Seanad Éireann debate -
Tuesday, 28 Jun 1988

Vol. 120 No. 9

Forestry Bill, 1988: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Energy (Mr. Smith)

I was very heartened by the welcome this Bill received in the other House. While there were, naturally, differences of view on certain aspects, there was general agreement that the Government were doing the right thing in establishing a new commercial forestry company.

Forestry is part of our heritage and is one of our great national assets. Since the foundation of the State, successive Governments have pursued the aim of increased afforestation, to counter the destruction and neglect of previous eras and to provide self-sufficiency in an asset which is the raw material for so many industries. While it was not always possible to realise fully national forestry targets during this period, the important point is that all shades of political opinion recognised the importance of forestry as a major contributor to the well-being of this country. It is true to say that the earlier afforestation programmes set the seeds for future generations as, indeed, will our efforts to continue the work undertaken by our predecessors.

I hope I will not be accused of being partisan when I say that forestry development has received a major boost under the present Government which has targeted forestry as a primary developmental activity. A record national planting target of 11,000 hectares in 1987 was achieved. The target was increased further to 13,000 hectares in 1988 and this will also be met. In fact, I expect that total planting this year will reach 14,000 hectares, comprising 10,000 hectares of State planting and 4,000 hectares of private planting.

In addition to these targets, the Government's Programme for National Recovery set a target of increasing wood production in 1987 by 50,000 cubic metres to 1.25 million cubic metres. In fact, the targeted increases was doubled and a total of 1.3 million cubic metres was produced. This generated receipts of £19 million, an increase of 11 per cent over projections and 16 per cent greater than receipts in 1986. Receipts in 1987 were also an all-time record which I expect will be broken again this year when timber sales are expected to exceed £20 million.

The earlier period of Irish forestry was marked, because of the absence of significant private sector investment, by the necessity for substantial State intervention. While public forestry is likely to remain the predominant element in achieving national planting targets in the foreseeable future, the balance between it and private forestry has changed significantly in recent years. Private planting was a record 3,200 hectres in 1987, a tenfold increase over the corresponding 1983 level and, as I have said, I expect it to reach at least 4,000 hectares this year. I have recently launched three new initiatives on private forestry grants. The Western Package scheme, formerly aimed at the poorer areas in the west, has now been extended to all disadvantaged areas in the country. EC funding has been increased from 50 per cent to 70 per cent. A new farm forestry scheme has been launched, aimed at full time farmers, which increases the scope and level of grants available. The EC will reimburse the State 25 per cent of grant expenditure. A new compensatory allowance (headage payment) scheme will allow farmers, who are in receipt of headage payments in respect of livestock, to continue to receive such payments if they afforest part or all of their land. This scheme will be 50 per cent funded by the EC.

The availability of EC funding has been of considerable assistance to the Government in their initiatives to develop the private forestry sector. I hope I will not be accused of being churlish when I say that it is a source of disappointment to me that similar levels of EC funding have not to date been available for public forestry developments. Since we joined the Community in 1973, public forestry has received to date only some £8 million in direct EC grants as compared with an expenditure of about £500 million during that period.

There can be no doubt that both public and private forestry are essential elements in achieving national forestry targets and, as I have said, public forestry is likely to be the predominant partner for some time to come. The need for high national planting targets is obvious when one considers that only about 6 per cent of this country is afforested as compared with a Community average of some 24 per cent. Given the fact that Irish trees have the fastest growth rate in the Community, it is clear that sowing the seeds now through a sustained forestry development programme will reap the rewards in the years to come.

When I came into office, I quickly realised that we needed to increase substantially the level of EC funding for Irish forestry. I am glad to say that the major drive I initiated to this end has begun to bear fruit. In January last, I announced that we had been allocated a total of £8.1 million from the European Regional Development Fund for road building in State forests. This will finance about 55 per cent of the £15 million cost of constructing 358 km of new forest roads and the upgrading of 107 km in the three years 1986-1988. This is the first time that the ERDF has injected substantial resource to mainstream forestry activities.

In the latter part of last year, I visited Brussels and had important discussions on Irish forestry development with Vice-President Frans Andriessen. During these discussions, I invited him to visit Ireland and I am glad to say that he accepted this invitation and will come here next month. It was a source of considerable satisfaction to me that a forestry initiative resulted in a visit to Ireland by such an important Community personage.

While we have made progress on the EC front, we still have a long way to go before we can be satisfied with the level of Community funding support for Irish forestry. I intend to continue my efforts to ensure that such funding reflects the importance of forestry to this country and the major part it has to play on our economic development.

I mentioned earlier the role of successive Governments in the development of national forestry programmes. These investments are now beginning to come to fruition. As of now, about 50 per cent of Irish forests are producing saleable timber. Our forest estate has expanded from virtual extinction to its present size of nearly 350,000 hectares. Output from State forests will reach about 1.5 million cubic metres of timber in 1988. This will increase to two million cubic metres by 1993 and three million cubic metres by the turn of the century.

I think, therefore, that the signs now for Irish forestry are very positive. We also have a major advantage in our proximity to the large market of the United Kingdom, which imports more than 90 per cent of its timber requirements. The EC as a whole imports approximately 75 per cent of its requirements and, in fact, its timber import bill is second only to that for oil. The stage has thus been set for a major drive on export markets by Irish forestry in the years ahead. The plentiful home-produced timber resources will also provide the opportunity for downstream industries to capitalise on these markets.

I would be remiss if I did not pay a warm tribute to the staff of the Forest Service, both serving and retired, for their work in developing our State forest estate. Their efforts have in large measure contributed to the present situation where Irish forestry is now in a position to realise its potential. They deserve our thanks for the part they have played in our forestry development.

Hitherto, the Forest Service have operated as part of the Civil Service. In recent years in particular, there has been an increased emphasis on the need to exploit the full commercial potential of forestry and to operate it as a business. It has become increasingly obvious that a Civil Service structure was not the best way to achieve these objectives. The Government, therefore, have decided to establish a new commercial State-sponsored body to develop State forestry. The Bill before Senators, to which I now come, implements the Government's wishes in this regard.

Many Senators will undoubtedly have read this Bill with interest. I do not think it necessary, therefore, to go into each of its provisions in detail at this stage. These will in any event become clear as we consider the various sections of the Bill later. The best approach, I think, would be for me to outline generally the scope of the Bill and the broad purposes of its various sections.

The Bill is divided into three parts. The first part, comprising sections 1 to 8, is concerned with general provisions and I do not think there is a need to go into these further at this stage. Part II, which comprises sections 9 to 38, deals with the establishment and administration of the company. Essentially, these sections fall into six broad areas. Sections 11, 15 and 16 contain normal-type provisions in relation to the company's memorandum and articles of association. Similarly, section 10 and sections 17 to 23, inclusive, deal with the capital formation of the company, share issues and payment of dividends etc. Sections 24 to 29, inclusive, contain provisions in relation to the financing of the company borrowing, Exchequer funding of current and capital expenditure and so on. Sections 12 and 13 outline the objects and general duty of the company. Sections 30 and 31 deal with accounts, audits, and annual reports of the company. Sections 32 to 36, inclusive, contain provisions in relation to the company's directors, chief executive and staff. The remaining sections deal with the name of the company, section 9; establishment of annual sales programmes, section 14; by-laws, section 37, and general ministerial powers in relation to the company, section 38.

Part III, comprising sections 39 to 53, includes a number of transitional provisions applicable to the company. Again, it is convenient to divide these sections into broadly related categories. Sections 39 to 41, inclusive, deal with the transfer of land, other property, and rights and liabilities. Sections 43 and 44 contain provisions in relation to staff transferred from the Department of Energy to the company. Sections 47 to 49, inclusive, deal with claims by or against the company, legal proceedings and enforcement of judgments. Sections 50 to 52, inclusive, provide for the continuance of notices, licences, permissions, planning consultations and so on effected before vesting day.

The remaining sections deal with the position of the company in regard to rates and stamp duty, sections 46 and 42 respectively, power of Commissioners of Public Works to undertake work at the request of the company, section 45, and transitional financial provisions, section 53.

The First Schedule contains particulars of repeals of parts of certain enactments and the Second Schedule contains details of amendments of parts of the Forestry Act, 1946, mostly relating to penalties for tree felling offences. This, then, is a summary of the main provisions of the Bill. I would now like to comment in some detail on what the Government expect from the company and, in this context, to outline first the financial framework in which it will operate.

Forestry is, by its very nature, a long-term investment. The full returns on investment in forestry are not realised until a plantation is clearfelled at 40-50 years although there are, of course, intermediate stages when thinnings are sold. Even here, the normal pattern for conifer plantations is for thinnings to commence when the stand is about 20 years old.

Despite the progress which has been made in forestry in recent years, and it has been very real progress, the State's forest estate has not yet reached the stage where receipts from timber sales and other miscellaneous activities cover the cost of the Forest Service, £55.5 million gross in 1988. This is a fact of life. The new company, therefore, will not reach a cash break even position on its operations for some time to come. It is thus important that in the early years of its operations it receives substantial State financing and that a significant proportion of such financing be made available through share subscriptions to avoid the company being lumbered with interest charges which it would have difficulty in servicing if the predominant support instrument were loan financing.

The Bill, accordingly, reflects these needs. Section 26 provides that the Minister for Finance may provide funds to the company for capital works up to a limit of £100 million. Such funds may be made available either through subscription for shares in the company, Exchequer payable advances, or a combination of both. The actual amount and mix will be decided by the Government in the light of the development plans submitted by the company.

Under section 29, the Minister for Finance may make available to the company, during a period of four years from vesting day, grants up to an aggregate of £30 million for current expenditure. Section 27 provides that the Minister for Finance may provide up to £3 million for working capital, in return for its equal value in shares, and the company itself is empowered under section 24 to borrow up to a limit of £80 million. Such borowing may, under section 25, be guaranteed by the Minister for Finance.

The Bill, therefore, provides for an overall funding limit of £213 million for the company. This will be sufficient to finance the operations of the company over a period of about five years, such operations to include significant planting programmes by the company. I would emphasise that the figure of £213 million is a limit and that the actual funding to be made available to the company will depend on the particular circumstances prevailing and on its development plans and progress.

In my view, the funding provided for the company is not ungenerous. While it will probably be necessary to provide further financial support for it after the period indicated, I would expect this to be on a much lesser scale. In fact, it would be a serious illusion for the company if it saw the Exchequer as a constant source of financing. That most certainly will not be the case. We expect the company to stand on its own feet, to conduct its business in accordance with the requirements of the marketplace, and to reach profitability as quickly as possible. Freed from Civil Service constraints, its essenthat task will be to operate to strict commercial criteria and to exploit all available opportunities.

During the period covered in this Bill, it is my firm intention to adopt a very vigorous attitude to proposals for financial assistance submitted by the company. The company is in the very fortunate position in that substantial assets, financed through taxpayers' moneys, are being transferred to it without any obligation to repay any part of the expenditures incurred in their creation. For any company, this is a tremendous head start. While we do not want to cripple it with debts, we must also guard against an even worse situation in which the company is, in effect, relieved of the obligation to conduct its affairs on the basis of private sector efficiency, because we are too easy-going in the provision of State funds.

As I have just mentioned, the taxpayer has already invested substantial amounts in forestry and we now expect the company to put its inherited house in order and to provide substantial returns on this investment. I will conclude on this point by saying that, although there is provision for it in the Bill, I will critically examine any proposals for the guaranteeing of the company's loans. If it is necessary we will have to put up with it but I will be very anxious to avoid anything which might give the impression that the State has any responsibility for the financial outcome of the company's activities. We also intend to avail of the provisions of the Bill, for example section 38 to set financial targets for the company in consultation with it. These targets will not be mere formulation of words and numbers.

For the company to meet the goals we will set for it, its operations must reflect a number of crucial factors. In the first place, a commitment to commerciality must permeate all parts of its organisation. In the past, the development of forestry in this country was not always guided by strict commercial considerations and, as I have already said, a Civil Service structure is not the most conducive one for commercial operation. All that must now change. Freed from the constraints of the Civil Service, the company will have the necessary flexibility and freedom to conduct its business in a commercial way like any other private sector company. It will have no excuse to do otherwise and no excuses will be accepted.

Secondly, the company must operate in a cost effective and efficient manner. I mentioned earlier that the current development of our forest estate has a major influence on the break even date and that, because our trees are at a certain stage of growth, it will still take some time before profitability is reached. There is not much the company can do about that, but it can certainly do a lot in terms of reducing its operating costs. I expect it to do so and thus achieve a much earlier break even date than would have been the case if forestry had continued to be operated within a Civil Service structure.

I spoke earlier about the strengths of the forest service and indeed, that service has great strengths. Like any other organisation, however, it is also capable of improvement. It has been clear to me from my examination of forestry affairs both at headquarters and in the field that there is considerable scope for organisational reform, for the elimination of unwieldly and costly procedures, for the adoption of better practices in the forests, for the introduction of new arrangements which will reduce outgoings on purchases and increase income per unit of sales, and for the identification of the optimum utilisation of the land and other assets. There is a need in general for the creation of an entirely new culture in relation to forestry which will have less to do with outdated procedures and much more to do with running an efficient operation and giving the people of Ireland a better deal for their money.

In short, I expect the new company to have a fundamental look at forestry organisation, structures and practices and to identify the most efficient and cost effective way of conducting the business of forestry within a commercial environment.

An emphasis on management and performance must also be given the highest priority within the company. Standards of excellence must predominate. There should be no place for individuals or groupings who see the organisation as existing to fulfil their own particular purposes. On the contrary, all staff should see themselves united in a common goal — to achieve the purposes of the organisation. This will be the real test of an individual's performance within the company.

The company is indeed fortunate that many of the staff which will be transferred to it have long experience in the various aspects of forestry. This will undoubtedly be a great strength which will considerably help its development. At the same time, much of this strength would be dissipated and, indeed, could be counter-productive, if the staff concerned did not adjust quickly to the new tasks and different operational environment in which they will find themselves. I am fully confident that this will not happen. Indeed, I am glad to note that the staff have given their support to the objectives we have set for the company and I look forward to their continuing commitment in this respect. Bearing in mind that traditional constraints did not allow for sufficient attention to be paid to these things for a long time past, I am convinced that in the new situation very significant improvements will be effected in the near future.

I will, therefore, be throwing down the gauntlet to the chairman, the directors the chief executive and the management team as a whole to deliver the goods in accordance with the charter which I am asking the Oireachtas to provide for the company. I do not accept that this is just another semi-State board. I expect far more than that and if I do not get it I will give the board a very hard time. As I have mentioned, there are useful provisions in the Bill in regard to performance requirements and achievement of targets. We intend that the powers given in these respects to the Ministers for Energy and Finance will, in association with the financial provisions of the Bill, be used in such a fashion as to assist in bringing and about the radical changes that are necessary. While we will set the company difficult tasks, we are confident that it will meet these tasks and will fulfil our high hopes for it. Accordingly, I commend this Bill with confidence to the House and I look forward to a useful and constructive debate on it.

Mr. G. Reynolds

I would like to take this opportunity to welcome the Bill before the House. Its aim is to grant power to the Minister with responsibility for forestry to establish Coillte Teoranta. Before dealing specifically with the Bill, I have been aware for a number of years that different Governments have been advocating the development of our forestry industry which they say would beneficial in the restoration of our economy. I cannot help drawing a comparison between forestry and tourism. We have been saturated by the present Government telling us that the development of the tourism industry would generate such a financial bonanza that it would go a major way towards alleviating our economic troubles. The development of the forestry industry, we are told, holds a similar trump card. However, I am hopeful the Minister will learn from the mistakes of his Government colleagues, particularly in tourism, where we provided £4 million for a tourism task force, which I must say was an excellent idea, but due to incompetence or lack of communication between members of this Government, the fishing rod licence which was introduced had a devastating effect on the development of our tourism industry. I certainly hope the same thing will not happen in the development of the forestry industry.

However, today we can start off on a proper footing as far as the forestry industry is concerned and make sure that we generate the full economic potential from its development. There are some shortcomings in this piece of legislation which must be addressed to facilitate the positive development of Irish forestry. The Bill implements generally the contents of the Forestry Review Group report. The major emphasis of the review group report was on the need to regard the national forest sector as an asset to be managed commercially for the benefit of the State. I have no doubt the Minister has taken this into account and will make sure that the taxpayers' money which is being invested in forestry resources will be well spent.

The staffing of Coillte Teoranta causes some concern. One of the points highlighted by the review group report was the lack of commercial experience at Department level. How was the chief executive expected to make good the departmental deficits in this regard? The directors of Coillte Teoranta will be appointed directly by the Minister. There is no requirement in the Bill that the persons appointed by the Minister will need to have any experience or involvement in the forestry sector. Given that the appointment of directors will be one of the most effective mechanisms for ensuring the availability of commercial and technical resources, it is to be regretted that the Minister did not see fit to include the provisions specifying from where such directors should or will be recruited.

