I thank the Senator for raising this important subject at this time of the year, rather than in September or October. It is my aim to meet everybody throughout the country to hear his or her point of view. The price of timber is very solid and the future for the industry is very strong, and not just from an exporting point of view.
A large number of people are interested in getting involved in woodchipping. It is crucial that the right number of hectares are planted on a continuous yearly basis to ensure people who become involved with new enterprises have access to supplies. I was informed yesterday that the price of ash has increased from €60 to €90 a tonne for thinnings. I am happy to tell the Senator that I have been bundled with figures for the past number of months. I will give him the facts. I am delighted to tell him there has been a massive increase in applications from farmers over the past two months and I have no doubt we will meet the target of 7,000 ha.
The area of the national forest estate in Ireland is some 752,000 ha, or nearly 11% of the total land area. This has expanded significantly since the mid-1980s, with the introduction of grant schemes aimed at encouraging private landowners, mainly farmers, to become involved in forestry. Of the national forest estate, 53% of forest cover is in public ownership through Coillte Teoranta while the remaining 47% is in private ownership. This contrasts with the position 25 years ago when over 75% was in public ownership with 25% in private ownership. There are over 16,000 plantations now owned privately, predominantly by farmers.
Farmers undertake the bulk of new planting and an increasing number of them are viewing forestry as a realistic land use option. The establishment grant covering the entire initial cost of planting of the trees coupled with an annual tax-free premium of up to €715 per hectare for up to 20 years has become a very attractive option for farmers many of whom, traditionally, would have been reluctant to plant trees on agricultural land. While the Senator points out that the number of applications for approval was down in volume in 2011, it should be highlighted that there has been a substantial increase in the volume of applications in the first two months of 2012. I am delighted to say there has been a 57% increase in the area for which technical approval for afforestation has been sought in comparison to the same two months in 2011. I was also encouraged to note that at the recent Teagasc forestry clinics around the country there was a strong interest shown by landowners in the possibility of planting some land. I look forward to a continuation of this interest throughout the rest of the year.
Forestry is one of a number of land-use options open to farmers and the reasons for fluctuation in the level of interest for the schemes are many and varied. The relative attractiveness of other schemes and agricultural enterprises play a major role in a farmer's decision to plant. Increasing commodity prices and rising farm incomes in competing agricultural activities can impact on the level of interest in forestry. Forestry is a voluntary scheme and decisions made by individual landowners and farmers are determined by their individual circumstances and choices. In spite of all the competing land use options, there remains a healthy interest in forestry among farmers and landowners.
The Senator made reference to changes made by my Department that have excluded areas from forestry. In this regard, he specifically referred to the limitations in regard to the use of unenclosed land. The decision to restrict afforestation on unenclosed land was taken for environmental and economic reasons. The Department has a legal obligation to ensure that any forestry operation which is licensed or approved by it does not adversely impact on the environment.
While the Department accepts the various issues around the planting of unenclosed land, there is also the reality that some enclosed land parcels may have a portion of unenclosed land associated and integrated into the overall land area. In these cases the Department allows an integrated project of enclosed and unenclosed land as long as the unenclosed land does not exceed 20% of the project area.
To set the record straight, the issue of unenclosed land is not holding back the levels of afforestation in 2012. Already for this year's planting programme, my Department has issued a total of 4,760 ha in financial approvals. With new applications received by my Department of 3,120 ha for just the first two months of this year, up 57% on last year, I am confident that approximately 7,000 ha will be afforested.
There is a wider issue of whether we should, from a scientific viewpoint, re-examine the area of peatlands and unenclosed land to ensure that our policy is based on the most up to date scientific, environmental and economic rationale. Let me start by outlining the current policy. One of the main reasons the Department does not allow planting levels of unenclosed land above the 20% limit is due to the fact that development of large areas of unenclosed lands has a potential to pose a threat to the environment.
Unenclosed land can contain ecologically important wildlife habitats and species. In the context of water quality, the EU water framework directive requires EU member states to achieve good status in all waters by 2015 and must ensure that this status does not deteriorate. Future afforestation must take account of the potential impact on water quality over the full life cycle of the forest from planting to harvesting. The risk of fire damage to forests located on unenclosed land is greater than on enclosed land. It is my intention to do what I can to ensure whatever action can be taken to prevent such major outbreaks in the future.
Unenclosed land can be nutrient poor, requiring at least one application of phosphate fertiliser. The requirement for fertiliser on these sites has the potential to poses significant environmental risks, especially to adjacent aquatic habitats and species, such as the freshwater pearl mussel. That being said, there may be instances where portions of unenclosed land may produce good yields of timber and be afforested with minimal risk to the environment.
As we all can agree, the Department must use limited funding to provide grants for afforestation of land that is environmentally and economically suitable for forestry. Therefore, a working group will be established shortly by my Department to examine the future management of existing forests on peatlands. It will also be examining the afforestation options with regard to unenclosed land. The priority must be to ensure that limited financial resources are targeted towards lands that provide the best value for money with a view to expanding the forest estate to ensure they can be sustainably and economically managed in the future. My Department will continue to promote afforestation to landowners as an economically attractive land use option which will reward them and their families for generations to come.