strategy which lists the common objectives Member States should pursue and also the lines of action Member States should endeavour to follow. However, in the compromise which was reached at Council Working Party level the Resolution was considerably watered down and now merely lists the objectives which Member States shall take into account in the context of their national policies, all objectives having regard to sound economic criteria. The list of objectives is as follows:-

1.To make more wood durably available for industry through proper forest management taking into account all the functions of forestry.

1.1An increase in the volume of wood on the stump as a result of afforestation, reafforestation and/or improvement in the productivity of existing forests.

1.2Better protection against threats to the forest.

1.3Harvesting and deliveries at a level which takes advantage of the volume of annual growth consistent with prudent forest management principles.

2.To use raw materials with greater economic efficiency in industry, in particular by:

2.1Improving the yield from the processing of logs; and

2.2Improving the recovery and use of wood residues in industry.

2.3Improving the collection and recycling of waste paper.

3.To seek to identify barriers to improvement in industrial structures in the Community wood chain including, for example, the structure of sawmills.

4.To promote product standards and construction codes at Community level in the relevant sectors including, as a matter of priority, sawn timber, taking into account modern techniques of production, marketing and use.

5.To encourage the industrialisation of wood components and wood-derived components and construction units.

6.To take account of other Community policies, in particular, regional policy.

10.The Commission view the forest-based industries as a consistent whole in that they use the same natural resource - the forest. These industries have in common their high degree of dependence on raw materials, supply conditions and most of them are faced, where their products are concerned, with very keen foreign competition and this is reflected in a serious trading deficit for the Community.

11.The activities in question have an important role to play. The market is vast and the wood industries contribute to a not insignificant extent towards employment and industrial activity, regional balance, the meeting of aspirations for a better quality of life, and the maintenance of economic independence vis-a-vis the outside world.

12.They give grounds for concern in more than one respect: internally, the situation and recent trends in these branches of industry are unfavourable, while externally, the Community has a considerable trading deficit.

13.This situation can to some extent be attributed to the general trend in the economies of the Community countries in recent years, but there are also specific causes to do with the structure of the industry and the supply conditions of raw materials. It is all the more necessary to examine these causes in order to seek solutions because, if no action is taken, the situation of these industries could become even more difficult in the future.

14.The Commission maintain that there is a clear need to examine and formulate a long-term strategy for the wood and paper industries, since the forests that provide the raw materials generally develop over more than one generation. This is seen in the context of an overall industrial strategy which the Community is now formulating and it is already apparent that one of the objectives of this strategy will be the best possible industrial exploitation of the Community’s natural resources. This applies, for example, to the wood and paper industries. They have significant growth prospects based on a potentially abundant indigenous resource which is renewable.

15.Also a certain amount of coordination is needed between the forestry industry and the wood industry, for “just as there can be no forestry policy which does not concern itself with industrial outlets, there can be no industrial policy which does not concern itself with supplies”.⁽¹⁾

16.This sentiment was echoed in the report of the Inter-Departmental Committee on Quota/Tender Sales Systems for Disposal of State-Owned Timber which stated “the Committee accepting the separateness of tree growing and timber processing recognised that, especially in the Irish context, each depends ultimately on the efficiency, success and survival of the other.”

17.The Community’s considerable trade deficit in the wood, wood products and pulp and paper sectors is indicative of market conditions which are largely determined by imports from third countries which themselves are subject to instruments of commercial policy and competition policy conducted at Community level.

18.This trade deficit indicates the weakness in the wood chain since it is mainly attributable to processed products, demonstrating not only that wood production is inadequate (although the wooded area could produce much more) but also that all too often the wood industries fail to satisfy the demand in terms of quantities, qualities and prices, and this demand is to a great extent covered by imports from third countries. The acuteness of these problems varies from one Member State to another, and they are irritating to a greater or lesser extent depending on the potential of the individual Member State, but they are common to all Member States.

19.Thus the Commission feel that an examination and measures or lines of action at Community level is justified on the following grounds.

-The basic resource for the production of wood is land, and decisions taken in the context of the Common Agricultural Policy may have a direct effect on land use. As the Community progresses towards greater interdependence, the equilibrium of land use will tend to be achieved at Community level and the siting of forests and the wood industries will be affected by this.

-The wood producing areas are to a great extent located in less-favoured regions likely to qualify for European Regional Development Fund aid;

-Forestry and the forest-based industries constitute a sector in which, perhaps to a greater extent than in other sectors, public authorities exercise a direct influence either as forest owner, or through legislation or special tax schemes, or aid aimed not specifically at sylviculture but also at industrial sectors.

- All these national measures must be compatible with the rules of the Treaty of Rome relating in particular to the free movement of goods and to competition.

-Similarly, certain products are not yet the subject of satisfactory standards. The groundwork for such standardization should be carried out at Community level, in order to avoid the walling-off of national markets and in order to open up the market of the ten Member States while affirming the fact that they belong to a unit which has a separate identity vis-a-vis the outside world.

-In this respect, it should be specified that standing trees are included in Annex 11 of the Treaty, i.e., the list of products covered by the provisions of the Common Agricultural Policy. On the other hand, only unworked cork (sub-heading 45.01 of the Brussels Nomenclature) and not wood, whether cut or processed (Chapters 44, 47 and 48) is included in this Annex.

-Moreover, it is likely to become more difficult to cover world demand for wood towards the end of the century; the industry’s development has already been slowed down in Scandinavia as a result of the shortage of wood. In addition, a significant proportion of the wood available in the developing countries is used as firewood, with the result that it is likely that the continuation of the present recession will have little effect on the world wood shortage.

20.In any event, it was felt that the present conditions relating to the supply of raw materials generally constitute a handicap to the Community industry compared with competitors with more abundant and more easily workable natural resources which also enjoy the active support of their public authorities. In the circumstances, therefore it is important that the Community should once again display its interest in these sectors and supplement the measures relating to forestry policy and the raw materials research programme (1982-85) by proposals defining a strategy for the wood industries. This strategy seeks to overcome the difficulties by exploiting to the full the strong points: the size and growth rate of the Community markets and the possibility of satisfying a greater proportion of demand with products manufactured in the Community by a quantitative and qualitative development of raw materials resources and products of first-stage processing (sawn timber and paper pulp).

21.In its analysis the Commission considers trends in the sector, external trade and trends in the markets for materials, semi-finished and finished products.

