The application for higher forestry incentives submitted to the European Commission last year included a provision allowing for review of the rates at three yearly intervals. Such reviews provide a better safeguard in maintaining the value of the forest premium for farmers and other beneficiaries. For example, had last year's application been based on indexation the level of increase would have been about 6% compared to the average of 30% actually achieved and announced by me last March. The rationale behind the premium is to compensate farmers for the income loss in changing from farming to forestry.
The application also proposed increased premium levels for those who planted in earlier years under Council regulation 2090/82, but it did not prove possible to secure increases in the negotiations which were concluded last March. I indicated at that time that, having secured my immediate priority of increasing the incentives for current planting, I would shortly pursue the question of adequate increases for those who planted in earlier years and I have done so. A further proposal was submitted to the Commission in April and the matter has been pursued vigorously by my officials and me in the meantime. I was involved in useful discussions on our proposal with the Commission last month and will be having a further meeting next week. The House can be assured that I will do all in my power to secure satisfactory increased premia for those involved.
In recent years planting levels, while very substantial, have been significantly below target for a variety of reasons. Following two good years in 1995 and 1996 planting fell to a low of 11,403 hectares in 1997. The outturn for 1998 and 1999 was 12,928 hectares and 12,668 hectares respectively. It may be too early yet to say that we have turned the corner in terms of planting with the revised rates expected to have an impact next year.
Additional InformationI am nonetheless pleased that the latest planting forecast for this year is 15,000 hectares. Planting projections for the next five years are in the range of 16,000 to 20,000 hectares. Apart from the impact of higher levels of financial incentives, the provision for increased integration of forestry and REPS, included in the Rural Development Plan 2000-2006, should contribute to reaching those targets. I am in regular contact with the farming bodies and they are fully supportive of my proposals.
