Following discussions with the European Commission, the Minister of State, Deputy Byrne, announced, in March last, significant increases averaging 30% in the rate of afforestation grants and premiums for those planting from 1 October 1999.
The afforestation grant is a once off payment, made in two instalments, which is aimed at compensating farmers for the costs associated with the establishment of the plantation. I do not intend to extend increased grants to those who planted before 1 October 1999. I am, however, attempting to secure increases in the level of annual forest premiums for those who planted prior to 1 October 1999. Despite protracted negotiations, the European Commission refused to agree to co-fund similar increases in the forest premiums paid to those who planted before that date.
I am now considering possible funding from the Exchequer for those who planted prior to 1 October 1999. The estimated annual cost of such at present is £3.4 million. In view of the State aids aspect, any decision to have the cost borne by the Exchequer would also require European Commission agreement.