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Seanad Éireann debate -
Wednesday, 14 Mar 1979

Vol. 91 No. 7

Report of the Joint Committee on the Secondary Legislation of the European Communities: Motion.

I move:

That Seanad Éireann takes note of the report of the Joint Committee on the Secondary Legislation of the European Communities on the Commission's Communication concerning Forestry Policy in the European Community.

This is an aspect of policy which, perhaps, it would be easy for us to let go almost by neglect. This is not, perhaps, relevant to us; we have only a very small area of forestry in this country; relatively few people are involved in forestry; we do not have a timber industry of any significance or magnitude. I would suggest, however, that it is, perhaps, precisely because of these reasons that we should be taking a very close look, indeed, at the European Community proposals regarding forestry. There is also, the fact that forests throughout the world are a very rapidly diminishing natural resource.

Throughout the Indian sub-continent, through Asia, through most of Africa, now through South America, forests are being depleted at an enormous rate. They have been depleted at the sort of rate from which we ourselves suffered over the past few centuries. This is having very major effects, both in the availability of timber and forest products throughout the world and many other ecological effects that could be of considerable significance.

Another very little realised but major aspect regarding forestry and timber products is that next to oil and hydrocarbons, the major import of the European Economic Community is timber and forest products, amounting to something in the region of 8,000 million units of account in the last year for which records are available. It is the second major import, both of the Community as a whole and of every single individual state within the Community, including this country. The imports have doubled over recent years. They are steadily increasing as each year goes by and, as technology develops, the likelihood is that dependence on timber as a natural resource will increase rather than diminish as new uses are found in the manufacturing industry generally and in the chemical industry, as well as in the more usual aspects of construction business and so on.

There is an increasing world-wide shortage which has been largely neglected. Just as, up to eight or nine years ago, we took oil and our sources of it for granted, in the same way there is an approaching crisis in supplies of timber and forest products. We are, perhaps, the worst situated of any of the countries in the Community in relation to this. We have made major efforts in recent years to increase our acreage of forestry, which is good. We have also attempted to develop some timber industry. This is also good and is something we have to look at very closely. Indeed, there are aspects of our timber industry which are very relevant to this resport which the commission is putting forward and which the Joint Committee and sub-committees have been considering.

Our reasons for requesting this debate are the great importance of the subject and its particular relevance to this country, and certain special problems that are specific to this country. The official title of the commission's communication is Forestry Policy of the European Community and it was dated Brussels, 1 December 1978. In it the commission indicate their intention to propose the development of a common forestry policy. They are not suggesting uniformity of forestry policy but are suggesting that there should be a common policy. The report reviews Community action in the forestry area to date. It considers the actual structure and ownership of forests and there are very marked differences between the situation in this country and in other countries of the EEC vis-a-vis State ownership and private ownership. These differences in ownership present certain major problems to this country. The report also goes into such matters as conservation, protection of the environment—to which we are paying so much more attention nowadays—the access and recreation matters, wildlife management and so on. It also goes into some slight detail on the actual legislation regarding forestry, taxation proposals, information and such like matters—the general instruments of forestry policy.

The report is basically a statement of aims rather than the design for specific action. It has two very specific draft proposals. One is that there be a Council resolution concerning the objectives and principles of forestry policy. The other draft proposal is for a Council decision to set up a permanent forestry committee representing the EEC. Incidentally, there is some slight doubt as to the actual entitlement of the EEC Commission and Council to involve themselves in forestry policies. I do not think this was specifically covered under the EEC treaties and agreements. However, it is generally accepted that forestry is, and should be, allied to, and considered in the same light as, agriculture. I am sure we in this country would wish to do so. We do not wish to see good agricultural land being turned over to forestry, or any conflict between land used for forestry and land used for agriculture—there is no need for such a conflict.

Another relevant aspect is the implications of forestry policy vis-a-vis regional policy. It would be our view that these two should be considered in a single context and this particular aspect is very relevant to certain developments which appear to be taking place.

