Seanad Éireann debate -
Thursday, 14 Nov 1985

Vol. 109 No. 13

Report of Joint Committee on the Secondary Legislation of the European Communities on Forestry and Forest-Based Industries: Motion.

Mr. Connor

I move:

That Seanad Éireann takes note of the Report of the Joint Committee on the Secondary Legislation of the European Communities on Forestry and Forest-Based Industries.

It is my pleasure to introduce in the Seanad this 15th report of the Joint Committee on the Secondary Legislation of the European Communities. This one deals with forestry and forest-based products. This is a very comprehensive report in that it deals with the whole forest and timber industry both in Europe and the European context as well as in the Irish context. I would like to congratulate the people who worked upon it, who prepared it and who made it such a comprehensive document. The document looks at the problems, the deficiencies and the potential of the Irish forest and timber industry. It is also very informative in the way it looks at the European forest and timber situation. It put the Irish timber and forest industry into the European context.

One of the first points made in the committee's report is that forestry is not one of the items covered by the common policy set out in the Treaty of Rome. This, of course, is a great pity. The result is that the EC Commission can only have a very marginal forestry policy and can only have a very marginal effect on the conduct of forestry policy — that is, if one exists at all — throughout the Community. That is an amazing fact because after oil imports, as the report says, the next largest import into the Community is timber. There is a very large and powerful lobby within the Community which is against the introduction of a common policy to cover timber and forest products. The lobby, it appears, consists of the United Kingdom, a very powerful member, of course; the Federal Republic of Germany, which is economically the most powerful member; and, strangely, Denmark.

All of these countries have their reservations about having Community policy extended to forestry. That is most surprising considering that the product we are talking about is in very scarce supply and that, as far as Europe is concerned, it seems it is a diminishing resource and it will continue to be and to be in scarce supply well into the next century.

The Community, of course, has had some lengthy deliberations about the inclusion of forestry and, as a sort of compromise, has established a number of objectives. Most of them are important and they are relevant in the Irish forestry context. It would be useful to read them out. These are on page 6 of the report under the list of objectives. They state:

1. To make more wood durably available for industry through proper forest management taking into account all the functions of forestry.

1.1 An increase in the volume of wood on the stump as a result of afforestation/reafforestation and/or improvement in the productivity of existing forests.

1.2 Better protection against threats to the forest.

1.3 Harvesting and deliveries at a level which takes advantage of the volume of annual growth consistent with prudent forest management principles.

2. To use raw materials with greater economic efficiency in industry, in particular by

Improving the yield from the processing of logs; and

2.2 Improving the recovery and use of wood residues in industry.

2.3 Improving the collection and recycling of waste paper.

3. To seek to identify barriers to improvement in industry structures in the Community wood chain including, for example, the structure of sawmills.

4. To promote product standards and construction codes at Community level in the relevant sectors including, as a matter or priority, sawn timber, taking into account modern techniques or production, marketing and use.

5. To encourage the industrialisation of wood components and wood-derived components and construction units.

6. To take account of other Community policies, in particular, regional policy.

Much of the earlier part of this report deals with the development of the Community policy. What I have just quoted is what the report has to say at a very early stage.

It deals, of course, with the need for development of a Community timber policy. It deals with the need to establish a better equilibrium between the agricultural use of land, with its vast surpluses, and the silvicultural use of land, that is, growing of trees, the large market deficit for timber in the Community and the likelihood that this will be the case for a long time to come. That is very important. We have a Community policy — and it may be strange for farmers to say this — which aids to a huge extent agricultural products which are in huge surplus but we have no Community policy to aid forestry, an industry in serious deficit within the Community.

The report makes another interesting point on page 12, where it states:

Moreover, it is likely to become more difficult to cover world demands for wood towards the end of the century; the industry's development has already been slowed down in Scandinavia as a result of the shortage of wood. In addition, a significant proportion of the wood available in the developing countries is used as firewood, with the result that it is likely that the continuation of the present recession will have little effect on the world wood shortage.

That illustrates the points I was earlier making about what is said in the report vis-à-vis what the EC is not doing about developing a proper forestry policy.

The next paragraph of the report deals with the problem of the finishing and processing wood industry within the Community. We see it is faring very badly against its competitors in the United States, the USSR, in Scandinavia and indeed elsewhere. The point is always made about the lack of support by practically every Community country within its own national boundaries for their own national forestry industry. On page 14 in the report we read under a heading "Trends in the Sector";

It is the Commission's contention that attention in this area is warranted not only because of the contribution this sector makes to the Community's economy in general but also because the industries in question are frail and their position is deteriorating. For example, 41,000 jobs have been lost in the Community in the wood and paper sector between 1977 and 1980.

In the pulp and paper industry the number of paper mills dropped from a figure of 1,302 in 1974 to 903 in 1980. In other branches of wood processing the situation appears more stable but even so 24,800 jobs were lost between 1977 and 1980.

These are some of the reasons why we had problems at Scarriff and Clondalkin.

The next section of the report deals with some of the submissions which have been received by the committee and included in this report. The submissions received by the committee deal with the Irish forestry industry and much of them makes very interesting reading. First of all, I should deal with the section of the report which deals with the western package, which is section C of the report. That is, of course, naturally of great interest to people like myself coming from the west of Ireland and coming from a county which is designated to be within the western package area.

This forestry development scheme, which we popularly refer to as the western package, was introduced in 1981 and it was the implementation of an EC regulation No. 1820/80. That applies to certain designated areas in the west of Ireland like the counties of Donegal, Leitrim, Sligo, Mayo, Galway, Monaghan, Longford, Cavan, Clare, Kerry, parts of west Cork and west Limerick and, of course, my own county of Roscommon. This scheme which is, as far as I know, the only coherent forestry scheme operated by the EC, was to give special aid for private forestry development in these disadvantaged areas in the west of Ireland. We should just point out that the scheme covers the afforestation of land which is marginal for agriculture but suitable for forestry and associated measures including the preparation of ground and scrub clearance. The grant aid is given for drainage, fertilisation, fencing and fire protection and maintenance of the plantation for a period of four years of planting.

The level of grant is also very generous. It gives 85 per cent to a farmer who wishes to participate and it gives 70 per cent of all costs incurred to a private company who wish to participate. We have in the west quite a number of private companies. In fact, they would appear to be the only people who are taking up the scheme in any great measure, insurance companies, pension funds etc., and those people qualify for 70 per cent of development. It does not cover the purchase of land, but it covers all the preparations, the things that I have just mentioned. This is very good for the long term economic good of the country — but one might say, in passing, that it is a great pity that so much of the scheme so far is confined to that particular sector.

The grants are very generous. They are also imaginative in that at the beginning 75 per cent of the grant is paid at the formation of the forest — that is, at the planting stage, the clearance stage and the fencing etc. — and 25 per cent of it is paid four years later; and that, of course, is subject to the satisfactory maintenance of the plots of forests since their formation. There are very disappointing results from the scheme in the way that it has taken up by the people whom it was primarily aimed at: those small farmers in these designated counties who have between them thousands and maybe millions of acres of marginal land not suitable for agriculture.

We have figures here which go to the end of 1984 and the report rightly states that they are most disappointing. At the end of 1984 there were grants approved for 3,217 hectares. The scheme is in operation since 1981 and yet by the end of 1984 we have only 3,217 hectares in all. Much of that would be forestry taken up by this commercial sector rather than the small farm sector which is was primarily aimed at. If we go further into the figures we find that the 3,217 hectares were divided into 481 schemes by the end of 1984, but only 67 of them have been carried out and, in fact, only 631 hectares have been planted. That is a major disappointment. If one takes it that it is a combination of the commercial sector and the small farm sector the amount planted, in terms of what is available, can be regarded as almost being infinitesimal. I agree with the reasons given in the report for the lack of uptake especially among small farmers. There is a lack of forestry tradition in Ireland. There is no doubt but that we have had, because of our land history, a particular love of the land for farming. Land for forestry is no part of our tradition and that is one of the great barriers to developing this policy. Of course, there is also the great difficulty of creating interest among elderly farmers or middle-aged farmers. Very often the land that is suitable for forestry in the west is in the hands of people in that category. It is not easy to sell to them the idea that they should undertake a crop that would have a 40 year rotation without any financial remuneration to them for 40 years when most of them might not see the rest of their life span lasting out for 40 years.

There is also the problem of small farms. Many of the holdings are naturally very fragmented and a farmer who may have a few hectares or even only a few acres is reluctant to have that planted. There is also the lack of economy in that kind of activity — having a small plot growing for 30 or 40 years which by any standard could only give a very small return.

The Irish Co-operative Organisation Society make a very interesting point on how this might be tackled on a co-operative basis. Their suggestions to the committee are very worthwhile, I am one of the people who will be asking the Government to encourage as far as possible the promotion of this policy along this co-operative basis put forward. ICOS suggest that the western package could be utilised much more by the parent co-operatives in the western regions registering a central forestry co-operative. The new co-operative would become involved through its development offices in the setting up of tree planting groups at local level. Its role would be in two distinct phases, providing the motivation, information, organisation and the management services necessary to establish widespread involvement in private afforestation. They should become involved in timber processing, thus guaranteeing an outlet for existing and future timber.

The central forestry co-operative would work with local groups and along parish lines. This is very good suggestion. Their role would be to identify all marginal agricultural land as far as possible in any given area or parish. They would work with groups of farmers, trying to get them to come together to plant in viable blocks if at all possible.

This scheme would have to be linked to some form of annual income for the grower. No small farmer or even a medium sized farmer will give up a significant portion of his land, albeit marginal or very often useless land, to something which he cannot get an income from in the short term. If he has to wait 35 to 40 years for such an income it is only natural that he would not be interested in such a scheme. This could be overcome by the forward selling of the crop to the Forestry and Wildlife Service of the Department of Fisheries and Forestry. This means that by instalments on a yearly basis the landowner would sell a portion of the forest crop to the Department who would eventually harvest it. Each year the farmer would receive an income from the Department of Fisheries and Forestry. This is the principle of forward selling in practice.

I suggest that there should be a special headage payment made to farmers who participate in that kind of scheme. Farmers would argue that they were replacing animals with trees. They would also argue that these animals would at least be worth a headage payment to them annually from EC FEOGA funds. For instance, if a farmer transferred 20 hectares of land to forestry and it was deemed that 20 hectares, let it be marginal, was capable of sustaining so many livestock units. I suggest that a headage payment based on the sustaining value of the land to a livestock unit be paid to the farmer each year. This would be another income supplement to him to encourage him to enter into forestry under this scheme.

I would like to refer to some of the submissions made by the Irish Timber Council, who commented on the way we organise our forestry system under the Forestry and Wildlife Service and also the milling and processing industry here. They make one particular submission which should be seriously taken note of because I believe what they are saying is true. On page 37 paragraph 64, the report states:

The Irish Timber Council states that the management of our timber resources by the Forest and Wildlife Service of the Department of Fisheries and Forestry has been and continues to be deficient. The Council points to the review of the Irish Forestry Industry, by the Union of Professional and Technical Civil Servants, which represents foresters, forestry inspectors, engineers, surveyors, wildlife officers and draughtsmen in the Service which said, inter alia, that “The nature of the Civil Service leads to a situation where adherence to established routines and the strict application of official regulations is the norm, regardless of how inefficient such action may be in particular cases. This leads to employees becoming so preoccupied with meticulous application of detailed rules that they are in danger of losing sight of the very purpose of their work, to produce timber as efficiently as possible.”

It is pretty damning and I am sorry to say that a lot of it is the truth.

I might make my own comments on the Forestry and Wildlife Service. In my dealings with them I have found deficiencies in the way they go about their operations. I do not blame the personnel involved. I blame the outmoded and outdated Civil Service methods which are almost anti-action and certainly they have no commercial bent about them. Looking at the Forestry and Wildlife Service closely it is comprised of two separate entities. It is a dual system. First, the technical side goes from the forester to the chief inspector and, second, there is the administrative, clerical side which goes from the clerical assistant right up to the secretary of the Department. This structure leads to delays, conflict in decision making and overlapping. Very often there is poor communication between both sides and lack of control. Various people have commented upon these shortcomings in the system not alone in the Department of Fisheries and Forestry but throughout the Civil Service.

When we look at the commercial aspect of the Forestry and Wildlife Service and the way they operate we see that this sector is responsible for timber sales, harvesting, forest management, land acquisition, saw milling and private forestry. Recently I took a close look at one particular aspect of this sector and I was left wondering what method of business or book-keeping they deploy in the way they work. In 1983, according to the Forestry and Wildlife Service Report, 690 hectares of forest was destroyed by forest fire at an estimated value of £39,125. It means that the value of each hectare of forest trees that was destroyed was only £231. On looking at the figures for 1982, we find that 645 hectares were destroyed and the value was £123,690 or £191 per hectare. At the same time the Forestry and Wildlife Service were acquiring land at £500 per acre, which is £1,200 per hectare, and were paying up to £800 in grant aid for private afforestation, the maximum which can be paid, through the western package. It is crazy that the forests which were burnt have been valued so low, for example, at £231 per hectare for standing trees in 1982 and £191 in 1983. There is something totally and radically wrong with those figures.

On the marketing side, in 1983 there was 1,000,193 cubic metres of timber sold for £9,439,651, that is £9.43p per cubic metre. We find later in that report that the Department's harvesting cost of a cubic metre of timber is £22.20, yet the commercial value of the timber is £9.43 per cubic metre. There is something radically wrong with that situation.

I would also make criticism of the Department in the way they manage their forests. There is an enormous lack of pruning of growing trees in forests throughout the country. That is well known and it is very widespread. It is totally unsatisfactory because lack of pruning, especially in the early stages, leads to the development of very knotty timber. On the commercial market this timber is regarded as being inferior and it has a poor image. One of the reasons for the poor image of Irish timber is because of its knotty structure and knotty nature. That arises simply because of bad management of our forests during the formative years of the tree.

I also criticise the tendency by the Department of Forestry to plant many hectares of virgin bog with trees called lodgepole pines. Those lodgepole pines have very little commercial value and at times they are almost unsaleable. I am one of the people who see that the role of our deep virgin bogs is not for afforestation. They have an economic role in the production of turf and peat products. I cannot go along with this policy of taking over vast tracts of deep virgin bog for planting with trees of inferior quality that have a very inferior commercial value. There should be a greater move towards land which is of marginal agricultural value, the heavy soils and so on, because not alone have they a much greater potential for producing far better timber but they also have a greater growing rate. There is a far greater range of timber which can be grown in these kinds of soils. Virgin bog soils have a very limited use and are, by and large, confined to one particular kind of tree which, as I have stated, is inferior both commercially and every other way.