Trends in the Sector

22.It is the Commission’s contention that attention in this area is warranted not only because of the contribution this sector makes to the Community’s economy in general but also because the industries in question are frail and their position is deteriorating. For example 41,000 jobs have been lost in the Community in the wood and paper sector between 1977 and 1980. In the pulp and paper industry the number of paper mills dropped from a figure of 1302 in 1974 to 903 in 1980. In the other branches of wood-processing the situation appears more stable but even so 24,800 jobs were lost between 1977 and 1980.

23.In terms of physical quantities production in these industries was found to be stagnant. After modest increases in production between 1970 and 1974 growth slowed down sharply between 1974 and 1977 (with a distinct downturn in 1975) followed by stagnation since 1977.

24.In regard to turnover and value-added the situation is also giving cause for concern. Sales expanded by an average of 11.7% per annum between 1973 and 1977. However, as a result of the severe inflation during that period turnover crept up by no more than 1.7% per annum at constant prices and current exchange rates. The trend in value-added is even more discouraging. Value-added grew on average by 6.6% per annum, but again considering the inflation rate and taken at constant prices and current exchange rates it had fallen by 17% over the four years, i.e. by slightly over 4% per annum. Inflation has therefore masked extremely rapid deterioration in the position of the industry between 1973 and 1977 and the few statistics available for the post-1977 years, are not encouraging.

External Trade

25.The Commission argue that since the mid-seventies the Community’s economic growth has begun to slow down and the Community has been beset by problems e.g. the energy crisis, high inflation and the emergence of new highly competitive rivals. It is therefore argued that the Community must devote more attention to its balance of trade, ensure that the pressure of external competition on various sectors is kept to within tolerable limits and to help each sector of industry to defend its competitive position. The forest-based industries is a sector where the Community cannot be satisfied with the external trade situation. The trend in trade is not dramatic overall in terms of value. The deficit was already very high in 1974 and 1975 and has continued to rise steadily. In 1980 it had reached 11.7 million ECU.

26.This overall trend, however, conceals much more adverse product substitutions: products are being imported which incorporate an increasing level of processing; this tends to fuel the increase in final consumption, sometimes considerably, while Community production is stagnating or declining. Some articles (in particular certain types of panels and paper) are being imported at prices which cannot be matched by the European industry (price of raw materials and energy, level of industrialisation and, in some cases, labour costs).

27.As far as exports are concerned, European firms appear to be seeking refuge in upmarket products. This is no doubt the right reaction but it is constantly called into question by increasing competition and will only be an effective means of defence if the level of capacity is maintained for more bulk-grade products.

28.There are, no doubt, many explanations for the imbalance of trade and its continuing trend, but the difference in the conditions of supply of raw materials in the Community on the one hand and in third countries on the other seems to be a determining cause for this situation.

Trends in the markets for raw materials and semi-finished products

29.The analysis of the relationship between wood producers and industrialists is seen in the context of the smaller quantity of pulpwood and building timber available in the Community and the physical and volume shortfall in supplies relative to the level of demand in the various industries which is affected in the higher raw materials costs for wood and other fibrous papermaking materials borne by the Community’s industry as compared with the costs borne by their competitors outside the Community, particularly in North America. To assess the economic conditions in which industrialists can guarantee a regular outlet for wood produced in the Community it is necessary to take into account constraints such as competition on the level of semi-finished and finished products imported from third countries.

30.In the pulp wood industries it was found that the amount of wood used as a raw material in 1980 by the EEC paper industry to produce 5.1 million tonnes had a value of 650 m. ECU, about twice the value of the same amount of wood used in North America in the same year.

31.It was found that the supply cost of building timber is mostly much lower in the large producer countries than in the Community.

32.The amount of wood produced in the Community’s forests for manufacturing industries had dropped from 62.803 million cubic metres in 1970 to 61.487 million cubic metres in 1979 whereas consumption has increased by 18% a fact which obviously leads to a large raw materials deficit although this has been greatly eased by the stepping up of the recycling of waste paper and the recovery of waste materials. The rate of waste-paper utilisation in the Community is the highest in the world.

33.Thus the Commission proposals have three main objectives. Firstly to increase the long-term wood supply to Europe by increasing the forest estate, more efficiently utilising and harvesting that which already exists, better forest protection and increasing the annual cut of wood to match growth. Secondly, the proposals seek to increase log yields (i.e. the percentage return in volume terms on cutting regular-shaped timber from a round log), and increase the utilisation of sawing waste and the recycling of waste paper. Thirdly, to improve the structure of the wood-using industries. Throughout the Community some 1.4 million people or 5½% of all the industrially employed - a figure on a par with the car and textile industries - work in the wood-using industries. Whilst the average size of organisation is some 350 people, about 400,000 work in small, mainly privately owned concerns of less than 20 staff, many often self-employed. Although at the small-scale end of the market, which particularly covers the furniture, joinery and building construction trades, this structure is acceptable to meet the diverse demands of specialised and local markets, at the other end this is not the case. The remaining million people work for large industries such as sawmills, pulp and paper manufactories or panel producing industries. Their products have to compete against world competition and so the industries have to be properly structured to face this. In recent years they have not done so well and so it is the Commission’s wish to aid them by improving the structure of such key-industries as sawmills and developing firms of optimum size to face competition.

C THE FORESTRY ELEMENT OF THE “WESTERN PACKAGE” (REGULATION 1820/80)

34.The Forestry Development Scheme introduced by the Minister for Fisheries and Forestry in implementation of Regulation (EEC) No. 1820/80 applies to that part of the West of Ireland designated as disadvantaged under Directive 75/272/EEC (as amended) comprising the counties of Donegal, Leitrim, Sligo, Mayo, Galway, Monaghan, Longford, Cavan, Roscommon, Clare, Kerry, West Cork and West Limerick. The scheme commenced from 15 April 1981 and forestry development undertaken on or after that date in accordance with the terms of the scheme are eligible for grants. The overall duration of the scheme is ten years from the commencement date but it is subject to review every four years after that date.

(a)the afforestation of land which is marginal for agriculture but suitable for forestry and

(b)associated measures, including

-preparation of ground (including scrub clearance)

-drainage

-fertilisation

-fencing

-fire protection and maintenance of the plantation for a period of four years from the year of planting.