Another omission in the Bill is that it fails to address the contentious issue of valuation of assets. One of the major problems in the forestry Department, and even among independent experts, is trying to establish with any degree of accuracy the proper value of existing stocks. This will cause a serious problem in the development of the new company. If the value attached is too low an estimate, the company and its chief executive will show great results but at the cost of virtually wiping out any meaningful private sector participation in forestry. On the other hand, if the estimate is too high, an unacceptable burden will be placed on the company in trying to meet unrealistic and unachievable targets. The latter situation would have dire consequences for the future of the company.

Another omission in the Bill is that there is no inclusion of annual performance indicators. A provision should be included in the Bill allowing both Houses of the Oireachtas to examine the performance and progress of this body. A lot of taxpayers' money, as I have stated before, is being invested in the company and there should be an automatic means of reviewing the working of this company.

Dealing with the Bill itself, section 14 and section 44 are severely restrictive on the chief executive's autonomy to pursue the job as he or she sees fit. Section 14 deals with the sale of timber and land, which will have a major role to play in the development of the company. But, under that section, the chief executive cannot make any decisions without the approval of the Minister. Section 44, which deals with superannuation, again restricts the chief executive and no decision can be made without the approval of the Minister.

When the Bill was published many people expressed surprise that there was no reference to research and development in the list of duties to be undertaken by the company. The Department have been using the Wood Technology Unit of Eolas for 26 years now. What is to be the fate of this unit? Surely Coillte Teoranta needs this expertise, particularly to establish standards which will eliminate importation of Canadian and Scandinavian timber. The Minister is very well aware that we need a lot of research and development to be carried out in the forestry industry. I have experience myself in the sense of having involvement in a building industry where a lot of timber was imported over the past number of years, mainly from the Scandinavian countries, while Irish timber has been regarded as inferior in the sense of being used for roofing and basically in the building industry. Research is of vital importance. I know there has been a take-up of and an improvement in the standard of Irish timber, and due to cost effectiveness native timber is cheaper. But, unfortunately, at the moment it is not of as good a quality as imported timber.

Another thing which I would not like to see developing concerns private and public forestry investors. The acquiring of land for afforestation can be an emotive issue. What must be avoided is that a farmer who wants to acquire land for fanning must not run into competition from both public and private forestry sectors which would increase land prices. This could bring about the situation I have seen in my own county, unfortunately, where you had pickets and even forestry machinery burned. It is something that is very emotive, and I know there is not a lot you can do in legislation to stop this type of thing happening. The forestry grant-aid scheme under the Western Package will, as I know the Minister is aware, finish in 1991. This was a very worthwhile grant. It was specifically provided that farmers themselves would take up the grant and plant 25 per cent, 50 per cent, or all of the land if they so desired. Unfortunately, the grant has been taken up more by private afforestation companies and insurance companies and the people for whom it was really provided have not availed of it.

I am glad to see in the Minister's speech that he has decided on a new compensatory allowance headage payment scheme which will allow farmers who are in receipt of headage payments in respect of livestock to continue to receive such payments if they afforest part or all of their land. That is a very worthwhile aid to the scheme and I welcome it.

As the Minister is no doubt aware, I made representation to him here in this House regarding the formation of a wood processing plant in County Leitrim and also for the headquarters of Coillte Teoranta to be established here. I think many people from the west will be looking for this. I will not go through the pros and cons as to why it should be placed in Leitrim, but I am sure the Minister is aware that we are at the centre of the forestry industry in County Leitrim. We are told we have the best land in the country for planting, that trees grow twice as fast there as anywhere else. Under the Government's theory of decentralisation, if County Leitrim is entitled to anything, we have a just cause in looking for the establishment of a forestry department in the county.

I will be putting down a few amendments on Committee Stage and I look forward to discussing them.

Mr. R. Kiely

I welcome the oportunity to speak on this important legislation. I think this is the Minister's first time to come in here to deal with policy legislation and I would like to congratulate him on his appointment. It is indicative of the Government's commitment to develop afforestation. I compliment him on the very energetic and enthusiastic manner in which he is applying himself to this very important task.

Forestry in Ireland, although comprising only 6 per cent of our land compared to the EC average of 24 per cent, has come a long way from the development drives of the 1950s, 1960s and 1970s. We now have a million acres of plantations which support a large number of wood industries supplying over half of our own domestic needs of constructional timber while also developing sizeable domestic and export markets for other timber outlets. Present annual production is 1.4 million cubic metres and this will rise to two million by 1993 and three million by the year 2000. In all, forestry and the wood industries give sustainable employment to some 6,500 people — a figure which will increase further as the balance of our existing plantations mature.

The Government recognise the advantages to the country of developing the timber industry and have in their Programme for National Recovery given forestry a high profile as an area of development which can contribute significantly to resolving our economic and social problems. To date the State has played the major role in forest development in the country, accounting for some 85 per cent of all forestry. In County Cork alone the State owns over 42,000 hectares of forest. Last year the Forest Service planted some 8,000 hectares throughout the country and it is the intention to increase this further to 10,000 hectares this year.

The volumes of timber now coming onstream and the increased planting rates generated by recent initiatives have provided a springboard for new employment in forestry. A great deal of this new employment is, of course, in the private sector and in the establishment of new contracting firms engaged in planting, harvesting and, indeed, all aspects of forestry.

I have no doubt that the potential for future employment is great. It is worth noting that forestry in particular is one area which literally plants the seeds of employment for the next generation. What we are doing today will be for our children and our children's children. The record planting levels of today will provide many jobs over the next 40 years and beyond in forestry and in downstream industries.

A cornerstone of the Government's policy in the forestry area is the transformation of the Forest Service into a commercial company designed to meet the challenges of the future and to capitalise on the investment made by successive Governments since the establishment of the State. Legislation has now been introduced to establish this company, which will be known as Coillte Teoranta or the Irish Forestry Board Limited.

The policies and strategies of the Government, as reflected in this legislation are: (1) to establish a commercial company to implement the State's afforestation programme; (2) to allow the company, freed from existing Civil Service constraints, to exploit all available opportunities, to conduct its business efficiently and economically, as if it were a private sector company; (3) to provide it with the staff and resources necessary to achieve these aims; and (4) to monitor its performance critically each year, having regard to the various targets set for it.

Ministerial responsibility in regard to the company will essentially be concerned with establishing policy and monitoring performance. Enormous amounts of public funds have been invested by successive generations of Irish taxpayers. We will be looking to the new company to maximise the value of these investments and provide a growing financial return to the State as soon as possible.

This legislation will fundamentally change the structure and future of forestry organisations. I expect the company to build on the strengths it is inheriting and, with the more favourable environment and greater freedom it will have, to achieve a more rapid development of forestry than was practicable within the confines of the Civil Service, which was often required to carry on its activities otherwise than on the basis of sound business principles. The company is being given a major national asset. The Government expect it to make the optimum use of that asset and to maximise the returns on forestry. That is what I hope this legislation will do.

It is clear to me from my examination of forestry affairs, both at headquarters and in the field, that there is very considerable room for organisational reform, for the elimination of unwieldy and costly procedures, for the adoption of better practices in the forests, for the introduction of new arrangements which will reduce outgoings on purchases and increase income per unit of sales and for the identification of the optimum utilisation of the land and other assets. There is a need in general for the creation of an entirely new culture in relation to forestry, which will have less to do with outdated procedures and much more to do with running an efficient operation and giving the people of Ireland a better deal for their money.

The establishment of the new company will, I am convinced, give the timber industry a new air of confidence and a new impetus. With the record planting levels being achieved by the Forest Service, this new level of activity has already commenced. We have a versatile and competitive timber industry, well qualified to respond to the future challenges ahead. The sawmills have already reacted with enthusiasm to the improved timber production levels and have introduced, and will continue to introduce, the most modern technology in order to strengthen our competitiveness. The State expects this type of response from the private sector to the many opportunities available in the timber industry. I am convinced — and I am sure the Minister and everyone else is convinced — that the private sector and the timber industry in general will benefit from the establishment of Coillte Teoranta.

I would now like to turn my attention to private afforestation. The position in Ireland in relation to private afforestation is unique. In the other EC countries the private forestry sector plays a far greater role in the national afforestation programme. The relatively low contribution made by the private forestry sector in Ireland to the national afforestation programme contrasts very strikingly with the position pertaining in Great Britain, our nearest EC partner. In 1977 private woodland owners in Britain accounted for roughly half of the national afforestation programme. By 1984 the position had changed dramatically. In that year the afforestation programme of the private sector was double that of the British Forestry Commission. While there are many differences — economic, social and financial — between the two countries, I think it illustrates the scope that exists for an expansion of the private forestry sector in Ireland.

I would like to emphasise that I do not consider that a vigorous private afforestation programme can be achieved only at the expense of other branches of agricultural production. I am convinced that forestry and agriculture can form a mutually beneficial alliance, especially now that there are restrictions on agricultural production and milk quotas and probably further restrictions on other agricultural produce. Forestry and agriculture should be fully utilised.

There is in excess of one million hectares of marginal agricultural land which is ideal for forestry. It consists principally of wet mineral, upland and blanket boglands, which are to be found largely in the west of Ireland from Donegal to Kerry, Cavan, Monaghan, Wicklow, the Rossmore plateau and Senator Reynold's county, Leitrim. These lands give very low production — and consequently profit — from agriculture but can yield significant returns from forestry. Leitrim, which is widely accepted as being ideal for forestry, gives an average yield of 22 cubic metres per hectare compared to the national average of 16. While the rest of the areas referred to may not be as high as in Leitrim, they are nevertheless very productive for forestry. There is thus a large potential land bank available for the expansion of farm forestry without encroaching on the land suitable and available for traditional agricultural pursuits. While all land is potentially forestry land — the actual decision being a matter for the owner — the probability is that farmers with marginal land would be well advised to seriously consider forestry as an alternative land use to the production of agricultural commodities which are in over supply.

There are, however, two other factors which should increase the attractiveness of the afforestation option. The first factor arises from our natural climatic advantages for tree growing. The growth rates of Irish forests are the highest in Europe. On average, Irish forests yield a third more timber per year than British forests and more than twice as much as forests in other European countries. The second factor is the favourable market prospects for timber in both the domestic and export markets. This country imports timber and timber products to the value of £400 million annually. There is considerable scope for substituting home-produced timber for these imports. Timber is the largest commodity import to the EC after oil. The fact that the UK is less than 10 per cent self-sufficient in timber means that there is a ready market for all the timber that can be produced in this country. It must, therefore, be obvious that forestry is a worthwhile and promising investment.

Proposals for the development of a Common Forestry Policy by the European Community have been hampered by the lack of a suitable provision in the original Treaty of Rome. While the European Commission have taken many initiatives over the years to evolve a Common Forestry Policy on an informal basis, their efforts have foundered on the opposition of member states to a more liberal interpretation of the Rome Treaty. The evolving agricultural and financial problems of the Community have, however, brought about an atmosphere in which the afforestation option is likely to receive more favourable consideration. The re-organisation of markets for agricultural commodities in over supply will profoundly affect the Community agricultural sector and could give a fresh impetus to the development of forestry throughout the Community. As and when agricultural prices are stabilised or fall, more and more land will become available for afforestation. Afforestation is the best alternative land use which could be exploited to the benefit of the economy, employment and the environment. Our aim should be to devise the best possible land use between agriculture and forestry, which complement rather than compete with each other.

Up to 1986 the private sector in this country had been slow to invest in forestry. However, it is worth noting that this situation has since improved. Last year the rate of planting achieved by the private sector reached an all-time high of 3,200 hectares, a quarter of which was planted by farmers. With a recognition of the benefits of forestry investment, both to the individual and the Community, I am confident that private afforestation will continue to increase over the coming years. Therefore, I urge all landowners seriously to consider investing in forestry and availing of the generous incentives provided by the Department under this legislation.

Two new EC assisted incentives aimed at encouraging farmer forestry have been introduced. One of these provides the following grants for full time farmers and farmer co-operatives: up to £550 per hectare for planting conifers; up to £850 per hectare for planting broadleaves; up to £8 per metre for forest roads; up to £35 per hectare for the provision of firebreaks and waterpoints in forests.

A second incentive launched recently will allow farmers who are in receipt of headage payments in respect of livestock to continue to receive those payments for 15 years if they afforest part or all of their land. The availability of compensatory payments during the first 15 years of a plantation's life — a period during which it is producing no income but is generating costs — should encourage more farmers to invest in forestry. With an annual income to look forward to farmers will, hopefully, become much more interested in forestry as a farm enterprise.

As well as the availability of generous grants, the prospect of a good financial return should also encourage more landowners to get involved in forestry. Based on current costs and prices, it is estimated that a hectare of forest would produce approximately £11,000 worth of timber over its rotation of 40 years, representing a return of 4 per cent over the likely rate of inflation. When the generous forestry grants are included, returns of up to 10 per cent inflation can be achieved.

Some investors may be reluctant to invest in forestry due to the risks of loss or failure which have to be faced over the long growing period of the plantation. I think the following points might help reassure any such worried investors. Over 80 years experience of State forestry shows that the risks of substantial losses due to fire, insects and disease are very low. Indeed Ireland, because of its geographic location, is spared much of the ravages of industrial pollutants; and this, coupled with a vigilant approach to imported plants and timber, has given Ireland a relatively good plant health status compared to other European countries. In any event, forest plantations can be insured against such losses.

Another obstacle to investment in forestry by the private sector is the lack of a forestry tradition in this country. However, the example being set by State forestry, as well as the expansion of private forestry and the promotional and educational efforts undertaken by the Department, is helping to bring about a change of attitudes. This attitudinal change will overcome the problems associatied with the lack of a forestry tradition. I would like to mention now the growing of ash. This is one of my pet subjects. The Munster Council of the GAA have launched an ash promotional scheme.

Mr. Ferris

We will want it soon.

Mr. R. Kiely

You had it in Tipperary on 17 June. In this respect when I was at the game in Thurles last Sunday week — I do not know whether Senator Ferris was there — I was most pleased to see the Minister launching this grow ash scheme in County Clare, where the Clare County Board have bought eight or nine acres and planted ash there. The Munster Council will match the Government grant pound for pound and, with the Minister's interest, I am sure there will be more ash growing and that the future of hurling will be secured. The Minister in that photograph definitely showed that he had played hurling formerly. I do not know if he was as good as his brother Billy, who played with Tipperary, but you could see that he had the cut of a hurler. I welcome the Bill and wish it every success.

An Cathaoirleach

I should have been in that photograph because I was standing beside him.

Mr. Ferris

It is extraordinary in a way that an office holder can be excluded by the media. I want to commend the Minister on what he has been doing to stimulate interest in the growing of ash. It is a disgrace that a country, the sponsor of the magnificent game of hurling, is faced with the dilemma of importing ash to make hurleys. It is ridiculous. The Minister was drawing attention to that fact by his presence at the pilot project under the auspices of the GAA board. It is a good thing and people should be conscious of it. There is quite a lot of ash growing around parts of Tipperary that is not grown specifically for that purpose but is used afterwards quite effectively — and Cork will know fairly soon how effectively it can be used.

The Bill before us has been talked about by the industry for a long number of years. It was recognised, generally speaking, that something needed to be done in the area of afforestation, the development of forests, the stimulation of interest in growing trees, and outlining the economic benefits to the country. The Minister has addressed himself to the problem and has responded to it by introducing the legislation before us today. Needless to say, there are individual areas in the Bill that I am concerned about and I will put down amendments which I hope will be discussed, in particular on the issue of workers in the forestry service who have given a life time to the service.

In my own county, in particular, the forestry service had a very proud work-force. They worked extremely hard and for long hours. They were out of bed before most people even thought of going to bed sometimes. They were an extraordinary breed of people but there was always tremendous job satisfaction in working in forestry. Unfortunately over the years — I agree with the Minister who has addressed this problem — it became a kind of a Cinderella service in the Department and in people's minds. Few opportunities were available in forestry and, as a result, forestry workers were not replaced when they retired or died. We had the ludicrous situation that, when there were vacancies in forestry, rather than employing people in State employment, the State divested themselves of that responsibility and gave out contracts to private individuals who in turn I understand, employed people who were drawing social welfare. People in responsible positions were given contracts by the Department to retrieve timber from the forests and take it down to the roadside for sale. The workers engaged in that were unofficial. If the Department had continued as the direct employer of these people it would have been much better. The end result would have been better and there would have been continuing job satisfaction in the forestry service.

That said, we should pay tribute to all those people in the Department who had special responsibility in the area of forestry. Indeed, the Minister's predecessor, Mr. O'Toole, in the publication Investing in Forestry in 1984 addressed himself to this problem as well. In the introduction to the booklet he said: “Despite State efforts the percentage of forest, both State and private, is still less than 6 per cent of the total national area.” Out of the total acreage available for planting, only 6 per cent was planted either by the State or the private sector. He continued: “This is by far the lowest percentage in Europe, even though timber as a raw material is in short supply in Ireland, in Europe and in the world at large.” This problem obviously has been identified but has not been properly addressed.

The then Minister went on to say:

"The Irish climate is well suited to the growth of trees, particularly the spruces and pines which are so important in the world timber markets. A great deal of our land, under-utilised because of inherent problems which render it unsuitable for the intensive agriculture of today, is ideal for timber production. The State forestry programme will be continued but the Forest Service, with the knowledge and experience gained to date is confident that private afforestation and forest development should, and indeed must, become an integral part of future land use programmes."