There is a need for total reorganisation within the Department of Forestry. It needs a completely new commercial drive and commercial outlook. I suggest, along the lines that Devlin suggested for the Department of Forestry and indeed for other Departments, that the Department should be organised in such a way that the Minister should be at the centre of a body of advisers and they would be responsible for the formation of overall policy, strategy, planning and so on. There should be a number of executive units directly under him with a chief executive officer. They would have the broad responsibility for carrying out the policies which would be directed by the Minister and his central corps. I would hope that this CEO, with a director of development, a director of finance and a director of administration would, in an aggressive and in a modern commercial way, tackle the commercial side of the-Forest and Wildlife Service. We would hope that they would contribute to the development of a proper wood processing industry with marketing, sales, proper planning and research.

That section could also become involved in encouraging private afforestation along the lines on which the Department of Forestry are involved in selling the western package today. The problem with the FWS and the western package is that the Department are involved only to the extent that they administer the grants, carry out inspections and so on. They are not involved in encouraging people in a positive way to get into forestry. This is where the ICOS suggest using the co-operatives to encourage farmers to consider the concept of co-operative afforestation.

The Society of Irish Foresters have also made an interesting submission to the committee. These are the people who are out on the ground and they make a number of salient points. They suggest that many of the difficulties which have arisen might have been avoided if the Minister had set up a consultative committee as authorised by section 10 of the Forestry Act, 1946. The society also views with concern the failure to meet the planting programme of 10,000 hectares per annum in recent years, in view of its predictable effect on the supply of industrial raw material. Also as site quality is of the utmost importance on the level of supply, the traditional attitude towards afforestation of marginal land should be altered. In this context farm woodlots could contribute significantly to local wood and energy demands. That is an interesting point.

The society also points out that with the maintenance of the 10,000 hectare afforestation programme, employment would reach a figure of 15,000 in the early part of the next century compared with 7,000 people at present. I think the FWS employ about 2,200 and the remainder would be employed in the private forestry sector. They also make the very valid point that forestry provides productive employment in many remote areas where agriculture alone could not provide an economic livelihood. Forest industries are located near forests and therefore the wealth generated stimulates further rural development. They feel that the primary aim of forest management is the achievement of a sustainable yield, which means a never-reducing supply of renewable resources to the wood processing industries.

My disappointment with the submission by the Society of Irish Foresters is that they have not highlighted many of the flaws and faults in the way the Department system works. They must have their own points of view about it because they are the people who are actually implementing it. I take it that they are imaginative people. They are there at first hand to see the shortcomings and shortfalls and so on.

I would like also to comment on one other aspect of the submissions to the committee. There was a rather interesting submission concerning pastoral forestry made by Dr. Rory Harrington. It is something that is totally new in Ireland and it is very innovative but it needs to be looked at. It is no harm during this debate that we should consider some of the principles of what is called pastoral forestry. This type of forestry caters for the needs of wider spaced trees. It has the advantages of shelter provided by the trees, but also, because the trees are more widely spaced than normal, it allows for grazing as well as tree growing. There are a number of advantages. Where there is the shelter of forest trees, there is a higher soil temperature and therefore better growing conditions. That might be offset by lack of light.

Dr. Harrington makes the point about the number of hectares one can have under trees and the number of livestock units which land so farmed can sustain. There is a very good dual purpose, the production of animals for meat and the production of trees for the timber industry. He makes the point that the level ground and wider spacings afford easy access and ensure that felling and extraction costs are reduced. The shelter provided by the trees promote both pasture and grazing animals. Experiments have shown that favourable climatic conditions can prevail in the shelter of trees, with benefits of reduced evapo-transpiration by plants and soil and reduced chill effects, especially on livestock and, of course, on the soil itself. The shelter provided also reduces food requirements for growth and the seclusion afforded by trees reduces conflict between animals, with resulting benefits in production and reproduction. That is an interesting pastoral point.

Ireland's potential as a forest or timber producing country has never been realised and above all it has never been recognised. It is amazing that forest trees grow much more rapidly in Ireland than in any other country in Europe, certainly in northern Europe. The European average for the production of a cubic metre of timber per hectare of ground deployed is about 2.2 cubic metres per annum per hectare deployed. The average production of timber in Ireland is something like 11 cubic metres per hectare per annum — I may be wrong in these figures but it is in or around that amount.

A recent survey of County Leitrim — they all tell us that County Leitrim has the best forestry land in Ireland — showed that forests could develop at a rate of 22 cubic metres per hectare per annum. That must be one of the highest tree growths in the world. I do not believe that even in the tropics you would get tree growth as great as that. There is no doubt that we have never really had a true national forestry policy.

I was interested in what the committee had to say about the forestry industry in Scandinavia. They give an example of what can be achieved by a thriving forestry sector. The best example one could get is one of the Scandinavian countries, particularly Finland. In 1980 Finland had a total of 19.90 million hectares of productive forests, some 71 per cent of that country's land area. Approximately 60 million cubic metres are produced each year and account for approximately 50 per cent of that country's total export earnings. Yet Finland has a yield of only 2.5 to 3 cubic metres per hectare per annum, compared with the figure of 16 cubic metres per hectare per annum for Ireland. Finland, a cold semi-Arctic country derives 50 per cent of its total export earnings from forestry. Ireland, with the best land in northern Europe for planting trees, is a major net importer of forest and timber products.

I compliment the Joint Committee and the sub-Committee, under Deputy Joe Walsh, for the preparation of this very comprehensive reference on the forestry industry, not just here in Ireland but in the European context. It should be seriously read by our people. I am delighted to see the Minister of State at the Department of Forestry here with us today. Certainly we might not agree with all of the points the report makes but by and large it is telling us the truth. I would urge as far as possible that the point about the co-operative selling of the Western package and so on should be taken up by the Government and that it would form the cornerstone of a new Government policy on forestry.

Mr. Smith

Before I deal with the joint report on forestry I want to say a few words on the multi-fibre arrangements. This is an opportune time for the House to discuss this matter because the multi-fibre arrangement comes up for review.

An Cathaoirleach

That is after this motion.

Mr. Smith

I understood we were taking Items Nos. 1, 2 and 3.

An Cathaoirleach

Not together.

Mr. Smith

I was not here for the commencement of proceedings and I had presumed, as on other occasions, that we would be taking all the reports in combination.

Over the past few years there have been a number of opportunities in this House to discuss the prospects for greater afforestation. On all occasions the contributors have asked for a greater impetus by Government and by the various agencies throughout the country that can become involved in development of this great natural resource. However, one has to say at this stage that we are disappointed at the general response. Over the years the Forestry Department, in Government terms, has been the Cinderella.

If one were to look at it in European terms, the fact that timber and timber products remain outside the scope of the CAP would indicate that Governments in the European Community also have not approached this question of afforestation in the way they should. After oil imports to the Community, timber imports constitute the second largest import bill in the Community. When one takes into account that the average land covered by forests in Europe is 21 per cent, as high as 29 per cent in Germany reducing to 6 per cent in Ireland, the lowest in the Community, one immediately recognises that while the task for Europe as a whole is quite significant, as far as this country is concerned it is horrendous.

Criticism has been levelled at the Department of Forestry. I will not immediately join that league. In fairness to the Forestry Department, over the better part of this century that was the only real activity which was taking place. Governments in previous times when finance was very much more constrained than it is today saw fit to become involved in programmes which have resulted in a million hectares being planted. That is far from what is desirable, but one has to recognise what was made possible in the past and the context of what is happening today. The average of 10,000 hectares per year was achieved for a great number of years. It is regrettable that in recent times we have not been able to keep up with that target. The area of greatest deficiency has been in private afforestation where we are totally out of step with the better part of the rest of the world. We have to look seriously at this question. There is no point in hiding from this fact. It behoves all of us to see in what way we can at Government level, through the farming organisations, co-ops and so on become more involved in a positive way in encouraging greater plantation.

ICOS in a very valuable submission to the joint committee suggested the establishment of a number of forest co-ops. Probably enough co-ops have been established already. There is a need for co-ops who have already built up the trust of the farming community in other areas to diversify and extend their activities into the forest regime. Not alone do we have to break down the barrier where there is a significant delay in the income deriving from afforestation to the individual farmer concerned, but we have got to get over the historical and psychological barriers that are there in abundance as far as many farmers are concerned, particularly in the regions of the country which are most suitable for forestry such as in the western region, where a very significant proportion of the population live on small and poor holdings, where 25 per cent of the owners are aged 65 years or over, and where more than 25 per cent of the owners are bachelors.

Taking these considerations into account, if we are going to make that land available we have to begin with a scheme of incentives, which in the short term will perhaps be expensive but which will not need to be continued beyond a period of five or ten years, to see if we can get over the immediate hurdle which seems to be the stumbling block, the resistance or the core that has not been possible to penetrate up to now. Let us not come back to this House in five or ten years' time talking about a miserable 631 hectares that have been planted under the western package in a private afforestation. It is an absolute disgrace. Nobody could imagine when Finn Gundelach toured the west in the late seventies and was encouraged to become involved in a massive scheme of aid, part of which was aid for private forestry, that five or six years later we would be at the stage when less than 1,000 hectares are actually planted in the 12 western counties under this scheme.

In considering the advantages of afforestation we must take into account that we import about £300 million worth of timber products annually, the employment potential that is involved and above all the regional balance in the context of providing job opportunities in afforestation in areas where there are few alternative opportunities. The significant factor in all of this is that much of the land which is unsuitable for commercial agriculture and for producing the normal agricultural products is, according to scientific evidence available to us, very suitable for the growing of trees. In support of what Senator Connor said, the facts indicate not only that this land is immensely suitable but by comparison with land under afforestation in Europe, the cubic capacity per hectare is four or five times greater here.

This inevitably means as far as private afforestation is concerned that it is quite likely that the smaller farm unit can be a viable proposition in terms of afforestation once we get over the first time lag for income. We have made suggestions in the joint committee in relation to diverting headage payments to try to provide some income for the people who are either leasing or becoming involved in private afforestation. These payments would not be necessary for longer than a five or ten-year period. If we do not tackle the problem at this level, we will be coming back here year in year out saying the one thing, repeating the amount of acres that are suitable for afforestation, repeating the advantages that this country has and at the same time making no progress whatsoever in removing the barriers that are preventing developments from taking place.

In relation to the imbalance between private afforestation and State afforestation, there has been no tradition of private plantation. We must be prepared to introduce schemes which make this a viable proposition for individual farmers. I do not think it is necessary all the time to talk in terms of Government grants. The co-operative system, the farming organisations and ACOT must become more involved in establishing educational outlets. We are talking about a resource which has obviously been neglected, where the country has a natural advantage, where we are importing millions of pounds worth of timber products, where we have a climatic advantage for Sitka spruce, which is very widely used in the newsprint industry, yet we are not able for some reason to capitalise on that resource. On the other hand we have surpluses in many of the main agricultural products and huge amounts of money being spent on intervention and cold storage. It is possible with the introduction of the quota systems for the main agricultural products to produce sufficient to meet our quotas using considerably less land but with better management.

All the evidence available leads one to the conclusion that a fairly dramatic exercise has to be engaged in. In terms of the educational outlet and facilities I am discussing ACOT and the specialist services such as An Foras Talúntais need to be given the necessary funds to transfer that operation right out into the heartland of the main areas of Ireland which are suitable for forestry. If that programme is to be intensified, all the natural advantages that are there for this purpose must be highlighted. The intermittent grants or subsidies needed in the initial stages to compensate people who are involved in plantation, and have a considerable wait for the coming to fruition of that investment, must be made available. All of these must be lumped together in a national effort to try to make progress in afforestation.

Reference was made by Senator Connor to the submission by Dr. Harrington. I do not agree with some of the submission. That type of afforestation and plantation was more suitable for previous generations where we had 400,500 and 600 acre holdings rather than for the more intensive kind of programme I have in mind. I do not think we should be diverted down the road of plantation which would be of minor significance in terms of what is really needed for the country.

Overall, I think the committee should be complimented on a very fine report. It is one which should not be left gathering dust. Time and time again we have been discussing in this House reports of that nature and others. While the Minister of State is present I think it is an opportunity for him to outline to the House what kind of Governmental response we are going to get from the discussion on this report and also what is happening in EC terms in trying to have a Community programme which would facilitate the Government in the transfer of resources towards getting a fairly ambitious programme under way.

Mr. Ferris

I shall make just a brief contribution because other Senators wish to speak also. From the Labour Party point of view I want to put on record our attitude, whether it is ideological or otherwise, to the whole development of forestry services in Ireland. I am using the report of the joint committee as a vehicle to do so.

It is important that we agree that forestry is vital to the economy. Many Governments in the past have emphasised its importance and the need for its development. Unfortunately, some statements which recently emanated from various sources indicated that the Government might consider the disposal of forests to private individuals. There was a lot of controversy arising out of the statements. These originated with a representative of the banking institutions in Ireland and were taken up by various speakers. The Minister was quoted as saying things which, I understand, he may not have said at all.

At that time I put on record that the Labour Party are in favour of the retention of forests in public ownership and for their development as a national resource. In going through the report of the joint committee I notice that they also recognise the importance of forests throughout Europe. The accession of Spain and Portugal will not create a large imbalance in the situation regarding the production of timber in the Community over the foreseeable future or even over the next couple of decades.

The views of Mr. McBride are taken seriously by many people. He is on record as saying that there has never been a sufficient economic input by Government into the development of forests. He has continuously said this. As a Cabinet Minister he had a lot of experience of the problem of getting Departments to take sufficient interest in the development of forestry in Ireland. If we look at the overall amount of timber available, at the new markets in the timber industry, and at the processing industry, Medite, in my own constituency, it is obvious that we have available to us for the first time, as the result of the opening of this new factory a few years ago, facilities to process all the products of our forests. I am glad that a change has taken place in the marketing procedure arising out of our forests and the production of timber. Some of the marketing techniques used in the past were so archaic that people involved in the industry, small sawmills and so on, were totally frustrated in trying to purchase timber from the Department of Forestry.

It is only right to recognise and put on record that the Forestry and Wildlife Service of the Department determine the forest policy of the State. It derives its powers from the 1946 Forestry Act. This Act gave the Minister for Lands — the Forestry and Wildlife Service evolved in the meantime — the authority to buy and sell land, including compulsory acquisition. It is important to put on record that the Department of Lands have the power to acquire land compulsorily for afforestation. In recent budgets the Government have given the power to people who have marginal land to plant it by afforestation and to get tax concessions by doing so.

If banking institutions and other private individuals want to get into the area of forestry there is sufficient land in Ireland available for them to purchase, but I could not condone the disposal of lands already in public ownership for private plantation. Both schemes can work in conjunction with one another, but there is a major responsibility on the Department of Lands under the Forestry Act of 1946 to ensure that we maintain a forestry industry. The number of people involved in forestry employment is considerable but could at least be doubled if there was a dynamic policy of ensuring that the amount of land available was properly looked after and planted. The research which has gone into this has shown that the Irish climate, soil and all the other conditions lend themselves to good afforestation in Ireland.

