The recent midterm review and resultant changes to the Forestry Programme 2014-2020 have attracted widespread attention, especially from farmers with suitable marginal land to plant as well as other landowners and investors.

Farmers remain in pole position to invest in forestry as they own the valuable existing land resource. Non-farmers are finding it increasingly difficult to buy into the afforestation programme as prices for suitable forestry land continue to increase.

There is a suitable 400,000ha land bank available for afforestation without negatively affecting agricultural production. Farmers wishing to plant – or who have planted – are exploring this land resource. It includes limited agricultural land, such as 105,000ha of rough grassland not farmed and 179,000ha of unenclosed land that would support productive forests without environmental or food production constraints.

In recent years, up to four out of every 10 farmers who planted in the past are repeat planting. These farmers are not only planting some of their existing holdings but looking at other marginal land to build up a profitable resource and an excellent pension fund.

They have discovered that the cost of establishing a forest which can be as high as €6,220/ha is fully state-funded from years one to four (Table 1) and annual premium payments range from €190 to €660/ha over 15 years depending on species and planting scheme (Table 2).

Dairy, tillage, suckler and sheep farmers view these premia as competitive rates over a 15-year period. However, for those looking beyond this time horizon the benefits are just as attractive as prices for timber have remained steady and even increased despite the uncertainty of Brexit and recent volatile currency exchange rates.

That said, while many will hone in on the economics of forestry, the days of wall-to-wall highly profitable coniferous planting are long gone. The recent Department review has reinstated the achievement of a 30% broadleaf target which was surpassed from 2004 to 2012 but has fallen in recent years due to ash dieback. However, the broadleaf programme is likely to recover due to attractive incentives and the recent directive from the Forest Service that all sites will be required to carry a minimum 15% broadleaves by area.

A 30% broadleaf target coupled with setback lowers the production capacity and the economic potential of the forest estate but also provides non-wood benefits which the sector is capable of delivering.