Vol. 458 No. 4
5 Mr. Ellis asked the Minister for Agriculture, Food and Forestry the progress, if any, that has been made by his Department regarding the issue of a policy for the forest and timber industry; and if he can give a date for publication of this policy. [16963/95]
I am in the final stages of putting together the elements of the draft strategic plan which I will be submitting to Government for approval as soon as possible. I hope to publish a final document early in 1996.
Consultants were appointed in May 1994 to review the sector and provide a comprehensive analysis which was intended to be a key element in drawing up the new strategy. In the event, the consultants report took longer than was originally envisaged and subsequently, as the work of producing the strategy document progressed, it was necessary to have further dialogue with the get additional information from the consultants. All of this, and the complexity and extent of the work involved for the Department, has resulted in the preparation of the document taking a longer time to complete than initially anticipated.
I attach considerable importance to this plan, which will be the first of its kind for Irish forestry. It will provide for the first time a comprehensive and integrated framework within which this rapidly-growing and multi-faceted sector can develop up to and beyond the year 2015. In its scope it will encompass elements which range from forest nurseries through growing and processing to timber end-uses and products. It will set objectives which will be consistent with securing optimum national and economic benefit from the forestry sector and towards which our national forestry policy and practices will thereafter be directed.
I am glad the Minister acknowledged that this review commenced when Fianna Fáil was in Government. At least some of the consultants appointed are doing some work. Will the Minister indicate if an all-island approach will be adopted in the strategic plan for the timber industry and whether it will include a land use policy? Many farmers are concerned about the type of land becoming available for forestry. On the one hand, there is a need to develop the timber industry and, on the other, to devise a land use policy to maximise agricultural output of farmers who seek this land in their area.
My colleague, the Minister for the Environment, is obliged under the Programme for Government to devise such a policy, on which the Minister of State, Deputy Deenihan, is working. A number of aspects include Northern Ireland. A Northern-based company, Balcas, which accounts for one-quarter of Coillte sales, is integrating and rationalising sawmilling capacity on the whole island. This is of considerable significance. On administrative matters, such as environmental considerations, Forbairt grant aid or developments at the wood processing level, we can operate within our jurisdiction only. I am very anxious to develop forestry on an all-island basis.
This overall plan, which encompasses site consultations with the Department of Finance, has taken up a huge amount of my time in so far as the Forestry Service of my Department has had to undertake the task which, in my view, the consultants did not do adequately. There were apparent contradictions and errors in their data. We were very disappointed with their study to the extent that we did not pay the full cost of the study and are disputing it. This is the principal reason for the delay. By the end of this month I hope to have completed internal preparations for this plan, after which we will request the observations of other Departments. Deputy Cowen will be familiar with this procedure. At this point I am involving the Department of Finance because it entails huge investment assumptions to the year 2015, incorporating annual planting levels of 25,000 hectares, European Union-led grant aid, a breakdown of public and private forestry involving Coillte Teoranta, the overall issue of the selling of timber, transparency of sawmilling prices and environmental aspects. I foresee this being one of the key growth sectors of our economy with the potential to create many thousands of jobs, through group outputs and exports, on which there are no European Union limitations. I consider this overall area to be extremely important and regret the delays that have occurred to date.
Would the Minister give me the benefit of his views on two aspects, first in relation to many small sawmills which in any rationalisation drive might be driven out of business. As the Minister will be aware, they have been endeavouring to remain viable. They complain about lack of availability of raw materials from Coillte Teoranta and some discriminatory practices in terms of obtaining raw materials. Would the Minister agree that many small sawmills have been able to gain access to some niche markets in which larger sawmills are not really interested? Will the Minister ensure that whatever strategy is adopted will not sound the death knell of many small sawmilling operations, some located in my constituency at places such as Clonaslee and Mountrath, where nothing else exists to provide employment? Would the Minister agree it is crucial that such companies not be put out of business in the name of rationalisation?
Would the Minister also accept the crying need for a labour-intensive maintenance programme in many of our State forests? Whenever one talks to people who formerly worked in the Forestry Service, they claim much work remains to be done in maintaining and pruning many of these young forests and the fact that we have not been doing so adequately ultimately means we do not reap the type of product required. Has the Minister any views on obtaining contract labour, if he cannot appoint staff permanently, to address this issue, which is of acute concern to many people in the industry?
On the Deputy's first question about sawmills, I have had detailed discussions with the Irish Timber Council, with individual sawmillers and others and am very aware of the difficulty. The difficulty is that sawmills have the capacity, even on a single shift, to deal with more than twice the amount of timber available. In other words, there is a mismatch, involving a monopolistic raw material supplier, Coillte Teoranta. Under whatever system one supplies or sells timber there is not sufficient to go around.
I am insisting on a fair, transparent, market-oriented sales system, with a reserve price, in circumstances in which Coillte Teoranta cannot act as judge and jury in the manner in which it sells timber. It is on that basis only their involvement in equity ownership in the sawmilling sector can be considered. I am conscious of the employment potential of small sawmills. While some have market niches, I perceive a specific difficulty with larger sawmills, half a dozen of which are internationally competitive. They need dual shifts to be viable, whereas a smaller operator can obtain local supplies at niche level. This must be dealt with on a market-oriented basis. There are some court cases pending in relation to the sales system. In negotiations with foresters, Coillte Teoranta and my officials, I am very anxious to move forward on this path so that we obtain a fair return on our forests in addition to having a transparent, market-orientated system of selling timber.
I do have concerns about the quality of forests in the course of growth, both within Coillte Teoranta and the private sector. In terms of quality control and premia payments — afforestation grants stretch over a period of 15 to 20 years —it is my intention to impose fairly rigorous and tough standards so that the output of trees per acre is as high as possible, involving labour-intensive activity.
At a technical level, I am happy to support what Deputy Cowen has said. Obviously, Coillte Teoranta is involved in a cost-cutting drive. It has transformed its financial position and its product is an accruing asset to the taxpayer for which I, as shareholder, have responsibility. Notwithstanding cost control, I will ensure that the quality control aspects of forestry production are adhered so as to maximise output.
Whenever one travels throughout Europe, one observes many small sawmills. Would the Minister agree that our sawmills are unable to compete with the larger, foreign counterparts to whom most log timber is supplied and that, despite representations from many Members, this has continued to be the case. Will the Minister devise a policy that will not only help existing smaller sawmills but create other labour-intensive ones?
Given that tree planting has increased tenfold over the past decade, all this extra output must be exported. It is a most competitive business involving the United Kingdom and European countries, in particular Scandinavian ones. Those sawmillers who have invested £3 million or £4 million in sawmilling technology — the latest scanning technology making maximum use of timber, with fewer shavings, bark and so on — will readily acknowledge that such technology facilities are necessary. Therefore I could not devise a system whereby small sawmillers would obtain timber at the expense of others who are internationally competitive. As the extra production of trees comes on stream, capacity and availability of timber raw material will come into synchronisation. We need to develop an orderly process, not involving widespread rationalisation but perhaps advancing a case for amalgamations, consolidation and joint ventures. We need a two-tier approach encompassing small companies that can prosper in particular niches while having three, four or five really large companies, even multinationals, that can compete with the best worldwide, thus forming the basis of a market for all these trees.