The 1946 Forestry Act was followed by studies with recommendations to expand the forests. This resulted in a rapid increase of afforestation for approximately 20 years, from 1946 onwards. Unfortunately, we went through economic problems in the seventies and eighties. The present Government recently acknowledged in the national plan, Building on Reality, the value of national forests. The plan states that the Government “are determined to ensure that the national forests are developed to the maximum national advantage”. That quotation must run counter to suggestions that anybody in the Government or the Government themselves would seriously consider selling off our forests to the private sector. Recent estimates from the Forest and Wildlife Service have put the effective forest acreage, or the area under forests, at 328,000 hectares. That is about 4.8 per cent of the total land area, which just puts in context the level of afforestation we have in this country. About 85 per cent of that is all that is held by the State, so that the amount of land under forests held by the State is not really significant. But it is very significant to those engaged in forestry and to the economic situation. It could be more significant if the Government addressed themselves to the problem of trying to ensure a dynamic policy for the development of our forests. Anything that we read in this document from the committee would not run contrary to the attitude and philosophy I am now suggesting to the Minister of State who is with us at the moment to ensure that there is a degree of importance given to policy which has not been given to it in the past, apart from the first 20 years.

About 10 per cent of private marginal land afforestation is economically advantageous and private landowners plant an average of only about 700 acres a year. That is an extraordinary situation in view of the fact that banking institutions and others are suggesting that we should sell off forest land when with tax incentives and suitable land available to them private owners plant only about 700 acres a year. I would suggest respectfully that anybody in the private sector who wants to get into forestry can do so. They would improve the overall economy and they would get tax incentives from the Government to do so. We offer grants, advisory services and tax concessions in the hope of increasing private sector afforestation. I do not think that the private sector would expect us to sell forests we have already developed at public expense, the taxpayers' expense, and where we have invested a lot of money in the infrastructural development of our forest roads so as to be able to remove the timber when it comes to fruition. Is it seriously suggested that suddenly we should just pack up and leave all that to the private sector when the private sector already has tax breaks and all other sorts of incentives to enable them to do the work themselves?

The products of the industry are subsidised by the State mainly in fixed capital investment and this is provided in the supply of wood and in the supply of machinery. Information on this has been published by the Forest and Wildlife Service. The service itself sells its wood to the industry through this combination of quota and tender sales system which continually supplies a percentage of their requirements to mills at fixed prices. There has been a change in recent times in the method of selling timber and that has been welcomed because people have found it almost impossible to come to grips with the sales system that was hitherto provided. I am glad that a change has taken place in it.

The number of people employed by the Forest and Wildlife Service in 1983 — the only figure available to me — was 3,664 people, the industrial employment averaging 2,500 people. Both figures are down from the 1982 level so that, because of the lack of a commitment by the Government, or by this Government now, to this particular area of forest development, the numbers employed in the industry are dropping. I contend, from my point of view, that here is an area in which the Forestry Department can really involve themselves in increasing employment and adding to the overall national economy, if they would treat the forests with the importance that I consider they deserve.

The report itself is an excellent one. It has gone over the whole philosophy of the attitude of this country to forestry going back over 100 years or more. It makes very interesting reading; and I am sure that when this House have fully considered the report itself they will agree it was a useful exercise. Within the Community it is important to know the attitude of partners in Europe towards afforestation. Ireland should play a major role in the production of timber, the development of its by-products down the line with as much value added to it as possible, creating as much employment in this country as possible and maintaining the long tradition that the Forestry Department have in the development of our national forests for the benefit of the nation.

Mr. Fitzsimons

I have spoken on this subject before in the House and I do not want to repeat any of the points I made, but there are some areas that would bear to be emphasised time and time again. The first thing that strikes me in relation to this report is that despite all the technical and scientific progress made we still have no real substitute for timber from the point of view of the structure of timber, the strength and the decorative uses of timber. In some areas plastics are substituted very successfully for natural timber — kitchen fittings and areas like this. I recall that during the last war many of our best sycamore and beech trees were cut down to provide veneers for the timber industry. I recall at that time those people who were purchasing the trees invariably had to see what type of timber was in the tree and they used cut a small slice of the bark and tree to see what type of veneer it would give. The farmer who was selling the tree thought that the purpose of doing this was to see if the tree was sound but in effect it was to see what type of veneer was there. I also recall that in many cases where the piece of bark was placed back in position it grew into the tree again in a short space of time.

With regard to the substitution of plastics and aluminium in windows, for example, we have a problem at the present time in the joinery industry. Something could be done in this area. There is no doubt we must move along with the times and progress — and there are certain aspects of aluminium and plastics which appeal to the user as regards maintenance — but, from the point of view of aesthetics and the decorative effect there is no substitute for real timber. We all have learned the poem in which the poet cried out "Cad a dhéanfaimid feasta gan adhmad? Ta deireadh na gcoillte ar lár." I hear this used in an advertisement on television and radio. The pronounciation is different to what I learned, I must say. This report in some sense has the same pathetic cry of scarcity, of not enough being done in an area that is very important.

I have said before on very good authority that Irish timber is as good as timber grown anywhere else. I have come to the view that indeed Irish timber is better than timber grown in many other places. I have discussed the subject with people who worked at timber and owned saw mills. They told me that the big problem in the past with Irish timber was that it never got a fair chance. There were many cases, for example, where a tree would be cut down, cut into timber and built into a house within the space of a few days. Certainly in that kind of a situation nobody could expect to get satisfaction.

In my former parish of Kilbeg in County Meath a considerable area has been planted with trees. This afforestation is due almost entirely to the efforts of the Muintir na Tíre organisation in the parish. I would like to pay tribute to the work done by Muintir na Tíre, because they have worked all over the country to this effect. This is also a tribute to the late Canon Hayes about whom Senator Ferris has spoken with such enthusiasm and who comes from his home place. We share some connection with Canon Hayes because he was in the parish of Kilbeg, his first curacy on loan from Tipperary, and there are happy memories of him there. I would like to pay tribute to the great work done by Muintir na Tíre in this area and indeed in all other social areas.

The report points out quite rightly that, after oil, forest products represent the single biggest import category of the European Community. It is one of the largest items on Europe's balance of payments blacklist, accounting for over 11,000 million ECUs per annum. This situation will not change on the occasion of the next Community enlargement, due on the 1 January next year, because Portugal will be the only member state with a new production surplus in timber, which will not affect the Community.

Although a Community policy on forestry is at the very early stage of its development, the joint committee feels that now is an appropriate time to consider the attempts being made in this area. This is especially so as there has been a very disappointing response to the forestry element of the western package from which so much was expected and which promised so much. It was specifically designed to stimulate the development of forestry in the western area. The Commission proposals come under three headings and they are the three main objectives: first, to increase the long term wood supply to Europe by increasing the forest estate, by more efficiently utilising and harvesting that which already exists, by better forest protection and increasing the annual cut of wood to match growth. Secondly, the proposals seek to increase log yields — that is the percentage return in volume terms on cutting regular shaped timber from a round log — and increase the utilisation of sawing waste and the recycling of waste paper. Thirdly, it is proposed to improve the structure of the wood used in industries. These three headings are discussed in great length in the report and they are worthy of study.

With regard to the forestry element of the western package itself, the report goes into some detail. That is important. The forestry development scheme introduced by the Minister for Fisheries and Forestry applies to that part of the west of Ireland designated as disadvantaged under EC directive. It is comprised of the counties of Donegal, Leitrim, Sligo, Mayo, Galway, Monaghan, Longford, Cavan, Roscommon, Clare, Kerry, Cork and west Limerick. The scheme commenced on the 15 April 1981 and forestry developments undertaken on or after that date in accordance with the terms of the scheme were eligible for good grants. The scheme covers forestry development which is (a) the afforestation of land which is marginal for agriculture but suitable for forestry, (b) associated measures including preparation of ground including scrub clearance, drainage, fertilisation, fencing, fire protection and maintenance of the plantation for a period of four years from the year of planting. So, in effect, it covers all works connected with or ancilliary to afforestation.

The grant levels are generous. They are described in some detail in the report. The maximum grant payment is 85 per cent of approved costs for farmers — and 70 per cent of such costs for others — who undertake the planting of their lands themselves or through some competent forestry service, who utilise all or part of their lands for forestry purposes under a partnership, for example, a leasing arrangement with either an investment agency or the State subject to an overall limit of 1,210 ECUs per hectare. This is subject to a relationship between the ECU and the IR£ but I believe at present the limit is something over the £800 quoted in this report, which seems to be a generous grant. The grants are payable in two instalments, 75 per cent on satisfactory formation of the plantation and 25 per cent four years later, subject to satisfactory maintenance since planting.

The general conditions are worth considering:

(a) The areas planted by an applicant in any one planting season must be not less than 0.25 hectares.

There must be some good reason why this applies. I calculated that approximates to two-thirds of an acre; but, personally, I see no reason why smaller portions would not qualify for a grant because in effect what it means is that, however small the portion, we are making progress, and I am sure there are areas where less than this amount might be available or where it might only be possible to deal in any particular year with a smaller section. I would ask the Minister why is it related to that small area?

Individual areas of less than 0.25 hectares will not be taken into account in calculating the amount of grant payable.

Again, that is a mistake for the same reasons—

Save in exceptional circumstances, the width of any plantation must be not less than 40 metres (44 yards).

Again, I would ask why? I am sure there may be some very sound and practical reasons, but it could also be that those are arbitrary lengths and depths. I see no reason why the smallest area, much smaller areas indeed, would not be included in this grant scheme. The trees planted must be of a species suitable to the site and approved by the Minister. A certificate to this effect must be provided by the applicant. This is reasonable and right and proper.

An adequate number of trees at suitable spacings must be planted. Again, this would hardly need to be repeated in detail, but it seems sensible. Then the report goes on to list softwoods. I wonder why hardwoods are not included, because hardwoods are much more difficult to grow. They take much longer to mature, from 100 years upwards. The country is practically denuded of hardwoods, oak and sycamore and beech or the deciduous type of trees. I would like to see an emphasis on the hardwood area rather than on the softwoods.

The plantation must be adequately fenced and protected. In carrying out the work all reasonable steps should be taken by the beneficiary to avoid adverse effects on the environment. This is important and has been gone into in some detail. The type of tree is important environmentally and I think it would be generally agreed that deciduous trees are far more attractive than the conifers.

Payment of the second instalment may be withheld if the plantation has not been satisfactorily maintained since its foundation. That is a condition no one could object to. There is an advisory service available to people who want to plant trees. It is important to pay tribute to all the professional people in the advisory service of the Forestry and Wildlife Service who do so much work in promoting afforestation. Last week they had an open day. A weekday seems to be a bad day on which to have this kind of arrangement. I would suggest a Sunday or a Saturday would be more suitable. Consideration should be given to this so that many more people could attend. Efforts should be made to notify schools, especially secondary and community schools, to give students an opportunity of benefiting from these open days.

With regard to the discretionary nature of the grant, the report says:

Grants to assist private planting are paid at the discretion of the Minister for Fisheries and Forestry. In areas where State forests have already been established the Minister will not normally be prepared to pay a grant in respect of lands which, in his opinion, would more appropriately be incorporated in State forests.

I would ask, why have this regulation when we are making progress and getting more land planted, which is the whole purpose of the exercise? Here is a situation where, perhaps, there is a small parcel of land in an area which the Minister might consider should be incorporated in a State forest but it would not qualify for a State grant. This should be changed.

The response to the scheme to date has been most disappointing, despite departmental assurances that it has been well-advertised through leaflets, radio and television, the holding of public lectures and articles in local papers. Grants in respect of only 3,217 hectares have been approved to date. These are as follows: in 1981, 45 hectares; in 1982, 490 hectares; in 1983, 923 hectares, and in 1984, 1,759 hectares. These are more than doubling up each year and they must give some satisfaction. Nevertheless, it is a pity that to date it seems less than 8,000 acres have been planted under trees. The reasons for this are considered in the report. They are supposed to be historical, social and economic. The principal reasons are listed and include the lack of a forestry tradition in Ireland. In fact, the little private afforestation which was previously undertaken in Ireland was associated with the landlord and the big house. Hence it was suspect to the rural population. This was so in the last couple of centuries but it did not apply to a period before then. This is covered in more detail in a later section of the report.

There is an obvious difficulty in creating an interest among single, middle-aged men and elderly farmers in an investment where the pay-off is 30 or 40 years hence. This is understandable. I am sure this applies equally to married men and women. It is a long time to wait and I do not see why it should refer specifically to single, middle-aged farmers.

The small farm size creates pressure for more land to be redistributed rather than to be afforested, especially if this is being undertaken by outsiders. This is understandable if the land is of good or even average quality. By and large, we are referring to land which is not suitable for agriculture. The long term nature of the investment is another handicap. The largest trees comprising the highest value and output could take 35 to 45 years to mature fully. The report is specifically referring to and, indeed, dealing with softwoods only. This is a pity. A section of the report should deal solely with hardwoods and should make an attempt to progress with the planting of hardwoods.

The report is very interesting. It goes into detail about the historical situation in Ireland with regard to forestry. It goes back 8,000 years which is a very long time. It must be conjectural in many cases. The report comes to the sixteenth century where it is stated that one-eighth of the country was under forest. This situation soon changed drastically. We know that many of our forest plantations were cut down in order to make it easier to conquer this country. They removed the cover for those who were defending the country. Destruction of the forests was carried out in the seventeenth and eighteenth centuries. There was great turmoil, strife and conflict. No attempt was made to replenish these stocks which were destroyed. As a result, Ireland was a net importer of timber by the early part of the eighteenth century. The shortage of timber had the effect of making it more difficult to build houses. There was a limitation as regards the structural timbers that were available. Most of the old thatched houses, for example, were very narrow. This was the primary reason as there were no strong beams. This is why the old thatched house developed. Houses were long and narrow in structure, due to the scarcity of timber. This was one of the reasons why the traditional thatched house is so attractive. The limitation of materials available and the ingenuity of builders, together with the scarcity of materials, resulted in the distinctive features of the traditional thatched house which we know so well today. The agitation by the tenant-farmers for land reform made it difficult for the landlords to invest in afforestation. They saw it as a forewarning of things to come. With the first Land Act of 1881 the landlords became conscious of the insecurity of their ownership. They commenced the liquidation of their woodland assets, preparatory to the sale of the land itself for division among the tenants. All these landlords and big houses had sawmills of their own. Like most of the big houses, they are still there today in a dilapidated state.

