Everyone at Green Belt would like to wish you all a very happy, healthy and sustainable 2020.

We look forward to working with you in 2020 and beyond.

The McKinnon report, commissioned by the Department of Agriculture, has been published. It focuses on the Application Approval Process for Afforestation in Ireland. A similar report was published on the Scottish afforestation program and approvals and it has resulted in a significant increase in approvals and planting rates across Scotland. All these approvals are in line with environmental and ecological conditions and the forestry industry in Ireland is encouraged that the report into Irish approvals will have a similar impact. Recently, there has been a significant slow down and in some cases halt, to afforestation approvals in Ireland. There are numerous factors behind this scenario but the industry has come together to campaign strongly to overcome these issues. The industry, through its representative body Forest Industries Ireland , will continue to apply all the pressure necessary on the Minister and his department to make sure a vibrant, profitable and necessary industry is given the full opportunity to continue to succeed. The McKinnon report is below.

There is much talk about the issues surrounding climate change and global carbon emissions. Many solutions are discussed and promoted, but one that is consistently, and one close to our hearts, lauded as a very real and tangible option is forestry. There are many opinions regarding forestry and native planting of woodlands versus commercial forestry - when in fact there is room for both. Each species sequesters at different rates which varies over time and soil conditions among numerous other factors. Simply put - forestry is an effective sequester of carbon and it is retained in the materials produced from harvesting the timber - take CLT in construction for example. It is offsetting the use of concrete and fossil fuels and "...and sequester massive amounts of carbon by tying up the wood in buildings for decades or even longer, perhaps in perpetuity."

Other large carbon producers (???) such as airlines Ryanair and Easyjet and fuel company Shell are taking the impact of forestry into their carbon accounting suite. Each of these have recently launched various versions of forestry initiatives to offset the carbon they produce, in tandem with other activities.

Shell, for example, have a target to reduce their net carbon footprint by 2 - 3% by 2022 (a 3 year plan). This includes planting 5 million trees over the next 12 years, and includes replacing diseased Ash trees, a reforestation project in Spain and an 800 hectare endangered forest regeneration project in Queensland, Australia.

Ryanair have promised to help in the replanting of the Monchique area in the Algarve in Portugal and have already donated €250,000 to the cause - monies raised by the company and their customers.

similarly, Easyjet are seeking to become Zero Carbon and have committed to investing £25 million in 2020 in forestry, renewable and community based projects.

While these ventures may not solve the issues and the crisis, it is certainly an improvement on the attitudes of many and can only help highlight the plight facing us.

I'd like to acknowledge @eleanormharris who provided some of the links here via a twitter thread.

Ireland has an obligation to address it carbon footprint. One of the best ways to achieve this, is to plant tree's. A mixed and diverse selection of softwoods and hardwoods will capture and retain carbon for generations, even in the material that is ultimately produced from these woodlands. As part of the country's commitments to reduce carbon, we need to consider so many aspects of the way we carry out our lives and business. Considering the use of Cross Laminate Timber (CLT) in the construction trade to replace the heavy dependency on concrete is a realistic, attractive, viable and cost saving alternative - and a wonderful way to improve the private forestry market in Ireland. Please see related editorial featuring in the Farmers Journal next week. And to understand the life cycle of forestry in brief, you can watch this short video.

A report commissioned by Minister Andrew Doyle into the socio economic impacts of forestry on the county. The full report can be downloaded here, but some of the most salient points, as highlighted by UCD’s Dr Áine Ní Dhubháin and her associates are: 1. The agricultural land use in County Leitrim is primarily grassland which is found on poorly drained soils of low fertility. Many of farms in the county are likely to include High Nature Value (HNV) farmland.

Кожна людина має власний ритм навчання, уподобання і цілі — для когось важлива бізнес-лексика, а для когось актуальніша мова подорожей. Саме тому стандартні групові заняття не завжди дають бажаний результат. Альтернативою є індивідуальні уроки англійської, що адаптуються під конкретні потреби учня. Такий підхід дозволяє викладачу гнучко змінювати темп, акценти та методи залежно від прогресу. Крім того, персональний формат сприяє глибшому опрацюванню складних тем, зменшенню стресу та формуванню довіри між учнем і викладачем. Це особливо корисно для тих, хто хоче досягти результату у стислі терміни або готується до конкретної події, наприклад, співбесіди чи іспиту.