Forestry in the Community generally is a major industry. No less than 21 per cent of the total land area of the EEC is in forests. We tend to think of Germany as being the main forest area but France accounts for about 45 per cent of the total. A table on page 11 of the report gives details of the forest area in hectares. Very substantial areas of Belgium, Denmark, Germany, France, Italy, the Netherlands, and even of the UK and Luxembourg, are covered in forest. The only very small percentage of land area relates to this country. No less than 32 per cent of the Luxembourg area has forest; 20 per cent of Belgium; 29 per cent of Germany; 25 per cent of France, and even Denmark, which tends to be regarded as treeless, has nearly three times our forest area, and the Netherlands and the UK have twice the percentage.

Despite all the excellent efforts that have been made over the last few years, we are still very far behind when one related these to the opportunities for forestry in Ireland and the ravages which have occurred over the last 200 or 300 years in relation to this very important and increasingly valuable natural resource. At present only about 5 per cent of our land area is covered by forests. Of this, about 670,000 acres are in State forest and about 202,000 acres in private forest. It is given in much detail, in the report of the Minister, for the Forest and Wildlife Service, which indicates that direct employment in the State forests at present is about 2,530. There is a very interesting point that, despite the small percentage of forest in Ireland the actual rate of growth per hectare, per acre in Ireland, is the highest in the Community. Certain areas of land, which are not suitable for agriculture, have better potential for forestry than anywhere else in western Europe and are probably among the best in the world. The trees grow rapidly and yet they do not suffer from the softening which occurs in other areas of rapid growth, so there is timber which grows relatively rapidly and which is of very high quality.

The actual details of the objectives and principles of the forestry policy, which are being proposed by the Commission, are in terms of general principles. Page 72 of the report states:

Forests should be protected and managed as a renewable resource to supply products and services which are essential to the quality of life in the European Community now and in the future. The main objectives should be: a sustainable increase in the economic production of timber, the conservation and improvement of the environment, public access to forests for recreation and, where practicable, these objectives should be pursued in conjunction with one another by multiple use management, the weight to be attached to each being varied according to ownership and the particular needs at a given place and time.

In general, we would agree with that. The fact that our forests are, very largely, State forests means that there is good public access. I am sure many Senators have taken advantage of the many improvements for which the Forest and Wildlife Service have been responsible in making our forests easily accessible and excellent recreation areas.

The commission suggest that forestry policy should recognise the long-term nature of forestry, which renders sudden major changes in policy undesirable and shall take account of distinctive characteristics and complementary roles of private forests. State forests and other publicly-owned forests, and seek to create conditions in which efficiently managed woodlands are economically viable. Again, we would agree with this general statement of principle and policy. Fortunately, there has been a tendency in the Community to give almost total priority to private forests, which suits all the other countries in the Community except, perhaps, ourselves. We have had to rely—and I am all in favour of private forestry—basically on State forestry. We must be very careful that any support which the commission give to the development of forestry will also go to State forests; otherwise we will lose out badly in this respect.

The report also states:

The third general principle is that forestry policy measures should be formulated and implemented with due regard to other national and Community policies especially those concerned with land use, agriculture, wood-using industries, regional development including employment and standards of living especially in economically less forward regions, urban and rural development.

Again, I am sure we would agree with these statements and suggestions as regards policy. There are many aspects within this. This is a non-party report by the Joint Committee and it has strong support, right across the board, from all three parties. Although these principles are ones which we could support, we would have reservations on whether, in practice, they are really being implemented by the Community at this stage, or whether the actions which are taking place really bear out the suggestions regarding, for example, regional development, or regarding wood-using industry. I shall come back to that in a moment.

The fourth general principle is, conversely, that agricultural and other policies with forestry implications should pay due regard to the functions and effective management of the forests. That is a general principle within the limits set by national legislation; whereas donors should be free to manage their forests, if they wish, forestry policy measures should be co-ordinated at Community level to the extent necessary to achieve common objectives. This last one may sound very well but it is a suggestion which we must regard with a considerable degree of caution and care.

