Interaction of forestry with other farm schemes
- Eligibility for forestry premium payments
- Forestry and the Basic Payment Scheme (BPS)
- Forestry and Greening
- Forestry and Early Retirement Scheme (ERS)
- Forestry and Areas of Natural Constraint (ANC)
- Forestry and Agri-Environmental Schemes (incl. GLAS)
- Further information
Forestry is a highly attractive enterprise for many farmers and landowners. The decision to plant is a long-term land use change and consideration of all implications is recommended, including its potential to compliment other farming enterprises and to provide financial, environmental and social benefits. The merits of the forestry option should be explored with family members, including issues such as future objectives and succession planning.
It is strongly recommended that farmers review current and potential gross margins available from current farm enterprise(s) when considering alternatives. Tools such as the Teagasc eProfit Monitor are invaluable in this regard. The Teagasc forestry financial calculator (FIVE) can be used in a complimentary manner to provide indicative returns by comparing forestry planting scenarios. Important indicators include the annualised value of a future timber crop in today’s money, the Annual Equivalent Value. Potential tax benefits and tax planning should also be considered.
A whole farm planning approach requires analysis of how planting land may interact with other important farming issues such as stocking rates and nitrates calculations. The interaction of forestry with other farm schemes is also critical and these interactions are generally well disposed towards forestry. Some of the main issues are summarised below.
Eligibility for forestry premium payments
The Forestry Programme 2014-2020 does not differentiate between ‘farmer’ and ‘non-farmer’ premium rates. Unified forest premiums are available to approved applicants. These enhanced premiums will be paid to compensate for potential income foregone over a 15-year period.
Eligibility criteria still apply in relation to the sale or transfer of pre-2015 plantations. For example, if the owner of a plantation, established at the farmer rate of premium, plans to sell or transfer all or part of his/her planted land during the term of contract (normally 20 years, corresponding to the previous premium payment period), the transferee may be eligible to continue claiming the farmer premium by meeting the criteria for farmer status. This requires either an active herd number in the new owner's name or documentary proof that 25% of income is from farming, as appropriate.
Forestry and the Basic Payment Scheme (BPS)
Under the Direct Payments system, eligible applicants receive a payment under the Basic Payment Scheme (BPS) and Greening. It is a requirement that all BPS applications must be submitted online so ensure you are registered for online application in good time. Read more about the interaction of forestry with the Basic Payment Scheme here:
Forestry and Greening
All farmers eligible for payment under the BPS are subject to greening. However, over 90% of applicants will automatically qualify for the Greening Payment on the basis of their current farming practices (e.g. more than 75% permanent pasture).
In broad terms, it is the arable sector that will have greening obligations. Arable farmers should be aware of their obligations, relevant greening area calculations and should also be aware of any exemptions that may apply in their situations in relation to greening obligations. For example, if an applicant has more than 15 hectares of eligible arable land, 5% of this area must be in Ecological Focus Area (EFA), apart from exempted categories.
Further details on the interaction of Forestry and Greening can be found here: Basic Payment Scheme.
Forestry and Early Retirement Scheme (ERS)
While the Early Retirement Scheme (ERS) is closed, the single category for forest premiums may act as an incentive to retired farmers to plant, particularly where lands they had leased to qualify under the ERS are returned to them.
Forestry and Areas of Natural Constraint
The Disadvantaged Area Scheme (DAS) changed to an Areas of Natural Constraint (ANC) scheme in 2015. This is an annual area payment based on minimum stocking density. The threshold payment area for most farms is 30 hectares (or 34 hectares on mountain land) as per the Disadvantaged Area Scheme.
Planting a forestry plot on a farm holding whose total eligible area is equal to or lower than the threshold (30 or 34 ha) would result in a pro-rata reduction in ANC payment. In the case of holdings above the threshold area, there may be opportunities to maximise ANC payment and also plant some land.
Forestry and Agri-Environmental Schemes (e.g. GLAS)
The Green Low Carbon Agri-Environmental Scheme (GLAS), similar to AEOS, is not a wholefarm scheme. Successful applicants must choose appropriate options, some of which are area-based.
Parcels that are in GLAS cannot be converted to forestry. However, opportunities continue to exist for afforestation and for other forestry schemes on parcels which are not in GLAS. Applicants and their Advisors should look at the opportunities afforded by both schemes when planning for GLAS.
The forestry option has many benefits but it is important that farmers and landowners are fully aware of the implications in advance of informed decision making. For further information, contact your local forestry advisor who will be able to provide you with independent and objective advice.
Regulations may change over time. Before making an application, please check that you have the most recent information.