That Government and the next combined Fine Gael and Labour Government invented a whole new tax regime as a stimulus to the private sector.

An Cathaoirleach

Senator Ferris, for the record what were you quoting from?

Mr. Ferris

I am quoting from Investing in Forestry which was published and endorsed by the former Minister, Mr. O'Toole, and I will let the Editor of Debates have a copy of it so that she will see what I am quoting from.

The tax incentives which were brought in by way of budget changes gave a special incentive to the private sector, not alone to plant trees and to have a tax incentive for doing so, but also to benefit under the gift tax and inheritance tax regimes of the time so that there would be an incentive for people to designate certain marginal lands for growing trees.

The gift tax and inheritance tax sections were generous because in the case of forests growing on the land, the market value of the land was reduced by 50 per cent or a sum of £200,000 whichever was the lesser for gift tax and inheritance tax purposes. That would fall to the beneficiary if an Irish farmer was defined as the beneficiary.

It was the belief at that time that, if people were given the right incentives, tax incentives and grants to grow timber privately there would be a major take-up in this area. Unfortunately, it is true, and I stand corrected if it is not true, that the take-up for that programme was very small indeed. This is an indication of people's perception of the pay back procedure involved in growing timber. We have an excellent climate and a large amount of land which lends itself to afforestation, but the return on investment is perceived by the agricultural sector, in particular, as being so marginal and so slow and long term that there is no incentive whatsoever to go into the growing of trees on a commercial basis.

The Bill removes from the Department the responsibility to develop afforestation, plans and programmes of planting. If anything is welcome in what the Minister is trying to do, it is the possibility, that, if it is done in a commercial way, there may be more of a response to it than to any State Agency. I am aware of the fact that there is an ever-growing demand for this product.

In my own county, in particular, a factory was set up — there are some environmental problems with the factory — to process a particular fibreboard. Medite Europe Ltd. process fibreboard, and their demand for raw materials cannot be satisfied locally to such an extent that they are sending transport throughout Ireland to collect timber from the State forests, the property of the Department. If a Canadian or European company had the incentive to start a major manufacturing process like that using native timber, they obviously have a commitment from a commercial point of view to purchase timber and all the timber that can be grown.

It removed the scandal of timber being exported from the docks in Waterford at prices as low as £1 per tonne. It was then processed in Sweden creating massive value added for the Swedes. The Irish Timber Industry and the building industry has to pay dearly for it. That distorted the balance of trade in that area. Thankfully that has all changed now and we can actually add value to our own product and export it. The product is excellent and can be commended to the building industry. There is no problem about markets for the end product. However, they must have a commitment from the people to invest and to continue to produce timber in the long term. The production of timber, apart from the economics of it, is a tremendous environmental benefit to any part of Ireland. One has only to look at the Knockmealdowns, the Galtee Mountains, parts of Slievenamon and those reas which for years have been associated with the growing of forests. The sight of forests growing on the side of the mountain is magnificent. The actual beauty of timber at that level of production has to be seen to be appreciated. Only foreign visitors can really appreciate what a forest can do to the environment and the way it blends into and adds to the whole atmosphere of rural Ireland. From this point of view, the growing of timber has the added advantage of being a tourist attraction. I must commend the Department for the way they have opened up the forests to people. They have an infrastructure of road networks so that people can enjoy and appreciate the forests. People can go through them on a Sunday with children, because there is no place that is safer, or happier, or environmentally purer than a forest. The forest walks that have been supported by the Department and forestry workers throughout the country have been a tremendous success. Designated areas within forests for forest walks and for identifying trees which have a historic significance to the area, are a tremendous educational boost for children. One can only commend them. I hope the new company will continue to open up the forests to people, with a restriction about fires and all the other problems that can arise in very dry weather. I commend the Department for what they have done in this area.

Of course, nobody could ever be satisfied with the amount of money invested by the State in forest development. We always had a financial restriction and, because the pay-back was so slow, there was not really an incentive for the Government to do this either. In the short term there will not be a pay-back and their will still be a demand made on the Exchequer to provide capital funding for projects. The actual concept may be of benefit to the industry. When we go through the Bill in detail we can point out some of the anomalies we consider might arise because we have a lot of experience of setting up semi-State bodies and other companies like Bord Telecom, An Post, the new transport board, Dublin Bus, Irish Rail and all of those we have set up by legislation. We are committed to ensuring that the State plays an active role in the area of forests. However, I am afraid that the commitment required from the private sector may not be as forthcoming. I have admitted that the State were slow and not generous enough in advancing programmes for the development of timber. In the past we learned some lessons.

The Minister on assuming office immediately offered forest lands for sale. Personally I objected to the concept because I could see no reason for the State to divest itself of all its infrastructural investment and planting investment at a time when the pay-back was likely to materialise for the benefit of the State. I felt it was short sighted of the Government to suddenly offer the land for sale. I had no objection to the concept of selling the produce of the land for the benefit of the State but I had a reservation about the sale of forest lands as I felt we were selling off the kitchen silver for short term capital gain.

There is a motion on the Order Paper in the name of the Labour Party objecting to that concept. However, I understand that the take-up by the private sector was practically nil. The Irish have the idea that you will not make money from forestry. If that is the case, this private company will be watched with interest by all to see what ingenuity they will bring into the market place. The Irish Timber Council issued a document called The Irish Timber Industry: A Policy Statement. The private sector felt at the time that there was an need for the concept of a semi-State body and for taking control from the Department. They identified the problem of how the Department disposed of their timber. The Department have an archaic system of offering timber for sale by tender when it is available. We have had complaints from the people involved in the timber and sawmilling industry in our areas that their demands for timber were not met. They were unable to bid for it in the normal way and they were unable to apply to purchase it in the normal way because of a peculiar quota system of purchasing. I hope this new company will have new ideas about how they can market their produce, how they can make it available on the open market, how they can have open bidding to ensure that there is a proper return on investment for the Government and for this semi-State or private company that will now be developing the role of the Forestry Division. In that booklet, The Irish Timber Industry: A Policy Statement published by the Irish Timber Council say and I quote:

The Sawmilling industry has, many times, recorded its total dissatisfaction with the method by which it receives its supplies of raw materials from the State. We do not, therefore, intend to describe the procedure here in great detail. In brief, the Department indicates at irregular intervals that it has quantities of timber available for supply to the Sawmilling Industry — the quantities available vary as to 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. The Department invites tenders for its timber against a secret reserve. If the tenders submitted do not meet this reserve, the process is either repeated in full or the Department will barter the price upwards by negotiation with individual mills. The consequences of such a system are predictable. Individual sawmills are in a state of constant uncertainty as to their raw material supplies; mills often find themselves purchasing and transporting timber from remote forests while local sources are denied to them. A great deal of management time is wasted in examining timber with no certainity of success in purchasing it and, ironically, the system yields no monetary advantage to the State in terms of enhancing the returns for timber sold.

In recent years, the industry has succeeded in negotiating with the Department a quota system under which qualifying mills are guaranteed a percentage of their requirements. Regrettably, this quota does not operate satisfactorily as it is not regularly updated to take account of increased processing capacity.

Those are some of the problems that the Forestry Division had in trying to deal with a national asset and in disposing of it for the benefit of the State. Hopefully in this Bill and in this new structure that will not arise and people can genuinely have access to the produce of forests. Hopefully when we go over this in detail, we will be able to discuss the actual procedure to be followed.

The only problem I have with this system is that, once it is up and running, once the Bill is enacted and the President signs it and the company is set up, there is relatively little opportunity for the House to question what is happening. We will be told it is no longer a ministerial responsibility, that they are not accountable to anybody, they are accountable only to themselves and probably they will furnish a document for our perusal at the end of the year, their accounts and balance sheets etc. We will not have the opportunity we have today to ask the Minister about the changes that might be involved in the procedures we have followed in the Department and what procedures we are now laying down for this new company, what restrictions will be on them and how they will act and who they will be finally answerable to.

If the State is making a continuing capital investment over a period of years which the Minister has indicated that they will be doing, obviously the new company will be answerable to the Minister with responsibility. I hope there will be procedures available to us then in the allocations of money either in the debate on the Appropriation Bill at the end of the year in the Seanad, or on the publication of the Estimates to discuss how they are functioning. Members of the Houses of the Oireachtas should still have a role in trying to have an input into an area which we feel is crying out for development and has been constrained because of departmental structures.

An Cathaoirleach

Senator Ferris, what were you quoting from?

Mr. Ferris

I was quoting from a document published by the Irish timber industry, a policy statement which was submitted to all Members of the Oireachtas for our perusal following the publication of a policy document on forestry by the IDA. Following publication of the IDA report in 1984, the NESC report on forestry policy was also published. There was a lot of concern because suddenly the IDA divested themselves of the responsibility for grant-assisting people in the timber industry, particularly sawmillers. They suggested that there was now an over-supply of sawmilling processes throughout the country.

I started my working life in a sawmill and while I did not have my fingers cut off there, I am likely to get my head cut off here if I drift away from the Bill. There is a commitment by a lot of people in rural Ireland to this industry. There is a great love of forestry and of timber and everything concerned with it. It is one of our national assets and we should value it at every conceivable level. That is happening. There is a new awareness in people's minds about forestry since my colleague from North Tipperary took charge of the portfolio. There is an awareness in people's minds of his commitment to it. I think it is because the Minister can look down at various forests that he realises there is a future in them.

Mr. Smith

Look up.

Mr. Ferris

If you look up, you cannot see the wood for the trees. There is a commitment in my constituency to a continuing development of the forests as we know them. I hope we can reassure all the workers in the industry. They have expressed extreme concern about their change of role, their employment in the Department and their transfer suddenly into a private sector arrangement as outlined in the Bill. With those reservations, particularly in regard to the employees in the company, we will have an opportunity on Committee Stage to develop further our thoughts on the various sections. As a general principle I want to commend the Minister for what he is doing in an important area of our economic life. It is a tremendous national asset that must not be neglected by the Government or the private sector.

Mr. Mullooly

I very much welcome this Bill the purpose of which is to make provision for the development of forestry and to provide for the establishment of a new commercial forestry company for this purpose which will be known as Coillte Teoranta or the Irish Forestry Board. The State's entire forestry estate and most of the functions and staff of the Forest Service of the Department of Energy will be transferred to the new company when it is established. I welcome the decision of the Government to proceed along the lines provided for in the Bill. I welcome the fact that Coillte Teoranta will be registered as a company under the Companies Acts with commercial goals and carrying on its operations in the same way as a private sector company. This is the same very successful format which was used in the case of An Post and Bord Telecom Éireann.

The principal difference as far as Coillte Teoranta is concerned is, however, that the Minister for Finance may, if the Government so decide, sell his shares in the company at some stage in the future. While I see nothing wrong with this private participation option being provided for in the Bill, I certainly hope that it is something which will not be contemplated for many years to come. Forestry is a very important economic resource but, in Ireland until the coming into office of the present Minister of State at the Department of Energy and the present Government, it has been a very neglected resource. While the EC has an average afforestation of 24 per cent compared to a world average of 30 per cent, Ireland has only 5.5 per cent or 6 per cent afforestation, this despite the fact that in Ireland the combination of suitable soils and mild oceanic climate means that very high production can be achieved with good practices.

Another interesting statistic is that the European Community imports approximately £16 billion worth of wood products each year which is in excess of 60 per cent of its total requirements. I understand it is the world's largest importer of these products. There are, therefore, very strong economic reasons for developing our forestry resources and, of course, in addition to the economic aspects, there are also very strong recreational and environmental reasons for being involved in forestry and Senator Ferris has referred to these. There is also the fact that the employment potential of forestry is considerable both at the planting stage and in the ancillary works and the various downstream industries which forestry is capable of generating. It is to be welcomed that the Government identified the potential of forestry in this regard and that the action plan in relation to forestry which is outlined in the Programme for National Recovery is being so successfully implemented.

I would like to congratulate the Minister of State at the Department of Energy with special responsibility for forestry, Deputy Smith, on having achieved a record national planting target of 11,000 hectares in 1987. I am confident that he will also achieve and, indeed, surpass the considerably higher target of 13,000 hectares which has been set for 1988. I understand that prior to 1987, the annual planting target was of the order of 10,000 hectares but that the achievement of this target was the exception rather than the rule for a long number of years.

A very welcome development has been the increased interest in private planting. The Minister has stated that the 11,000 hectares which were planted in 1987 included 3,200 hectares of private planting and that he expects this area will increase to 4,000 hectares in 1988. The significant improvements in the national scheme of grants for assisting private planting, which were announced by the Minister in 1987, were a considerable help in this regard. The basic grant was increased from just over £300 per hectare to £500 per hectare. The minimum area to be planted in order to qualify for a grant was revised downwards to two hectares except in the case of areas adjoining existing woods where a minimum of one hectare would qualify for grant-aid.

Also, the reduction in the rate of grant which previously applied to planting in excess of 16 hectares was removed and the £500 grant per hectare was to be paid irrespective of the area planted. In addition, the payment of the grants in two instalments — 75 per cent on completion and 25 per cent four years later — was a great incentive to private planting and, indeed, the £800 per hectare grant which was made available for the planting of hardwood trees was a further very welcome incentive. Of course, the considerable free technical advice which is available to people interested in private planting has also been very helpful in this regard.

I also welcome the three new initiatives in private forestry grants which the Minster outlined for us today: the fact that the Western Package has been extended to all disadvantaged areas in the country; the fact that there is a new forestry scheme aimed at full time farmers which will increase the level and scope of the grants available to such farmers; and also the fact that headage payments will be allowed to farmers who are in receipt of headage payments for livestock if they afforest part or all of their lands. I welcome the fact that these payments will continue for a period of 15 years because this will assure such farmers of an income during the non-productive stage of their forestry development.

I am delighted to learn that the Minister has invited Commissioner Andriessen to visit the country and that he will be coming here in July. Even though the EC does not have a common forestry policy, such as the common policies which exist for other major natural resources such as agriculture and fisheries, it is encouraging to note that the Commission has taken and continues to take the view that, where forestry measures can be shown to be important in the context of agricultural development, such measures should be included in agricultural structures programmes. For that reason it is important to increase European awareness of the case for Irish forestry and in that context I welcome very much the announcement of Commissioner Andriessen's proposed visit.

We are fortunate in Ireland that we are not affected to the same extent as other EC countries by the twin problems of forest fires and acid rain. It is of interest to note that each year in the Community over 100,000 hectares of woodland are destroyed by forest fires and in Germany alone half the forests have been damaged, some indeed very seriously, by acid rain. However, as the area of forestry increases in this country over the years ahead, so will the risk of forest fires. While the risk or incidence may never be as great here as it is in the drier regions of southern Europe, I believe that it will be increasingly important to do everything possible to heighten public awareness of the necessity to exercise extreme caution in the proximity of forests and plantations to avoid doing anything which might result in or cause a forest fire.

In this connection also, I believe the Minister should seek assistance from the EC to ensure that fire brigades in all areas of the country where there are forests will have available to them and at their disposal the best possible and the most effective equipment for dealing with forest fires if the necessity arises. I also believe that personnel involved in such fire brigades should have an opportunity to undergo specialist training in the most effective techniques for dealing with forest fires and, indeed, perhaps the Minister might also consider the establishment of regional task forces within the fire brigade service for the purpose of dealing with this problem.

One of the problems for fire brigades in many areas in the past when a forest fire occurred was the difficulty of getting to the scene of the fire because of very poor access roads to forests and the almost impassable condition of practically all forestry roads where, indeed, such roads existed at all. In this context, apart altogether from all the other reasons for which I could do so, I welcome the £8.1 million which the Minister secured earlier this year from the European Regional Development Fund for the construction and improvement of forestry roads.

In many parts of this country and on many farms, particularly in the west, the traditional farm enterprises are not capable of generating or providing reasonable incomes. Most farmers own some land which provides very little income. This land is marginal for sheep or cattle production, but it may be quite suitable for growing trees. In fact, very often trees can be grown without any reduction in livestock numbers or in income from livestock production and many more farmers than are doing so at present could benefit under the Western Package Private Afforestation scheme grants. In this regard, I believe that forestry training programmes could be of great benefit in helping farmers to adapt to forestry. I believe there is also great scope for co-operative farmer forestry. Very often a number of farmers own adjoining marginal land areas. In such a situation a group afforestation project would make considerable sense.

In many parts of the country, too, particularly in the west, there are fairly sizeable areas of cutaway bog, or other marginal land, which are now practically and, indeed, in many cases totally unused. Formerly, the type of areas to which I am referring would have been owned in very small plots by a very large number of local people, many of whom have long since left the area or died with the result that great difficulties in relation to acquiring title would arise for any individual or group of individuals who might be interested in purchasing such areas for afforestation purposes. I would like to see some powers of compulsory acquisition given to the new company which would enable them to acquire such lands and to establish title to the type of areas to which I have referred. I understand that Bord na Mona have such powers under the Turf Development Acts in relation to similar situations which can arise in the case of turbary. If a way could be found around the difficulties to which I have referred, these areas could be used for afforestation projects by the company, or they could be made available to local co-operative groups for co-operative forestry projects. I believe it is a shame to see these areas which have such wealth production potential in terms of forestry being left lying idle and useless. Before I conclude, there are just two other matters to which I wish to refer.