The commission goes on to discuss the actual forest estates in various respects, the wood production itself, the various human, national environment and public aspects, what protects us, wildlife management and instruments of forestry policy. We would all, generally, accept these, and there have been many such developments in this country; in fact, we are well ahead, as the Minister would agree. On instruments of forestry policy, in general terms, I am sure we would like to see tax incentives for forestry and appropriate forestry legislation. We will support research and development in education and training, in general terms, information, consultation and so on. The Joint Committee are a little worried that this is not necessarily what is happening in practice. First, there is the question of State forests versusprivate forests. State forests are of major importance in this country and we must take care, in any agreements we come to, or any acceptance of the commission proposals, that private forests do not get an undue degree of support or, more seriously, that the State forests are not excluded from EEC support. We will have to be very careful about this.

We must look at the degree of limitation of Community aid. I know that the European agricultural guidance and guarantee fund gives support. There have, however, been some suggestions emanating from that direction that the commission is considering amending previous suggestions; the effect of such amendment would be to limit Community aid to disadvantaged areas and this would have very serious implications for us. It is something that we should be very careful to ensure is not accepted by the persons concerned.

A specific matter is the question of our chipboard factories and in the Joint Committee's report we devote one specific area to this. It seems strange that, despite the extreme dependence of the European Community on timber imports—an independence which, as I have mentioned, is second only to its dependence on oil and which is, despite the very large forests existing in France and Germany, becoming greater and greater—this very small but important industry in this country, the first we have effectively developed relating to forest products, is experiencing difficulty in remaining viable. These are only two small factories involved and yet they are having considerable difficulties; not because of any lack of efficiency; not because of any lack in how it works, or initiative on the part of management or workers; but basically because of low cost imports from Third World countries, imports may well be very transient in nature and may well become extremely costly. It is, in the committee's view, difficult to understand how the EEC could continue to allow the situation to develop. It says in paragraph 12:

In the committee's view it makes little sense to allow existing factories to go under if the need is for making the Community less dependent on imports.

We must look very carefully at this situation. The committee specifically recommend that this matter be pursued with the Commission. I hope it will be pursued very vigorously, and I am sure it will.

We have, in forests, an important natural resource. It will also, I hope, in this country be, as well as a natural resource, a national resource—one of growing importance and growing value over the years. Let us not neglect forestry, particularly at this early stage when decisions are being taken and which obviously are likely to have very long-term effects for forestry. It will be very difficult in five, ten, 15 or 20 years, to try to change policies. Of all industries, the forestry industry is, perhaps, the most susceptible to long-term change and the least susceptible to sudden alteration, or compensation for past failures. I would hope—and I am sure it is the view of the committee—that a very firm and a very considered attitude be taken towards the commission's proposals. I would like to commend the Report of the Joint Committee on the Secondary Legislation of the European Communities on the Commission's Communication concerning Forestry Policy in the European Community.

I would like to join in the reference to this report. I note that the communication of the commission states that its intention is to propose the development of a common forestry policy, but only in the sense of having some clearly defined objectives and principles of national forestry policy, common to all member states.

The report makes it clear that the committee, and also the commission, would be against any overall harmonisation of laws. I suppose what is intended is to have a series of objectives and that member states that can do so would honour them, but there would be no question of enforcing them. Quite obviously, each member state must be left to its own devices on how it runs its forestry policy because that policy will depend on the particular circumstances of each member state.

As Senator Conroy points out, and as the report mentions, this country differs considerably from the other countries of Europe in that almost all the forestries here are State-owned. It would be a good thing if there were a common policy with regard to certain matters such as public access and recreation, conservation and wildlife management. The other matters, such as structure and ownership and what is to be done with the subsequent forest product and the detailed national instruments as far as policy, legislation, taxation and so on are concerned, are matters that will have to be left to the individual countries. If the commission were to seek to give directions in those areas, I think that would be wrong and perhaps inappropriate. I think the influence of the commission will have to be restricted to what one might call the environmental area, generally.

