The increase in forestry grants and premiums announced this week will push the base price of forestry land over €7,000/ac, auctioneers have predicted.

However, estate agents warned that securing land for planting will remain difficult.

They pointed out that much of the country’s forestry-type ground is designated and thereby ineligible for planting.

Meanwhile, there is intense competition for any ground that is not designated.

Under the new forestry programme farmers will be paid €1,103/ha for 20 years to plant native species, an increase of €438/ha on current payments.

Premiums

Premiums on plantations of spruce have been increased from €510/ha to €746/ha and the period of payment extended from 15 years to 20 years. The planting grants have also been significantly increased.

Roscommon-based property consultant John Earley described the new premium rates as “very attractive”.

“This is a positive move. The higher premiums will definitely enhance prices. Around €7,000/ac will now be fairly common for forestry ground,” Earley said.

There has been strong demand from investors for large blocks of land for planting, Earley explained.

However, while blocks in excess of 100ac are being sought, these investors are purchasing the 20ac to 30ac holdings that are coming on the market.

Price rise

Southeast auctioneer David Quinn agreed that the price of planting land was now likely to move to €7,000/ac following the announcement of the higher premiums.

Quinn said ground for forestry in south Wicklow was generally making around €6,000/ac, but was now likely to top €7,000 if it were a “dead cert” for planting.

“It could put a 20% premium on suitable ground,” he maintained.

However, Clonakilty-based auctioneer John Hodnett forecast that land availability will remain a serious impediment to planting.

While he accepted that the higher premiums will result in increased land prices, Hodnett pointed out that the supply of ground for planting remained “very slack”.

“Land availability is the problem. There is big interest in forestry from individual investors, farmers and pension funds. But the amount [of land] to buy is limited,” Hodnett said.

Where land could be bought at the right price, it was invariably designated, he added.