Under section, 15 of the Bill I see that "the number of directors (including the chairman) shall not be more than 9." I am a great believer in the concept of worker involvement in decision-making and worker participation. I regret that there is no provision in the Bill for the appointment of worker directors. I certainly would urge that, when the directors of the new company are being appointed, consideration should be given to the appointment of at least one or two directors from among the staff or the employees of the new company.

The other point I wish to make is in relation to the location of the headquarters for Coillte Teoranta. Senator Reynolds has already suggested that the new forestry headquarters should be located in the west of Ireland. I certainly would agree with him in that regard. In that context, all of the public representatives in County Roscommon including my colleague, Senator Connor who, I expect will be the next speaker on this Bill, have made representations already to the Minister making the case for the location of the forestry headquarters in Castlerea. I am chairman of Roscommon County Council and in that capacity I also have the honour to be a member of the Roscommon County Development Team. The county development team have also made a comprehensive submission outlining all the arguments in support of Castlerea.

I do not intend to reiterate that case here today but I certainly urge that sympathetic and favourable consideration should be given first of all to locating the headquarters of the new company in the west of Ireland and, secondly, to the case that has been made for Castlerea as an ideal location for the new headquarters. With these few words, again I want to welcome the Bill and to reiterate my congratulations to the Minister of State for what he has achieved to date in the forestry area. I trust that the high hopes he has for the new company will be realised. I wish the new company every success and I am confident that, if the targets which will be set for the new company are achieved, we will then see a whole new era in forestry in this country.

Mr. Connor

The underlying intention or principle of this Bill is absolutely correct, praiseworthy and in the nation's interest. In no area of economic development have we failed so glaringly as a country since independence than in the development of an indigenous forestry and timber industry. This Bill has its faults and shortcomings. Nevertheless, its warts and all, it is a long overdue and radical step in the right direction. I unreservedly congratulate our former colleague in this House, now the Minister with responsibility for forestry, on insisting that the Cabinet should give him this legislation. The Cabinet have so often taken a blind, irrational approach to economic reforms that they always seem to see any change as likely to cost additional money or upset their often zombie-like fixation on rigidly sticking targets on each item and in each area, even if that is foolish or wasteful.

An Cathaoirleach

You compliment it and take the good out of it by bashing the other side.

Mr. Connor

These are the problems of facts. The major reason our forestry policy has been a spectacular failure since 1922 is that we tried to promote the policy and the industry from the base of Government Departments when, by the very nature of things, it could not be entrepreneurial and could not experiment with more up to date work practices. In short, it was just anti-action. The Union of Professional Civil Servants who represent the foresters, the inspectors, the engineers and the wildlife officers in the Department could not have put it better in a submission to an Oireachtas Joint Committee in 1985 which they said:

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.

That was at the very heart of the dilemma of Irish forestry. The decision to establish a commercial semi-State company along the lines of Telecom or An Post to turn afforestation policy and practice in Ireland upside down and inside out — that is what is needed for starters — is welcome. Unless key amendments are made to this Bill, the much needed dynamic will not be there to do the job that has to be done. Nowhere in this Bill do I find the onus being placed on the new company to expand and enlarge the national forestry estate. On the contrary, the Bill will clearly give power to the company to dispose of existing lands in the hands now of the Forest and Wildlife Service, purchased in the first place for the purpose of tree growing.

Section 14 (1) of the Bill — and I might read it into the record of the House, with your permission, a Chathaoirligh — states:

The company shall submit to and agree with the Minister each year a programme for the sale and acquisition of land and the sale of timber, whether standing or felled.

I disagree fundamentally with the implication in this section. As a matter of absolute principle, one of the fundamental duties this company need to have is to enlarge the area of land permanently under forestry.

There is a huge potential land pool there to achieve this. It is estimated that there are 3.3 million hectares of land suitable for forestry in the Republic. The area of land in the hands of the Department at present is approximately 400,000 hectares, with something around 350,000 hectares planted. The area of land in the hands of the Forest and Wildlife Service has hardly changed in the past three years. When the Minister talks or even boasts of planting 10,000 hectares in State forests — and he presents this as an absolute expansion of the national forest, we have to say to the Minister that this is simply not true. What the Minister fails to tell us is that most of this planting is re-afforestation of lands where clear felling of mature trees has taken place. That is just re-stocking, if you like, the lands that have already been clear felled. It is also just planting lands that have, for years, been in the hands of the Forest and Wildlife Service but have not been planted to date for one reason or another. To give us a clear and honest picture let the Minister in his reply to this Second Stage debate say how many hectares of additional land were purchased in 1987 and how many additional acres or hectares will be purchased in this current year before the estate is handed over to the new company. Only in that way can an objective judgment be made on these announcements of new plantings.

There must be two sets of figures given, one giving the acreage of sowing that replaces the equivalent acreage felled and sold and another figure which gives us the acreage that is additional to the restocking category. These latter figures are the only ones to be mentioned here as a step forward. I can accept that there are certain circumstances in which the new company could dispose of certain lands after they have been clear felled. I have in mind here the large areas of blanket verge bogland purchased and planted by the Forestry Department over the years. This practice was a total mismatch.

Lands with a very deep layer of waterlogged peat is totally unsuitable for good forestry. The only trees that grow well in these soil types are lodge pole pines which have little commercial value and, because of the poor root holding qualities, are very prone to damage from wind and forest fires with the heather and coarse dry grass undergrowth. This kind of land should never be planted with trees. It should be exploited for its real worth, the production of peat for fuel and other uses. Cut-over bogs where the character of the soil is changed completely can be very suitable. The suggestions that the new company should work in close harmony with Bord na Móna on the afforestation of cutaway bogs, where that is appropriate, is to be supported in every possible way. For every acre disposed of by the company because of unsuitability there should be an absolute imperative placed upon them to purchase a compensating area of suitable land — and there is plenty of that around. The Agricultural Insititute estimate that there are well in excess of 2½ million hectares of a mixture of wet, mineral lowland soils of mountain slopes, the drumlin belt and acres of mineral soil with a thin layer of peat, all unsuitable for conventional agriculture and now by and large being used for what we call conventional agriculture. If they are unsuitable for agriculture, they are eminently and only suitable for forestry.

Naturally all of this is not available for disposal into forestry, but I am convinced that with the right incentives, more than half of it is. When this company finds its feet and starts returning a profit — and, given the market situation and potential that it will operate in, it is difficult to avoid the notion that it will make a profit very quickly — from any profit it makes it must set aside a certain portion in all the years that profits are made for the purchase of additional suitable land to augment the national estate. By a combination of State-sponsored — totally commercial activity, of course — and activity in the completely private sector, we must strive to have a million hectares planted by the end of this century.

That ironically would not even return us to the area of plantation that was on this island, or on the 26-county part of it, 100 years ago. It is not widely-known that, for the second half of the 19th century and in the first two decades of this century, we lost hundreds of thousands of acres, indeed hectares of plantation that were felled and never replaced. These were very often decideous hard wood plantations such as oak, beech, elm and acer or maple varieties just to mention a few. Nowadays we have a total preponderance of coniferous soft woods like spruce and pine. In the national forests at the moment we have about 80 per cent of soft woods and about 20 per cent of hard woods. We should use this opportunity to establish a premium for the planting of more long maturing hardwoods like elm, oak and ash and the varieties of acer or maple that can be grown in this country.

I take it that the new company will have a major role in encouraging and administering public policy in the purely private expansion of land under trees. We have had a lot of talk of incentives for private forestry or in practical terms getting farmers, the occupiers of marginal land, or other landowners to switch from very traditional farming practices such a conventional farming, grass growing for beef and dairy livestock, to the planting of trees which is the only profitable crop suitable for these often wet mineral soils. There has been much ado about planting incentives under the Western Package and extended headage payments. I do not know if the line given is just more political mischief or downright naive folly, but we are asked to believe that we are about to witness thousands of farmers whose patterns of farming and land use are inappropriate switching to forestry because of these incentives. This is nonsense. Nothing of the kind will happen. No sane landowner would change from grass growing however poor the profit, by getting a grant of, say, £800 to plant and establish each hectare of his land under forestry and then being promised headage payments of an average of £500 per annum for X number of years. I mention £500 because that is the average headage payment to farmers targeted under this policy. You say to him or her: "You are now a forest farmer and when your crop has completed its rotation it is fit for harvesting in 30 years time You can collect all your profits."

This whole suggestion is so contemptibly simplistic and so foolish that it is not worth another comment. What we must establish is a policy whereby a pool of capital is created from which a farmer who moves out of traditional farming and into forest farming could draw. Along with the incentives of the planning grant, which incidentally is of little burden on the State, and the extended headage payments — also something that would not burden the national Exchequer overmuch since the EC would be paying 70 per cent of the cost — from this capital pool the farmer could, by the principle of forward selling, draw an incremental annual payment for the duration of the rotation of the tree crop. When the trees are harvested and the products sold, appropriate deductions would be made to go back into the pool to cover the advances to him which he needed to live on while the trees were growing.

This policy can be put in place given the will to do it and the underwriting of the capital pool. An acre of trees now-days has a greater return on an annual per acre basis than an acre of high quality millable wheat. The only difference is that all other conventional farm crops rotate on a yearly basis. Trees need 25 to 35 years to harvest at maturity. If you aggregate the value of 100 acres of trees from the time of planting to the time of harvesting and take another 100 acres and place it under any conventional farming enterprise, including cereal growing or dairying for the same period of years as the timber is growing, the profit on the single rotation of the tree crop would be far greater than the aggregated profits, with adjustments for accumulative inflation, on the similar area under intensive conventional farming for the same period. Unless the forward selling principle is incorporated into a policy for encouraging farmers to turn their marginal lands into woods and forests, it is a guaranteed failure well before you waste time and energy trying to set up a policy without it.

From my own practical experience of the Western Package incentives to forestry I have seen some instances, but they are quite rare, of farmers taking up the present set of incentives and planting the land themselves. Thousands of acres of land, usually of the wet, poor mineral variety, are being bought up from farmers, who are often in financial difficulties, by forestry development companies. These companies qualify for very generous planting and establishment grants under this package. They plant and establish the forest which takes about four to five years. They draw the final instalment of the establishment grant. They then sell the established woodlands to banks and insurance companies who purchase them as investments.

This is all very laudable in so far as it is increasing the area under trees but one has to question such generous grants going to what are very profitable companies. It gives what are obviously very good value investments to banks and insurance companies, companies that are among the most profitable in the State and that are not known very often for their willingness to subscribe a better share of their profits in tax to the State, a State that looks after them very well.

The Western Package incentives to forestry are, in my opinion, the usual muddle-headed proposals supposedly meant to help smallholders to get an alternative, more probitable line of land use. Instead the real beneficiaries are companies who use the incentives to enhance their profits and to diversify their activities. The only benefit to the smallholder is that it creates a market, but at a bad price, for his marginal land. He usually sells this to defray debts he accrued simply because he was in the wrong kind of farming anyway. The history of modem Irish agriculture is often a sorry catalogue of inappropriate land use and mismatch of crops or enterprise to land or soil type.

There is in forestry a tremendous opportunity to correct much of this but alas, in the meantime, we continue to use public policy to introduce yet another mismatch on the agrarian scene. The incentives given to attempt to get small and medium holders to diversify into timber production are so inadequate and so off the mark that instead the farmer on the margin is only encouraged to divest himself or herself of his or her chief asset, the land. While this relieves his or her financial situation in the short term it beggars them in the long term. The real beneficiaries are the investors of the associated banks and the major insurance companies. Surely there is something grotesquely mismatching about this as a policy.

The Minister gave a figure of 4,000 hectares as the target for private planting this year but sadly most of that private planting is being done for or by the financial institutions and not by the small dwellers whom the EC incentives are supposed to help. It is superfluous to state again the extraordinary low level of wooded land in the State by comparison with all other countries in the temperate and cool climates where commercial forests grow well. Ireland's low level, less than one-third of the European average, is not just extraordinary by reference to available unused or, indeed, misused marginal land but it is also extraordinary when the reference is to our highly suitable climatic conditions which provide for one of the highest levels of yield class in forestry in this temperate zone. I should explain to the House that the term "yield class" is the forester's way of explaining the growth of a forest measured in cubic meters of timber per hectare per annum.

In this country the yield class, that is the cubic metres of newly grown timber per hectare per annum, ranges from 12 per cent to 15 per cent on existing or old forest estates. On the new estates the rate of growth is much better. By comparison the European average yield class, taking account of the damage to forests by acid rain etc., is 3.5 per cent. In the Scandinavian countries — Norway, Sweden and Finland — the home, in most people's minds, of mass national forestry, the yield class is less than 4 per cent. Compare that with certain estates in County Leitrim which experts, and there are many of them, say should be all covered with woodland. The yield class there has been found in surveys to go as high as 30 per cent, ten times greater than the average level on mainland Europe and in Scandinavia.

The injecting of a new drive into the actual growing of trees is, perhaps, the major function this new company will have to tackle. The chaotic situation in the downstream timber industry will also have to be tackled. Our pulpwood industry is uncompetitive and devastated with bankruptcy and closure. In recent years we witnessed the closure of Clondalkin Paper Mills, Waterford Paper Mills and the chip manufacturing factory at Scarriff in County Clare. New technology and competition from abroad have been at the root of the problem for the pulp, chip and paper industry in this country. This new company will also have to beam into these very fundamental areas.

The saw milling industry is also chaotic and disorganised at all levels. It now has a capacity to process one million cubic metres per annum, but from our national forests it can get little more than half the raw materials it needs. The supplies of timber from the Forest and Wildlife Service to the industry hardly ever meet the projected targets. The output from the Forest and Wildlife Service to the industry is usually released in a patchy and disorderly manner and this leaves the sawmillers in a constant state of uncertainty about raw material supplies and their future generally. This new company must put an end to this chaos in which the millers cannot get supplies from mature stock in their own immediate areas and often have to travel to remote locations to collect source supplies. I remind the Minister again of all the other shortcomings we have just mentioned. There is much disorder and nonsense relating to the output of the forests and this new company must ensure that that crisis is put into some kind of order.

At present there are about 7,000 jobs in forestry, directly and downstream. If we could get a new expansion of the national forestry estate, move up from the 400,000 hectares at present to a target of one million hectares by the end of this century, and if we could marry this policy of expanded estate to close co-operation and co-ordination with the sawing and processing industry and give that industry the marketing and technological lift it needs, we could have at least 15,000 or perhaps 20,000 people employed in wood and forestry in this State in a matter of a very few years. For all kinds of sound economic reasons we must target our policy to bring the nation's planted area up to the European average of 20 per cent of all available land under forestry in the shortest possible time.

Forestry, as we know and as has been mentioned here in the House already, is not a part of the Treaty of Rome. Given the huge deficits in the timber trade in Europe, there is bound to be a major shift in the incentive policy in the EC and resources for the industry will be increasingly found from savings in agriculture and savings from the Common Agricultural Policy. Let us remember that almost 6 per cent of industrially employed people in the Community work in wood using industries. That is as high as employment in the textile industry and the car industry throughout Europe. It is logical to expect that Community policy, given all these facts, will move towards making forestry a listed activity for special subsidy for the same reason as agriculture was given this status over 30 years ago with the setting up of the Common Agricultural Policy. Our Government should press that this is the direction Community policy in terms of forestry should go.

There is one other reason we must act to establish our industry on its own feet at all levels. Supplies of wood worldwide run lower and lower. This is the view of all observers and experts in the area. They agree that this trend of declining supplies will continue for the next 30 years. Supplies from abroad will become more and more scarce and more expensive. More and more countries will ban saw log or raw log exports in favour of processed wood products only. We must remember that we import a major amount of saw logs every year. Let us remember too that 50 per cent of the world's exploitable forests today are in developing countries. Naturally, they would be little short of mad if they did not endeavour to export this valuable product and resource, processed or manufactured, rather than in a log state.

When the Minister announced his decision to form this company last January, he promised that its headquarters would be located outside Dublin. While I have not heard him repeat that promise here today, I am sure it remains his intention to locate it away from the capital. On 4 February last I moved a motion on the Adjournment of this House requesting that the new headquarters be located in Castlerea, County Roscommon, and I renew that call here this afternoon. With the permission of the Cathaoirleach, I will reiterate the incontrovertible reasons for locating the new headquarters in Castlerea.

Castlerea is one of the principal towns of County Roscommon. Almost all the counties in the western region have had announcements of major shifts of portions of Government Departments to towns within their administrative areas. County Roscommon has been the complete exception in regard to these good news announcements, although the destruction of traditional industries and unemployment has been more marked in the towns of County Roscommon than elsewhere. Because decentralisation is meant to inject employment and income into depressed regions, the case for Castlerea is outstanding. Over the past five years this town has lost 130 industrial jobs, some of them in State activity. On top of that the mainstay employer in the area, St. Patrick's Psychiatric Hospital, is about to close down, taking another 200 jobs out of the town. This is a blow that Castlerea cannot take. Unless some rescue package is put in place, the town will go off the map in a very short period.