So far as we are concerned, forests are mostly in the ownership of the State. There has never been any large-scale private planting in this country because there has not been proper awareness of the importance of timber as a commercial crop. Studies were done which showed that large areas could be taken over and would be suitable for planting. Those studies showed that the owners of the land in question could be given an annual income from the beginning and that it would be economic to do so because of the ultimate return from the timber crop. What needs to be encouraged here is not large scale planting of that kind where people are removed from their land but increased emphasis on private planting in a small way. I am not sure what the present minimum area of land must be in order to qualify for a grant; it used be one acre and not many farmers would have waste acres which they could set aside for forestry, but they would have a couple of roods. If the present minimum grant area is one acre it should be looked at again and reduced to one rood or a half a rood. That would encourage quite a lot of planting of trees throughout the country.

I am not sure what the present position is with regard to the activities of the Forestry Division of the Minister's Department. I do not know whether the annual planting target has been achieved or whether the annual land acquisition target has been achieved. I get the impression that the acquisition of land for forestry is slowing down fairly considerably. The Minister might be able to help us on that, indicate the reason for it and indicate if the planting target is falling behind. He might also indicate what the policy is with regard to the cropping of timber. There is considerable dissatisfaction among our timber merchants with regard to the policies of cropping and selling the timber. I have heard it said that the methods of sale are so geared that they are driving up the price to a figure which is not merely just profitable for the vendor, the Department, but is extravagantly profitable and is having an adverse spin-off effect in the subsequent use of that timber, whether it be for building or other uses.

The present system of selling is by tender. There is a limited amount of timber and a fair amount of willing purchasers so that when the sale is by tender there is hot competition and the price tends to become inflated. I understand that the policy of cropping timber is unduly conservative and that the Department could sell a greater amount of timber each year. However, I can understand their reluctance to do so if their reafforestation programme is beginning to fall behind.

If the reafforestation programme gets further impetus and is increased, I urge that great care be taken when planting in scenic areas. There are many instances where careless planting has cut off vistas of considerable significance or, if it has not already done so, as the trees mature it will do so over the next ten to 15 years. There has to be great sensitivity in planting where there are wide vistas available for passing motorists.

I agree with the views of the committee that forestry should be regarded as part of agriculture. It is land-use and should be regarded by the Community in that context. Aids, development and encouragement incentives should be available for forestry as for other agricultural activities. It is right to emphasise that, because our forests are State-owned we should not, therefore, necessarily be excluded from any aid that may be made available for the development of forestry. Some part of regional policy could be directed towards increases in forestry because it is very often a suitable activity for disadvantaged areas. I note with interest that the IAOS are interested in developing a co-operative forestry scheme in the west. I hope this pilot scheme will come to pass and that this debate may be of assistance in arranging that. The wildlife management being carried out by the Forestry Division has been excellent and I would like to commend those who have been involved in it. It should be intensified and, with it, the educational booklets that are available and the educational programmes that are carried out by that section of the Department should be expanded so that the coming generations will be totally aware of our wildlife heritage and sensitive to the need to ensure its complete protection. There is nothing in the report with which one could disagree. One would have to agree with it all but I wonder how real it is for the Community to recommend a common forestry policy and, at the same time, recommend that there be no harmonisation of legislation.

I welcome this report in that it gives us an opportunity to discuss our forestry position even though we may only think about it. We know that in the EEC 21 per cent of the land is covered by forestry. One important matter is that the import of timber from outside the EEC in money terms is equivalent to the deficit on the oil position. A second important point is that although planting or production is increasing by 1 per cent per annum, the demand for timber is increasing by 2 per cent. Therefore, we have a net drop in the EEC overall of 1 per cent. In view of that position, I agree that we should support any study or any committee that the EEC may appoint to go into this on policy for the Community. Our position appears to be different from the average of the EEC. We will have to look at our position carefully before we join any common policy until we are sure that that policy is to our advantage.