Grant Level

36.Grants are related to costs approved by the Minister for each forestry development project. The maximum grant payable is 85% of approved costs for farmers (and 70% of such costs for others) who

-undertake the planting of their lands themselves or through a competent forestry service

-utilise all or part of their lands for forestry purposes under a partnership, i.e. leasing arrangement with either an investment agency or the State subject to an overall limit of 1210 ECUs per hectare. (This limit is subject to variation depending on the relationship between the ECU and the Irish pound. At present the limit is approximately £800).

Grant payment

38.The decision as to whether the plantation has been satisfactorily formed and maintained or on any other aspect of the work, rests with the Minister.

General Conditions

(a)The areas planted by an applicant in any one planting season must be not less than 0.25 hectares.

(b)Individual areas of less than 0.25 hectares will not be taken into account in calculating the amount of grant payable.

(c)Save in exceptional circumstances the width of any plantation must be not less than 40 metres (44 yards).

(d)The trees planted must be of a species suited to the site and approved by the Minister. A certificate of provenance must be supplied in respect of all trees planted.

(e)An adequate number of trees at suitable spacings must be planted. The following species may be planted at not more than two metres apart when planted pure or in mixture; Norway spruce, Sitka spruce, Douglas fir, Larch, Scots pine, Lodgepole pine (Coastal provenance), Monterey Pine, Lawson Cypress, Monterey Cypress, Noble and Grand Fir.

(A 2 metre spacing would require approximately 2,500 trees per hectare; A 1.5 metre spacing, would require 4,500. The Forestry and Wildlife Service advise where there is a doubt as to the species or spacing to be used).

(f)The plantation must be adequately fenced and protected.

(g)In carrying out the work all reasonable steps shall be taken by the beneficiary to avoid adverse affects on the environment. Where, as part of an approved work programme, specific conditions are prescribed on environmental grounds, e.g. in relation to planting of broadleaved species, drainage work, etc., these conditions must be fully complied with in advance of payment of grant.

(h)Payment of the second instalment may be withheld if the plantation has not been satisfactorily maintained since formation

(i)A grant will not be paid in respect of any planting on land for which a grant is payable under any other State scheme or for which trees are provided at public expense either free of charge or at reduced rates.

(j)In so far as is practicable receipts must be submitted in respect of all costs incurred in the establishment of a plantation showing separately the amount of VAT paid.

Advisory service

40.Technical advice is available free of charge from the Forest and Wildlife Service on such aspects as ground preparation, drainage, fencing, species selection, spacing, planting methods and fertilisation and the likely cost of establishing a plantation. Persons contemplating planting are urged to avail themselves of this advisory service.

Stocks of Plants

41.The Forest and Wildlife Service, with the cooperation of the private nursery trade, prepares each year a list of stocks of tree plants available from private nurseries. These lists are made available, on request, to persons who intend to plant lands under the scheme.

Discretionary nature of Grants

42.Grants to assist private planting are paid at the discretion of the Minister for Fisheries and Forestry. In areas where State forests have already been established the Minister will not normally be prepared to pay a grant in respect of lands which, in his opinion, would more appropriately be incorporated in State forests. In these circumstances in order to avoid any later misunderstanding it is important that persons contemplating the purchase of land for planting in expectation of grant being payable under the scheme should enquire in advance from the Forest and Wildlife Service as to the eligibility of such land for grant purposes.

General

43.The Minister reserves the right to revise or amend the terms of the scheme at any time.

There is a separate grants scheme for the remainder of the country and for lands in Western areas which do not come within the ambit of Regulation (EEC) No. 1820/80.

44.The response to the scheme to data has been most disappointing, despite departmental assurances that it has been well advertised through leaflets, radio and television, the holding of public lectures and articles in local papers. Grants only in respect of 3, 217 h.a. have been approved to date as follows:-

481 schemes had been approved up to the end of 1984, but only 67 have been carried out and in fact only 631 hectares have been planted to date.

45.The reasons for this situation are historical, social and economic, the principle ones being:-

(1)The lack of a forestry tradition in Ireland. In fact the little private afforestation which was previously undertaken in Ireland was associated with the landlord and the “big house” and hence was suspect to the rural population.

(2)There is an obvious difficulty in creating interest among single middle aged and elderly farmers in an investment where the “pay-off” is 30 or 40 years hence.

(3)Small farm size creates pressure for more land with attending pressures to have land re-distributed rather than afforested especially if this is being undertaken by outsiders.

(4)The long-term nature of the investment. The largest trees which comprise the highest value output take 35 to 45 years to fully mature. Although there is of course some return from earlier thinning of site, this pulpwood is a low-value product. This raises the question as to how the landowner is to provide from himself before his investment “pays off”.

46.While many of the reasons given for the poor response have little to do with economics the Joint Committee believes that if the economic conditions are right, the other considerations can be overcome and a number of suggestions as to how this could be achieved are dealt with later in this Report.

D FORESTRY AND FOREST-BASED INDUSTRIES IN IRELAND

47.Historically, Ireland of 8 thousand years ago was covered by large areas of forest stretching from coast to coast broken only by the waters of lakes and rivers. During the period which followed the climate was, for a long time, warmer and wetter than at present. Such conditions encouraged the growth of fens and eventually high bog in the midlands and blanket bog along the western seaboard. Areas of forest were over-run by this phenomenon and much woodland destroyed. The remains can be found today beneath the peat in the form of ‘bog-oak’ and ‘bog-deal’.

48.To a small extent the Stone Age and later the Bronze Age heralded the beginning of forest clearance for agricultural purposes. However, one-eighth of the country was still under forest by the end of the sixteenth century but this situation soon changed drastically. After the Flight of the Earls and the colonialisation of the country our native woodlands were exploited to develop a strong export trade, Irish oak being employed for many diverse uses, from casking French and Spanish wine to building the hulls of the East India Company’s ships and for charcoal for iron and glass work. Unfortunately no attempt was made to replenish tree stocks, an omission which may have been deliberate policy, and as a consequence of this exploitation Ireland was a net importer of timber by the early part of the eighteenth century.