2. The percentage forest cover in Co. Leitrim in 2017 was 18.9%. This is the highest percentage forest cover among all counties and is substantially higher than the national level of 11.0%. Sitka spruce is the dominant species in the forests in the county, accounting for 61.3% of the total forest area. This is higher than the national figure of 51.0%. Native species account for 30.7% of the forest area in the county.
3. The growth rates of trees in the county are high; for Sitka spruce in private stands growth rates are estimated to be 20% higher than the average in private stands nationally.
4. One of the main aims of Government policy with respect to forestry is to expand the percentage forest cover in the entire country. It is currently 11% and the aim is to reach 18% nationally by the year 2046. Incentives in the form of establishment grants and annual premiums have been available to landowners since 1990 and higher premium payments have traditionally been available to farmers to encourage greater rates of farmer participation in afforestation. This situation changed in 2014, when farmers and non-farmers were deemed eligible for the same rate of premium payment for the first time.
5. An earlier study of forestry and land use in Co. Leitrim, the Leitrim Resource study, conducted in the 1970s, identified the potential of the land in the county for forestry. It also identified a very strong resistance amongst farmers in the county to selling land for afforestation. At the time afforestation was almost exclusively carried out by the State.
6. To find out more about the owners of forests in Co. Leitrim, a survey of a sample of owners was conducted as part of this study. The main findings are:  **Just over two-thirds of owners of forests in Co. Leitrim had planted forests on their own land;  Twenty-six percent were investors (i.e. they bought land/forest purposely for investment);  Five percent had inherited their forest;  Just over 30% of the forest owners were not resident in Co. Leitrim (half of these were from neighbouring counties);  The average size of an individual forest plot was 6.92 hectares. Forty percent had planted more than one plot. The average total area planted per owner was 14.0 hectares.  Seventy-five percent of owners were farmers (full-time, part-time and retired). **
7. The social impacts of forestry were addressed using qualitative research methods. The aim was not to achieve a demographically balanced and representative sample of the opinions of the population of Co. Leitrim, but instead to understand the range of opinions held by people regarding forestry in the county. The main source of the information came from interviews held with 23 interviewees who were selected purposively to capture a range of opinions. Information from a survey of forest owners and voluntary written submissions provided additional information. The issues that emerged from the interviews were later grouped into themes. The major themes include those relating to forestry as a land use, forestry’s role in the community, and forest policy. A strong divergence of opinion was noted for most of the themes.
8. The economic impact of forestry for Co. Leitrim (and the associated employment) was assessed. A base year of 2017 was chosen. The analysis estimated that a total of 50.3 full-time equivalent (FTE) jobs were generated for Leitrim residents as a result of forestry activity in the county in that year; a further 25.0 FTE jobs were generated for non-Leitrim residents. An additional 76.0 Co. Leitrim residents had employment in forestry outside of the county. Thus a total of 151.3 FTE jobs were generated as a result of forestry activity in Co. Leitrim in 2017. Wood processing in the county generated a further 158.0 full-time equivalents, half of whom were residents of Co. Leitrim. Thus,** in total 309.3 FTE jobs were associated with forestry/wood processing in Co. Leitrim in 2017.**
9. An estimate of the direct economic activity associated with forestry in Co. Leitrim in 2017 is €15.0 million. The economic activity associated with wood processing is €11.5 million in 2017, giving a **total of €26.5 million economic activity associated with forestry/wood processing in 2017 in Co. Leitrim. **
10. A comparative assessment of the relativity of forestry and farm incomes was undertaken, using a micro-simulation modelling approach and discounted cashflow analysis. Based on this approach, the estimated overall percentage of farms in Co. Leitrim where the return from forestry (on a per hectare basis) would be higher than that from agriculture is 67%.