One of the important points made in the report is that at present Ireland has the smallest percentage of land under forestry in the Community. A figure of 6 per cent, compared with 9 per cent in Britain, 27 per cent in France and 29 per cent in Germany is noted. The average for the Community as a whole is 21 per cent. Our potential for wood production is unparalleled by any other country in the Community. The report points out that because of our oceanic climate, our proximity to the Gulf Stream and also the fact that timber production from relatively fast-growing conifers such as sitka, spruce and other pines means that the highest class yield in Europe can be achieved in Ireland. This is very important and it should be emphasised. It is not emphasised enough. There is a figure of 14 per cent for the existing forest estate which is generally in less productive areas compared with 11 per cent in Britain and an EC average of 3.5 per cent. A recent survey assessed an average yield class for County Leitrim of 22 per cent with individual plots reaching 32 per cent. That is an extraordinary comparison to which attention should be drawn. The average for the EC as a whole is 3.5 per cent as compared with a high level of 32 per cent in certain areas of County Leitrim. In areas of the EC where they have this low average they are able to plant and cut down timbers and make forestry commercially viable. In this country where we have a capacity of approximately eight times as much, we are far behind.

The report tells us this represents a considerable natural resource which has yet to be fully exploited. There are large areas of under-utilised land which are ideally suited for forestry production. Forestry and forest-based industries in Ireland have experienced problems. There is an over-capacity in the sawmills sector and the pulpwood used in industries have had a particularly difficult time with all investment prior to 1982 going broke. It is an extraordinary situation, all of them going broke. The report refers specifically to the Clondalkin Paper Mills and the chipboard company in Scarriff. Even in this situation where we have such enormous capacity, and where there is this outlet for the timber, it is difficult to understand firms which invested in that area before 1982 going broke.

The Irish Timber Council state that the management of our timber resources by the Forestry and Wildlife Service of the Department of Fisheries and Forestry has been and continues to be deficient. That is a very serious claim, pointing the finger at the Forest and Wildlife Service. This should be examined in great detail. The council points to the review of the Irish Forestry Industry by the Union of Professional and Technical Civil Servants, which represents foresters, forestry inspectors, engineers, surveyors, wildlife officers and draughtsmen in the service which said among other things that the nature of the Civil Service leads to a situation where adherence to established routines and the strict application of official regulations is the norm, regardless of how inefficient such action may be in particular cases. This leads to employees becoming so preoccupied with meticulous application of detailed rules that they are in danger of losing sight of the very purpose of their work, which is to produce timber as efficiently as possible.

That is a serious charge. I am sure it could equally refer to other areas quite apart from forestry. In the Civil Service, there is this inherent inhibition which one does not have in the private sector. That is an area that should be looked at in order to give more scope and leeway to the people who are immediately involved in afforestation. The alleged deficiencies in the operation of the Forest and Wildlife Services are stated to be the absence of any specialist training for its management and staff and the inordinately high harvesting costs because of faulty methodology. That is something that one would think would be mandatory and necessary. This is difficult to understand in a situation where many professionals would be involved. Even with the strides that have been made in this area, we seem to be behind, because of faulty methodology.

The report refers to the lack of any policy to improve timber quality by culling and proper resource management. That is one area I thought was well looked after in the Forestry Department. The report mentions the absence of any marketing ability within the service. I think that this is necessary, even though the markets are large and the outlets are available. Obviously, it is very important to carry out an analysis and programme to concentrate on the marketing in order to make as much profit as possible from the forestry section.

The report goes on:

In the Council's view the bureaucratic nature of the current management of our forestry resources has two specific consequences which impact most adversely on the Irish sawmilling industry. These are — the system by which timber is sold to sawmills by the Forest and Wildlife Service.

The absence of accurate production forecasts by the Department which would allow proper planning by the industry as a whole.

This is something which could be overcome with proper management. The report goes on to state:

The Department indicates at irregular intervals that it has quantities of timber available for supply to the sawmilling industry — the quantities available vary as do the locations and the industry has no way of knowing at any given time how much timber will come on the market and where it will be located

This is a serious defect which should be highlighted. Something could be done about it and it is most important to do it. The report goes into further detail. It says that the Council:

proposes the establishment of an autonomous semi-State organisation (An Bord Adhmaid) on the lines of other commercial and development organisations such as Bord na Móna or Bord Iascaigh Mhara, in substitution for the existing structure. The Council sees the board comprising of representatives of growers, processers and users as well as persons involved in the technological and developmental aspects of industry.

The Minister should look into this immediately. It seems to be a very sensible suggestion. It seems reasonable. In fact, it seems to be something that should have been done a long time ago. We should have An Bord Adhmaid or a specific board to look after all these organisations, to look after all these aspects, to cater for all these problems and to plan for the future.

The report goes on to state that the board will be divided into four principal sections — a resource development division, a processing division, a marketing division and a financial and administrative division. All of these are considered in some detail.

The council believe that, given the existence of dynamic and entreprenurial management, the Irish softwood industry can substitute current imports, making timber one of the State's most important and most valuable resources. We would all concur with that. As I have already said, I see no reason why hardwoods cannot be included or why we are concentrating solely on softwood to the complete exclusion of hardwood. Hardwood is most important. It takes a long time to mature and has four times the life of the softwoods. I am at a loss to understand why there is no specific section relating to hardwoods.

The Society of Irish Foresters suggest that many of the difficulties which have arisen might have been avoided if the Minister had set up a consultative committee, as authorised by section 10 of the Forestry Act, 1946. I am sure that must have been considered by the Minister. It would be interesting to know why this consultative committee was not set up. It is a long time since 1946. I am sure a consultative committee would be most important and would do invaluable work in that area. I would ask the Minister to look at this seriously, now that we are dealing with this report.

The society also view with concern the failure to meet the planting programme of 10,000 hectares per annum in recent years in view of the predictable effect on the supply of industrial raw material. Again, we had this target of 10,000 hectares, which is a modest amount, yet we failed to reach it in a country which has such potential and which has such an area of land. It is only in very recent times that this emphasis has been placed on promoting the grants which are available in this area. The report states that as a site quality is of utmost importance to the level of supply, the traditional attitude towards the afforestation of marginal land should be altered. I am not totally clear what is meant by this. Is the report saying that land which is not marginal, which might be classed as average or classed as land which is capable of giving a return to the agricultural sector — and perhaps even some of the good land — should be included in the afforestation programme? If it is saying this, I would not agree with it. We have so much land that is suitable I could not understand why it should be necessary in that situation. The report goes on:

The society points out that with the maintenance of the 10,000 ha. afforestation programme, employment would reach a figure of 15,000 in the early part of the next century compared with 7,000 at present. Forestry provides productive employment in many remote areas where agriculture alone could not provide an economic livelihood. This is most important. I recall Senator O'Leary being critical of forestry in one contribution which he made and which I regard highly. Taking everything into consideration, it is unreasonable to be critical particularly of the short-term returns which some Members would emphasise or concentrate upon, because this is a long-term project. Employment is most important and is something which is not considered sufficiently, particularly with the present situation of almost 250,000 people unemployed.

The report goes on to consider some submissions which were made. These have been referred to by previous speakers. Professor Joyce in his submission makes the point that in a situation where we have one agricultural product after another, giving rise to embarrassing and costly surpluses, a change in land-use within the Community seems long overdue. This seems to be very sensible and straightforward. There is much potential in this area. Clearly, there can never be a surplus. There can never be a problem in that regard. We are not utilising this suitable land for this purpose. Professor Joyce goes on to state that we are all only too well aware of the problems that can be encountered. He cities the Western Package as an outstanding example of resistance to change.

The report goes on to say:

The Joint Committee was most interested in a submission from Dr. Rory Harrington on the subject of pastoral forestry, i.e., the grazing of animals in forestry. The concept is as old as agriculture but the practice as it relates to modern farming is very recent.

I must say it is an area of which I am totally ignorant. I know that people who let land would be reluctant to let it for the grazing of horses or ponies because they eat the bark at the bottom of the trees. It is news to me that there is a possibility of feeding animals totally in the area of forestry. It is worth considering. The report tells us that there is little practical demonstration of its potential, but Dr. Harrington maintains that the concept is biologically sound and the technology and practical knowledge are available for immediate implementation.

An Leas-Chathaoirleach

Before I suspend the sitting, as agreed on the Order of Business this morning, I wonder would the Deputy Leader of the House, Senator McDonald, indicate if it proposed to resume Item No. 1 at 2 p.m.?

Sitting suspended at 12.30 p.m. and resumed at 2 p.m.

Mr. Fitzsimons

Before the adjournment I was dealing with the question of employment. I referred to the part of the report which states that with the maintenance of the 10,000 hectares per annum afforestation programme employment would reach a figure of 15,000 in the early part of the next century compared to 7,000 at the present time and that forestry provides productive employment in many remote areas where agriculture on its own could not provide an economic livelihood. This is very important.

The report then goes on to tell us that to ensure the orderly management and maintenance of the forest resource it is essential that the ultimate control of factors such as protection, proper exploitation and regeneration, which influence sustained yield, must be vested in the State. This should be seen as a separate function from the operation of a forest enterprise which may be under the control of such diverse interests as the State, semi-State, private companies or individual owners. I would like to remark at this stage that there are reports in the media that there was a possibility that the State would dispose of some of its assets in this area. It was generally agreed that this would be a retrograde step. The proper course is that the State would give encouragement by way of grant, advice and all the other incentives that are there to bring the suitable land into the production of forestry.

Dr. Harrington enumerates the major benefits of pastoral forestry, which is the grazing of animals in forestry. The report states that it is not a new concept but is certainly new in this country. He lists a number of points which are worthwhile taking into consideration. The joint committee must have have considered them worthwhile considering since they are included in this report. They are:

1. More marketable timber of higher value is produced and presently costs at port of entry approximately £400 to £600 per cubic metre.

2. A forest enterprise is established without reduction of existing pastoral land use.

3. Small and separated parcels of land can be planted and tended economically.

4. Labour requirements are farm orientated in scale and continuity.

5. Costs of establishment are low— £200 to £400 per hectare (£80 to £160 per acre).

Dr. Harrington estimates the return at present values which he goes on to detail.

In their presentation to the joint committee Woodfab Limited, a company employing 380 people with an annual wages bill of £4 million, drew attention to several distinct features of forestry in Ireland. This must be taken into consideration from a company of such size and such importance. Some of the points have already been emphasised. At 6 per cent Ireland has the lowest area of land under forest in Europe. This compares with an average of 20 per cent in other EC countries. Ireland's forests are 80 per cent coniferous species, which have short rotation, usually 30 to 40 years. The inference from that is that the remaining 20 per cent would be hardwood. This could be increased considerably.

With regard to Ireland's high productive capacity it is pointed out in the report that in terms of cubic metres per hectare per annum Ireland has a "yield class" of 16 compared with 11 in the UK, three in the Scandinavian countries and a Community average of two and a half. In an earlier part of the report he referred to a Community average of three and a half but the proportion remains much the same. Regarding the large availability of land suitable for afforestation, the report states that Ireland has at present 400,000 hectares under forest but there is an additional 3.3 million hectares which is marginal for agriculture but suitable for afforestation. In Community terms there is some imbalance between State and privately-owned forests.

We proceed to the views of the committee, which are very important. I will not deal with them all but the ones that are most important and those that appeal to me most. The State is clear how important the forestry and forest based industries are to the European Community and to this country. The report states:

Apart from the huge balance of payments deficit, the demand for forest products in the EEC has also contributed to the depletion of natural resources elsewhere in the world.

This is worth taking into consideration from the point of view of a selfish approach to it, that by not providing enough for ourselves, we are taking these products from the underdeveloped countries. Fifty per cent of the world's forests come from the underdeveloped countries, according to the report. The report then states:

Forestry could be logically considered as a natural part of the Common Agricultural Policy but its main product, timber, is not listed in Annex 11 of the Treaty of Rome as a recognised agricultural product.

This has been referred to a number of times in the report and has been referred to by other people. It is a big drawback. I am not sure if anything can be done about it. The report also states:

In terms of financial support, forestry, as pointed out in the Woodfab submission, receives only a tiny amount of funding, a few million ECUs in comparison with agriculture massive 18.6 billion ECU budget. Yet Europe's forests cover some 35 million hectares or over one-fifth of the land surface and represents a considerable natural resource which is also renewable.

This is an anomaly. It is in the general area of agriculture and therefore it is only natural that it should be considered part of the Common Agricultural Policy. The reality is that it is not. It has received very little support in comparison with the agricultural sector.

Further in the conclusions the report states:

A major drawback with investment in forestry through the Western Package has been identified as the long wait for return of capital. A number of worthwhile suggestions have been made to the Joint Committee, for example, the continuation of headage payments for, say, 25 years from the time of switching to forestry, and forward selling of timber. The Joint Committee feels that these suggestions are worthy of consideration and could contribute to enticing more landowners into forestry.

The report refers to social welfare benefits which could apply to people in this area. In the long term it would cost the State more but it would result in increasing the area under forestry. The report continues:

The Joint Committee sees the Western Package as an ideal way of stimulating private afforestation in this country, which is low by European standards, especially if undertaken by means of the co-operative approach favoured by ICOS. It feels that a strong private sector involvement is vital for the development of forestry in this country and that it would be beneficial to have a 50/50 ratio, rather than the 80/20 balance between State and private ownership that exists at present.

This is further making the point that the State should not dispose of its assets in this area but should encourage development in private ownership while it retains what it has and disposes of it in the normal way. The report continues:

Forestry would seem to offer ideal opportunities for pension-fund type investment, and consideration should be given to offering tax incentives, as in the UK, to ensure investors are guaranteed a good return.

This is something I feel the Minister should consider with great care. The report further states:

The Joint Committee feels that the Land Act, 1984, which introduced the relatively novel concept of land leasing into Irish agriculture, could be usefully invoked to increase the supply of land for afforestation.

As far as I can recall the minimum period for leasing under that Act was seven years which seems far too short a period to be of any use in the area of afforestation. I feel that the joint committee must have given considerable thought to applying this concept to improving afforestation. I feel this is something the Minister should look at as well.

With regard to extending the western package to the rest of the country the committee had this to say:

The Joint Committee has a lot of sympathy with the view expressed by Woodfab that the forestry element of the Western Package be extended to the entire land mass of the country. In view of the present disappointing response it would obviously be difficult to make a strong case on this at present but this is yet another reason why the scheme must succeed, so that the point might be forcibly argued at a later stage.

I compliment the committee on the views expressed. These views were made by professional people who are very knowledgeable in this sphere. It seems the area is so wide, the 13 counties I listed, that it would be worthwhile extending it to the rest of the country. In Meath for example we have land that would rate among the best in Ireland and yet within the county of Meath there are large tracts of land which are unproductive, lowlying and which cannot be drained properly. These grants should be made available to areas, some of which are very large and even wooded parts of County Meath, like Sliabh na Caille and north of Nobber, where the land is suitable for afforestation. I have no doubt that there are similar areas all over the country.