49.The 1880s introduced another turbulent period in Irish history. A succession of bad harvests resulted in a depressed state of agriculture and reduced income for both landlord and tenant. Agitation by tenant farmers for land reform led to the Land Act of 1881 and its three Fs - fair rent, fixity of tenure and freedom of sale. Landlords saw it as a forewarning of things to come and subsequent Land Acts did nothing to allay their fears. Conscious of the insecurity of their ownership they commenced the liquidation of their woodland assets preparatory to the sale of the land itself for division among the tenants. There was no funding for a State authority to acquire the woodlands for the nation. The authority for land transfer, the Estate Commissioners, could only buy the woodlands if they could recoup their costs by resale, so the sawmiller was the only outlet in a position to purchase from the landlord, new owner or Estate Commissioners. Travelling sawmillers came over from Britain and travelled from estate to estate across the country. Woodland areas were left derelict to develop into useless scrubland or were so denuded of commercial trees that only a woodland facade remained.

50.In 1908 a Forestry Committee noted that the number of sawmills had risen almost fourfold since 1881 and that 250 of those had been established over the previous four years. Once again an export trade in timber developed with almost three-quarters of the felled material being shipped out of the country. Those woodlands which had escaped the axe were to be called upon for supplies during World War 1 and by the 1920s the area of woodland was reduced to one-third of that existing a century before. Private forestry in Ireland had been dealt a blow from which it has not yet recovered.

51.State afforestation was first placed on an organised basis with the establishment of the State Forest Service in 1904. In 1922, an area of 17,030 acres of forest land, including 2,337 acres of new plantations was inherited by the newly established Irish Free State. Further acquisition of land for afforestation proceeded slowly with periodic revisions of target. In 1938 it was 300,000 acres and this was raised to 500,000 acres in 1941. the annual planting programme also accelerated to a pre-war peak of 7,500 acres but fell back to 4,000 acres during the war years. A post-war cabinet sub-committee restated the pre-war policy of raising the planting programme to 10,000 acres per year and also set a national forest target of 700,000 acres. In 1948 a decision was taken to increase the annual planting rate to 25,000 acres per year over a 40 year period. This target was maintained until recent years.

52.At present Ireland has the smallest percentage of land under forest in the Community. A figure of 6% compared with 9% in Britain, 27% in France and 29% in Germany. The average for the Community as a whole is 21%. Yet our potential for wood production is unparalleled by any other country in the Community.

53.Our moist oceanic climate, linked to timber production from relatively fast growing conifers such as Sitka Spruce and Lodgepole Pine means that the highest “yield class” (i.e. potential production expressed in cubic metres per hectare per annum) in Europe can be achieved in Ireland, a figure of 14 for the existing forest estate (which is generally in less productive areas), compared with 11 in Britain and an E.E.C. average of 3.5. In fact a recent survey assessed an average yield class for County Leitrim of 22 with individual plots reaching 32.

54.This obviously represents a considerable national resource which has yet to be fully exploited and there are large areas of under-utilised land which are ideally suited for forestry production.

55.Yet forestry and the forest-based industries in Ireland have experienced problems. There is over-capacity in the sawmilling sector and the pulpwood using industries have had a particularly difficult time with all investment prior to 1982 going broke, for example, Clondalkin Paper Mills and Chipboard in Scariff. Many of the difficulties affecting the industry were highlighted in the submissions received by the Joint Committee.

E VIEWPOINTS OF INTERESTED PARTIES

56.In its submission to the Joint Committee I.C.O.S. proposed the development of 2 pilot co-operative forestry programmes in the North central area under the umbrella of existing co-operatives in the regions concerned to take advantage of the generous grants available under the Western Package. I.C.O.S. believe that, because of the trust farmers have in their co-operative, its involvement would do more than anything else to give farmers confidence in a planting programme and overcome the present antagonism in this regard. Also a co-operative approach could succeed in bringing the small areas of the land available on individual farms into viable blocks.

57.I.C.O.S. feel that the type of private afforestation programme envisaged would

-open the way for greater areas being planted by the state but in a way which would be more acceptable than at present to the local community

-improve and enhance the landscape and the environment generally (not always a prime concern for the normal commercial investor)

-most of all it would provide much needed employment in depressed and isolated regions, thereby arresting the decay in rural society.

-additional annual income from forward selling of timber and also equivalent headage payments available for land transferred to forestry under the proposed Directive 559 (Article 15).

59.What is envisaged is that the parent co-operatives in the regions would register a central forestry co-operative. The new co-operative would become involved, through its development officer, in the setting up of tree planting groups at local level. Its role would have two district phases:-

-Providing the motivation, the information, the organisation, and the management services necessary to establish widespread involvement in private afforestation.

-Becoming involved in timber processing - thus guaranteeing an outlet for existing and future timber.

60.The Central Forestry Co-operative would work through local groups which would embrace small close-knit rural communities organised on the lines of an existing half-parish area or water scheme group. Its role would be to canvas all farmers in their area with a view to having all non-agricultural land planted and to group such small plantations into viable blocks.

61.I.C.O.S. recognise that, because many land owners in areas which have the most potential for the development of private afforestation are advanced in years. A long rotation crop like forestry, irrespective of the high returns it might yield, is usually not an attractive option in the circumstances. It is therefore imperative that a farmer planting trees would have the opportunity of forward selling the timber to provide him with an incremental annual payment throughout the duration of the rotation. I.C.O.S. feel that such a scheme would also give farmers confidence in planting which is lacking at the moment. Naturally the incentive of an annual income from planting would be lost if the person involved were to lose an equal amount in social welfare payments or reduced pensions and accordingly I.C.O.S. have been involved in negotiations to secure a financial package to provide farmers with an annual payment from forward selling to the F.W.S. or conversely from the leasing of land to the F.W.S. Part of the package would be to ensure that the first 20 to 30 acres disposed of in this way would incur no penalty with regard to social welfare or pension payments.

62.I.C.O.S. maintain that because of the climate that exists at present, and borne out by the lack of progress made in the Western Package, the co-operative approach private afforestation is the only one that can succeed, and given the necessary ingredients it can deliver a thriving private afforestation programme which would have a massive social as well as economic impact on the communities involved.

63.In its submission to the Joint Committee the Irish Timber Council maintain that, while the industry has vast unrealised potential and is poised to become a vital and significant economic sector, its performance to date has been disappointing. The industry, it is said, is disorganised at every level, it lacks cohesion or direction and is subjected to policies and methodologies which are the antithesis of the normal requirements for an efficient industrial structure.

