Dáil Éireann Debate, Wednesday - 20 September 2023
746. Deputy Paul Kehoe asked the Minister for Agriculture, Food and the Marine how forestry premiums per hectare per year compare with other farming enterprises; and if he will make a statement on the matter. [39864/23]
View answerThe premium rates in the new Forestry Programme represent the calculation of income foregone from other farm enterprises and an additional amount for forest management and forest-environmental and climate services provided by the forest owner. The relevant rotation period for the mix of tree species was also taken into account so that the income foregone was considered for the rotation period rather than for the period of the premiums. The calculations considered the baseline income from farm enterprises contained in the National Farm Income Surveys in the previous three years in order to determine income foregone. In addition, farmers retain BPS/BISS payments.
The grant and premium calculations were subject to analysis in a Cost Benefit Analysis commissioned by my Department. The analysis showed that for farmers, depending on the forest type chosen, the internal rate of return was between 13.62% and 14.89%, resulting in a significant return from planting forests.
Income is obviously not the only consideration in deciding land use by farmers, but these premiums offer an attractive option to farmers to plant forests as part of their farm enterprise. The National Average Farm Income (average across farm enterprises) in the 2022 survey was €1,009 per hectare. The average premium payment across all forest types under the new programme is €1,003 per hectare, to which the BPS/BISS payment can be added in the majority of cases. I would caution, of course, in using averages, that the income from Dairy Farm Enterprise was an outlier at €2,332 per hectare in the 2022 survey.
The 2022 Farm income Survey presented the following earnings per hectare for different farm enterprises. These earnings include BPS payments.
|
Dairy Farm average per hectare |
€2,332 |
|
Cattle rearing average per hectare |
€301 |
|
Cattle other Farm average per hectare |
€506 |
|
Sheep Farm Average per hectare |
€366 |
|
Tillage Farm Average per hectare |
€1,087 |
This compares with forestry premiums ranging across 12 forest types, from €350 per hectare for emergent forestry, €746 per hectare for mixed high forests with mainly spruce, €1,103 per hectare for Native forests and €1,142 per hectare for forests for water. These rates do not include any BPS or BISS payments that might also be payable. Nor do they include the significant tax free income arising from thinning and harvesting.