Nationally Ireland has a great capacity to expand from a low base by European standards. There is only 6 per cent afforestation and tree growing. We can do nothing only improve. It is interesting to look at the imports of timber given in the report. Wood manufactures excluding furniture, in 1979 was £35 million, in 1980, £37 million; in 1981, £46 million; in 1982, £42 million; and in 1983, £42 million. The figures for furniture of wood are 1979, £21 million; 1980, £24 million; 1981, £29 million; 1982, £29 million and 1983, £26 million. That is a very large amount of money which could considerably reduce our balance of payments.

The conclusion of any report is the most important part. I will not go into all the aspects of the conclusion just the important points. The report states:

In terms of its potential the forestry sector in this country could be said to be in its infancy at present but it represents a considerable natural resource, which is renewable and . . . can make a significant impact on the nation's prosperity in future years. While it would seem that at Community level forestry will remain the "Cinderella" of Europe's natural resources for the immediate future, we have been given an opportunity under the forestry element of the Western Package to show what can be achieved with the help of Community aid.

In this House and elsewhere complaints have been made on many occasions and are continually being made that we do not avail of all the aids available from the Community. We could take advantage of much more aid if we set about improving the situation in relation to forestry.

I would like to refer to some of the publications on this important subject. One of them is Europe's Green Mantle, Heritage and Future of our Forests, No. 204, which was published in October 1984. It refers to some important aspects regarding the risks associated with investment in afforestation. It refers to acid rain, this recent phenomenon. Acid rain causes great problems in forest areas in Germany but at that time it was not proved conclusively. Forest fires are a large problem.

I quoted before in this House and it is worth quoting again from The Irish Press of Monday 18 February 1985. The heading was “Garda Probe After Fire Ravages 500 Acre Forest”. It states:

Gardaí in Mayo are investigating three fires, one of which destroyed more than 500 acres of State forest and caused houses in Ballina to be evacuated early yesterday morning.

This must be a major stumbling block in the area of investment in afforestation. In that situation the investment and hard work of many years are lost in a matter of hours. I know that the forests and plantings are designed so as to leave considerable gaps between sections but this is an area which should be looked at with great care because it must inhibit development as far as many people are concerned.

Fragmented private forests and rising costs are dealt with and then the report goes on to tree diseases. It deals specifically with two of them, Dutch elm disease and oak wilt disease. We know that Dutch elm disease has wiped out all the elm trees in this country and over most of Europe. There is a less serious problem with the oak wilt, which is apparently an endemic fungal disease but it still has taken its toll, and then storm damage. Storm damage is a serious problem. I am sure all these things will be dealt with by the Minister and taken up by him.

The Case for Forestry is a book issued by the Forest and Wildlife Service which I have found over a number of years to be very helpful and informative. As far as I know the last edition was revised in 1983. Perhaps it would be possible to include a page bringing this booklet up to date. The last publication I want to refer to is Grants for Private Planting. I commend this leaflet which is available from the Department of Fisheries and Forestry, Forest and Wildlife Service, which gives all the details regarding the grants that are available.

This is a very important area for the country. There are serious deficiencies. The progress that should be made has not been made. It seems that by and large over a number of years we have remained static: mar sin críochnóidh mé mar a thosnaigh mé le ceist an fhile nuair a dúirt sé: "Cad a dhéanfamíd feasta gan adhmad, tá deireadh na gcoillte ar lár".

Mr. McDonald

The joint committee in their examination of the development of Community policy on forestry and forest-based industries considered in the main two documents. The first one was the communication from the Commission to the Council on the Community action programme with the proposal for a Council resolution concerning objectives and lines of action for Community policy regarding forestry and forest-based industries, a document of 1983. The second one was the Council Regulation EC No. 1820/80 for the stimulation of agricultural development in the less favoured areas of the west in so far as it deals with forestry.

During the course of the work of the subcommittee of the joint committee, representatives of the Irish Timber Council, the Department of Fisheries and Forestry and representatives of Woodfab met the members of the joint committee and in addition there were a number of written submissions made so that the entire industry was looked at from quite a number of angles. I consider that the document examined in the most comprehensive way ever the industry both from the point of view of its potential to our economy and its potential as a vehicle to employ people. I suppose the Minister for Finance will be interested in the industry as a means of easing the balance of payments.

Despite all that and the vast amount of work and the hours that were spent on it, I must express some disappointment at the unusual lack of interest in this subject, which I suppose most people will say is dealing with one of our natural resources. Maybe it is lip service but people like to lay a claim to it. The people in the saw-milling industry will want the timber for nothing. They say they need free timber in order to keep people employed. I do not think the Department of Forestry should be confused with the Department of Social Welfare. If people say that there should be changes and that we should have a new forestry board it should be on more economic lines and certainly not be set up as yet another social welfare operation.

I do not share the view that the Civil Service are incapable of meeting the challenges of the present time. After 25 years in the Oireachtas I understand, as well as everybody else, the constraints that public officials have in administering the Acts of the Oireachtas but I believe the Department officials, especially those dealing with forestry, whether it is the forest owners or saw mills, should be able to reduce the amount of red tape. That is all that is required. I hold the view that perhaps the section in the Department of Forestry dealing with sales should take on board some considerations of commerce and industry and not continue on being constrained by outdated regulations which come from the system that we have and which is enforced by the Comptroller and Auditor General. I see nothing wrong with complying with the wishes of the Comptroller and Auditor General but in modern commerce I hope it is possible for the section dealing with sales to move into, accept and take on board commercial practices which are common in the last quarter of the twentieth century.

This industry does not need another commission, another review body or anything of that sort. The country is bedevilled by committees, commissions and people who are doing reviews on an ongoing basis. This industry needs action. If I have one criticism of the Government it is their inaction on updating the policies governing forestry. It is not so long ago that we were in Opposition. I know that in Opposition our party had a very dynamic and forward-looking action programme for development of our forestry resources. I am at a loss to know why the Minister has not acted on that.

I recognise that we have in the Department of Forestry top-class administration and management personnel. We have an excellent force of forestry workers. The State and the Department of Forestry own 30 per cent of the land in County Laois. There is a huge imbalance between management personnel and ordinary forestry workers. I will not mention in this House a figure but I would like to see at least 500 or 600 more forestry workers being employed.

I am not a forester but nevertheless I detect a reduction or a disimprovement in the standard of forestry management over the last few years. Fine trees set out in long straight lines have grown to a majestic proportion, especially in some of the valleys of the Slieve Bloom. In the areas that were cut down and harvested over the recent years, they are being replaced by a system that would make any forester weep. The ground is not being cleared and anywhere that the workers find a space in the bushes and briars they just plant a tree. The people who will be harvesting the newer forests in 40 years' time will not be able to walk between rows of trees — they will be fighting their way through the scrub and undergrowth. I do not think the nation can expect the same kind of yield from a forest that is planted in imitation of a natural process without any effort made by man. I suspect that the change in the modus operandi could certainly be put down to a reduction in the costs of replanting.

All we require to get greater impetus into our State forest is that there should be a greater utilisation of manpower. In other words, the Department should employ more people on the ground to do the actual work. This would have a tremendously beneficial effect on the economy of the rural areas where the forests are. Great strides could be made if the Minister would put a little effort into securing greater resources for his Department.

We have had over the last number of months experience in meeting senior officials of the Department of Forestry and representatives of a number of saw milling interests. Woodfab, in the course of their meeting with the Joint Committee, set out a number of areas in which they would like to see forestry and forest policy being changed and improved. I would not agree to any suggestion that the Irish taxpayer should be subsidising raw material for private commercial interests like Woodfab who are part of the Smurfit Group and control 40 per cent of the saw milling industry, while the other 60 per cent is comprised of 164 small family-owned saw milling units. These people are pleading bankruptcy and uneconomics. I do not want to go into that, except that I have been told that it takes about eight cubic metres or eight tonnes of timber to make a roof for an average house. If the saw mill acquires that raw material from the Department of Forestry, if it is light saw log they pay somewhere around £13 per cubic metre and if it is heavy saw log they will pay as much as £30 and £31 per cubic metre. So that is a cost in raw material of either £104 or £240, depending on the type of timber they buy. If you go in with your lorry or your trailer you will be charged £1,100 or £1,200 by the saw mill to get that requirement. The people who embarked on this programme of afforestation in the thirties and forties did not set about that work and that creative investment solely to provide subsidised raw material for the commercial interests of this or any other decade.

Regarding the sale of forest to the banks or to private interests, I would be in favour of the Department selling off huge squares of mature forests or, perhaps to describe it better, standing timber to anyone who put up the money to purchase it — I do not mean to purchase the land but to purchase the standing timber — if that money was used to increase the amount of acres that the Department would then be able to plant. That is very important because we are not planting as many hectares as we should if we want to ensure that we do not in the next few years become totally dependent on imports of all grades of timber.

In their examination of this very important industry which has great potential, the joint committee make many interesting recommendations. Among those is that there should be greater incentives for people to embark on private afforestation and private planting.

The forestry element of the western package covered in the 1980 regulation by the Commission has been introduced here by the Minister for Forestry and applies only to that part of the west designated as disadvantaged under Directive 75/272/EEC, as amended. Since that regulation has been amended by the extension of designated disadvantaged areas in practically all of the Twenty-six Counties, I would expect the Department to include those disadvantaged areas within the scope of that original proposal by the Minister. Therefore I take it that the implementation of the regulation as announced by the Minister some time ago under this directive will now include areas like the Slieve Bloom in Laois and the areas in the other counties that have been officially designated as disadvantaged. It is important if we want to encourage people to embark on private planting that they be given the full benefit of the grants of £800 per hectare which are offered for the less developed areas. It is important that the Department should clarify that point.

In addition to these measures, the scheme covers the afforestation of land which is marginal for agriculture but suitable for forestry and associated measures including the preparation of ground and scrub clearance. The Department do not seem to be doing that themselves. This means that we are going to have reduced yields, especially in the formative years of the new tree planting programme. It also includes drainage, fertilisation, fencing, fire protection and maintenance of the plantation for a period fo four years from the year of planting.

Grants are related to costs approved by the Minister for each forestry development project. The maximum grant payable is 85 per cent of the approved costs for farmers who undertake the planting of their lands themselves or through a competent forestry service, who utilise all or part of their land for forestry purposes under a partnership, that is a leasing arrangement with either an investment agency or the State, subject to an overall limit 1210 ECUs per hectare. This is approximately £800 per acre. Grants are payable in two instalments: 75 per cent on the satisfactory formation of the plantation and 25 per cent four years later subject to satisfactory maintenance since the formation.

I would suggest to the Minister and the Department that it is hardly in the interest of good forest husbandry to leave it as simple as that. I would hope that after a number of years when the thinning process should be commenced that a further cash payment would be made to ensure that the necessary thinning would take place and to encourage it. At the pruning stage an additional grant should be paid. If those two amendments could be made it would set the new afforestation programme off on a good start. After ten or 15 years the fencing and maintenance of the forests is rather simple. In the formative years there certainly needs to be control of the undergrowth, thinning and pruning to ensure that there will be good quality trees available for timber.

The financing of that scheme could be organised if the Department were to take a down payment. It could be recouped at the felling stage whenever the square of forestry became mature. We need a good follow-up.

Another point which has not been mentioned in the debate so far is that a high percentage of our forests are of the coniferous or evergreen variety. The report lists the types of trees, beautiful as they are, which the Department are planting; but our stock of hardwood is diminishing to a great extent. I should like to express the hope that the Department would endeavour each year to purchase suitable top-class land that would be able to produce hard timber such as oak or beech. I know that the life cycle is much longer than that of the pines, firs and so on. Our mix of timbers here is all white, soft timber but the Department, in the interest not only of beautifying the countryside but also in the interest of the national economy in the long term, should ensure that a minimum number of hectares of hard timbers are planted each year. The Department should be able to acquire on the open market the necessary land on which to do that.

In the European Community as a whole the amount of timber produced for manufacturing industries has dropped from 62,803 million cubic metres in 1970 to 61,487 million cubic metres in 1979, during a period when consumption increased by some 18 per cent. Since that there has been a noticeable decline in the popularity of plastics as a replacement for timber finishes. There has also been an increase in the recycling of processed wastepaper. The big deficiency in those figures as supplied by the report may not be so great according to the present day statistics.

I would hope that the Department in their campaign to have greater areas of lands planted would be able to embark on an advertising campaign designed to evoke a greater response. Since the Minister announced the campaign the statistics show that in 1981 only 45 hectares were planted; in 1982, 490 hectares; in 1983, 923 hectares; in 1984, 1,759 hectares, giving a total of 3,217 hectares. A total of 481 applications had been approved up to the end of last year, but only 67 were carried out and in fact only 631 hectares have been planted to date. This is a pity because the scheme by any standards is relatively generous in regard to grants for marginal land. The farming community have a very small return on marginal land. Indeed, one could plant it and leave it lying there for future generations without any great loss of income. If the Minister were to make it quite clear that all designated land would qualify for the higher rate of grant I would hope to see that figure changed dramatically over the next year or so.

The joint committee in their views and recommendations have ranged fairly widely and greatly encouraged landowners in the planting of forests. Senator Fitzsimons has already mentioned the fact that the country has lost practically all of its stock of elm trees due to Dutch elm disease. I recall about 18 months ago writing to the Department on the question of Dutch elm disease, especially in County Laois. Practically every elm tree in the midlands is dead. The least the Department could have done was to encourage landowners, ACOT or the councils to have those trees removed if, by leaving them standing, there was the danger of spreading the disease. Absolutely nothing has been done about it and that is a pity. Some effort should be made to try to contain that type of disease and not just ignore it because obviously it will not simply go away.

In the submissions to the joint committee one of the big problems that came up and one of the complaints from the saw milling industry was the procedure for selling squares of timber which the Department operate at present. The tendering procedure was severely criticised, as well as the auction system which the Department introduced on a temporary basis not too long ago. I understand from the Department that those systems are widely used by state departments in many European countries and, indeed, by private forestry owners as well. I cannot see that a case can be validly made by any saw mill for supplies of timber at less than the commercial timber is worth.

Woodfab are a commercial organisation who do excellent work and have mills in a number of locations around the country. They acquired a mill from Irish Forest Products a couple of years ago in Mountrath. They have been giving good employment and turning out very high quality produce for the past 40 or 50 years. They provided 50 or 60 people with good and gainful employment. When you see a big name and a multinational company moving into an area you would be inclined to put out the red carpet, but unfortunately my experience in Laois is that you are much better off to have the private family-owned enterprise interested in keeping the wheels of industry turning. They have an interest and a genuine sense of identification with the people who work with and for them.