During the period 1914 to 1918 this country was almost denuded of timber and when we became an independent State we had to start from scratch. We had to put a lot into our forests for years before we got any output. Therefore, we are probably getting the output now. The Minister will possibly tell us what the present position is with regard to this. From the figures on what we are planting at the moment, it appears that we are gaining at about 2.5 to 2.8 per cent per annum on our planting. Based on the fact that we have only 5 per cent of our land under forest, it means that if we were to supply ourselves with our own timber we would want about 8,750,000 acres under timber. At the rate we are increasing, I do not think any of us will see the day when we will have that. As Senator Conroy said, we have to be very careful. Our agricultural land is very important to us and we do not want to start growing trees on land which can, economically, give us a better product than timber. However, that may be possible in some of the disadvantaged areas.

We must remember that we are a developing country. We joined the EEC on that basis. There is an EEC Regional Development Fund and if the Community feel that there should be development of Irish forestry to benefit the Community as a whole our policy should be such as to benefit under that.

In the EEC there is 60 per cent private forestry, 20 per cent State and 20 per cent other public bodies. We are 77 per cent State, and I do not know if EEC membership will make any difference but if we have to consider making changes to get money to develop we must do so. We all know that in the early thirties we developed our bogs very well under a State-sponsored body, Bord na Móna. I do not know whether it would be of any benefit to us to do something similar in forestry, but as the EEC is about to look at this problem, and probably bring out a policy on it, we should have a general look at our policy on forestry so that we can either develop our policy and go ahead or row in with the EEC policy if it is a development as far as we are concerned.

I welcome the debate and note that it arises out of the report of the Joint Committee on the Secondary Legislation of the European Communities. The debate is very much in context in that at present there is a very serious position, not just in Ireland but in the Community generally, in relation to the timber processing industry. The matter is being considered seriously by the commission following representations from a number of Community countries. We are not the only people who are suffering from this; the Community is suffering from an upsurge of low-cost imports from third countries that have put the timber processing industry in jeopardy. That includes the timber processing industry in such strong economies as the Federal Republic of Germany and in France and Ireland. Despite the immediate difficulties which will be surmounted when the Community devises some way of dealing with these imports, the problem is essentially a short-term one. The long-term prospects for timber products are good. Demand will tend to out-run supply in the type of market situation that will exist. I am talking very much in the long run ahead to the year 2000. There will be constant erosion of the supply situation and an enhancement of the demand situation. That means that the investment we have already made in forestry is a good one. The investment over the years is now coming on stream as far as we are concerned and the cycle of meaningful and viable development of our timber products is coming to hand in that the first real draw on our timber products for industrial development will start about 1982-1983 on present forecasts. In regard to timber, one of the advantages is that one can plan ahead in this manner.

The short-term difficulties which apply across the board throughout the Community, have affected the Irish timber processing industry. There have been difficulties in the Athy hardboard factory, in Munster Chipboard in Waterford and in Scarriff, County Clare. There are other outlets, such as the Clondalkin Paper Mills, that are going reasonably well but the real difficulty has been in chipboard production. Due to a combination of factors, to one of which I referred already, and Senator Conroy referred to it—the importation from third countries—I have been impelled to the view that what is required in regard to our timber processing industry is an overall rationalisation or national plan in regard to the existing plants. With that in mind, discussions were initiated—they are at an advanced stage at present—in regard to the future of the two main chipboard enterprises, Waterford and Scarriff, with a view to rationalisation taking place in regard to production and marketing from these two firms. Interest has been expressed by certain major firms in moving into such a rationalisation programme that will involve these two existing chipboard enterprises. I cannot say any more at present because negotiations are at an advanced and delicate stage and I hope they will prove fruitful. The rationalisation proposals which have been encouraged by a committee composed of the Department and the Industrial Development Authority were incorporated in a special report which we have to hand from A.D. Little, consultants, and have been adopted as the modus operandi which will be followed if and when we reach a successful conclusion in our negotiations by the firm involved in taking over these chipboard enterprises.