11. The total carbon stock in Co. Leitrim forests is estimated to be 12,606,000 tonnes.

12. Several Coillte-owned, recreation forests are located in Co. Leitrim, but visitor numbers to these are not available. Private forests are generally not available for public recreation. Our survey of forest owners indicated that some used their forests for recreation. A small percentage (16%) said they allowed others to recreate in their forests.
13. Available data on the biodiversity associated with forestry in Co. Leitrim is limited. The forest owners surveyed indicated that the following tree species were found in their forests: alder, ash, birch, oak, rowan, sycamore, beech, larch, Sitka spruce, Norway spruce, lodgepole pine, western red cedar, “cypress” and Douglas fir. Sitka spruce was by far the dominant species. The survey of forest owners also provided some information about the fauna within private forests. Forest owners reported sighting a variety of animal and bird species in their forest, most commonly rabbit/hares, badgers and pine martens.
14. Forests can have negative and positive effects on water quality. Water monitoring data from Co. Leitrim indicated that 36 water bodies have been identified as being at risk of not meeting their Water Framework Directive (WFD) status objectives. The most significant pressure leading to this “at risk” status is agriculture, accounting for 42.9% of the at-risk water bodies. Hydromorphology (16.3%), forestry (14.3%), invasive species (8.2%), anthropogenic pressures (6.1%), industry (4.1%), urban waste water (4.1%), urban run-off (2%) and extractive industries (2%) are also identified as significant pressures. Within the WFD, some water bodies are classified as having a high ecological status. Of the eight high status objective waterbodies in Co. Leitrim four are at risk and four are not at risk. Agriculture has been defined as the sole significant pressure for two of the sites, with peat (extractive industry) identified along with agriculture for another waterbody. The fourth waterbody has hydromorphology listed as a sole significant pressure. Hydromorphology includes sediment/drainage issues and thus may be a pressure as a result of forestry land use.
15. Since 1989, a condition for receipt of grant-aid for afforestation has been the compatibility of forestry development with the protection of the environment. Guidelines, which are now Regulations, were introduced in 1992 and were further expanded and replaced by Environmental Regulations with respect to Afforestation in 2016. The Regulations are extensive, but a key element is setbacks (or buffers in earlier versions). From 1992, forests had to be set back from public roads, houses, rivers and archaeological features. Setback distances have been expanded a number of times.
16. Since 2000, the issuing of felling licences was accompanied by the condition that the felling and planting that took place should be in accordance with the Guidelines that applied at the time. This implies that second (or more) rotation forests established since 2000 should have complied with the setback (buffer) distances specified in the guidelines at that time.
17. Inspections are carried out by Forest Service District Inspectors (DIs) to ensure compliance with regulations. All applications for afforestation licences are desk assessed by DIs. An estimated 61% of afforestation sites were visited in 2018 in advance of an afforestation licence being issued; a similar percentage was field inspected after stand establishment in that year and a slightly higher percentage, i.e. 67%, was field inspected before the final grant payment was made. Inspection rates for forests in Co. Leitrim are similar to these national rates. Field inspection rates for felling licences are much lower; nationally, 19% of all applications for felling licences in 2018 were field inspected by DIs. Inspection rates for felling licences in Co. Leitrim were lower than the average. The county has the second highest number of applications for felling licences.
18. Since the Forestry Appeals Committee (FAC) was established in 2018, a total of 189 appeals have been submitted to it, 25% of these relate to Co. Leitrim. All bar one were third party appeals. With respect to afforestation appeals that have been heard to date, the decision in the majority of cases has been to uphold the decision of the Minister to grant the afforestation licence. For almost one third of the appeals, the FAC varied the conditions of the licence. Of the four decisions to date to cancel the granting of licences, one of these was a successful appeal made by an applicant against a decision not to grant an afforestation licence.

Коли потрібно швидко підвищити рівень англійської до прийнятного рівня — для поїздки, роботи або термінового проєкту — класичні програми часто не підходять. У таких ситуаціях оптимальним рішенням є інтенсивний курс англійської, розрахований на короткий проміжок часу. Заняття відбуваються регулярно, з високою частотою, і охоплюють ключові аспекти: граматику, розмовну практику, лексику. Такий формат дозволяє зануритися в мову повністю, що сприяє кращому запам’ятовуванню та впевненості в спілкуванні. Програма підходить як для новачків, так і для тих, хто хоче швидко відновити навички після перерви. Головне — мотивація та готовність працювати інтенсивно протягом визначеного періоду.

As the fallout from the sale of the Irish Forestry funds to AXA IM continues, the damage being caused by reckless commentary from the vendors of that fund is highly frustrating and downright unacceptable. The person quoted in the articles has seen fit to strike a blow to the very heart of the industry, in what appears to be a vain attempt to rescue their own reputation.

Green Belt have been the pioneers in Irish forestry since 1982, with all others in the private estate following. While there are very good foresters and companies across the industry, and the private estate being in a position to thrive, such broad, overwhelmingly destructive comments damage the hard work and integrity of those in the industry.