That is the argument that decentralisation should be used to save what is a regional economy but there are other outstanding reasons, from the point of view of the economic success of the new company, for locating in Castlerea. Castlerea is in the centre of the western region of Ireland where there are one million hectares of land suitable for forestry, according to the Agricultural Institute. Recent surveys by the Forest and Wildlife Service show clearly that the greater part of all recent land acquisitions are in the western counties, simply because that is where the suitable and available land is. That is only right and proper, not for any emotional reason but purely for the good economic reason of locating where the greater part of the national estate is. We should remember that 45 per cent of the existing growing forest estate is in the western and midwestern region and 50 per cent of the potential land for forestry development is in this region also.

Castlerea is in the very centre of this region. As a town it has all the facilities to absorb the transfer of these headquarters quickly and immediately. There is ample building space available for locating new offices. There are 60,000 square feet of empty factory and office space in the town, as a result of factories which have closed or advance factories that were never occupied. They belong to the Industrial Development Authority and are readily available for occupation by this new company should the decision be taken to come to Castlerea. There is ample additional housing in the town. One of the symptoms of recession and depression is that there are plenty of houses for sale and there are plenty of those around Castlerea. There is also an ample supply of cheap building land in the surrounds of the town for new house building.

The town has been stricken most savagely by emigration. It is interesting to note that The New York Times, one of the most prestigious newspapers in the world, is shortly to do a major set of articles on the effects of emigration from Ireland and the kind of effects that haemorrhage can have on a region, a town, or an area. The New York Times has chosen Castlerea as the place in which to do its survey and its analysis on the effects of emigration. The question is: why should they come to Castlerea rather than any other place in Ireland? We know that practically every town, village or parish has been savagely affected by recent emigration. They are coming to Castlerea because it is an area most acutely affected by recent emigration trends and it shows what that can do to the fabric of an economy and the fabric of society itself.

As we did on 4 February last, we make our plea. I do not believe our case can be contradicted. We have the space. The town has the facilities in terms of good schools and cultural and recreational facilities and it is quite close to a university town — 40 miles from Galway. I reiterate our appeal for Castlerea. I hope the Minister, being of a sympathetic nature as we knew him to be when he was a Member of this House, will respond positively to our call.

Mr. McEllistrim

I welcome this Forestry Bill, 1988. It is important that a new commercial forestry company should be formed to deal with forestry and the sale of timber in the future. This is very necessary. I take this opportunity to congratulate the Minister on initiating this new company and on the efforts he has made since he became Minister of State with responsibility for forestry to make forestry one of our prime productions in Ireland. He has made a great effort and there has been a great response to afforestation and planting of trees by the Forestry Division and, indeed, by private people who are anxious to go into afforestation.

Forestry is part of our heritage and is one of our great national assets. It is important that we produce enough timber for our own needs. Indeed, we are coming to the stage when we will soon be almost self-sufficient in soft timbers and that is something that is very much welcome, especially when so much timber was imported in the past. I notice the Minister's speech that in 1987 we planted 11,000 hectares of trees and in 1988 it is expected that we will plant 14,000 hectares. That is a tremendous achievement and is a big increase on the past three years. I congratulate the Minister again on making an effort to encourage forestry planting which is on the increase every year.

Timber sales for 1987 amounted to £19 million and it is anticipated that the figure will be £20 million in 1988. That is a sizeable amount of money. Private afforestation contributes very much to planting and to the sales of timber. In the Western Package there is a 70 per cent grant for planting or afforestation and that will encourage many of our small farmers to plant some of their non-productive land. It is a new forestry scheme whereby full time farmers will not lose their headage grant. They will get the full headage grant, even though they will have a lower number of cows, if they plant a few acres of trees. That is very desirable and it also encourages those small farmers to plant some of their marginal land and land which would not be so productive for milk or for cattle but would be quite suitable for the growing of trees.

I notice that 6 per cent of our country is under afforestation and 24 per cent of Europe is under afforestation. The Minister is making a great effort to have that percentage increased. Europe imports 70 per cent of its timber needs. Ireland can fulfil some of those needs by growing some extra timber here. Last year £8.1 million was spent on road making by the Forestry Division. This is a considerable amount of money. I am sure that when the Minister was a member of the local authority he witnessed the very same problem as we have in County Kerry. Often at county council meetings we hear criticism of the Forestry Division because heavy loads of timber travel county roads and they do much damage to them. Kerry County Council have often made requests to the Department to repay them some of the money spent on those county roads to bring them up to standard. Those roads were never made to carry heavy weights of timber. I am delighted to see that over £8 million is being spent on forestry roads, which are not county roads of course. Perhaps the Minister would encourage some of the people in Europe to make special grants available for county roads, especially in the forest areas where the transport of timber causes considerable damage to those roads.

I am also delighted that the Vice President of the European Community is coming to our country at the invitation of the Minister of State with responsibility for forestry. I am quite sure that he will bring him around and show him all the best forests that we have. I hope he will be successful in encouraging him to give us extra finance from Europe for afforestation and planting, something we very much need. I noticed when Senator Connor was addressing the House that he talked about reafforestation and said that most of the tree planting is reafforestation. I completely disagree with him. He is living in Roscommon and I am living in County Kerry. I saw no reafforestation in my county, or in any of the counties adjoining it. There is a lot of afforestation in County Kerry. Many new forests there are productive at present. I do not know where Senator Connor has seen this reafforestation that he spoke about.

He made a plea that the headquarters of the new company should be in Roscommon. In view of his statement about reafforestation, if that is what people are doing in Roscommon I do not think that county would be a suitable place to have those headquarters. I am not even making a suggestion that they should be in County Kerry. It probably should be in some central county, perhaps in his own county of Tipperary. That would probably be more suitable because it is central. I have not discussed that matter with the Minister.

Mr. Norris

The Minister is blushing and hiding his face.

Mr. McEllistrim

He is not. He need not blush because if the headquarters were situated in Tipperary they would be in one of the best counties in Ireland where we have the best and the most productive land. Indeed, it might be no harm to plant parts of Tipperary where there is some bad land. I hope the Minister will be lucky in getting more funding from Europe for afforestation because it is something that we need. I wish him the best of luck when the Vice President of the European Community comes here. I am quite sure he will be very impressed with our forests.

I notice that 50 per cent of the forests are providing saleable timber at present. That is a great achievement in a short few years. The EC import 75 per cent of their timber requirements and there is a great opportunity for us to provide some of that need. Our climate, and the type of land we have, are very suitable for tree growing. It has been conveyed to me that trees grow twice as fast in Ireland as they grow in other European countries. We should take note of that and encourage more tree planting by our farmers. Indeed, the State should do everything possible to encourage more planting.

In my county we are very conscious about tree growing and afforestation. Quite recently a new company was formed and they propose to grow small trees for export to other European Countries. They hope to buy 500 or 600 acres of land for tree growing. They will have five to ten acres under glass and will grow the trees in a glasshouses before transplanting them. They expect to get involved in reed making and create anything from 150 to 200 jobs in County Kerry. The company quite recently purchased a machine for planting trees. I do not think the forestry division have a machine for planting trees but this private company have purchased such a machine.

I should like to thank the personnel in the forestry division for the tremendous efforts they have made in the past 20 years to encourage afforestation. I spent eight months in charge of that division and I was very impressed by the work done by the staff. I wish those joining the new company the best of luck. We appreciate the work they did in the past. When this new commercial State company is formed after the Bill is passed I am quite sure many of them will get involved in it.

I note that the funding for this State company will be £213 million for the next five years. I am quite sure that will be adequate to supply their needs and if they require more money I have no doubt they will be back to us looking for it at some time in the near future. I would like the Minister to explain to us what the position will be about amenity areas. In my county we created amenity areas in forests such as forest parks and forest walks. They have proved very attractive to our tourists and we would like to see this part of the work developed. Will the new company be responsible for amenity areas which in County Kerry have been very attractive.

Senator Connor said some small farmers would not plant some of their marginal land or bad land. I met a person during the weekend who was selling 30 acres of land to a private company for afforestation and he was getting £500 an acre for very marginal land. I am quite sure the price will increase. We all know that you can buy agricultural land in Ireland for about £1,200 an acre. You can buy it for less in some counties or for a little more in others.

I wish the Minister every success in his efforts in his Department to promote afforestation. I am quite sure that the new company will be a great success. With some of the personnel who will be transferring from the forestry section to the company and the Minister looking after it, I am confident that it will be a tremendous success.

Mr. Norris

I am very glad to be able to welcome this Bill which is, by and large, an excellent and much needed piece of legislation. If I may refer to the Explanatory Memorandum that sets out the purpose of the Bill the Minister, I am sure, will understand why I am prepared so wholeheartedly to welcome the Bill. In the Explantory Memorandum it is made clear that the purpose of the Bill is to make provision for the establishment of a commercial forestry company under the Companies Acts to which will be transferred the State's forest estate and most of the functions and staff of the forest service of the Department of Energy.

The Bill also provides for the amendment of certain penalties, mostly related to tree felling offences in the Forestry Act, 1946. That is particularly welcome for a number of reasons. First of all, I welcome the socialist element in the Fianna Fáil Party's policy where they are recognising that it is important that the assets of the State should be vested in the people. Of course, as a socialist this is very much what I believe. I hope there will be an increasing conversion reflected in Government policy towards this point of view. There is no doubt whatever that the forests of this land are an important national asset that should be controlled by the State. They should be controlled also as efficiently as possible by the State. I join with the Minister in believing, first of all that the people of Ireland should have control of this asset and that, secondly, it should be managed as efficiently as possible.

The second reason that I welcome the indications in the Explanatory Memorandum as to the reasons for this legislation is that the penalties involved relating to tree felling offences are being seriously and strenuously looked at. I hope that this is at least in part a response to the outrageous situation where certain unscrupulous persons have acquired in the past large estates here and proceeded to engage in what in commercial terms, if it was a commercially quoted company, could only be regarded as asset-stripping by felling and exporting part of the natural resources of this country in a manner which I regard as almost treasonable. While I agree with much of what my distinguished colleague. Senator McEllistrim, had to say, I was rather surprised when he challenged Senator Connor with regard to the word "reafforestation." I am sure I do not have to remind Senator McEllistrim of a very fine poem that I learned when I was in school called, Cill Cais. I do think this was from a neighbouring county to his, not perhaps Kerry, but within earshot: Cad a dhéan-faimid feasta gan adhmad? Tá deireadh na gcoillte ar lár. Níl trácht ar Chill Chais ná a teaghlach. Ní chluinfear a cling go brách. That indicates very clearly what the attitude of the Irish people a couple of hundred years ago at least was with regard to the despoliation of this island.

Senator McEllistrim referred, perfectly correctly, to the fact that 6 per cent of Ireland is now afforested. I understand that this represents a considerable increase over the early years of this century. I thought it was a 100 per cent increase but, in fact, it is considerably more than that and that is very much to be welcomed. If we put it in the perspective that the European countries, taken as a total figure, have, as Senator McEllistrim said, 24 per cent afforestation, it is clear that there is something anomalous in Ireland. When one puts that together with the fact that, as he has correctly pointed out, Ireland has an unusually favourable climate for the growing of timber, there clearly has to be a historical political explanation for this. I am sure Senator McEllistrim knows what that is; that until the late Middle Ages the island of Ireland was very largely afforested and, in fact, the majority of the island was covered in forest and that this was pillaged by what I am reluctant to call — in the light of a debate which took place while I was representing the interests of my city abroad — an occupying power. That is a historical fact. The navy of the larger imperial entity was built from Irish oak. If one wants to see where our mediaeval forests are, one can still see them but in the roofs of places like Westminster Abbey and so on. I am very glad that we have begun the process of reafforestation and that is why it is reafforestation because we were deforested.

There has also been an important change. I would like to come back to this again and seek some further information from the Minister on it. The change has been in the kind of trees that are planted. This relates partially to commercial considerations because we are principally talking of soft wood trees, of conifers, sitka spruce and so on whereas of course, the great forests of Ireland were not pine forests at all. In fact, a great number of them were deciduous, particularly the great oak forests, very small fragments of which now survive. I have been a kind of wandering minstrel around various counties of Ireland. I have distributed my favours, residentially speaking, and I did for a time live in County Wicklow which is one of the most beautiful counties of Ireland. There is there in the Glen of the Downs, a surviving fragment of the great oak forests of Ireland. More important, there was the very significant afforestation in the great estate surrounding the house at Coolattin. I hope the Minister will be able to give us some cast iron guarantees that the appalling pillage that took place in Coolattin will no longer be tolerated by the Irish people. I am delighted to see him nodding his head with regard to that.

I would like to think that it would be possible to encourage the planting not just of conifers or evergreen trees but also of hard wood and deciduous trees. I know that there may be some small problem here. The turnover, even with regard to conifers and evergreens, is quite long term and it requires foresight on the part of any Government to engage in this kind of programme because the turn around is, I understand, between 35 and 40 years whereas with regard to hard wood trees it can be 80 to 90 years but it is a worthwhile investment. If a programme of this vision had been embarked upon at the turn of the century when I am glad to say the head of my mother's family, the late Lord Castletown, who also had an Irish title. The Mac Giolla Patrick, was pleading for that kind of afforestation programme, we would be well on the way to reaping the benefits of it. It requires very considerable vision and imagination to look down the road 80,90 or 100 years, particularly when we are threatened ecologically by so many potential disasters in terms of pollution, radiation, the atomic bomb and so on. I believe that we have, in this House at least, progressed from the days of the 18th century when a notorious northside politician from Dublin, Sir Boyle Roche, asked rhetorically:

Posterity be damned; why should we do anything for posterity; what has it ever done for us?

I believe that we have advanced beyond that and we are now prepared to consider, with some degree of political foresight, what the situation of this country may be further down the road.

I would like to take this opportunity — and I do so having sanitised myself by nailing my socialist colours firmly to the must — to congratulate the Government because I believe in giving every dog his due. I refer in particular to the programme known as the Programme for National Recovery published at the beginning of this year. In paragraph 22, which deals with forestry, the programme states that the Government have adopted a firm action programme to realise the potential for job creation, import substitution, export revenue, regional and social development that exists in forestry. The main elements of the programme were to include the appointment of a Minister of State with specific responsibility for forestry.

I have placed a tick beside that because they have done it and we very much welcome that. The programme proposes the setting up of a new State-sponsored company to operate State-owned forestry on a commercial basis. It stated that the new company should be launched early in the new year. Perhaps not quite "early" but we will bend things a little bit. It stated that an interim board would be announced shortly. Again, I am today placing a little tick beside that. I may have a few other things to say about the board because I hope, in the light of recent controversies, there will not be too much political intervention in the establishment of the board. I see the Minister opening his mouth. Perhaps he is about to say something?

An Leas-Chathaoirleach

The Chair would prefer if the Senator continued with his speech.

Mr. Norris

The programme states that farmers will be encouraged to avail fully of available incentives, including EC funded payments to expand into forestry. Again, I am putting a tick beside that. That is also included in the Minister's speech and I may return to it. I very much welcome that for a number of reasons: first of all, because I think it is important that we regulate our agricultural economy in tune with what market requirements actually dictate. I do not think, for example, that we need to be expanding the dairy industry when we have a milk lake. There is a vacuum with regard to forestry and one which will be very beneficial to this country to take up in a number of ways. These kind of incentives will also mark a departure, I understand, from previous Government policy in which the exploitation of our land resources for forestry has, by and large, been restricted to non-agriculturally productive land.

I welcome the fact that it appears to me — if I am not misreading the Bill — that we are moving towards a stage where marginal land can now be employed. This has a number of economic benefits in terms of the farming community and also means that the kind of trees that are being planted can be allowed to accommodate an increasing variety of tree species. We may be able to develop into the hard wood varieties because of the greater richness and more appropriate content of the soil. Perhaps I can remind the Minister — I am sure he does not need to be reminded — but I would like to place on the record the fact that of the area under afforestation which is, I understand, 335,738 hectates — at least it was before lunch; it may have gone up slightly since then but that is what is was according to the Minister's Department — 97.4 per cent was conifer and only 2.6 per cent was hard wood. That is an astonishing — I hesitate to say imbalance because, of course, there are natural, historical and agricultural reasons for this — disproportion. It is one that it seems to me would be well in the interests of this country to consider, at least in some proportion, redressing. I accept that the economic benefits of this are considerably down the road.

I should like to take up a point that was made by Senator McEllistrim, that in the meantime while we are waiting for the tree crop to mature we have the benefit of the scenic attractions of the afforestation programme. I say that as somebody who has never shared the late and lamented poet. Senator William Butler Yeats, affection for Ben Bulbin which I regard as an obscene naked lump on the horizon which would well benefit from a few trees on its crown although I gather this is not likely to happen. There is no doubt whatever that sensitively handled at least the afforestation programme is a very considerable asset in terms of tourism and particularly if the new company can be persuaded to get away from this rather boring landscape of eternal sitka spruce and put in some deciduous afforestation.