We have more serious difficulties in regard to the hardboard enterprise in Athy but discussions are taking place with a view to a take-over in that industry also. I mention those aspects because the Department is closely involved for one important reason, in order to ensure mature timber coming on stream from about 1983 onwards on a regular basis. In order to ensure that that continues to take place in regard to mature timber it is essential that we have an outlet for our thinnings. The whole essence of the harvesting of timber in a proper way is to ensure that there is proper cropping of thinnings until timber reaches maturity. In regard to an outlet for thinnings this is where the woodpulp industry, particularly chipboard, is an important factor. From the point of view of properly cropping and harvesting our mature timber resources it is essential in that operation to have an outlet for thinnings. That comes down to a proper woodpulp outlet along with outlets, such as saw-logging, for more mature timber products.

We have also commissioned a report, which has just come to hand and which is currently being examined by the Government, one into which my Department and the IDA made an input, on the long-term development of timber products generally, apart from the outlets for thinnings. The future of the whole timber processing industry requires a more sophisticated degree of timber processing than we have gone into heretofore. I am speaking of advanced paper products such as newsprint which we do not manufacture at all; all our newsprint is imported. For the more sophisticated forms of timber production, beyond certain forms of paper, packaging paper, hardboard and chipboard, we have not gone into any more sophisticated added-value form of timber production. There is a definite lacuna there in our industrial arm.

We are talking about expensive and sophisticated equipment in which energy input is very high and expensive. Such a project is being considered at present. It will have to be financed to a large extent by the State and, possibly, operated as a co-operative venture with either existing or other private enterprises not here at present or with one of the existing private entrepreneurs. Such an operation would add a new dimension to the whole timber processing area, bringing us away from the immediate added-value involved in chipboard, wallboard and rough paper, and into a more sophisticated form of paper and newsprint production. We have not tackled that area yet and in that area the State will have to take a positive lead, either by way of direct or indirect involvement in ensuring that such an industry is established. It is essential to establish it in order to provide an outlet for timber products which will be coming on stream in the middle of the next decade.

As far as involvement with the Community is concerned the important aspect that we must emphasise—it has already been referred to and is highlighted in the committee's report—is that as far as the Irish situation is concerned, any Community aid that may be devised must be made available to State forestry as well as to private forestry. The European view in this respect tends to emphasise private forestry and the need to help private forestry. Our position is unique by reason of the very high proportion of our land devoted to State forestry rather than to private forestry. We must ensure that whatever aids or means are adopted by the Community, under whatever heading, to help forestry production that will be made available to State and private forestry.

On the industrial side, it is important that the Department should play an active role in this area because of the control they can exercise by reason of their pricing policy vis-á-vis the raw material. Certain criticism has been voiced in regard to the pricing policy operated by the Department. The Home Grown Timber Merchants Association criticised the whole method of sale of sawlog timber to them and I propose to meet them to discuss how best we can agree on a quota and pricing system that would be reasonable. Similarly, whatever emerges from the rationalisation proposals I have spoken about with regard to the chipboard industry, our pricing policy and methods of delivery are all-important. I want to assure the House that I have made a thorough investigation of this area and it is one on which the Department are concentrating to ensure that no policy, whether in the way of the provision of timber or thinnings or in the way of price, will be allowed to impede what we regard as a national development in this area.

We will build in a reasonable pricing policy as an integral part of the processing industry. We cannot look on this in a narrow way of the Department selling timber or thinnings in order to gain the best price possible. We must look at it on a broader basis than a mere pricing policy as such. We do not want to give away our timber resources for nothing but we must fit the price into the national requirements and into a national plan with regard to outlets for our timber products. The price must be such as to take cognisance of the highest added-value utilisation of timber and the highest degree of employment in added-value occupation.