We will not make comment on the activities of the IFS fund managers but would like to address the concerns some may have about investing into Irish forestry and those who might be considering our FACT initiative - www.fact.ie

FACT 1 - FACT is a limited company owned by the shareholders; FACT 2 - Any decisions around the sale of the initiative would need to be rubber stamped by at least 67% of shareholders; FACT 3 - FACT will acquire semi mature forestry across Ireland; FACT 4 - These forests will undergo rigorous due diligence; FACT 5 - the management fee's are set out from the beginning and are mainly activity based; FACT 6 - All folios and maps are open for viewing and confirmation; FACT 7 - Returns are realistically targeting 5% per annum compounding over the 10 year term.

Forestry in Ireland plays an extremely important role in rural communities and provides excellent social, environmental and economic opportunities to the country as a whole. Regardless of your opinions of particular species, the reality is that Ireland is failing badly to reach its climate change targets and one of the best ways to address this is to plant forests and manage forestry sustainably, now and into the future.

So, for those exploring forestry for the first time, do not be put off by the bad news stories you are reading. Take time to find the company or partner that works best with you.

We look forward to meeting you.

At recent 'Talking Timber' events hosted by Teagasc, tax consultants spoke about the tax treatment around forestry - sales of forestry and timber.

Here is the link to those videos.

When you decide your route into forestry establishment or investment, please let us know and we will guide you through the process every step of the way.

In an article published by the FT (below), there are really interesting comments and projections affecting institutional investment decisions. These decisions are the basis for private investment (in my opinion) and the recommendations from some of the experts quoted below really point to diversity, security and less risk exposure. Hardly surprising we thought of forestry immediately. If you haven’t already thought of Forestry investment, then please check www.fact.ie or the document attached. Article with thanks to Chris Flood from the FT

A quarter of the bonds issued by governments and companies worldwide are currently trading at negative yields — which means that $14tn of outstanding debt is being paid for by creditors in a bizarre reversal of normal practice.

Negative yields have forced long-term institutional investors, such as pension schemes and insurance companies, to make unprecedented changes to their asset allocation mix because sovereign bonds can no longer deliver the returns needed to meet the promises made to retirement savers.

Negative bond yields are a direct result of the vast asset purchase schemes introduced by central banks to stave off a worldwide economic slump after the financial crisis.

Quantitative easing programmes were intended as emergency measures that would be withdrawn once it was clear that a sustainable economic recovery had begun.

But with the trade war between the US and China slowly suffocating global economic growth, central banks have embarked on a fresh round of liquidity measures to try to prevent a recession.

© (FT) The Federal Reserve cut US interest rates on Wednesday for the first time in more than a decade, a change that the European Central Bank is expected to follow next month.

Speculation is also building that the ECB will restart its bond-buying programme before the end of the year to try to stimulate economic growth in a moribund eurozone.

As a result, the challenges presented by negative bond yields are set to intensify.

Torsten Slok, chief US economist at Deutsche Bank, says interest rate cuts by the Fed and moves to ease monetary conditions in Europe, China and Japan will drive pension funds and insurance companies to hunt for better yields in riskier assets.

This could be a dangerous course of action, he warns.

Many pension funds and insurance companies increased their holdings of corporate credit, equities and structured products, as well as alternatives including private equity and real estate, after the 2007-08 financial crisis.

Mr Slok fears that some of these investors have been lulled into a false sense of security as reductions in US Treasury yields over the past decade were accompanied by strong gains for equities and a tightening in the spread (gap) between yields on corporate bonds and government debt.

“This correlation only worked because the US economy did not fall into a recession. But if interest rates are going down because there is likely to be a sharp slowdown in global economic activity or even a recession, then it does not make sense for pension funds to buy more risky assets,” he says.

Torsten Slok warns against the false sense of security some pension funds and insurers have fallen into previously The Fed’s monetary policy shift has led to an inversion in the US yield curve (where short-term interest rates are lower than long-term rates), a historical warning sign that the economy could move into recession.

“The Fed will have to quickly resort to unconventional monetary policy, notably QE, if the economic outlook turns sour,” says Silvia Dall’Angelo, senior economist at Hermes, the London investment manager.

Worries that a recession is looming are widely shared by investors. A poll of more than 400 clients conducted by Barclays in June found that half thought a global recession would start before the end of next year. The other half did not expect it until 2021 or later.