Having gone into this area I would like to briefly take up this notion of tourism because I would like also to pay a tribute to the workers in the Forest Service, and also the aspect of the Forest Service which comes most directly into contact with the public and deal with forest trails, wildlife reserves, picnic sites and also the excellent production of small leaflets which are left in boxes and for which honest citizens pay by putting coins in the boxes. These leaflets are feely available, are excellently written, most instructive and very clear. They are a real asset to the enjoyment and appreciation of the national landscape by the citizens of Ireland. I very much hope that responsibility for this will be taken over by the new company and that it will not be hived off as a kind of unnecessary and noncommercial expense. I am sure the Minister will agree with me that, apart altogether from the direct economic advantages of forestry, it is important that our people as a whole appreciate the significance of forestry and are allowed as much access as is practicable to this area of our national resources. I hope this will happen.

Returning to the Programme for National Recovery, I note the Government are aiming for record national planting targets of 11,000 hectares in 1987 and 13,000 hectares in 1988 and so on. They seem to me to be on target. The Minister in his speech referred to the Programme for National Recovery as having set this target of increasing wood production in 1987 by 50,000 cubic metres to 1.25 million cubic metres and said that the targeted increase was doubled and a total of 1.3 million cubic metres was produced. This generated receipts of £19 million, an increase of 11 per cent over projections and 16 per cent greater than receipts in 1986. Receipts in 1987 were also an all-time record which, I am glad to note, the Minister says he expects will be broken again this year when timber sales are expected to exceed £20 million. I congratulate the Minister on those figures. I believe he deserves the congratulations and support of the House.

I would like, however, to put them into context. I understand that in 1987, for example, the value of timber and timber-related imports was in fact £435 million. Our exports, about which a number of speakers have waxed lyrical, constituted only £137 million. I believe that taking into consideration the demography of the country, taking into account the climatic conditions of the country, we should be aiming for a stage where we are an exporter of timber. There is no reason why we should not. I regard it as outrageous, although it is not the responsibility of this Government, it is very long term, that we are importing timber at all. I would like to comment on this later on because there are certain reasons and there are certain things we need all to be aware of and they are not just to do with the capacity of the country to produce timber.

We all know that but there is a question of quality and standards. It is extremely important that these be consistently monitored because I am aware of situations in which, for example, architects have advised clients not to employ Irish timber because it has a reputation for not being properly seasoned. I understand that this has been very largely addressed and I hope that it will continue to be addressed. I hope the standards of Irish timber will become such that not only will it be regarded as eminently fit for Irish consumption but also it will become an attractive import from the point of view of European countries. What I am talking really about is the question of up-to-date plant in sawmills, correct apparatus for grading timbers and also correct drying machinery so that we will have properly prepared, properly dried, properly seasoned timber available for domestic consumption and for export. I believe this is beginning to happen and as an Irishman, I welcome the idea that we have yet another product which is regarded worldwide as one of excellence.

I would have to take some comfort from the fact that the figures indicate that the Irish construction industry is beginning to display confidence in Irish timber products as a result of which the use of Irish timber in our own construction industry has risen from 15 per cent in 1981 to 50 per cent in 1987. That is a very remarkable, a very good and a very much to be welcomed vote of confidence in our native industry with regard to the production of timber. I note, however, that this has again to be put into a particular context in that we are still a very considerable importer of timber and timber products. The figures that I have been given indicate that there has been a substantial improvement. In 1981 the Irish construction industry was dependent for 80 per cent — I find that a shocking figure — on imported timber products. The Irish construction industry which has been regarded so long politically as the reflationary engine of the Irish economy was using 80 per cent Canadian and other timbers as recently as 1981. In 1987 this dependence on imports has been reduced to 50 per cent and that is something I welcome very much.

I also welcome the fact that this increased reliance on our own domestic products will unquestionably have an impact on jobs. The forestry industry is not really labour intensive but, at the same time, it does employ people and particularly it employs people in areas of the country where the land has been traditionally poor and employment levels are quite low. Despite all the various county by county contentions for the regionalisation of Government offices, I would have to support what Senator John Connor said in that I hope very much that the headquarters of this,new company will be appropriately located in or near one of the counties which has a considerable afforestation programme. It would seem to me that this is an appropriate response and in the light of the poem that I read earlier on, and in the light of the historical aspect of deaf-forestation and reafforestation, it would seem to me that Roscommon would be a singularly appropriate place to have this headquarters in view of the fact that it was one of the places——

Mr. Mooney

Not if you come from Leitrim.

Mr. Norris

Well, Leitrim is not too far away either. But, if you bear in mind the fact that this is one of the places to which the Irish people were driven — to Hell or Connaught — and that Clonalis House, which is very close to Castlerea, was the seat of the ancient kings of Ireland, the O'Connor Don, that his family are still living there and that their heraldic emblem is in fact — I am glad to say, in the light of what I was saying about deciduous forest programmes — an oak tree, it seems to me that it would be very appropriate for a number of reasons if some consideration were given to the location of principal offices of this company outside Dublin. I hope the Minister will notice my generosity as a Dubliner in making that point. Perhaps some place in the west like Castlerea would be an appropriate place to locate this company.

The figures I have to hand are not 100 per cent mathematically accurate but they are, generally speaking in round figures, fairly accurate. I understand that there are about 2,000 or 2,300 non-established State employees in the forestry service and I do feel a little concern for them in these difficult days. Anybody who is non-established may be in for a bit of a rocky ride, and there are about 200 to 300 foresters in addition to which there are around about 3,000 workers in sawmills throughout the country. So, we are dealing with a workforce fluctuating somewhere between 6,000 and 7,000 people; and this, in a period of retrenchment and in a period of economic difficulty, cannot but be a quite important element in certain sections of the rural community in particular areas of the country. Again, I welcome very much any programme that will increase what I see as being an element of importance in the management of the rural economy.

A further element in the Programme for National Recovery is the question of a major drive to increase substantially the level of European Economic Community funding for forestry. Again, I welcome this. It is very important. I assume that the Minister or his representatives will have pointed out to the officials of the European Community the anomalous situation of this country, for historical circumstances that have been delineated, by which Ireland is very substantially below the European average in afforestation, and I think that this should make them look sympathetically with regard to funding.

I congratulate the Minister on having successfully invited Commissioner Andriessen to Ireland later on this month, or next month perhaps. I am sure he will be impressed by the efficiency and beauty — for we must not neglect aesthetics — of the Irish forestry programme. I hope the Minister will strongly urge on him the views of all parties in this House that, whereas the substantial investment in private forestry schemes is greatly welcomed, the apparent niggardliness of the Community with regard to support for State afforestation programmes is deplored across the party spectrum. The Minister was a little shy and did not want to appear churlish. I do not mind appearing churlish at all. The Minister on my behalf can be as strong and as churlish as he likes. I am sure he will find it difficult to be churlish, but he can certainly reflect the very strong views of those in this economy and in this Parliament who feel that the European Community should do more for the State programme.

Of course, like other people, I welcome the funding for roads within the actual perimeters of the afforested area, but I think that Senator McEllistrim made a very valid point when he remarked that there are areas of this country which are very heavily afforested and on which the heavy transports take either forestry machinery or actual loads of partically cut timber, that considerable damage has been done to the surface of the roads by virtue of this traffic, which is not the ordinary motor traffic, and that there is a case there to be argued for getting Community funding to upgrade these roads in the interests of the general motorist as well as the interests of the forestry industry. There is, of course, as the Minister is well aware, a nice term in Euro-language called "the margin of appreciation." I believe that a little subtle use of this concept of a margin of appreciation might allow the road network inside the forest system to be appreciated out into an area of the general county road network which would be appreciated by many of the people in the local areas.

I would like also to know from the Minister, because as I remarked earlier on we are talking not just of an important economic asset in direct terms, we are also talking about the impact in terms of tourism, whether there will be any consultative role, for example, for bodies like An Taisce. I know this can be a controversial and problematic area. We recently had a rather bizarre episode in which An Taisce's position with regard to the siting of a large ESB installation in an area of national scenic beauty was overruled by a Minister. I understand that this is not likely to be allowed to happen again. It is important that we should be sensitive to the fact that the views of people involved in the exploitation of our rural amenities from a tourist point of view and the point of view of aesthetics should not be entirely overlooked. I believe these sort of bodies would support the view I have taken: that it is important not just for economic reasons — and there are very good economic reasons for expanding into hard wood afforestation — but also from the point of view of the tourist industry.

The result of the Government's programme, according to their Programme for National Recovery, is going to be to considerably increase the national forest base in this country. I believe this may happen. It requires considerable determination, which has recently been shown — I overlook the split infinitives because I do not want to be considered a particularly fussy person; I will not use the word “booksologist”— but it is obviously something that should and will be welcomed by most people.

I would like to turn briefly to some other areas covered in the legislation and then say a couple of words about the Minister's speech in response to them. With regard to the Bill, I have already mentioned, as far as section 35 is concerned, the position of chief executive of the company and the appointment by the Minister. Again, I hope and assume that this appointment will be made without any political bias and in the long term interest of the country and of the industry and that the person appointed will be a person of leadership and expertise in the area who will give the kind of direction to the growth of this industry which it needs. The Government have very clearly targeted this area — I think correctly — with the development of fishing resources and so on as a kind of green area which has a potential for very considerable and very important growth.

There is one point I should perhaps have made earlier. I mentioned the figures of £435 million of imports and only £137 million of exports, leaving a shortfall of approximately £300 million. I quite accept that not all this wood could ever be grown in this country. There are specialised wood products, specialised tree types and so on. Even leaving aside that argument, which I dealt with earlier on, there is, for example, an annual import figure there of £55 million which represents the kind of softwoods that we actually do grow in this country. So that entire £55 million could and should be taken up. That is a very considerable amount of money, in my opinion. I see no reason why it should not. Of this £55 million — I must correct myself — £30 million is conifer and the other £25 million is non-conifer. So that we have £30 million that is directly substitutable.

It may appear that I am moving slightly around the point, because I was addressing the question of the appointment of a chief executive, but my reason for reintroducing the economic argument here is to say that at the core of this is a really hard substantial financial interest. What we need is somebody of serious business acumen who is able to assess the world situation, who is able to predict market trends and who is able to ensure that we do not import into this country £50 million, or even £30 million, worth of materials which this country is ideally suited to produce.

I note that section 37 provides that the Minister may make by-laws "to regulate access to or use of any land owned, managed or used by the company" contravention of which will be an offence. I would like to say that I very much hope that access to as much as is possible of the parkland and forested areas of this country will be continued by the Forest and Wildlife Service and also that some sensitivity will be shown to the ecological balance and the existence, for example, of some rather rare species like pine-martens and so on, so that these places will continue to be an asset to this country.

I also hope that in situations where this new company acquire land — and I presume it will be in the position to acquire land — it will treat that land sensitively, particularly and especially where the land so acquired contains buildings of historic architectural significance or cultural significance. I say this because, having praised the Forestry Department and the Forest Wildlife Service unconscionably throughout the afternoon, I now have a slight reservation, and that is that, historically speaking, there has not always been a sensitivity shown when land was acquired. To be fair, I am not quite sure whether this is a responsibility of Forestry or not, but I know that there were many important historic houses islanded in the centre of land acquired for the purposes of afforestation and these houses were subsequently neglected, abandoned, allowed to become derelict and demolished. I suppose the most spectacular and shameful example of this is Coole Park in County Galway, the former home of Lady Gregory, which would be such an asset in terms of tourism in this country. It was simply allowed to decay and then demolished on foot of a dangerous building order. I could cite a number of other examples. I hope there will be some sensitivity.

It also has to be borne in mind that for some of these houses a reasonable amount of land has to be allowed to go with them. I understand that part of the policy has been, when these kind of places were acquired, that most of the land was sold off with about an acre of land around the house left. That kind of hinterland is not enough to support a house. A house, particularly an 18th century house, requires some kind of economic hinterland unless it is going to become problematic. I hope that, under section 37, some degree of sensitivity will be shown in these sort of areas so that the new company will enhance our experience of living in this country; and, of course, this links with Part III of the Bill, section 39, which provides for the transfer of land, including buildings, to the company from the Minister. I hope the Minister will make clear that in a case where there are historic buildings they are to be adequately preserved, whether they are 18th century, whether they are pre-1700 or whenever they are. I would like to feel that they will be sensitively treated and that they will be maintained properly by this new company. Perhaps one of the things that the company could do would be to have a small survey of such buildings. I would like to know what buildings, particularly what historic buildings, and what historic sites are covered by any afforestation programme. Of course, the Minister will be well aware, with regard to the question of European Community funding, that it is a requirement for all European funding that an environmental impact survey has to be undertaken where any programme such as even afforestation, is concerned.

I would like to turn back, just very briefly before I conclude, to some other remarks made by the Minister. I have already mentioned this question of funding from the European Community and I support the Minister in that. I do not wish to expand on that; it would take too much time. I would like to welcome the fact that, although there is an encouragement to private enterprise with regard to afforestation programmes, we have not — as I read the Bill, anyway — engaged as yet in the kind of lunatic schemes that they have across the water where pop stars, for example, have been encouraged to offlay some of their earnings as a kind of tax write-off into totally inappropriate afforestation schemes which have had a very bad and very negative environmental impact, particularly in the north-western tip of Scotland. I believe I am correct in stating that the Minister has avoided this kind of trap. I hope he will continue to do so in the future and, unlike other Ministries in this and other Governments, will reject the temptation to follow British models. It is a very dangerous expedient, and I am sure he will have advice from within his own Department and from within the company which is to be set up under this legislation.

I note that in his speech the Minister says that the EC as a whole imports approximately 75 per cent of its requirements and that in fact its timber import bill is second only to that for oil. That is a very important admission on behalf of the European Community. Why should this be so? We are in a particularly vulnerable situation here. I certainly agree with the Minister when he says that the stage has been set for a major drive on export markets by Irish forestry in the years ahead; but I would also point out to him that we have not even yet reached the capacity to satisfy our own domestic market and that that must be made up first.

Again, having complimented the Minister on most things, I would like to just ask the question, I suppose that would be the way to put it. It is, I suppose, partly a grammatical question, because, having made a great deal of sense throughout his speech, in his third paragraph he resorts to what I can only describe as "blah", where he says that "an emphasis on management and performance must also be given the highest priority within the company. Standards of excellence must predominate. There could be no place for individuals or groupings who see the organisation as existing to fulfil their own particular purposes. On the contrary, all staffs should see themselves united in a common goal to achieve the purposes of the organisation. This will be the real test of an individual's performance within the company." That is the kind of thing that, in the middle of a hot summer's afternoon, one may get away with with an indulgent House and an indulgent and gracious Cathaoirleach, but it is really just a lot of clichés. I do not think it means anything at all unless — and this is what worries me — it is a coded message and, if it is, I would like the Minister to spell out exactly what is underneath it. Are there inside this organisation all these kinds of crypto-subversives waiting to paddle their own canoe and to plant rhododendrons on the Curragh? I do not quite know what is being got at here. It looks to me rather like a heap of padding. It is one cliché after another, joined by a couple of scattered prepositions, unless there is some encoded message which it defeats my poor, fatigued intelligence to unravel——

Mr. Mooney

You cannot see the wood from the trees.

Mr. Norris

Another cliché from the Government benches. How refreshing. Perhaps, my suspicion was right and it is just blah. However, having said that, I would like to congratulate the Minister, saying that I think a remarkable job has been done, a job which is long overdue, that it is necessary to restore the ecological balance, to, pace Senator McEllistrim, reafforest the country — I make no apology for saying “reafforest”— to protect our resources as a people against the rape and pillage that we saw at Coolattin and also in the economic interests of the country to have a really thriving forestry industry. I believe that the kind of policies that the Government have clearly embarked on, with the assistance of an excellent Forestry Service, are undoubtedly — to coin another political cliché — the way forward.

An Cathaoirleach

Before I call on Senator Mooney, I do not think the Minister, Deputy Smith, is one for "blah" or "padding".

Mr. Norris

It just crept in, a Chathaoirligh.

Mr. Mooney

I must say that I thoroughly enjoyed Senator Norris as he tripped through the rhododendrons around the Curragh and wended his way up around County Roscommon. I am glad I was here when he talked about Roscommon as a possible location for any future Forestry Secretariat. Coming as I do from County Leitrim, many of my own people would have a point of view in that area; but then again perhaps Senator Norris is looking to the future and perhaps might be moving to Roscommon at some stage. If he does, I am sure Senator Connor and his colleagues will be delighted to welcome him.

Mr. Norris

For my coronation.

Mr. Mooney

Like my colleagues, I welcome this Bill. I think it is probably one of the most significant pieces of legislation that has come before this House in the current administration. For far too long I have felt that forestry has not been given its due place in the scheme of things in Ireland. Having said that I come from Leitrim, it is pertinent in the context of the history of afforestation and of the attempts to reafforest this country to say that I agree with Senator Norris. All prejudices die hard. Indeed, as a youngster growing up in Drumshanbo and its environs, the mere mention of forestry was guaranteed to bring out the red corpuscles in even the most mild-mannered individual, purely on the basis that the perception then—I am glad to say it is not as strong now — was that forestry replaced people, that where there was an increase in afforestation there was a decline in population. In a county like Leitrim which has, I regret to say, a declining population — and even as late as last week the recent census returns confirmed this trend, albeit with a slow-up in the decline — there was a real fear that afforestation would result in a rapidly declining population to the point where Leitrim would be denuded of its people. I am glad to say that that view is not as strong as it was. However, it is still held by some sections of the population.