The pricing policy to be operated by the Department in the future will be subsidiary to the main objectives I have mentioned, the enhancement of the added-value aspect of our timber industry and the ensuring by that enhancement of greater employment in the processing side. This is tremendously important because as far as the future is concerned we have built up the natural timber resource. Any extra employment we will secure in this area will be in the processing rather than the actual production area. We have reached a steady level of production of around 10,000 hectares per year in our planting programme. That planting programme —and the planting programme that took place heretofore—will be sufficient to supply our requirements, as far as we can see, in the years ahead. Our challenge is to ensure that we have a properly organised processing arm to go side by side with the production that is coming on-stream and that is available, and will continue to be available, by a turnout of about 10,000 hectares per year.

Mention was made of the difficulties we are having in regard to the acquisition of land. This, of course, has been an inevitable development since our entry into the European Economic Community. Land for planting purposes is very difficult to obtain because of the extra revenue now being obtained from the agricultural use of land. As a result of the escalation in land values people, for any and every reason, are unwilling to give land for forestry or any other purpose because land is a bank at present. There is a lot of good sense in that; that is a fact of life we must compete with with regard to the acquisition of land.

One other aspect I should like to mention is in regard to private forestry. While it is very much the Cinderella of our forestry development programme, I have recently nearly trebled the grants available for private planting. One effect of that has been a new display of interest by the co-operative movement on tree farms. Tree farming was referred to already by Senator Cooney.

I had discussions with the IAOS and, through them, with the farmers' association in north Connacht. They have come forward with a proposal, based on private planting grants, under which a number of farmers would come together in a group enterprise to engage in tree farming. They would make use of the grants and would be financed by a leading finance house. We have had several proposals from banking houses to back this enterprise but we have not yet selected a particular proposal. They have shown an interest in backing similar type enterprises that may be organised on a co-operative basis by groups of farmers in the future.

The institutional interest by the finance houses is, quite practically, a financial one. They believe that investment in this sort of group enterprises is secure. The development of such land on a co-operative basis with farmers holds out a prospect as far as the finance house are concerned of securing their own reward in the form of the loan advanced to the particular group. I hope to have more details on this very shortly. The first such co-operative finance-backed enterprise is about to get off the ground. I hope to see similar ones being developed with the help of other financial groups who have shown an interest in that type of co-operative development of tree farming on a practical remunerative basis.

There is much more I would like to say in this area but as the Seanad can gather, there is much in the pipeline that is being considered at present and plans have not yet reached fruition. I hope to be more positive in the near future particularly in regard to the processing area. The joint report of the IDA and my Department is now to hand and is being considered by the Government. Hopefully that will deal with the proper construction of a processing arm which we do not have at present. Even though the debate is mainly on Community aspects in regard to forestry, the fact of the matter is that the answers to this problem will largely lie with ourselves. We have the timber coming on-stream into production. We know how much is there and how much we are likely to have over the next 20 or 30 years. We must now plan how to absorb this production to the fullest and most beneficial extent as far as highest added-value content and the highest degree of employment are concerned.

On behalf of Senator Conroy and myself, I thank the Seanad for taking this motion and the Minister for contributing to the debate. We believed, in the Joint Committee on the Secondary Legislation of the European Communities, that when this report went through it would provide an opportunity for the Minister to expose some of his policy thinking at this stage. Perhaps one of the things reports from the Joint EEC Committee can do is stimulate a few ideas which would enable us to think of how we are getting on at home in terms of what the EEC might have to offer us.

The first serious job that I had in life was when I went to London to work as a young engineer for a company, Standard Telephones and Cables. We were brought in to have a sherry with the managing director. He came over when he saw me, as the only Irishman of the group, and said: "Mulcahy, I remember when I visited your Parliament some chap got up and said in a forestry debate: ‘Why should we be wasting our time talking about this, what did posterity ever do for us'?" I never thought that I would contribute to a debate in the Oireachtas about forestry or thank my lucky stars that whoever was speaking at the time when the managing director listened to that debate did think about us.

