Caution on selling timber rights
In an article published on the Farming Independent, written by Claire McCormack, Private forest owners and their families have been warned to “exercise caution” about selling harvesting rights to their woodlands.
The caution from Irish Forest Owners (IFO) – a representative body for the majority of forest owner groups in Ireland – comes amid concern that many private forest owners “may not realise the true value” of their asset.
According to the latest prices, the final harvest value of a conifer forest is likely to be in the region of €10,000–€15,000 per acre.
It also follows moves from a number of investment companies that are seeking to buy the harvesting rights from private forest owners – offering a lump sum up front with annual payments until clearfell.
In a statement, Nicholas Sweetman chairperson of the IFO said many landowners have invested in forestry, especially over the last 30 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”.
Harvesting rights 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, adding that “detailed independent legal and taxation advice is vital.”