In recent years attempts by private companies, with the aid of pension fund and insurance fund money, to come into County Leitrim and surrounding counties and buy up land for private afforestation has created enormous difficulties. It has engendered some bitterness among the local population. In some cases the companies whom they represented coming into counties such as Leitrim and the north-west generally for private forestry perhaps were not as sensitive to the nuances of local feeling as they might have been; if they had been, perhaps they could have avoided a lot of the tension that arose as a result. However, I believe that period in our recent history is now past and that there is a growing realisation, led by representatives of the farming organisations in Leitrim, and particularly by the Irish Farmers' Association, that forestry does now have a real role to play in the future economic survival of County Leitrim and surrounding counties.

As a representative of that historic county, I would say that this Bill and its implications will carry the greatest impact for County Leitrim because, as has been stated by the Minister and, indeed, by several speakers, Ireland is unique in Europe and unique in the world in having one of the fastest growing land bases for a certain type of tree. Within Ireland, County Leitrim, because of the limestone content of its soil, has the fastest growing potential and consequently there is now a greater awareness of the economic benefits that can flow from increased afforestation to our county.

It might be worth putting on record that, like the national average. County Leitrim has only 6 per cent of its land planted by trees. Perhaps that goes against the popular view expressed in some parts of the county that more and more land has been taken up, land which otherwise could be used for planting. But we are well below our potential.

The idea of establishing a commercial forestry company is something that this Government are to be complimented on. The Minister touched on what he called the commercial criteria that will be employed. I am pleased that the Minister has put that emphasis in his speech. He states, "Freed from Civil Service constraints, its essential task would be to operate to strict commercial criteria and to exploit all available opportunities." I know that the Minister, when he is deliberating on the choice of chief executive and directors of this new company, will in a sense put his money where his mouth is and will ensure that the chief executive and the directors of this semi-State company will be of the highest commercial calibre, that they will be people who have a track record in the real world of commerce and industry and that they will be able to apply the expertise gained in whatever field of activity they have been involved in.

I do not wish to in any way infer that directors or chief executives of semi-State bodies are not capable people. I am only saying that there has been a perception down through the years since the foundation of the State, and not attaching to any particular administration, that sometimes individuals slip through the net and find themselves placed on boards where perhaps they are not the most suitable — the round peg in the square hole syndrome, I suppose. I am glad therefore that the Minister has devoted a certain portion of his speech here to the emphasis that would be placed on the commercial criteria to be employed by the new company.

Senator Norris touched on the historical background to forestry in this country and his perspection of forestry. I think it was useful that he should do so, and I might expand slightly on it. Here I must compliment Touche Ross for an excellent booklet which they produced several weeks ago in order to encourage investment in forestry in Ireland. Their book Investing in Forestry in Ireland — A Practical Guide, 1988 produced by Touche Ross in association with Celtic Forestry is something that should be required reading for everybody who has an interest in forestry development in this country, be they land owners or investors looking for a place to put their money. On page 4 of the booklet under the heading “Historical Perspectives” it states that until the mid-sixteenth century Ireland was predominantly a wooded country. The main species then were oak, alder and elm in the better lowland areas and birch and pine in the upland areas. The Tudor conquests of the sixteenth and seventeenth centuries resulted in a rapid exploitation of the native forests largely to supply, as Senator Norris specifically pointed out, the raw material for ship building and barrel staves, charcoal for small iron and glass industries and clear the land for agriculture. By the early 1700s virtually all accessible woodlands had been cleared. Despite some private planting in the 1700s and 1800s, Ireland's woodland area had declined further by the early 20th century due to changes in agrarian ownership. Indeed, those of us who travel the length and breadth of the country, particularly in the central plain — while there was the benefit of tree felling and the natural processes that have gone into the production of peat — can get an idea of the enormity of our forests in the pre-17th century period, in the middle ages and before, when one looks at this massive central plain. One cannot see the horizon for miles and miles. Obviously, there is tremendous scope for reafforestation.

It is interesting that the State-planted area represents approximately 80 per cent of the total area in Ireland under woodlands and it is in direct contrast with the European Communities as a whole where just 40 per cent of forests are in public ownership. This would be mainly as a result of the initiatives taken by succesive administrations since and, indeed, before the foundation of the State to encourage more and more tree planting. Perhaps I might inject a proposal to the Minister — it may not be necessarily in keeping with the Forestry Bill, but in order to make more and more of our population aware of the importance of tree planting, perhaps the Forestry Service in his Department might have input or some consultation with the Minister for Education to try to inculcate into young people the importance of trees and forestry for our national economic welfare.

I am thinking specifically of tree planting ceremonies. I know we have an Arbor Day and I know attempts have been made to have more and more people in our community involved in planting trees, but I think that if there was a Government initiative or a Department initiative more publicity could be given to trees one day or one week in the year, as an initial step. During that day or that week a significant number of trees would be planted by individuals in co-operation, of course, with county councils, urban councils, etc. Next, there could be a better educational follow-on in our schools to make more of our students aware of the importance of trees, helping them, perhaps, to identify the various trees, and those that have a more commercial impact, as obviously some trees grow more rapidly than others. When they eventually come out of school, out of second or perhaps third level education, some of these young people might become entrepreneurs in the forestry area. Unless people are made aware, in any walk of life or in any area of business activity, of the benefits, then they are hardly going to be interested. I feel that perhaps the Department of Energy, and the Minister with responsibility for forestry would have some input now that the Minister is bringing more and more of the forest activity under his umbrella.

It is interesting to note, when talking about the amount of State forestry in this country, that despite tax incentives going back as far as 1931 in some cases and more recently to 1969, only 21 per cent of Ireland's woodlands are in private hands. This statistic has some bearing on the Government's decision to set up a commercial forestry company.

Going back to what I said about inculcating, in our schools, a knowledge of trees and the benefits that can accrue from the planting of trees perhaps one of the reasons the private sector has not been involved to any great extent up to now is that they had not been made aware of the economic benefits of tree planting. In that context I have put on record that the first incentives were as far back as 1931, I am sure that all of us must agree that the initiatives taken by the Minister since January of this year, in consultation with his colleagues in Europe, to ensure that there is an increase in funding for forests in this country must be welcomed.

The Minister stated that he announced an allocation totalling £8.1 million from the European Regional Development Fund for road building in State forests. This will finance about 55 per cent of the £15 million cost of constructing 358 kilometres of new forest roads, and the upgrading of 107 kilometres, in the three years 1986 to 1988. He quite correctly stated this is the first time the ERDF has injected substantial resources in to mainstream forestry activities.

The Minister will be aware that representations have been made from my own county, through the county council, for improved funding, particularly in the north and mid-Leitrim areas for these access roads and for the building of access roads to State forests. As a result of the increased traffic into State forests in the Leitrim area a number of our roads have suffered. The Minister would be aware of this, of course, from various deputations and representations. Perhaps it might be opportune for him in his reply to give some indication of his thinking, not only in relation to County Leitrim but the north-west generally, in what areas it is being spent. The EC initiative is to be welcomed.

I found it somewhat surprising, again I am referring to the Investing in Forestry booklet, that despite efforts from various countries to establish a common forestry policy for the European Communities some member states are resolutely opposed to the adoption of such a policy. I am curious to know if Ireland has been in the vanguard of attempting to establish a common forestry policy in the EC. If they are, perhaps the Minister might again, for one's education, give some idea of why there is such resolute opposition among some member states to a common forestry policy. It seems to me that with the deadline in the economic benefits of the Common Agricultural Policy, particularly for Ireland as a result of the EC's ongoing decision making process to reduce and eventually eliminate surpluses within the Community, that a substantial amount of agricultural land which heretofore had been used for productive purposes will now be going out of agricultural production and that this land would obviously, particularly, here in Ireland, be of use for afforestation. I would be curious to know what the Minister's thinking is in this on an ongoing basis and what sort of response he has been getting from the EC from Ireland's point of view.

It is known, of course, that forestry has been encouraged by member states through their own initiatives, as indeed, it was here in Ireland and in many other states. Again I cannot understand why there is not a consensus in relation to a common forestry policy in much the way as there is in regional policy and environmental policy and in many others.

I would like to welcome the aspects of the western package as they apply to forestry. The details are now well known. I would, however, like to put on record a number of observations in relation to the western package as it applies to the Bill before us. For example, in my own county and in many of the counties of Ireland the concept of a full time farmer is not as widely known as it would be in the richer and more fertile lands of the south and the east. Consequently, many people involved in farming in disadvantaged areas would be part time farmers and would supplement their income by off-farm employment. I am anxious to know if the Minister has been successful in seeing that such individuals receive the same grant aid as full time farmers for the planting of trees on their land. There is also the difficulty facing many of these individuals in relation to financing. I am aware of some part time farmers who are eking a marginal living from their land and who would be supplementing their family income by off-farm employment. While they do not have the financial resources, they have the will to use a portion or all of their land for afforestation. Due to lack of collateral, or for other reasons, perhaps the slow return on investment, when they have approached financial institutions for the considerable sum of money needed to initiate a planting programme — with grants available — they have encountered some difficulty from the financial institutions responding to that need. I am curious to know the Minister's thinking in this area of financing. Those individuals in disadvantaged areas do not have the financial resources and have to wait, as the Minister is aware, for some time before they see a financial return on their investment. Even with the grants there is still a waiting period. I know the Minister is aware of these difficulties but he might tell us the up-to-date position on the question of financing for farmers who have difficulties.

Obviously the new commercial company will be very export-oriented. Again, I would be curious to know what efforts this new company will make to improve the quality of Irish timber. I am not an expert in this area but I have heard the Minister say on a number of occasions that there is considerable room for improvement, that while Irish timber in the main is usable over a wide area of activity, the high quality timber required for housebuilding and for certain specialised areas of furniture is not so widely available. I wonder what the Minister's view is in relation to the semi-State company being set up. Will they, for example, be directing their initial activities towards improving the quality of our timber rather than the quantity? On the basis of the statistics available to us, it seems that there is a big market, and an increasing market, for hardwood as opposed to softwood timber. The European Communities' imports total 75 per cent, while, as the Minister pointed out, our nearest neighbour, the United Kingdom, imports as much as 90 per cent of its timber needs. Obviously, here is scope for a veritable goldrush on our doorstep, if we can get our act together.

Due praise has been given to the Forestry Service, to the employees of the State who have toiled down through the years to ensure that the State forests under their protection have been maintained to the highest standards. Living in an area where there is considerable tree planting and State forestry, I have grown up in the knowledge that the State employees, who came to our area for a number of years and then moved on, with promotion, to be replaced by others, did, and still do, an extremely valuable job. They are people of the highest calibre. The Minister has duly noted the contribution they have made and this is only right and proper.

Senator McEllistrim asked about our forest parks and the increasing number of leisure parks around the country which are maintained by the Office of Public Works but into which, obviously, the State forestry service has some input. I am not sure where the overlap is, where one stops and the other takes over. I assume, until the Minister clarifies the position, the Forestry Service and the Minister's Department are responsible for the maintenance of State forests in forest parks. Returning to my earlier suggestion about inculcating a greater awareness and knowledge of trees, tree planting and the future benefits to our country among our school going population, could I put forward a suggestion — which I raised on another motion about our national heritage — that we copy an idea from our American cousins and have a system of forest rangers? Some weeks ago I saw a television programme in which one of the chief park rangers in America — the people who are in charge of the forest parks, the State parks, the reserves and the national monuments — stated that without the massive voluntary input from high school students throughout the year, that service could not be maintained, even in a country as rich as America.

Does the Minister see any merit in the proposal that some of our second or third level students who have an interest in our natural heritage would be employed in our State forests on a voluntary basis? In return — I am very much aware that money and resources are limited — they could be given examination credits for the amount of time they spent working for the Forestry Service. I do not know if it is a feasible proposal, but unless we make the present generation more aware of the importance of trees in our national economy, another generation will have the same sort of indifferent, apathetic or laissez faire attitude towards forestry.

Perhaps the Minister will consider the utilisation of this fine body of young people who have quite an amount of leisure time, particularly in the summer and at Christmas and Easter. Perhaps they could be encouraged to work in the State parks and the forest parks, where they would learn more about forestry and our natural wildlife and they would also learn to have a greater respect for our natural heritage. At the same time, the State, without any cost to itself in financial terms, could give them some form of remuneration in the form of examination credits, irrespective of the subject matter they were studying at the time.

Like Senator McEllistrim, I ask about the status of the forest parks under the new legislation. I have not had the opportunity to study the various Acts, but the penalties in the amendment of the provisions of the Forestry Act, 1946, have been increased in a variety of areas under the Second Schedule. Like the Minister, my colleagues and I totally decry any activity that vandalises our State forests or any vandalism which would result in trees, planted for public use and for public environmental enhancement, being damaged. I am somewhat at a loss in regard to the increases for particular penalties. I assume that it is for the vandalisation of our trees, whether they are forests or trees which have been planted by local authorities. Perhaps on Committee Stage we can get greater clarification of just what these penalties are for. But in general, I welcome the increases. It has brought them up-to-date and it should help to deter that hooligan element in our society who seem to get some peculiar satisfaction from breaking trees, ripping them up, or throwing them, particularly if they are saplings and in the earlier sensitive stages of growth, on the side of the road.

I am interested in the sections which deal with shares in the new company. The Government have yet to decide on the sort of mix they will have here. I presume this means between public and private ownership. Is there a suggestion that this company may be semi-privatised at some stage, and that shares will be offered on public subscription to private investors in this country who can buy and sell shares as they would with any other stock market quoted company? I would like to have that clarified. It is envisaged in the Bill that the new company would lease land in poor land counties, like my own county, for a lump sum or indeed for a regular income?

The reason I raise this is that the Touche Ross booklet Investing in Forestry in Ireland in a section devoted to types of forestry investments makes the point that:

established landowners holding marginal agricultural land or land unsuitable for their farming needs may consider planting trees on this land. The cost of investment to such landowners is considerably reduced. It has been estimated that there are over 1 million hectares of land currently under agriculture in Ireland which could be utilised more profitably for forestry.

For non land owning prospective investors,

and this is the point I wish to bring up

the cost of land acquisition must be borne. This may be reduced or deferred by: — Acquiring bare land so that costs of clearance and preparing the land are kept to a minimum. — Leasing of land. — Entering into a joint venture with a suitable landowner.

It may be possible to form an arrangement between a landowner and investor whereby the landowner leases the land to the investor in return for a reduced annual rent and a share in the future tax free profits on harvesting. Under such a structure, benefits would accrue to both partners.

Again I am thinking of my own part of the country. It is vitally important that more and more of the land of County Leitrim is planted with trees. I wish to emphasise that I am not encouraging the wholesale takeover of land, I am talking about land which is lying idle, land on which rushes are growing. In fact, there is an old saying around my part of the country that when a farmer looks at the land with rushes he says: "Ah, sure, it will grow nothing else". I would love to see that particular attitude dying a thousand deaths. This is being done through the incentives that are now being put forward and by the whole thrust of the Minister's enthusiasm for his brief over the past 12 or 15 months. We are reaching the point where people are well educated about the benefits of forestry.

But I think we have to change an attitude. It is difficult, if not impossible, to encourage landowners in the north-western counties to actually plant a portion or all of their land which they have been traditionally using either for grazing or purely as an acquisition which they have let out to other people for grazing purposes. I can fully understand farmers living in disadvantaged areas wanting to go for what might be referred to as the softer option. It is far easier to buy in stock, put in on land that is poor and cannot possibly grow agricultural produce, cannot be used for tillage and to use that land primarily as grazing or to take the grass off it for fodder. But surely there must come a time when those landowners will see the benefits of planting some portion of that land, not all of it. They could still have enough land for fodder and grazing for their stock but some of the land could be planted. It may be difficult to get them to plant trees. Going back to my earlier point, without being repetitive about the financial aspect, that perhaps the new company could enter into some form of land lease, I would be interested to know the Minister's thinking about the company's modus operandi in that particular area.

I have to come to that point in my contribution which has been reached by my fellow Senators from areas surrounding my own county, and that is the question of the location of suitable factories and also of the proposed secretariat for the new company. Suffice it to say that all of these things should come to Leitrim, naturally enough, as indeed every representative in every county will say that all of these things should come to his county. Very briefly may I put forward my views as to why I believe County Leitrim, and specifically the mid portion of County Leitrim surrounding my own town of Drumshanbo, should be given serious consideration for any proposal to set up a pulpwood factory in the north-west region?

It is common knowledge and the Minister has confirmed this in various statements and to various deputations, that the Government are actively seeking international entrepreneurs, hopefully home-based ones, to set up a suitable pulpwood factory somewhere in the north-western portion of this country. The main reason this particular area is being mooted is that the level of production of the thinnings is faster; it comes at a far faster rate in that part of the country than in any other part. Consequently, a lot of thinnings will be coming onstream in the next two to three years. I know what the Minister and the Government cannot force any entrepreneur to put his or her money into an industrial project in an area and say: "You must go there; you cannot go anywhere else." I fully accept that the hands of the Government and the Minister are tied to the extent that if an entrepreneur decides that he is going to locate in a particular area, then the Government must bow to his wishes. After all, we are a democratic society and they would obviously give him every help and encouragement once he had made a decision. However, I believe that in this instance because of the high level of State investment in forestry in the Leitrim area the Government will have a greater say in where the factory is to be located than if it were an ordinary industrial project and I believe that any would-be entrepreneur will respect that particular point of view and will respect the Government's opinions as to where the industry should be located.