In order to apply political pressure last year when we had a by-election, Woodfab let all their staff go the week before because they could not get supplies of timber. This year, two weeks before the local elections, we had the same procedure. I object very much to that kind of political pressure being used by a company who are aiming for a monopoly. There are 150 privately-owned family saw mills in the country and they are entitled to a living as well. I do not think very highly of the Woodfab empire who will barter shamelessly the jobs and the livelihood of 50 workers and use them as pawns in an effort to get timber for less than the market value from a Department of State.

The taxpayers are entitled to have the benefits of the State forests which were planted by earlier Governments in the State, whether it was in the twenties, the thirties or the early forties. People should not be allowed to endeavour to shove the Department of Forestry and the State forests into a situation where they are only to be considered as some sort of social welfare operation. That is a problem and I hope the Minister and the Department will continue to resist such blatant political pressure and try to change their sale system to ensure that they meet present day commercial criteria, so as to remove from the entire operation the insinuation by these people that the Department are charging too much for timber. I have already said that the Department are getting something like £13 per cubic metre for timber, yet the cost of a board in relation to the cost of the raw material is very high indeed. There must be a reasonable margin within which these companies can survive. If an ordinary family-based saw mill can survive and compete against the opposition of the big multinational company, then every effort should be made to ensure that these people get the supplies.

Another question raised by a number of people concerns the fact that so much of our State timber is sold to saw mills outside the jurisdiction of the State. I know we are in the EC and I know that if a lot of timber is put up on the open market it must go to the highest bidder. I accept that it does. Nevertheless perhaps the Minister might re-examine this area, which has been mentioned on a number of occasions by people who are concerned with this industry.

Last week the joint committee visited the plant in Moneypoint because we were concerned about acid rain which might affect the State forests. This was mentioned in the House again this morning. We were assured by the ESB that that will not happen. At this stage we can only accept the guarantees they are offering to us. I hope the Forest and Wildlife Service will monitor the situation and I especially ask them to place their own automatic monitoring equipment in strategic points in their forests. I hope they will be able to set the first one up immediately so as to be able to assess the atmospheric conditions and the purity of the rain before the huge boilers start up in Moneypoint next year. Even though they are two State operations, we are entitled to have clean air and we should be conscious of maintaining a top-class environment.

I welcome the report. I compliment our colleagues on the joint committee who worked so hard in producing it. It is a handbook containing a lot of valuable information. I hope that the Minister will learn from the obvious desires expressed in this report that greater resources should be allocated to forestry, which will have the spin-off effect of greater employment and much-needed employment in the forest areas throughout the country.

Mr. Lanigan

I welcome, as do other Senators, this report. Forestry for a number of years has been in modern terms on the back burner in relation to its importance in the Irish economy and the scheme of Government thinking.

In discussing the problems of forestry and forest-related industries we must look at the world scheme of things and look at what has happened throughout the world because of lack of interest in forestry and forest-related products. In the past 12 months we have concentrated on the problems of famine in the Third World countries. It has to be said that 90 per cent of the famine in Third World countries has been because of the lack of forestry programmes or of interest in afforestation plans or an interest in what was happening in the Sahel and sub-Sahel areas and indeed in the countries of South America. Ninety per cent of the food problems which have been created in the world have come about because of the lack of forestry thinking. Indeed, it could be said that the problems of food production in the world have been because the colonial countries of the world went into the Third World countries, raped the forests and reaped the harvests and then left the people of these countries to fend for themselves.

There was a slash and burn type of economy in the Third World countries where people went in and cut the timber but they left the roots behind. Once they left the roots behind when the rains came they kept the soil in situ. When the colonists went into these countries they uprooted the roots and took away the base on which the soil was being maintained. Because of that we see the phenomenal range of famine in Third World countries at present. This rape of Third World countries' forestry is continuing. In India there is not a tree left; the bushes have been burned and people are now using dung for heating and for firing whereas 50 years ago they were able to use trees or bushes.

In South America we have the situation in Brazil where it is estimated that 17,500 square miles of forest are being cut every year. Of course the 17,500 square miles of forest are not being used for the benefit of the economy of Brazil but are being used by multi-national companies who are raping these forests. We have problems then not only because of the agricultural change in the area but we also have a change in the ecology of the area. Approximately one quarter of world production of oxygen was based in South America, particularly in Brazil. Now each year, with the extension of the cutting down of these forests, we have a lack of oxygen in these areas. These are things we have to consider when we talk about the joint committee's report, as well as just dealing basically with what is in the report.

The problems of overcutting of trees in the areas of the world I have mentioned are different to the problems we have here. Afforestation was on the back burner for too long. We saw excellent people right through the years in the Department of Forestry but they did not get the support from the Government which was needed to produce what was required, not only in terms of building products but also in terms of the protection of our environment, of our wildlife, of the situation in the country where people could have an element of progress but could equally go out into the countryside and enjoy the delights of entering a wood or a forest. Thankfully, in the last few years the Department of Forestry have begun to see that by bringing people into the forests, by showing them what goes on in the forest, there is a larger relationship than that of pure commercialism. Bringing children into a wood for the first time is a delightful experience. They cannot believe that there is so much freedom. They see the growth and they see the deadwood. They see progression in terms of growth, trees which are 100 or 150 years old and they can relate to them. It is a delight to bring children into a forest, to see growth, to see age and to see new growth. We must compliment the Department of Forestry on what they have done to develop this interest in visits to forests and thus show a relationship between the past and the present. When one considers that at present the Department of Forestry holds about 400,000 hectares of land in their area of reference, of which approximately 300,000 is under afforestation it shows the range and size of their responsibility.

Unfortunately, a lot of the plans, or targets which have been set by the Department over a number of years have not been met. There has been an annual planting target of 10,000 hectares. Unfortunately, we have never reached that target; the maximum reached was about 6,500 hectares in a particular year.

Discussion has been going on as to the direction in which the Department should go in terms of the development of forestry, whether we should go for total privatisation, whether we should stick with the system we have, whether we should have a broad spectrum of interests, or have forests which would be partly owned by private interests and partly owned by public interests. One of the major problems that arises then is that it will take a long time for a forest to mature. It will therefore take a long time for a private individual to get a return on the capital that he will invest in the enterprise. Again, we have had controversy recently as to whether the Government were going to sell off all the forests, part of the forests, have a privatisation scheme or whether they were going to do this or that. Yesterday, the Minister, Deputy O'Toole, did say they were not going to privatise everything; this suggestion was the result of misconstruing something he said. If what he said was misconstrued he should have said it in a better way or he should get somebody better than himself at public relations. I do not want to get into the area of PR. Obviously, the public were given the impression that the Government were going to sell off their forests. This would be a backward step; even though the Department seem to be lacking in foresight at times nevertheless if they got the backing of Government they would have done a better job than has been perceived by the public.

The current planting rate is about 6,500 hectares per year of which approximately 700 hectares is reafforestation. In 1980 the total volume of timber sold amounted to over 500,000 cubic metres and realised £600,000. This shows that this industry is not a minor one. It is an industry which produces quite a substantial amount of money. In this year it is expected that there will be about £50 million realised from forest-related products. We have problems that are related to acid rain, environmental control and the effects which can be seen in forests because of lack of such controls. I do not know whether the Department of Forestry is sufficiently engaged in this question of environmental control. Acid rain is the "in" word for anything that happens to a tree. Acidity in the atmosphere has been growing from the European scene based on the huge amount of acidity that is coming from industries based outside the EC but with many elements within the EC, in parts of France, parts of Germany and the midlands of Britain. The problems that come from acid rain or the acidity in the climate are not felt in the country of production, they are felt approximately 1,500 kilometres away from the area in which the actual emissions occur.

There is the question whether we have an acid rain problem in Ireland or a problem of under-management of our forests. It has been suggested that one of the problems in Sweden and Denmark in terms of the loss of trees is that there has been over-management and because of this acidity elements cannot be eliminated. In other words, the more trees there are the less concentrated the fallout can be; the fewer trees there are, the more concentrated it is. It has also been said that acid rain is not causing the problems, that the problems are based on bad management. Billions of money are being made by a number of companies who have an interest in spreading this concept of acid rain pollution.

In recent weeks a seminar on environmental pollution was held in Dublin. In respect of Moneypoint a German consultant said that it would cost £45 million to comply completely with EC regulations regarding effusions. The ESB said it would cost £145 million. A study group from Trinity College said it would cost £300 million. another group of consultants said it would cost £400 million. Obviously, if one is talking in terms of emissions from one particular area or factory and the cost of control is in the range of £45 to £300 million then somebody is going to make a lot of money from it. The people who will make the most money out of it are not the people who want to control the emissions; they are the people who want to make money out of controlling the emissions.

In Ireland we have a relatively good atmosphere. Dublin is one of the few places in Ireland which does not have a relatively pollution-free atmosphere. As Dublin is in the basement of Ireland there is a pollution cover over it which is based, unfortunately, on the fact that in the seventies and early eighties there was a major change-over from oil to solid fuel. Therefore emissions from low chimneys in Dublin have been increasing at an enormous rate. There is no control over emissions from diesel or petrol vehicles. We have not yet confronted the problems caused by those emissions.

We must confront not only problems of the elements which I have outlined, but also what the lack of forestry provision has cost the Irish economy. If we had a properly based forestry situation we would have more than 25 per cent of native timber being used in the building industry in Ireland. When one considers the cost of importing 75 per cent of timber for the building industry one can realise what it means for the economy to advance the forestry element as much as we can.

The main categories of timber produced in the State forests are basically large saw logs which are used for the construction industry, transmission poles used by the ESB and various other larger poles used by Telecom Éireann. The small logs are used in pallets and wood fencing. Pulp wood is used in the manufacture of chipboard, fencing stakes, and so forth.

Throughout the years we have seen the demise of the timber processing industry in Waterford, Scarriff, Mountrath and Wicklow. We see that there is a huge decline in the number of people working in forest-based industries. Unfortunately, along with that, a number of companies based on the use of timber are in severe difficulties. Medite in Clonmel who were established for the manufacture of medium density fibreboard seem to be doing well and are capable of using most of the offshoots of the forest-based industries. At present they are using a lot of timber which was being exported. Hopefully, that enterprise will be capable of staying in business and will be capable us using all the thinnings that are available to them from whatever forests there are in Ireland. If we do not thin our forests the rate of reproduction will decline. The benefits from the thinnings will go to countries such as Sweden and Denmark where, up to recently, we have had a number of contracts with private companies which were very beneficial to the companies involved and to the recipient countries but of no benefit at all to the Irish economy because the Department of Fisheries and Forestry were subsidising every tonne of thinnings going out from Waterford, New Ross, Cobh, Cork and Sligo. Thankfully, the chipboard factory in Scarriff has been reestablished and was rejuvenated when FINSA took over. We hope that company will be successful.

We will have to ensure that the Department of Forestry make available at a reasonable price the thinnings that will keep these factories going. We have seen in the past that delays in thinning have hampered the ordinary development of our forests. Because thinning did not take place at the right time, forests did not grow as they should and the yields were down. We saw in the papers today that these Government cutbacks are going to be stopped. We may have a 1:1 replacement of people in the public service. Because of the embargo that was placed on public service employment in the past few years, the Department suffered and because of this, thinnings have not taken place at their correct time and as a result the industry suffered.

Boxwood and pallet wood are in big demand at present and there are considerable export outlets available. The existing processors in timber cannot meet the demands. Yet, many of them are working at 50 per cent production levels. Why is this? It is because the Department, whether through lack of knowledge in the marketing field, or of the commercial world, are dealing in an archaic way with the sale of the product they have available. As a result of this there is an up-and-down situation in factories where they do not know from day to day, month to month or year to year what product will become available from the Department of Forestry.

There has been much controversy about the method of selling used by the Department. It is not one we should enter into. The Department should set sales procedures as they see fit but these must be related to the needs of industry and not just to the needs of the Department because the Department and the processing industry must go hand in hand. Otherwise, we might as well privatise the whole industry and get rid of the Department and turn over the whole lot to privatisation. If we do that, sectoral interests will come into play. We will not see a forestry policy which will have relevance to the whole economy, the ecology and environmental control. Why should we be laying off workers in processing factories? Why should factory workers be on half time when it is suggested — and this is borne out by the report which is before us — that there is enough timber in the country of sufficient maturity to supply each and every one of the factories in the processing business at present?

The timber trade has been very critical of the failure of the Department to respond to market trends. I would not be totally au fait with the method of dealing between the Department and commercial interests but if each and every one of the commercial interests keeps hammering home the fact that the Department are itself not au fait, it is up to the Department to have a look at their situation in the market place. That is not to say there are not commercial companies which are inefficient or partly efficient. It is suggested that the difficulties could be avoided if the Department's marketing division make a few important decisions, first, to bring forward timber sales. In doing this it should be made known what amount and what quantities will be available during a particular year. It does not mean that they have to make an announcement every week that there will be ten trees here and 20 trees there. It is a matter of forward planning for the Department in terms of a 12 monthly or two-yearly cycle which would give the commercial interests the time to have a look at what they can process and what will become available.

Clear felling must be accelerated; we must also look at what has happened in the past in respect of thinnings. I have been looking at this situation for a number of years and have seen that Governments from outside Ireland have sent people to Ireland to teach how to thin, whereas we should have within the Department of Forestry a school where people would be taught how to fell, where to fell and when to fell. There is no school in this country which deals with forestry on the ground. We have excellent foresters, but these are people who have degrees in forestry or who have worked in forestry. The Department do not have a school which has saws, helmets or elements for safety and for production in order to give a proper grounding in forestry. We must ask them to operate in a very commercial manner. As I said at the beginning, many of the problems in the shortage of world food have been caused by the cutting down of trees and the lack of planning by colonial forces right throughout the Third World. Unfortunately, we, in the western world, and Ireland, are no better than the colonials were when we consider that, at the end of this century, it is estimated that there be an 8 per cent shortfall in world supply of timber, and by the year 2025 there will be a 32 per cent shortfall.

It is said that technology will overtake the need for this timber and the production needs but, having said that, if the technology overtakes the needs for timber, can one imagine a country such as Ireland with no trees? Can one imagine how barren this country would be if, as is suggested, there was a 32 per cent demand over supply? Who would come to this country to look over a ditch? Even the ditch would be gone. One would be looking over a fence made of plastic. The fields will be surrounded by plastic. What would happen then would be that people would start planting plastic trees to simulate what was lost. That might seem to be far-fetched but, if world demand for timber products increases at the rate it is increasing, and if the overcutting and the lack of planning in the production of trees continue, that will be a problem.