64.The Irish Timber Council state that the management of our timber resources by the Forest and Wildlife Service of the Department of Fisheries and Forestry has been and continues to be deficient. The Council points to the review of the Irish Forestry Industry, by the Union of Professional and Technical Civil Servants, which represents foresters, forestry inspectors, engineers, surveyors, wildlife officers and draughtsmen in the Service, which said inter alia, that “The nature of the Civil Service leads to a situation where adherence to established routines and the strict application of official regulations is the norm, regardless of how inefficient such action may be in particular cases. This leads to employees becoming so preoccupied with meticulous application of detailed rules that they are in danger of loosing sight of the very purpose of their work, to produce timber as efficiently as possible”.

65.The alleged deficiencies in the operation of the Forest and Wildlife Service are stated to be

-the lack of any policy to improve timber quality by culling and proper resource management

66.In the Council’s view the bureaucratic nature of the current management of our forestry resources has two specific consequences which impact most adversely on the Irish sawmilling industry. These are

-The system by which timber is sold to sawmills by the Forest and Wildlife Service.

-The absence of accurate production forecasts by the Department which would allow proper planning by the industry as a whole.

67.The Department indicates at irregular intervals that it has quantities of timber available for supply to the sawmilling industry - the quantities available vary as do the locations and the industry has no way of knowing at any given time how much timber will come on the market and where it will be located. The Department invites tenders for its timber against a secret reserve. If the tenders submitted do not meet this reserve, the process is either repeated in full or the Department will barter the price upwards by negotiation with individual mills.

68.The consequences of this system say the Council are that individual sawmills are in a state of constant uncertainty as to their raw material supplies; mills often find themselves purchasing and transporting timber from remote forests while local sources are denied to them. A great deal of management time is wasted in examining timber with no certainty of success in purchasing it and, the system yields no monetary advantage to the State in terms of enhancing the returns for timber sold.

69.A quota system, whereby qualifying mills are guaranteed a percentage of their requirements has been in operation in recent years and the Council would like to see the system regularly updated to take account of increased processing capacity, which does not happen at present.

70.As regards forecasting, the Council feel it is now apparent, for example, that the 1981 IDA Report, on the basis of which many fundamental and expensive investment decisions were taken was predicted on inaccurate and highly over-optimistic production forecasts by the Forest and Wildlife Service. The Service, they say, has constantly failed to meet its supply target since the Report was published.

71.The consequences of this initial miscalculation is currently being felt throughout the industry where there is substantial over-capacity.

72.The Industry’s production capacity had expanded from some 500,000 cubic metres to over 1 million cubic metres at present. All of the larger mills are currently operating substantially below their capacity and are operating either at the margin or at a loss. Employment in the industry is below its potential levels and the industry is incapable of meeting its import substitution targets and realising its full economic potential.

73.The Council, therefore, proposes the establishment of an autonomous semi-State organisation (An Bord Adhmaid) on the lines of other commercial and developmental organisations such as Bord na Mona or Bord Iascaigh Mhara, in substitution for the existing structure. The Council sees the board comprising of representatives of growers, processors and users as well as persons involved in the technological and developmental aspects of industry. The Board would be divided into four principal sections

-A Resource Development Division responsible for the development and implementation of a rational growing and harvesting policy properly geared to the abilities and requirements of the industry and the potential of the market place.

- A Processing Division to oversee a logical development of processing capacity, properly linked to the availability of raw materials and, the ability of the market to absorb the output, as well as upgrading the output of sawmills in order to maximise value-added and ensure that products of inferior standard are isolated.

-A Marketing Division - responsible for the sale of forest products to sawmills and other users.

-A Financial and Administrative Division - to outline the cost-effectiveness with regard to scale of production, capital and labour investments etc. and to co-ordinate on a financial level between different divisions.

74.Thus the Council believe that, given the existence of dynamic and enterpreneurial management, the Irish softwood industry can substitute current imports making timber one of the State’s most important and most valuable resources.

75.The Society of Irish Foresters suggest that many of the difficulties which have arisen might have been avoided if the Minister had set up a consultative committee as authorised by section 10 of the Forestry Act, 1946. The society also views with concern the failure to meet the planting programme of 10,000 ha. per annum in recent years, in view of its predictable effect on the supply of industrial raw material. Also as site quality is of the utmost importance on the level of supply, the traditional attitude towards the afforestation of marginal land should be altered. In this context farm woodlots could contribute significantly to local wood and energy demands.

76.The society also points out that with the maintenance of the 10,000 ha. afforestation programme, employment would reach a figure of 15,000 in the early part of the next century compared with 7,000 at present. Forestry provides productive employment in many remote areas where agriculture alone could not provide an economic livelihood. Forest industries are located near forests and therefore the wealth generated stimulates further rural development. They feel that the primary aim of forest management is the achievement of a sustainable yield, which means a never-reducing supply of the renewable resource to the wood processing industries.

77.To ensure the orderly management and maintenance of the forest resource, it is essential that the ultimate control of factors such as protection, proper exploitation and regeneration, which influence sustained yield, must be vested in the State. This should be seen as a separate function from the operation of a forest enterprise, which may be under the control of such diverse interests as the State, semi-State, private companies or individual owners. The necessity for further resources for forest research and the recreational benefits such as hillwalking, shooting and orienteering which are economically unquantifiable are also highlighted in the submission.

78.Prof. Joyce in his submission makes the point that in a situation where we have one agricultural product after another giving rise to embarrassing and costly surpluses a change in land-use within the Community seems long overdue. Yet he states we are all only too well aware of the problems that can be encountered and cites the Western Package as an outstanding example of resistence to change. Prof. Joyce feels that the I.C.O.S. proposal to establish two pilot forestry projects is a good one but because of the long-term nature of forestry the economic returns will not be forthcoming to influence prospective clients within the decade and that it is imperative to get things moving within that time.

79.He feels that, while the reasons generally given for reluctance to plant among landowners have little to do with economies, if the economic conditions were sufficiently attractive these problems could be readily overcome. Thus while the grants available under the Western Package are attractive they do not provide an income to the owner while he is awaiting a return on his investment. Therefore, while it may appear altruistic to suggest that the owner’s income be guaranteed (through use of headage payments or another scheme) until the income from the plantations exceeded the guarantee payment this would be balanced by the fact that some form of subsidy will be paid if the land remains in agriculture with a further subsidy being necessary to dispose of the produce.

80.Prof. Joyce suggests that if such a scheme developed there could be a form of forestry extension service along A.C.O.T. lines which would prepare simple management plans outlining future forest operations, yields and income, and if such a scheme for the disadvantaged areas were acceptable to the Commission it could replace the request for mountain area status for those regions.

