Producer group field event prior to the present lockdown
The Irish Forest Owners (IFO), a representative body for the majority of forest owner groups in Ireland, has warned private forest owners and their families to exercise caution about selling harvesting rights to their woodlands. On today’s prices, the final harvest value of a conifer forest is likely to be in the region of €10,000–€15,000 per acre and the IFO is concerned that many private forest owners may not realise the true value of their asset.
A number of Investment companies are seeking to buy the harvesting rights from private forest owners, offering a lump sum up front with annual payments until clearfell.
Chairperson of the IFO, Nicholas Sweetman, said “many landowners have invested in forestry, especially over the last thirty years. Owners should be cautious of relinquishing the value of their timber mid-way through the life cycle of their trees. They should not become sharecroppers on their own land.”
“It is of particular concern that these companies are cherry-picking softwood plantations that have recently come out of premium payments and that the owners are not being offered the true value of their forest,” he said.
The IFO is recommending that any forest owner considering these offers gets a valuation of their forest from an independent expert.
“Forest owners can also benefit from information and support from their local forest owners group, as well as independent advice from their local Teagasc Office”.
Forest owners also need to carefully consider the tax implications of selling their harvesting rights. At present, there is a favourable tax regime for forest owners for profits relating to forestry and for the transfer of forestry to the next generation.
“It is possible that relinquishing harvesting rights may have unforeseen adverse tax implications for the landowner and their family,” he said. “Detailed independent legal and taxation advice is vital.”
The IFO will resist any move to place the future of private forestry in Ireland in the hands of a few investment funds.