The EC is at this stage about 50 per cent self-sufficient in its timber needs. It will import 100 million cubic metres of sawwood and pulpwood per year by the end of the century. Imports to the EC are worth approximately £10,000 million per year. When one looks at the situation in Brazil and at the fact that 17,500 square miles of timber are being cut in that area, and when one looks at the needs of the EC one can see that a major problem is developing very fast.

Irish demand, it is estimated, will increase by about 90 per cent by the end of this century. The indications are that prices will also continue to rise for the foreseeable future. There is obviously a need to be met. There is also, it would seem to me, a need for the Department of Agriculture and the Department of Finance to tell people that there is an increasing demand for timber products. Not alone is there an increasing demand, but there is an increasing prospect of further building-up of acreage. There is no other industry that I know of on which a definite statement has been made that prices and demand will increase. There is no other industry that I know of of which the same could be said.

We have the soil and the climate which make the growing of trees easier than in many other countries. We have an average growth of conifers, such as spruce and pine, which is much greater than in any other area in Europe. Marginal land here can produce trees at a faster rate than in any other place in Europe. We must consider this when we talk about a coherent agricultural policy. Timber has to come into play in terms of a coherent agricultural policy. We cannot suggest that the growing of trees is any less important or any different from the growing of grain or the rearing of cattle. We must bring back the growing of trees into the agri-industry. We have not done it in the past, but we should consider it.

The figure for total imports of wood and wood-related products into Ireland in the past 12 months was between £400 million and £500 million. This figure is staggering. People in the IDA and CTT are trying import substitution on a small scale in small products. Here we have £400 million to £500 million going out per year to buy wood products which could be grown here faster than they can be grown in most other countries in the world. Eighty per cent of the total importation at present could be substituted by home grown products within five years. This is something to which the Department must address themselves. It is something to which the Irish economy and the Minister for Finance must address themselves, if we are to have a reasonable growth in forestry development and if we are to have a reasonable chance of having an indigenous industry which will support itself.

In the light of what I have said, it is timely that we should be talking about forestry and the report of the joint committee. We must ensure that national timber products production is increased to the maximum level at which there is a reasonable certainty that future home and export markets at competitive prices will be available, with an acceptable return on investment. We must ask the Government to speed up the western package. We must ask them to spread the word that there is money available for those who are prepared to invest and that huge grants are available.

The one item in the report which creates problems for me is the question of pastoral grazing. There is much emphasis in the report on this question. It is the considered opinion of many people in the forestry industry that pastoral grazing is not suitable for this climate. I should like to ask the Minister for his response to what has been said by Dr. Rory Harrington in connection with pastoral grazing. The response of people within the industry is that pastoral grazing is not a reasonable option and having listened to them, I too, have a feeling that it is not one we should pursue too far.

The report goes into detail about various firms which have been involved in the industry for a number of years and refers to the problems they have been confronted with and the effects that inflation has had on the industry. It refers to the rise in the cost of oil and to the response that was made by the Department to the rising costs. Unfortunately, the Department, it would seem to a lot of people, have not responded fast enough to the problems that they had to confront. When I say that I know many people in the Department are dedicated to their jobs. Indeed, they are dedicated to such a degree that they can be paranoid at times. They cannot talk about anything except the forests. They cannot talk about anything but the enjoyment that can be got. However, the people in the field complain about lack of direction from the various Ministers and from the officials in Department headquarters. They are interested in making certain that we recreate an Ireland where trees are part of the environment. Equally, they could play a huge part in the development of the Irish economy.

I have already mentioned the question of product substitution or import substitution. We must look at the fact that we could, in the forest or timber-based industries, substitute without any great problem £2 million to £3 million per annum on timber imports.

As I have mentioned, the western package should be pushed and hopefully extended into the high areas of Kilkenny and Carlow or elsewhere because it would mean that land which is marginal for agriculture could be used in a manner which, while not giving an immediate return to the farmer, would bring a return on a phased basis. The farmer would not have to wait for the second generation after he dies to get a return on his planting. In addition, enormous grants are available so that the farmer does not have to put up 100 per cent of the total capital cost. Not enough emphasis has been placed on the western package and too few people have become involved. The maximum grant payable is 85 per cent of approved costs for farmers and even those who are not farmers can get 70 per cent of approved costs. The incentive is there. These grants are available. They are different from the grants being given for the building of a house. You do not get the final payment on the building of a house until the roof is on and the pathways are around it, but in this instance 75 per cent is paid on the satisfactory formation of the plantation and 25 per cent four years later.

The other element in the report, which I would consider worthy of further study is this question of pastoral forestry. It is said that the concept is as old as agriculture, but the practice as it relates to modern farming is very recent. It is suggested that it is a system more suitable for places like Australia and New Zealand than it is for a country like Ireland I would like the Minister to address himself to that problem.

Why should Ireland, as is stated in the report, be the Cinderella of Europe in terms of afforestation, when we have land and a climate which is ideal for the production of wood on a commercial basis? We have huge surpluses of food. We have huge surpluses of meat products and dairy products which cannot be sold at a commercial level outside the State. Here we have a situation where we have underproduction of a material which can be sold at a commercial rate. Why should the emphasis not be placed on the production of something which can be commercially viable in any market situation in the world at present? Why not emphasise the fact that overproduction in one area is not the problem it might seem to be if people can commence production of an agricultural product which is commercially viable?

It is stated in this report that 50 per cent of the world's forestry is in the developing countries. Unfortunately, forestry as in Third World countries is diminishing at an enormous rate. In Ethopia, Somalia, India and South America forests are disappearing at a frightening rate. The Department must ensure that it gets from the Minister for Finance the financial resources to back up the dynamism in the Department to produce timber and forest-based products industry which are so badly needed not alone in Ireland but within the European Community as well. As I have said, the major drawback on investment in forestry has been identified as the long wait for return in capital. However, when one considers that a farmer can get a grant of 85 per cent and a non-farmer 70 per cent at the beginning, the capital input is not a lot. When one considers that then one can get 75 per cent on the setting-up of the forest and the other 25 per cent within four years, it would seem that there should be a much greater response to this package. I sincerely hope there will be.

Regarding the imports of timber products, the statistics are there: £35 million in 1979; £36 million in 1980; £45 million in 1981; £41 million in 1982; £41 million in 1983. Furniture of wood accounted for £20 million in 1979; £24 million in 1980; £29 million in 1981; £28 million in 1982 and £26 million in 1983. It might seem to some people that there is a reduction in the amount of timber products coming in. Of course, this is because there has been a run down in the building industry and the number of new houses that have been built. There was a very progressive build-up of imports to 1981 and then, suddenly, they started to reduce a little. That is symptomatic of what is happening in the building industry. It shows that the building industry is run down because of inflation. We have not even kept up in our imports. I would like to see those figures going down drastically through import substitution and through our production of native timber. It is not that there has been a substitution of native timber, but there has been an overall drop in the amount of building that has taken place here over the past number of years.

The conclusion of the report is that the forestry sector is in its infancy. That could be said about any other sector of the economy. The forestry sector is no more in its infancy than any other sector. It was set up at the same time as every other sector. It does not seem to have progressed. Successive Governments have not put an emphasis on timber production except in areas where they could do nothing else. We must get away from this. We must look at the economics of timber production. We will have to come to the conclusion that we have a viable industry in its infancy which could grow dramatically given the proper impetus by Government.

There are benefits to be had other than the economic benefits, such as the benefit of having a view from a window where one can see a tree growing rather than a view which is totally bereft of trees. People travel enormous distances to see forests and the animals that live in forests, to see the progression of growth from year to year and just to look at the environment created by trees. The environment created by trees is something that kids of all ages enjoy.

I mentioned in passing the problems associated with acid rain. There will be a report on acid rain in the near future from the joint committee. I do not think we have a major problem in terms of acid rain in Ireland. That does not mean that we do not have environmental problems which must be confronted. I ask the Minister in relation to this report to place a greater emphasis on the benefits that could be derived from a proper and phased development of our forests.

Deputy Joe Walsh and his sub-committee have to be congratulated for setting down in detail the problems associated with this industry. Equally, they show that the future for this industry is one with which we should all associate ourselves. It is an industry which is dormant, in relative terms but has the dynamism within itself to produce enormous benefits for Ireland.

Mr. Hourigan

I will endeavour to be reasonably brief. I do not promise to give you as long a dissertation such as Senator Lanigan has just concluded. First, I would like to say, without getting into the precise area of the report, that perhaps we should remind ourselves that the Minister of State, Deputy Michael D'Arcy, has worked very hard in tracking this whole forest development area in the past few years. The results of his work have yet to surface positively. I am aware that there is a policy on forestry which can and will change the whole situation. I hope that that policy will find its way into an implementation stage at the earliest date possible. I would like to pay tribute to the Minister of State and those working close with him for the excellent job they have been doing in changing this Cinderella aspect of agriculture into something different.

I would like to make a few general remarks. It could not be over-stated that the outlook, prospects and potential for the growing of timber are enormous. Furthermore, we must recognise that the combination of soil and climate in this country makes a most suitable situation for the growing of trees, especially conifers. We can outstrip any of the European countries in this regard. We have areas of the country, such as Leitrim, which can match not alone the European countries, but countries in other parts of the world as well. It is something that we do not give our country sufficient credit for.

We talk about marginal land. It is not necessarily suitable for forestry development. Some bogland is not ideal for such development. The Leitrim type soil — heavy clay — is where trees grow well and have good results in the long run. At present, we have less than 6 per cent of the country's land under afforestation. The relative situation in Germany is 29 per cent and in France 25 per cent. This would highlight for us the sort of potential that exists in a country such as ours where we do not have to interfere with agricultural production areas in order to develop a forestry situation enormously. Much land which is marginal for agriculture is suitable for forestry and would produce extremely valuable forest crops, without in any way reducing the output from agriculture from the land available for meaningful agricultural production. Much of the land being used at present for agricultural production is unsuited for agricultural production, whether it is beef, milk production and certainly tillage production, and the people who are trying to farm on this kind of land are not doing it any good.

It has been stated already, and I want to repeat it, that the EC is only 50 per cent self-sufficient in wood products; and in fact a country to which we export a lot of our goods, the United Kingdom, imports 90 per cent of its timber requirements. That illustrates for us the vast potential we have right on our doorstep for the exportation of suitable timber materials. All forecasts and all international studies would suggest to us that timber prices are likely to increase at a faster rate than that of any of the other commodities we have to contend with.

There are very generous grants for growing timber in Ireland. It is not sufficiently appreciated that we have up to 85 per cent of grants of the approved cost of planting payable in the western areas subject to a maximum of £800 per hectare. There are also significant and valuable taxation concessions available for those engaged in a forestry development programme. The whole advisory service on forestry development is freely available to people and is of a very high standard.

The tree growing operation, therefore, has a lot of potential for people. It is a question of getting people attuned into this concept — a new concept perhaps for a lot of people — and to engage in afforestation. It is something new and we have got to establish it. On present day costs a forestry plantation would produce up to £12,000 worth of timber per hectare over a crop life which in forestry terms is about 40 years. That is a return of 4 per cent above inflation. Many people need to get a clearer message with regard to forestry. At present we have a target of 25,000 acres per annum for planting. It is no secret that we are not coming within distance of that target. Successive Governments for various reasons have been unsuccessful in meeting planting targets.

It is also true to say that the western package for forestry has not met with the success one would expect in spite of the generous grants of 85 per cent which I alluded to a moment ago. One looks forward to a new radical and innovative policy on forestry development from the Minister of State and the Minister for Fisheries and Forestry which will increase substantially the acreage of land under trees with minimum cost to the Exchequer. We must bear in mind that the Exchequer is extremely heavily burdened at the present time. As I understand the broad philosophy behind the policies presently being put together, which hopefully will be finalised shortly and presented, the cost factor will not be great. This is one great advantage. Great tribute is due to the people involved in their compilation.

At present the area under trees in Ireland is extremely low, 5.7 per cent. The European Community is not self-sufficient in timber. It relies massively on imports to sustain the Community's timber processing mills. All the economic indicators point to a healthy future for timber prices. The climate and the soil are extremely suited to growing trees and there is a broad range of extremely generous tax benefits. These need to be emphasised a great deal more to attract people into the forestry development area.

A very important aspect of an expanded forestry programme is greater employment which would be provided. We could significantly reduce the number of those unemployed if we had a radical programme of forestry development. Sometimes it is not remembered that forestry is an industry that requires a great deal of manpower, a great number of semi-skilled operatives and indeed unskilled workers as well. In the overall it presents a lot of opportunity for employment in the areas of planting, road development, fencing, maintenance, thinning, cropping and, finally, at maturity stage.

Anybody with a knowledge of the agricultural scene will agree that farmers and land owners with low yielding agricultural land need some extra encouragement at present to make this switch from inferior type farming on inferior type land into the forestry area. The gains from the eventual sale of the thinnings, in the first instance, to the final stage of mature crop are perceived as too long term. This prevents people from getting involved in a forestry development situation. Frankly, 35 to 40 years is a long time, so some sort of leasing arrangement must from the cornerstone of this forestry development programme which would bring the benefits of forestry investment forward for the small farmer. This is the leasing programme. They cannot afford to wait. At the same time it would make valuable land — valuable in the context of forestry development — available to the Government.

Many people with a great deal of money — big companies such as pension fund bodies, etc — are anxious to invest in this forestry area if they are given the opportunity to do so. We must encourage that. In the interim the farmer needs to get an annual return. During the long period before he even gets returns from his thinnings, which is 12 to 14 years, to the stage when he gets returns from the final crop, he must be helped along through a system that embodies a leasing arrangement. In my view that is the best arrangement. In that way we would certainly develop forestry.

We must remember that, apart from oil, forestry is an extremely big factor in the economy. Forest products represent the biggest single export category from the EC. Bearing that in mind we must see the importance of the whole forestry area. In an EC context we are talking about in excess of 11,000 million ECUs per annum. That is a vast figure. When Portugal and Spain become members of the EC, we will see no great improvement in that situation because Portugal is about the only country in the new twelve which is self-sufficient from a forestry and timber point of view.

There is no real forestry policy within the EC, such as we have on the agricultural scene, where we have the Common Agricultural Policy. This is regrettable. There are, perhaps, a number of reasons why we do not have one. In the first instance, it was never included in the Treaty of Rome. It is also difficult to get agreement on the means of support for forestry development. It is far easier to get such agreement in relation to agriculture. Furthermore, it is difficult to get a consensus on the development of an industrial strategy for forestry and there are problems in changing the situation where timber input is used as a bargaining concession with the timber exporting countries, in other words, where we have timber exporting countries in trade with many countries at present. It is hard to change that. I do not think there is likely to be a common policy on forestry in the EC in the foreseeable future, in fact, not for quite a number of years.