81.Prof. Joyce also feels that we must be aware of the type of forest structures we should have in private forestry and that we should ensure a proper, planned approach to private afforestation so that viable management units will be established, as piecemeal afforestation of small waste areas on farms will add little to the nation’s wealth in future years. This would be an area where co-operatives would have a pivotal role to play.

82.Prof. Joyce is sceptical of the view that, because of the marital status and age-structure of land owners in disadvantaged areas, the land will fall to State or private afforestation in the not too distant future and feels that we should tackle the problem of afforestation with the existing ownership. If the EEC could be persuaded that the disadvantaged areas have a unique forestry potential and that generous funding along the lines mentioned above should be given, interest in afforestation could be awakened.

83.The Joint Committee was most interested in a submission from Dr. Rory Harrington on the subject of pastoral forestry, i.e. the grazing of animals in forestry. The concept is as old as agriculture but the practice as it relates to modern farming is very recent. Consequently there is little practical demonstration of its potential but Dr. Harrington maintains that the concept is biologically sound and the technology/practical knowledge is available for immediate implementation.

84.Pastoral forestry has developed from the recognition of the need for wider spaced trees and the advantages of shelter provided by trees. The wider spacing of trees reduces the rotation length required for a tree crop and increases the value of individual trees. Under existing forest management close spacing of trees means they must complete for light, water and nutrients and individual growth is reduced. Thus, in order to achieve maximum individual tree growth, trees are spaced 7 to 10 metres apart achieving 100 to 200 trees/hectare (40 to 80 trees/acre). The trees need to be individually managed and must be pruned continuously from when they become established (3 to 4 years) and until at least one timber length of 6 metres is free of all branches. This enhances the timber quality as the trees will be knot-free, straight and free of major, if not all, defects. Also some tree species with superior qualities which are unsuited to the poor lands presently used for forestry could be planted. Thus better quality timbers with shorter rotations are possible, for example, the radiata pine which has a approximate rotation of 10 to 30 years.

85.The level ground and wider spacings afford easy access and ensure that felling/extraction costs are reduced. The shelter provided by the trees promotes both pasture and grazing animal. Experiments have shown that favourable climatic conditions can prevail in the shelter of trees with the benefits of reduced evapo-transpiration by plants and soil and reduced chill effects especially on livestock. The shelter provided also reduces food requirements for growth and the seclusion afforded by the trees reduces conflict between animals with resulting benefits in production and reproduction and, although the light available for grass growth is reduced, there will be compensatory benefits from the trees increasing the growth of the unshaded pasture sward and in livestock performance. The grazing animal for its part plays a useful role in reducing the competition that trees have with other vegetation and helps in the distribution of nutrients to the trees. The trees must be protected until large enough to avoid being damaged by grazing animals (5 to 6 years) and a range of devices are available for this purpose. Alternatively livestock may be excluded altogether for this period.

86.Dr. Harrington sees the major benefits of pastoral forestry, which are unavailable from existing land use systems, as follows:-

1.More marketable timber of higher value is produced (clear knot-free pine presently costs at port of entry approximately £400-600 per cubic metre).

2.A forest enterprise is established without reduction of existing pastoral land use.

5.Costs of establishment are low £200-400/ha (£80-160/ac) and Dr. Harrington estimates a return at present values as follows:-

6.A wide range of by-products including winter forage, fuel, bedding and rough timber for on the farm use/sale.

7.Compatibility with other land-uses includes some horticultural crops and other tree species, especially those with very short rotations, e.g. Christmas trees and poles.

9.Providing an incipient break of traditionally moulded ideas; this could generate a new outlook and efforts to undertake alternative landuse methods generally.

87.In its presentation to the Joint Committee Woodfab Ltd. (a company employing 380 people with an annual wages bill of £4 million) drew attention to several distinct features of forestry in Ireland:

(1)At 6% Ireland has the lowest area of land under forest in Europe. This compares with an EEC average of 20%.

(2)Ireland’s forests are 80% coniferous species, which have short rotation, usually 30 to 40 years.

(3)Ireland’s high productive capacity. In terms of cubic metres per hectare/per annum Ireland has a “yield class” of 16 compared with 11 in the UK, 3 in the Scandanavian countries and a Community average of 2½.

(4)The large availability of land suitable for afforestation. Ireland has at present 400,000 hectares under forest but there is an additional 3.3 million hectares which is marginal for agriculture but suitable for afforestation.

(5)In Community terms a strong imbalance between State and private-owned forests.

88.Woodfab feel that Ireland with its unique growing potential can make a significant impact, relative to its size, on the Community’s huge trade deficit (second only to oil). They feel that the apparent lack of interest shown at Community level is appalling and forestry can aptly be described as the “Cinderella” of Europe. Investment in forestry is only a tiny fraction of what is contributed towards agriculture, amounting to only a few million ECU out of agriculture’s massive 18.6 billion ECU budget (out of a total community budget of 28.2 billion ECU).

89.With the crisis of huge surpluses in agricultural produce forestry is an ideal means of providing an alternate land use and reducing the imbalance between huge agricultural surpluses on the one hand and an enormous trade deficit in forestry products on the other. Woodfab therefore sees greater investment as the key to development in the sector, both at Community and national level. They feel the Western Package should be extended to cover the entire land mass of the country as there is marginal land in many areas which could be profitably exploited with the help of the generous grants available. The target would be to bring Ireland up to the European average of 20% afforestation with the planting of an extra 1 million hectares.

90.At national level tax benefits should be implemented to attract prospective investors. The investment would be rewarded by lowering the Community’s trade imbalance and by creating much badly need downstream employment in Ireland, especially in the poorer regions.

91.Woodfab were also critical of the tender system operated by the Forestry and Wildlife Service and the recent cut back in the State planting programme. This trend should be reversed immediately with the participation of private investment being considered to ensure that future supplies for the wood processing industry are not threatened. They feel the potential for forestry development is being underestimated. The development that has taken place has been very much on a piecemeal basis and a more integrated approach is necessary.