In 1983 and 1984 we can now look forward to a solid output of timber being available for processing. We have problems about how we are going to do it but these are the kind of problems we like to have. As the Minister said, when it comes to forestry, trees give one a chance to plan. One has some idea of growth rate and one knows what the production will be. One has time to think.

A number of points were raised in the debate and I should like to advert to one or two of them. The EEC are looking at the notion of harmonisation. They see a value in having common objectives and that is being drawn out. There is general agreement about that. A few facts were highlighted. The EEC are short on the supply of timber. It is the second highest import compared to oil. There is a 40 per cent shortfall. There is something like £5,000 million going out of the EEC to provide this resource. We brought out the point that in Ireland we have mainly a State forest operation whereas in the other countries there is a big private investment. The Minister was able to tell us that he is encouraging private investment by increasing the grants and that the IAOS are developing some projects in this regard. That sounds very interesting.

I was not too sure about the interpretation of disadvantaged areas in the EEC report. Perhaps this might be in our favour. Given that we have a low percentage of afforestation we might be considered as a disadvantaged area and any money that is available might come in our direction. I am sure the Minister on his visits to Brussels will keep an eye on that and will get whatever is going for us.

The Minister also gave us information on various reports and I am glad to see that his Department and the IDA are looking at the downstream possibilities. Hopefully this will provide employment for the eighties. I was delighted to hear the Minister place great emphasis on added-value as the objective of it all. In that regard he referred to the point that was raised on the Rodney Rice Hour about the pricing problem. I am glad to see that he is dealing with that.

In countries like Sweden, because of the taxation procedures and structures that operate there, people are encouraged to invest in timber. If individuals want to make an investment and do not necessarily want to put the money into the bank or into a high-risk investment, would the Minister consider selling some of his forests to them and in that way generate money for the State? We would still have the output ready to go into whatever downstream processing plant would arise. It might be a mad idea but, at the same time, there might be something in it because it releases money.

The Minister took the opportunity of telling us about the chipboard problem at present. The House would be very pleased to hear of some rationalisation at Scarriff and Munster and that there would be a possible purchaser to help to bring that about. From my assessment of that situation there is no way that this State could allow those two companies to go down. The Joint Committee mentioned that and recommended accordingly in their report. It strikes me as being strange that when we are dealing with our own resources we very often bring foreigners in to look after them for us. In this case, local indigenous raw materials were being processed by companies that had a foreign base. This can be a good thing but it also can be bad. We have grown up now and it is time that we did it ourselves if necessary. If private industry will do it, whether it is foreign based or not, well and good but if there is any question of their not doing it, we should go ahead ourselves.

The Minister also indicated that the opportunities for more sophisticated type of paper output from wood products were around the corner. As part of this there might be an output in the soft tissue area. Recently some Scandinavian companies have taken an interest in companies using that type of product. There is room there for some partnership in the future. I am sure that will form part of the examination made in the report the Minister referred to.

There is one other area from which we can learn something. On the Continent it has been established that it is possible to construct a line of houses much quicker if they are timber framed. I hope that this may give rise to large-scale kiln drying of our timber. There was a fear in the construction industry that anything made of wood was going to go on fire and we tended not to encourage timber construction in housing. Given the Minister's interest and responsibilities for timber, he might promote timber construction in houses. It has been shown that it is possible to build faster and, therefore, cheaper if one does that.

The National Economic and Social Council are also looking at some aspects of the forestry industry. I gather that some studies which have been prepared for the council might very well see the light of day in the near future. It is all coming onstream. In the Joint Committee report, which was the stimulant to get this debate going, the EEC committee is mentioned. It is being set up to look at what is going on in the EEC countries in the light of the principles and objectives which might emerge. It is important for us to be well represented and to keep our eyes in Europe focused on the opportunities for this country. I thank all the Senators who contributed to the debate and the Minister for attending.

Question put and agreed to.
The Seanad adjourned at 8.20 p.m. until 2.30 p.m. on Wednesday 21 March 1979.
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