The joint committee have presented a very comprehensive document to us. I am a member of that committee. The chairman and the secretary are to be especially complimented on the excellent detail which they have presented to us in this document which deserves very serious consideration. I ask the Minister to ensure that serious account is taken of the various proposals put forward in it.

There is no Community policy on forestry. At best a Community policy on forestry is in its embryonic or early stages. It is not inappropriate to consider the attempts being made to establish such a policy. We have seen the disappointing results of the western package. That must suggest to us that we cannot hope for great improvements in the near future.

There is much in the report that one could dwell on. I know other Senators wish to speak and I do not want to deprive them of that opportunity. I will go through a few points quickly. It would be desirable for the Commission to address itself very seriously to having a cohesive forestry policy. It should be borne in mind that throughout the Community approximately 1.4 million persons, or 5½ per cent of all the industrially employed people, are engaged in forestry. That figure is broadly in accord with the number of people in the car and textile industries. We can see that the potential for moving forward is absolutely enormous.

I will move on to some specific views of the joint committee which have been put forward. The joint committee have put forward views on the importance of forestry which are, broadly speaking, similar to those I have expressed in a different context. Basically, in their proposals which run right through the document, the joint committee, emphasise the importance of the forestry industry. They hope forestry will be treated in a different way in the future. I want to emphasise that we must take forestry development as a business project and not in any way as optional. It has a vast potential in its own right. One could go on for a long time making a case for forestry. I do not think it is necessary. This report presented by the joint committee is one which I would like to commend for very serious consideration to the Minister and the Minister of State at the Department of Forestry.

Mr. Kelleher

Like other Senators, I compliment the joint committee for their efforts in producing such a comprehensive report on forestry and forest-based industries. There are a number of facts emerging from this report that are disturbing. I will deal with them at a later stage. It is interesting to note that after oil, forest products represent the single biggest import category of the EC. Given this situation it is surprising that the community has no real forestry policy. However, the reasons for this were stated in a report carried out by the IDA which states that unlike agriculture forestry was not covered by the Treaty of Rome and therefore, it was difficult for the EC Commission to implement a full forestry policy. However a list of objectives to implement a national policy by member states was drawn up and the principle ones are as follows:

(1) To make more wood available for industry through proper forest management.

(2) To increase the volume of wood on stump as a result of afforestation.

(3) To have better protection against threats to our forests.

It is irritating to note that this country imports approximately £200 million worth of wood and wood products per annum. Basically, this trend applies itself across the board to the other member countries in the EC. This trade deficit indicates a weakness in the wood chain since it is mainly attributable to processed products showing not only that wood production is inadequate but also that the wood industries fail to satisfy the demand in terms of quantities, qualities and prices and this demand is covered by imports from third countries.

The report also states that it is likely to become more difficult to cover world demand for wood towards the end of the century. For example, in Scandinavia, the industry development has already been slowed down as a result of wood shortage. This leads to job losses. Between 1977 and 1980 41,000 jobs had been lost in the Community in the wood and paper sector. In other branches of wood processing almost 25,000 jobs were lost in the same period. The amount of wood produced in the Community for manufacturing has dropped whereas consumption has increased by 18 per cent, a fact which obviously leads to a large raw material deficit. Thus the Commission proposals have three main objectives:

(1) To increase the long term wood supply to Europe by increasing the forest estate.

(2) To increase log yields and make better utilisation of sawing waste.

(3) To improve the structure of wood-using industries, as 1.4 million throughout the Community work in these industries.

In 1980 imports of wood and wood derived products amounted to £15.8 billion ECUs while exports were valued at £4 billion ECUs giving a deficit of £12 billion ECUs. This should not be the case as the Community has vast areas of woodland and a climate suitable for fast growth of a variety of species.

In relation to the western package the response to date has been disappointing. In my view the scheme is a good one but there are a number of areas which require change to make it more attractive to the farming community. I believe there is a willingness by farmers to diversify but the scheme must be sold and marketed professionally. The maximum grants payable are 85 per cent of approved cost for farmers and 70 per cent of such costs for others. These are paid in two instalments, 75 per cent initially and 25 per cent four years later subject to a number of conditions. There is a wide range of technical advice available which is essential for anyone embarking on a tree planting scheme.

In this country we are geared very much in agricultural education. We have agricultural colleges throughout the country covering a wide range of subjects relating to crop husbandry, animal husbandry, dairying, beef etc. It is time we had a subject on the curriculum relating to afforestation to educate our young farmers how to make the best possible use of marginal land not suitable for agricultural production.

The trend up to now has been to retain as much land as possible for dairying, beef or cereal growing. However, as Senators are aware, there are huge surpluses of dairy products, cereals and beef in the EC today. As I have stated already there is a huge deficiency of timber and wood products. It is only logical that we should then be producing what is scarce in the Community particularly when we have the land and the climate to maximise production. For this reason I believe that a proper educational programme in second level education geared towards afforestation is vital for the future development of forestry. The lack a of forestry provision will be overcome by this education programme.

A major drawback with investment in forestry is the long wait for return on capital. I support the recommendations of the ICOS that a farmer planting trees should have the opportunity of forward selling the timber to provide him with an annual payment throughout the duration of the rotation. Such a scheme would give farmers confidence in planting which is lacking at the moment. I agree with the ICOS's recommendation on page 34 of the report of setting up two pilot cooperative forestry programmes. They feel that the type of private afforestation programme envisaged would enhance the income of farmers living in the area, increase the areas to be planted by the State and most of all would provide much needed employment in isolated regions. The main benefits for participating farmers would be:

(1) Non productive areas of the farm being made productive.

(2) Additional annual income from forward selling of timber, and also equivalent headage payments available for land transferred to forestry.

(3) The grants from the western package.

In their submission to the committee the Irish Timber Council were critical of the Forest and Wildlife Service. The main criticism was in relation to the system by which timber is sold to saw mills by the FWS. The timber system leads to uncertainty in relation to raw material supplies. Mills find themselves purchasing and transporting timber from remote forests while local sources are denied to them. A lot of management time is wasted in examining timber which might never be bought because of the system. An updating of the quota system is called for where mills would be guaranteed a large percentage of their requirements.

There is over-capacity in the industry at present. A guarantee of raw material is essential if the job levels are to be maintained. At present Ireland has the smallest percentage of land under forests in the Community, a figure of 6 per cent compared with 9 per cent in Britain, 27 per cent in France and 29 per cent in Germany; yet our climate is the most suitable for greater yields. This represents a considerable national resource which has yet to be fully exploited. There are large areas of land ideally suited for forestry production. Income from forestry plantation gives a return of 4 per cent above inflation. It generates a considerable number of jobs and helps our balance of payments. There is a great challenge ahead for the forestry industry in Ireland. I know that the Minister and his officials will not be found wanting in meeting this challenge.

Minister of State at the Department of Fisheries and Forestry (Mr. D'Arcy)

First of all, let me say a very sincere thanks to the Senators who have gone to a lot of trouble as far as this debate is concerned. Their contributions are very welcome. Secondly, I want to thank the members of the joint committee for their work in compiling a very valuable document that will be very useful in the years ahead. I have not the slightest doubt that the report and research carried out as a result of this document will be taken note of in my Department.

I am at a slight disadvantage because the House will recall that a review group have been sitting. I cannot comment on any policies that were brought up here in respect of the Department for the simple reason that the review group has now reported to the Minister and myself and that report is now before the Government for a decision. In view of the fact that decisions are about to be made in respect of the Forestry Department, I cannot pre-empt any of these decisions.

I would like to point out to the Seanad that the report was before the review group and all the submissions that were made were very valuable. It was only right that we gave a chance to everybody to make submissions from all sectors of the timber industry. As a result of that we are at the decision-making stage and I am hopeful that in the very near future these decisions can be announced.

I will deal with most of the points that were brought up by the Senators. If any Senator feels I have left out his point I would like him to contact me and I will respond to him in writing. One of the major items which was mentioned by several Senators was the question of the marketing of our timber. I would like to set the record straight in respect of this area. I cannot accept that the policy being pursued by the Department is the wrong policy. We had an interdepartmental committee which sat to report back to the Department. They upheld the policies being pursued by the Department. As a result of that interdepartmental committee's report we brought about some changes and they were considerable.

The big argument is not about the supply of material; the big argument is about the price. This timber is the property of the people of Ireland. It is the Minister's job and my job to see that it realises the maximum on behalf of the taxpayers, and that we intend to do. From time to time we are under severe political pressure. However; we deal with it as we find it.

Certain changes have been made, the most important of which is on the question of the quotas. Any timber merchant can come along to the Department and we will supply him in any year with 40 per cent of the timber bought the year before. He gets 40 per cent, selected by himself, adjacent to his own factory. That is a very worthwhile development. They are guaranteed 40 per cent of the requirement the following year. That is a valuable concession.

The second concession is on the question of the auctions. We have already held one auction and we will be holding at least three or four more auctions in the near future. As far as the merchants were concerned, the auctions did very little for them because there was no lowering of the price.

We have had over-capacity in the milling industry for some time. The point was made, which I want to correct, that the Department were not prepared to give projections of the amount of timber that would be available in any one year. We give yearly projections at all times. By and large, those projections are complied with in respect of the amount of timber put on the market. About 600,000 cubic metres per annum have been put on the market for the last three to four years. The industry is well aware of where that timber is because we specify where it is and give the amounts in each area. That is important.

We cannot be held responsible for the over-capacity. While we have a few mills which closed and made people redundant, I would like to point out that in spite of the closure of those mills we still sell all available timber. If it is not processed in one particular mill then it is processed in some other mill. That is the situation as it stands.

A question was raised in respect of the closure of Scariff. There was a lot of publicity about the closure of Scariff, but the Minister and I set about re-opening that factory. We identified a suitable firm in Spain, who are now in operation there. We also called in the Irish Timber Council and we made sure that they could guarantee a supply of timber to keep that factory going. The big problem there was the supply of suitable timber. We negotiated with the Irish Timber Council and we made the timber available. As a result of that the factory is open. I am very happy with that situation and the people in Scariff are happy with it. At present the Mountrath mill has been closed by Woodfab. We are in negotiations with Woodfab in respect of the availability of timber. I am hopeful they will respond to our proposals. It is of no benefit to the economy or to anybody to see any factory close, irrespective of the level of jobs.

The small mills, employing from 25 to 50 people, are doing a very good job. They will get every encouragement from my Department. Somebody made a comment about political pressure, about the availability of timber and people not being able to get timber. I interviewed people from six of these small factories. I find that they have made arrangements for adequate timber for at least 12 months in advance of the timber being required for the factory. That is a very good system, a good businesslike approach which I would like to encourage.

A question was raised about the extension of the western package to the rest of the country. As the Seanad will probably be aware, this is a decision for the EC, not for this Government. As far as we are concerned, we will put forward those proposals when they are available. It is a proposal which will be very worthwhile. We are all keen to see the western package benefitting the rest of the country also. Certainly any available land should be planted.

A question was also raised about the planting programme. The annual national planting target is 10,000 hectares per annum. I am sorry to have to say that this target has not been met for some time, either by the previous Government or by this Government. However, this Government are examining new proposals which I hope will put a new face on the entire forestry industry. As a result of that we are maintaining a steady planting rate. In 1984-85 we planted approximately 6,380 hectares; in 1985 to date we have planted 7,284 hectares. That is a reasonable programme. I am hopeful that the new programme will at least double that.

The question of private planting has been raised here. Programmes are being carried out in respect of advertising to try to encourage people to plant trees privately. The Government and the Department are very disappointed that the western package has not taken off to the extent we would expect. The grants measure up to 85 per cent of the costs of planting any portion of land. They are very generous, but people have not responded to them in the western region. We are half way through a ten-year programme. I would be afraid to mention the percentage of the uptake on that scheme because it is so bad. It is a great disappointment to all of us. However, the advertising is generating a nice response at the moment. I would ask the media in particular to give encouragement anywhere they can.

A point regarding acid rain was raised. This is a big problem outside our own country. The question of Moneypoint was raised by a Senator who gave certain figures of the requirements to ensure that acid rain does not affect our forests. The only comment I can make, and it is only a personal one at this stage in respect of this particular issue, is that if measures are to be taken to guarantee that acid rains will not affect our forests, the time they should be taken is before the project gets off the ground. As we all know, to remedy a situation like that would cost considerably more money. I would appeal to the ESB to ensure that they do not pollute our air in respect of forestry development.

Also a question was raised in respect of the grant payments. Under the western package grants of 75 per cent are payable when planting takes place. The other 25 per cent is payable after four years and this is more or less to guarantee that there is proper maintenance of the forests. There is no use putting in money unless you see that the forest is maintained and properly looked after.

The question of hardwoods was also raised. The policy of the Department is to sow approximately 4 per cent of the planting on an annual basis in hardwoods.

The question of pastoral afforestation was raised and it is a serious one that requires quite an amount of research. I would like to point out that this is not an innovation but would be new to Ireland. We have some research going on at the moment in respect of this particular scheme. A project has already been established in County Wexford with a view to finding out what exact benefits we can derive from this development. It would be wrong of my Department to become excited about this scheme without the research being properly carried out over five to six years. On this particular development we do not expect any quick results because it will be very tedious and slow.

Many Senators expressed the view that forestry is very beneficial. There is little need to point that out to me. As a farmer I am prepared to accept that. It is the greatest wealth creator we could have. There is not the slightest doubt about that. The strange point is that while we were doing some of the research we found that on reasonably good land it could give the same return as barley. I know it is long term investment but as far as we are concerned we are attempting to draw up a national policy that will take account of our own Department, which is very well equipped, the structures being extremely good as far as forestry is concerned and, secondly, the financial institutions who are showing an interest. The debates that have been going on recently will be very beneficial. If these institutions are showing an interest and they want to invest money in forestry, we will draw up the policies to allow them to do so. Above all we must consider the farmers who own the land. There is no use talking about afforestation if we cannot get the land. It is important for any policies that are drawn up that we can accumulate a large pool of land. The old saying is a true one; if you cannot sow, you cannot reap. I believe that with the right policies, the right approach, the right encouragement we can quickly double the planting rate in this country.

Mr. McDonald

When are we going to have the policies?

Mr. D'Arcy

I am not at the Cabinet table, but we are now at the decision stage. The work of the review group has been completed. My proposals are before the Government. There are very serious events taking place at the moment, as the Senator will appreciate. These would be secondary to them but I am hopeful that between now and Christmas a decision can be taken.

I wish again to thank all Senators for their contributions. In view of the fact that I cannot go into policy matters, if the House wishes we can come back here when these proposals are announced and I will discuss them with the Senators.

Question put and agreed to.

The Seanad adjourned at 4.45 p.m. until 2.30 p.m. on Wednesday, 20 November 1985.