F VIEWS OF THE JOINT COMMITTEE

92.It is clear how important forestry and forest based industries are to the European Community. Apart from the huge balance of payments deficit, the demand for forest products in the E.E.C. has also contributed to the depletion of natural resources elsewhere in the world. It has been estimated that 50% of the world’s forest resource is located in developing countries. Demand continues to rise in the long term and overseas supplies will become increasingly scarce and expensive if developing countries ban log exports in favour of processed timber. Against this background the Joint Committee is extremely disappointed at the lack of progress towards a Community forestry policy. The size of the forestry sector surely warrants more attention than it has received to date. Throughout the Community some 1.4 million people or 5½% of all the industrially employed work in the wood using industries. This figure is on par with the car and textile industries.

93.Forestry could logically be considered as a natural part of the Common Agricultural Policy but its main product, timber, is not listed in Annex 11 of the Treaty of Rome as a recognised agricultural product. In terms of financial support, forestry (as pointed out in the Woodfab submission) receives only a tiny amount of funding, a few million ECUs in comparison with agriculture’s massive 18.6 billion ECU budget. Yet Europe’s forests cover some 35 million hectares or over one fifth of the land surface and represents a considerable natural resource which is also renewable. “Yet” states the European Community publication, Green Europe (Vol. 204) “while agriculture continues to occupy the headlines of the European press, forestry is mentioned less. It is indeed the ‘Cinderalla’ of Europe’s natural resources”. The Joint Committee feels that it is time to eliminate this serious imbalance.

94.The Joint Committee agrees with the thrust of the Commission document on forestry and the forest-based industries. In its analysis it identifies the “serious and unjustified deficit in Community trade in wood and wood-derived products.” In 1980 imports or these products amounted to 15.8 billion ECU while exports were valued at 4 billion ECU. This gives a deficit of nearly 12 billion ECU (IR£8 billion approximately) and an export/import cover of only 26%. The situation is all the more serious in that this deficit cannot be accounted for, as in the case of energy, by a physical shortage of the raw material. The Community has vast areas of woodland, and a climate which is propitious to fairly fast growth and a wide variety of species. Also the Commission found the industries in the sector to be “frail and their position is deteriorating”.

95.Against this background what the Commission proposed in its original draft Resolution could hardly be described as dramatic yet the draft Resolution was considerably watered down when being considered at Council Working Party level. The Joint Committee feels that, considering the seriousness of the situation and the potential for development, the forestry sector should receive much more attention that it is presently getting and in the absence of a Common Forestry Policy, timber should be listed as an Annex 11 product and so become part of the Common Agricultural Policy.

96.While the response to the Western Package to date has been disappointing officials from the Department of Fisheries and Forestry have assured the Joint Committee that present indications are that there will be very heavy planting in 1985. The historic, economic and social reasons usually given for holding back progress in this area have been mentioned earlier in this report. It must be said that the Western Package was an ambitious piece of legislation and with the benefit of hindsight it would be unfair to be over critical of what might have been done, especially now as the scheme appears to be taking off. However, the Joint Committee would agree with the view expressed by Professor Joyce that we may have been somewhat negligent not to have carried out some research on the matter before the plan was launched.

97.A major drawback with investment in forestry through the Western Package has been identified as the long wait for return on capital. A number of worthwhile suggestions have been made to the Joint Committee, e.g. the continuation of headage payments for, say, twenty-five years from the time of switching to forestry, and forward selling of timber. The Joint Committee feels that these suggestions are worthy of consideration and could contribute to enticing more landowners into forestry.

98.The Joint Committee sees the Western Package as an ideal way of stimulating private afforestation in this country (which is low by European standards) especially if undertaken by means of the co-operative approach favoured by I.C.O.S. It feels that a strong private sector involvement is vital for the development of forestry in this country and that it would be beneficial to have a 50/50 ratio, rather than the 80/20 balance between State and private ownership that exists at present. The Joint Committee urges that a planting target of 1 m. hectares be set over a forty-year period (i.e. an annual planting rate of 25,000 hectares) which would be equally shared between the State and private sectors.

99.Forestry would seem to offer ideal opportunities for pension-fund type investment, and consideration should be given to offering tax incentives (as in the U.K.) to ensure investors are guaranteed a good return. While the Joint Committee recognises that in times of economic stringency such measures are not always attractive, it feels that the benefits to be gained from

100.The Joint Committee feels that the Land Act, 1984, which introduced the relatively novel concept of land leasing into Irish agriculture, could be usefully invoked to increase the supply of land for afforestation. It draws attention also to Section 67 of the Finance Bill, 1985 which is designed to encourage reinvestment in Ireland of the profits of Irish subsidiaries of foreign-owned firms by creating an attractive investment environment here. The Joint Committee would welcome a similar development in order to encourage tree planting and urges the introduction of legislation to make this possible at an early date.

101.The Joint Committee has a lot of sympathy with the view expressed by Woodfab that the forestry element of the Western Package be extended to the entire land mass of the country. In view of the present disappointing response it would obviously be difficult to make a strong case on this at present but this is yet another reason why the scheme must succeed, so that the point might be forcibly argued at a later stage.

102.Nationally, we in Ireland have a great capacity to expand from a low base, by European standards (6% afforestation) in tree growing. The large availability of marginal land which is suitable for afforestation coupled with the fact that our climatic conditions can produce a yield class (see paragraph 53) which is unparalleled in Europe means that we have a natural resource of vast potential which has hardly begun to be realised. The Joint Committee would draw a comparison between the excitement generated by reported oil and gas finds off our coasts with the comparative lack of interest in our forestry potential. There is a vast market in Europe and indeed the U.K., our closest trading partner, accounted for about one-third of the total E.E.C. deficit during the 1970s. In 1975 domestic production in the U.K. amounted to only 16%, 33%, 9% and 60% of sawnwood, chipboard, fibre-board and paper consumption respectively.

103.The advantages of a strong forestry sector are obvious. We are at present a net importer of timber and timber products. For example, in reply to a Dail question^* the total value of paper and paperboard imported into the country was stated to be £206.2 million in 1982, £217.7 million in 1983 and £184.2 million from January to September 1984 and on 12 December, 1984 in reply to a question regarding the total cost of timber products imported into Ireland for the previous five years the information was as follows:-

104.While the Joint Committee accepts that it might not be possible to achieve import substitution in all timber-derived products we can generally move from a position of being a net importer to a net exporter with the consequent benefit to our balance of payments.

105.There is also the benefit of increased employment. The Society of Irish Foresters maintain that with the maintenance of the 10,000 hectare afforestation programme, employment could reach approximately 15,000 in the early part of the next century from the present level of 7,000 people. Forestry production also maintains infrastructure in many remote areas and as forest industries are located near forests the wealth generated further stimulates rural development.