Rick Rieder, global chief investment officer of fixed income at BlackRock, says that although a US recession over the next couple of years is possible, the Fed could respond by cutting interest rates to zero and reigniting QE.

Mr Rieder says it is “difficult to see a change” in the established trend for pension funds and insurance companies to take on more credit risk and to increase their exposures to alternatives, given the shift by the Fed, ECB and central bankers in emerging markets to relax monetary policy to support economic growth.

QE programmes and a decade of ultra-low interest rates have inflated stock markets worldwide. The S&P 500, the main US equity benchmark, hit an all-time high in late July, up 347 per cent from its post-crisis nadir in March 2009.

Strong gains for stock markets over the past decade have helped many US pension schemes to narrow the funding gaps between assets and liabilities.

Mr Rieder says many US pension funds would like to buy more bonds to extinguish their liability stream but this has become difficult because of low interest rates.

“Pension funds can’t match their liabilities with where rates are today so they have to hope that equity markets will continue to rally,” he says.

At the same time, US companies are deleveraging, which has shrunk the supply of new corporate debt, leading to a dearth of investment-grade issuance. Net supply from municipal borrowers, another vital source of new issuance, has also turned negative so there is not enough available for pension funds and insurers to buy.

© (FT) US 10-year Treasury yields have dropped from 3.24 per cent in early November 2018 to 1.88 per cent following the Fed’s rate cut.

These reductions in US interest rates will increase the funding gaps faced by many US public pension plans.

Greg Tell, head of fixed income specialists at JPMorgan Asset Management, says pension schemes can counter these problems by increasing their holdings in high quality, long-duration bonds that tend to do well when interest rates fall and growth slows.

Such bonds include US Treasury STRIPs, investment-grade bonds issued by non-cyclical companies, along with high-quality credits including commercial mortgage-backed securities issued by government-supported agencies such as Freddie Mac and Fannie Mae.

Life insurance companies with long-dated liabilities can pick similar high-quality bonds that tend to do well in an economic slowdown along with short-dated securitised consumer credit as the US consumer sector has benefited significantly from low interest rates, says Mr Tell.

The Bank of England could also be forced to cut interest rates to support the UK economy in the event of a no-deal Brexit.

Steve Turner, a partner at Mercer, the investment consultant, says declines in 10-year gilt yields, which have fallen from 1.7 per cent in late September 2018 to just 0.55 per cent, have led to a deterioration in the funding position of pension schemes, depending on their level of liability hedging.

He warns that corporate pension schemes that do not already have robust hedges (protection plans) against unexpected changes in interest rates and inflation should consider increasing gilt holdings before yields possibly fall further. A fresh drop would create bigger deficit problems at a time when cash flows at their parent companies are under pressure because of the slowdown in the global economy and the uncertainty over Brexit.

“I am encouraging defined benefit corporate pension clients that do not have high hedge ratios — at least 80 per cent of their funded liabilities — to maximise the level of hedging that they can afford to do before yields fall further. Trustees should think about protecting funding positions as many parent companies are already trying to minimise how much they pay into their pension schemes, preferring to invest in technology, research and development to strengthen their businesses,” he says.

Bonds account for more than half (54 per cent on average) of the assets held by UK pension schemes, according to Mercer’s 2019 European asset allocation survey. Hedging ratios vary widely by scheme but just over half of the 876 European pension plans surveyed by Mercer have hedging ratios of 80 per cent or more in place this year.

Jos Vermeulen, head of solution design at Insight Investment, says most UK DB pension schemes are well funded, unlike five years ago. Increases in hedge ratios should also offset any further downwards shifts in interest rates.

“Movements in interest rates have less of an impact now on the funding position of DB funds in the UK,” says Mr Vermeulen.

Central banks look determined to prolong QE’s sugar rush to financial markets but that can only mean that the $14tn headache caused by negative rates for pension funds and insurance companies will remain unresolved for the foreseeable future.

Green Belt is delighted to see the DAFM publish forestry statistics for 2019

Annual Forest Sector Statistics The Forest Service has the responsibility for the collection and publication of forest statistics. An annual forest statistics report had been published by the state since its foundation up to 1988, but was discontinued thereafter. This publication reinstates annual reporting on the forest estate and forest industry and brings together previously published and new statistics into a single publication.

https://www.agriculture.gov.ie/forestservice/forestservicegeneralinformation/foreststatisticsandmapping/annualforestsectorstatistics/