I argue for the Drumshanbo, mid-Leitrim area, on two counts. Firstly, a Foras Forbartha report of 1976 stated that a timber processing industry could be viably located in the mid-Leitrim area, specifically in Drumshanbo that would have a job potential for upwards of 3,000 individuals. I know time moves on and circumstances and priorities change. However, there has been a continuing increase in afforestation in our county and in the surrounding counties. Consequently, the argument of 1976 must have as much, if not more relevance in 1988 or 1989 or 1990, when hopefully this new industry will be up and running. Secondly, Leitrim generally has a small industrial base.

Far be it from me to come into the House with the beal bocht, the poor mouth. That is not my form. I tend, perhaps, to exaggerate a little the benefits and attractions of my county rather than spend my time stating its disadvantages, economic and otherwise. But we cannot get away from the economic reality that County Leitrim has been badly served in terms of industry since the foundation of this State. I do not think the blame can be levelled at any one administration. I think it is a combination of factors, location and poor infrastructure. The partitioning of our country in 1921 took away our natural hinterland of northern neighbours. In the regionalisation of statutory boards over the past 30 years Leitrim has been grouped with larger and more powerful counties who, in the popular perception in County Letrim, have tended to skim off more of the cream and take more of the national cake. I know that my good friend. Senator McGowan, from County Donegal is present and perhaps he might feel that I am being unduly critical of Donegal. I am not. I am just saying that in the nature of things — and it is the same, perhaps, with Ireland in the European Community — that activity tends to gravitate to the centre unless, being on the periphery, you are pulling all the time to ensure that what you deserve you get; or what you feel you deserve you should fight for. It is in that spirit that I am here today in front of my Minister arguing that Leitrim has a strong case, not just on the grounds of sympathy and sentimentality, but on the first point I made about the An Foras Forbartha report. Secondly, because of the amount of thinnings that will be coming on stream and thirdly, because we feel badly served at present. We feel that here is an opportunity for the Government — I hope it is a Fianna Fáil Government, but I will not refuse it from any administration — when the decision is taken and the Minister of the day — I hope it will be our good friend. Deputy Smith, he being aware more than anybody, perhaps, of the economic disadvantages in County Leitrim — to be sympathetic to our case, a case which has been made by the Leitrim County Council and a case which has received and is receiving unanimous non-party and all-party support for the establishment of a wood pulp industry in mid-Leitrim.

Like the Minister, I would like to encourage more and more people in the private sector to give serious consideration to putting their money into forestry. I was interested to see the financial returns. It is estimated that they are currently running at 4 per cent to 5 per cent per annum. Indeed, this percentage will more than likely increase towards the end of the century as, internationally, timber stocks decrease. It is an excellent investment and indeed its primary advantage is that it is a barrier against inflation. I would join with the Minister and those of my colleagues who are calling for more investment in private afforestation in this country. Never before were there so many incentives, tax incentives, EC incentives and, indeed, such a general climate of goodwill throughout the country towards development of forestry as of now. I hope that those in our society about whom we are constantly reading and hearing, who have money they are investing outside Ireland, will look, even with a hard, business heart and — even if they are Irish they should allow sentiment to enter some of their decisions — give serious consideration to investment in the private sector in this country because of the returns that are there and the increase in returns that will be there.

Finally, I would be interested to know what will be the main thrust of the new company's activities in the specific area of tree development. I touched on this briefly earlier when I said that there was a shortage of good quality Irish timber. For the record, again quoting from Investing in Forestry by Touche Ross:

Commercial timber is divided into two main categories: Softwoods which are produced from conifer tree species;

Hardwoods which are produced from broadleaved tree species....

More than 90 per cent of the world's softwood is grown in the northern temperate regions, mainly Scandinavia, USSR and Northern America. Hardwood production is typical of the equatorial and southern regions particularly Latin America, Africa and the Far East.... In historical times, Ireland's native woodlands consisted mainly of broadleaved species, oak, ash and elm dominated the lowland areas with birch and pine (a softwood species) in the poorer upland areas. However, after the exploitation of Irish woodlands which started in the 16th century very small tracts of this native broadleaved woodland survived to the present day.

The State planting policies of this century are concentrated almost exclusively on fast growing softwood species.

It is in that context that I was curious to know what the commercial thrust of the new company will be.

Ireland currently imports most of its hardwood needs and little effort has been made to encourage the growth of hardwood so as to reduce this dependance on imports.

Whereas in recent years the forestry service has planted small amounts of broadleaved trees (usually about 3 per cent of the area planted each year) most of Ireland's broadleaved woodland is privately owned. Of the privately owned broadleaved woodlands, very little is less than ten years old and 80 per cent is over 70 years, fully mature and of rather poor quality...

In recent years small numbers of broadleaved species have been planted either in small stands or mixed through State plantations. The promotion of planting of broadleaved species has, however, been to a large extent by private individuals and small active locally based groups. The planting of conventional blocks of broadleaved species and of small groups of broadleaved trees within the urban environment is now being promoted.

This is to be welcomed.

This style of planting can create an amenity in the short term and a valuable resource in the longer term.

Indeed, in my own part of the country we are glad to see that the local county council have been encouraging the planting of more broadleaved species to enhance local environments, etc. I am curious to know what is the general thrust. Will the Minister be directing the new company or will they be identifying what they see as the best commercial prospects and then acting on them accordingly?

Before I sit down, I would like to add my voice to those of my parliamentary colleagues in the constituency of Sligo-Leitrim against what was originally intended and against which I believe now a stand has been taken and perhaps it has been prevented. I refer to the desecration, or the possible desecration, of the wonderful and beautiful scenery that Yeats immortalised around the Lake Isle of Inishfree. I know the Minister has taken a personal interest in this affair and I know from debates in the other House that my parliamentary colleagues have made a strong case to the Minister in relation to the proposed private planting of trees that would, according to local action committees, have a detrimental effect on an area which is part of our natural heritage.

I am not sure what the up-to-date position is but I would like to put on record my total abhorrence and complete opposition to this, despite the fact that it is private citizens, not the State who are involved here. As regards my remarks earlier, in a free society one should have the right, if one acquires land under the Constitution and because of the property rights inherent therein, to do with that land as one wishes. However, with the ownership of land comes certain social responsibilities, if not legal ones. I do not wish in any way to single out these individuals who made this proposition because of the fact that they are non-nationals, but perhaps the agitation which has been created and sustained by the people in the locality will bring home, not just to those individuals, but to any other non-nationals who have come into the country and who believe that because we are all members of the European Community and consequently have access to land within the Community, that in the purchase of that land there are obligations of a social nature and that there are obligations in this country which must be adhered to, irrespective of nationality. In that context I welcome the action that is being taken by the group around the Innisfree island and I hope that whatever decisions eventually emerge, the Minister's stated opposition to this and that of my parliamentary colleagues will win the day and not only win the day in Sligo but will serve as an example and perhaps a warning — if one could use that word cautiously — to any other persons who might be considering desecrating beauty spots throughout our country.

As I said at the outset, I welcome this Bill. I welcome it in the context of it being, I believe, one of the most significant pieces of legislation that has come before this House since the new Fianna Fáil administration came to power last year. It is significant because, for the first time, it is bringing a natural asset, something that we are very good at — growing trees — into the commercial sector. I only hope that the Minister will be coming back here to report in another year or two that the future targets set under the Programme for National Recovery will be not only met but exceeded to the point where our gross national product will have increased so substantially that never again will we ever hear the cry that trees denude the population. Instead, I hope we will hear the cry that trees are our future and that the more trees we have the better. The downstream industries that result from the plantation of those trees will ensure viable and permanent employment for future generations of our people so that they can stay in Ireland and not have to take the emigrant ship or aeroplane out of this country. I welcome the Bill in its entirety and I wish the Minister well in his brief and I compliment him on the superb work he is doing. It is not always easy for a politician in the public eye to do everything that is right. I have to say that Deputy Smith has more than risen to the task and I am proud to be associated with him.

Mr. Harte

Any Bill that sets out to develop forestry, which has been very long neglected, must be welcomed. I think this was recognised long before now. In fact, there was a major study of the forestry industry by the National Economic and Social Council which issued a report in 1979. At that time it was projected that there should be in the region of 20,000 more jobs over a 20-year period. It is now a bit of a puzzle as to whether that meant anything or not. Could the Minister indicate whether these jobs will be realised? Can the Department put a potential figure on the number of jobs envisaged over the next five years, having regard to their own Bill which they have introduced, ignoring past reports made in the time of the Coalition Government?

The NESC report went into great detail when it envisaged what the overall responsibility of a forest authority would be. They divided it into three distinct areas; a product development board which would have responsibility for developing a dynamic processing industry; a tree farming development board with responsibility for ensuring continuity of supply to the processing sector and the Forest and Wildlife Service which would have the responsibility for the protection and provision of wildlife and related wildlife reserves and amenities. This plan for the forestry industry was reiterated by a more recent study called The Proposal for a Plan for 1984-1985. That plan acknowledged that there was a considerable merit in exploiting the potential of the nation's forest products along the lines outlined by the NESC. It recommended that a new State-sponsored body might be set up for this purpose. The plan went a little bit further and suggested that perhaps Bord na Móna might assume additional responsibility as they had the technological expertise which might be employed to develop the competitive harvesting techniques required in upland areas.

We all know many studies have been going on with regard to forestry. We have all been very critical down through the years about different things that have been happening with regard to the neglect of the potential we have. The present Government have brought in a Bill that must be welcomed because it is there to develop the whole area of forestry. Any Bill that sets about making any major change in any situation usually gives rise to a lot of concern on the part of the staff, who have to give effect to the proposals therein, about what putting those decisions into effect might mean for them. As a consequence, there are about six or seven unions involved in dealing with forestry, in one way or another. Unfortunately, in this legislation, despite the Worker Participation (State Enterprises) Act, 1988 we have not got worker directors in the sense that we know them to exist in other companies, that is to say where one-third of the seats are reserved for worker directors in other semi-State bodies.

This obviously gives rise to great concern among the people who are actually employed in forestry. When one considers that anything is liable to happen with these new developments, and all the redundancies, etc., proposed for the public sector, it is understandable that there would be concern there. Therefore it is only right that as a former trade union official I should concentrate on the fears of the workers.

For example, in sections 18 and 21 there is concern as to whether the possible privatisation of the company, without reference to the Oireachtas, might be on the cards. If this is a fact it is of very serious concern because our experience of privatisation is that they go in, they take over and then the rationalisation starts and the next thing is we see the numbers being hived off in all sorts of ways. Taking the example of industry, the consultants idea grew up overnight; people were consultants in work study and job evaluation.

They all told you they were scientists but the fact is they were very subjective. They created situations for themselves. Consultants are now here. As a result of that, if there is the fear that the Minister can in fact get into the area of privatisation of the company, without reference back to the Dáil or Seanad, then the people are certainly entitled to be very concerned. At least when they have the Minister there they can deal with him: they do not know where their future lies in this case. One can understand the unions being concerned about this and that it is not acceptable to them. What is needed here is some clarification of the situation with regard to whether, in fact, this is in the Bill.

In sections 24, 25, 26, 27, 28 and 29 there is further information about the Minister's proposal for financing the company. This is another area of concern to the staff because if the adequacy of the funding cannot be properly gauged and the functions of the company properly known, where do staff go and what sort of situation are they in? Since they have not got worker-directors sitting on the board — as we feel there should be under section 15 — they have no feedback. Inevitably what will happen is that there will be some sort of a sub-tier board and sub-tier participation or sub-board participation. The position will be that there will be some sort of workers' council and in this there will be only the question of information and discussion. The question of agreement does not enter into it. It is confined to information and discussion. As a result, there is no particular early point at which the unions can get in and try to circumvent the effects on their members. It is a very serious development for the workers in that respect.

If the Minister decides to transfer or alienate his share in the company the very same thing happens: the workers will be affected in some way. These are some of the things that are of very serious concern for the people who are employed there and who have actually to give effect to some of the decisions that may be taken. In section 33, for example, whilst the section prohibits the unauthorised disclosure of confidential information by directors, it does not preclude directors from using confidential information for their own benefit. This is a matter of concern for the staff. The belief is that there should be some further consideration shown by the Minister in this regard and that in the interests of the staff this particular side of the legislation should be strengthened.

One wonders whether section 36 is actually necessary or whether it is consistent with the rationale behind the establishment of a State company. The ongoing relationship between the Government and State companies is likely to break down if this section is not explained much more clearly. It seems to give legislative force to what in practice is the ongoing relationship between the Government and State companies but does it really give it? That is a matter for concern. Again, the staff would be concerned too, in the ordering of the affairs of the company. The staff are entitled to be able to assess the likely impact on them of the operations of the company. We feel the Minister should outline the current proposals of the Government on general forestry policy and particularly his policy on land acquisition, afforestation, the black economy, joint ventures and EC grant aid. For example, in the EC grant aid area if you are going to get a grant from Forestry it is going to be somewhere in the agricultural area. This is a situation where, if you are going to press for EC grants, you take something away from agriculture. What sort of a problem does that present. If you do not get the grants, can you develop along the lines you are proposing with the company, or are the grants a vital aspect of it? These are points which have to be cleared up.

The staff are anxious to know which of the functions currently performed by the Forest Service will in fact be taken over by the company. That does not seem to be too clear to them at this juncture either. The staff request the Minister to give details of the land which he proposes not to transfer to the company. They would be very anxious to get hold of a list of this land which should be included in the Third Schedule to the Bill. There is also concern that section 43 provides guarantees only for the staffs transferred with effect from the vesting day. We assume that the intention is that all stock transferred, whether designated before, on, or after the vesting day, would be subject to guarantees. The staff interpret the section as guaranteeing only the position of staff of this Department who are transferred. The staff side are concerned about the absence of a guarantee for staff who might possibly be transferred from other Departments to the new company. These are areas that have not been cleared yet by discussions with the staff representatives.

I spoke about the financing of the company earlier on, the concern about information there. Again, the staff are concerned about the wide range of powers which will remain with the Minister, set out I think in the Second Schedule, Part II. They would like clarification on which functions the company will be required to perform and which will remain with the residual Department.

These are some of the areas where the staff are concerned and this is largely the part of the Bill I would be concerned about, both sections 21 and 15, because they are interlinked and have this kind of ongoing effect. One is linked into the other in the sense of the effect it is liable to have on the staff and therefore it brings out all the fears of the staff and results in non-acceptance by the unions who are there to represent the staff. There are many areas concerned. The unions feel that staff transferred to the company should be allowed to retain their Civil Service status for a transitional period. If this were done, they tell us, such a provision would allow staff to return to the Civil Service during the transitional period. We do not know whether section 43 will meet this point. It may well meet it, but we are not sure about it and the unions are not sure about it. We would like more explanation. The unions are wondering if this guarantee could be embodied in the legislation.

We welcome the Bill. We are not contemplating voting against the Bill on Second Stage but there are many amendments we would like to see. We will put them down for Committee Stage.

Another problem affecting the staff is the question of the location of the headquarters. Apparently, there is no information about that. We do not know whether the decision about the location is going to be made by the Government or by the board of the new company or who is to make the final decision. There is a great deal of vagueness still there.

The Minister's attention should be drawn to the situation of the staff in Castlebar although I am sure he is well aware of the problems there. Overall, that is the problem about the staff. Most of those who have dealt with the Bill so far have dealt with the question of the actual growing and planting of trees etc. I am largely concerned about how the staff will be treated.

It is interesting to note that at the moment we import about £400 million worth of timber and timber products. I happen to have two brothers working in the timber industry for years and they told me many years ago that many of these products could be replaced by home-grown products. On top of that, the whole question of marketing requires examination and innovating agencies are actually needed to make sure that those substitutions happen. Perhaps there have been some developments in this area over the years but there is a lot more to be done. I am not going to dwell too long on it at this stage. I am mostly concerned about the question of privatisation and the question of worker directors, workers' rights and protection for the staff in so far as they retain their entitlements. They need information all along in the light of present-day developments, for example the rate and pace of change, the way it takes shape and the suddenness with which one finds oneself in the greatest difficulty because initially one did not go into the problem deeply enough, or let it slip by. I do not know how the Dáil is functioning these days but we did not seem to get the fullest possible debate in the Dáil in the sense of going into the nitty-gritty of looking after the staff side of the matter and the question of privatisation. We hope, on Committee Stage, to get more information about it. The Bill is welcome as a general development in the forestry area.

Debate adjourned.

Mr. J. O'Toole

Is it proposed that we take the worker participation motion at 6.45 p.m.?

Mr. W. Ryan

If the Minister is available at 6.45 p.m.

Sitting suspended at 5.30 p.m. and resumed at 6.45 p.m.