106.For an example of what can be achieved with a thriving forestry sector one has only to look at the situation in the Scandanavian countries. In 1980 Finland had a total of 19.90 million hectares of productive forests - some 71% of the land area. Approximately 60 million cubic metres are produced each year and account for approximately 50% of total export earnings. Yet Finland has a yield class of only 2.5 to 3 cubic metres/hectare per annum compared to 16 for Ireland.

107.The Joint Committee appreciates that dramatic improvements cannot be achieved overnight but feels that it is imperative that action be taken immediately to develop our forestry resource along more sound integrated lines. The disappointing response to the Western Package would seem to indicate that a greater impetus is needed to get things moving. Forestry needs a much higher profile than it presently has and the Joint Committee is of the opinion that in view of the potential contribution that forestry can make to our national economy, development policy in this area should become the specific responsibility of an individual Minister.

108.The Joint Committee was very impressed with the commitment and enthus iasm for the subject exhibited by the individuals and bodies who made submissions to it. The criticisms made by the Irish Timber Council of the quota/tender system operated by the Forestry and Wildlife Service and the inadequate forecasting of future supplies were the subject of an Inter-departmental Committee^* which published its findings in October, 1984. The report found that the industry’s argument for advance detailed information on availability of timber supplies to enable it to plan effectively to be valid. Notwithstanding inherent difficulties, apart from restrictions on finance and staffing resources, the Report found that the F.W.S. has been remiss and expected to see positive steps taken to ensure that the genuine needs of the industry are met.

109.However the Report did state that the present system of sale by tender, which is not unique to Ireland, is equitable and accords with traditional policy and principles in regard to disposal of public property but recommended that the sale by auction of standing timber, in part substitution for tender sales, should be introduced by the F.W.S. on a trial basis as soon as practicable. The Report also recommended, inter alia, that the feasability of offering timber for sale by tender under longer term (say 3 years) supply contracts in suitable forests or group of forests should be explored by the FWS with a view to identifying the prospects of such form of sale and that an Advisory Committee representative of the F.W.S., the industry and other appropriate agencies and interests (including private timber growers) should be established to advise on research, development, promotion and marketing in the domestic and export markets of Irish timber and timber products.

110.The Joint Committee is convinced that the idea of pilot projects proposed by I.C.O.S. is an excellent one and expressed its support for the project in its Report (No. 12) on Disadvantaged Areas. The Joint Committee was gratified to hear the Minister of State at the Department of Agriculture speaking in the Seanad Debate on that report state:

“My understanding is that the idea of projects such as these was discussed at a recent seminar on private forestry organised by the Forest and Wildlife Service and that the service is very receptive to proposals of this nature and prepared to assist to the fullest possible extent when positive plans are drawn up”^*.

111.The Joint Committee feels that the most effective way to generateinterest in afforestation schemes such as the Western Package is to operate such pilot schemes to educate people to the realisation of the opportunities offered by afforestation as a more permanent use of their land resources, and wishes I.C.O.S. every success with its venture.

112.In this regard pastoral forestry, as outlined in Dr. Harrington’s submission, is an area which could benefit greatly from the operation of a pilot project, to prove its possibilities. As Dr. Harrington states, there has been little practical demonstration of its potential especially in Ireland. The Joint Committee understands that the system has operated very successfully in New Zealand and feels that it would be an excellent vehicle for introducing farmers to the benefits of forestry by allowing the establishment of a forest enterprise without the reduction of existing pastoral land use. If the system operates as profitably as Dr. Harrington maintains it can, the Joint Committee feels sure that many farmers will be attracted to undertake this type of farming in the future.

113.The Joint Committee agrees with Prof. Joyce when he states that “we must be aware of the type of forestry structures we should have in private forestry” and that “piecemeal afforestation of small waste areas on farms will add little to the nation’s wealth in future years”. In this regard we can draw on European experience, where private sector ownership tends to be quite small, fragmented and non-contiguous. Small scattered lots of timber are less attractive to merchants than large compact blocks. They are often less well tended, with poorer access for would-be harvesters, leading to higher harvesting costs, all of which means a lower return for the timber grower. In this regard the Joint Committee feels that the co-operative approach suggested by I.C.O.S. is the best way of ensuring that areas of land are blocked into viable units and thereby maximising returns for the grower.

G CONCLUSION

114.In terms of its potential the forestry sector in this country could be said to be in its infancy at present but it represents a considerable natural resource, which is renewable and with the extension of our forest cover and a more integrated development of downstream processing industries it can make a significant impact on the nation’s prosperity in future years. While it would seem that at Community level forestry will remain the ‘Cinderella’ of Europe’s natural resources for the immediate future, we have been given an opportunity under the forestry element of the Western Package to show what can be achieved with the help of Community aid. We have the conditions of available land and a unique growing potential, and if we demonstrate the will to do so we can only succeed.

115.The beneficial impact of afforestation on the environment cannot be understated. Industrial development in many instances wreaks destruction in the environment, despite planning constraints, and a prudent policy of afforestation could act as a balancing factor in this area. Indeed, planning authorities could play an important role towards achieving the planting targets advocated in this Report.

116.The Joint Committee, in its Report on the Environment (Report No. 3), dealt with the problem of acid rain and its effect on afforestation. This problem has to be tackled as a matter of urgency as there is evidence that some of our forests could already be affected. The Joint Committee hopes to return to that topic in the near future

117.The balance between recreation and employment because of technologic development, is shifting towards the former. This is an added impetus to increase our level of afforestation to provide a healthy outlet for recreational activity. The Joint Committee sees such a development as an important externality of afforestation.

118.The Joint Committee would like to emphasise the economic benefit of afforestation:

Forestry plantation, established at present-day cost, would produce up to £12,000 worth of timber per hectare (at present-day prices) over a crop life rotation of 40 years. This represents a return of 4% above inflation. If the landowner were to undertake some of the forestry operations himself the return would be further increased. The implications of this potential yield for our economy, particularly for creation of employment and our Balance of Payments, are obvious.

119.In view of the importance of this Report the Joint Committee specifically requests a debate thereon in the Dail and Seanad.

^* Report of the Inter-Departmental Committee on Quota/Tender sales systems for disposal of State-owned timber.

A. Introduction