Can premia be re-started?

Donald Trump

A smallholding is being put up for sale close to me. About 20 acres but half of it in forest. I think a previous owner was just tempted by the premia and the thought of having them there for retirement but sold the place a few years later. Land would have been good land, not marginal, originally. Planted about 15 years ago but not maintained. Has different sections with mix of oak/ash/alder and I think some spruce.



The holding was sold to a developer about 10-12 years ago. Bust came and whatever plans he had in his head for the place were shelved and now it is being sold.


My understanding is that the developer would not have claimed the premia.



Is it possible to restart claiming the premia if a buyer is otherwise qualified? If three years were claimed, would the next year be counted as year 4 or say year 15 if it is 15 years since the first claim?



If the plantations are in bad order, and a buyer would want to just cut them down and try to revert to agricultural use, would there be any restrictions? Do you need a licence/permission to cut them down?
What would typical cost of the reclamation be? (ignoring any income from the timber). How long would it take to revert back to decent land? It would have originally been good grassland. Flat and good soil. Are you talking a year or two? ten years? Or fifty?



If I were interested in buying I would of course get an expert in to tell me a valuation for what is standing. But if he tells me that they aren't worth much and will never be worth much, I'd just need to consider what it would cost to get them out of there. Or would it be an option to cut them down and restart again, this time claiming premia?

tabby aspreme

If the trees are removed, the initial planting grant and any premia paid, would have to be paid back , by who ever owns it at the time of removal.

Donald Trump

tabby aspreme wrote: »

If the trees are removed, the initial planting grant and any premia paid, would have to be paid back , by who ever owns it at the time of removal.

Ah. Very useful information. Thanks. Do you know what the typical timeframe would be that you'd have to leave them? I'm guessing though that schemes and conditions changed over the years


What about diseased trees? I heard that the ash trees were affected by the ash dieback disease

Donald Trump

This document says previous owner is liable under this particular scheme

https://www.teagasc.ie/media/website/crops/forestry/grants/AfforestationSchemeEd2190315.pdf


Page 20:

vii. If a new owner is not willing to participate in the Scheme, or is unwilling to give an undertaking to protect and maintain the forest in accordance with the Scheme, the previous owner will be liable for repayment of all grants and premiums previously paid under the Scheme in respect of the afforested land.

tabby aspreme

There is no time limit, once it's planted it has to stay planted, or repay the money.
The ash dieback reconstitution scheme is no longer in place, if there are ash in the wood they can be replaced using the woodland improvement scheme, I think.
Planting grants and 3 years premia would amount to approximately €2000 / acre for deciduous trees, if the establishment grant and 4th year premium was claimed then around €2800 / acre would have to be repaid

Donald Trump

tabby aspreme wrote: »

There is no time limit, once it's planted it has to stay planted, or repay the money.
The ash dieback reconstitution scheme is no longer in place, if there are ash in the wood they can be replaced using the woodland improvement scheme, I think.
Planting grants and 3 years premia would amount to approximately €2000 / acre for deciduous trees, if the establishment grant and 4th year premium was claimed then around €2800 / acre would have to be repaid

So that means that even if you kept the trees to maturity and clearfelled, you'd have to replant with forestry? That would have to be in the legal documents I'm guessing that come with the sale? What I mean is that if someone purchased it, without it being in the documents, they'd still be liable? In this case, the current seller is not the original owner and I don't think claimed premia or bothered with the trees at all.


:eek:


The issue is that the plantation was never maintained as I understand it. No thinning or maintenance. At least not in the last 10 years.


Sounds like it could be an expensive headache!

tabby aspreme

Donald Trump wrote: »

This document says previous owner is liable under this particular scheme

https://www.teagasc.ie/media/website/crops/forestry/grants/AfforestationSchemeEd2190315.pdf


Page 20:

As the land you are interested in was planted before 2014 , I would check the older regulations

tabby aspreme

Donald Trump wrote: »

So that means that even if you kept the trees to maturity and clearfelled, you'd have to replant with forestry? That would have to be in the legal documents I'm guessing that come with the sale?


:eek:


The issue is that the plantation was never maintained as I understand it. No thinning or maintenance. At least not in the last 10 years.


Sounds like it could be an expensive headache!

Thinning would not take place before year 12 to 14 in most cases, with oak even longer, sounds like a nice project for someone with an interest in forestry

Donald Trump

Great. Thanks for all the help/info. I appreciate it.

If I am interested to proceed, I'll have to get a forester in to do an assessment and advise

Donald Trump

tabby aspreme wrote: »

As the land you are interested in was planted before 2014 , I would check the older regulations

This one for "pre-2015" says the same thing. But my guess is that the actual contracts would override


https://www.teagasc.ie/media/website/crops/forestry/grants/Change-of-Ownership-pre-2015.pdf


paragraph 2 on page 2

Solicitors dealing with sale or transfer of ownership should be informed of the terms of the scheme. It is very important that any Solicitor drawing up a contract for sale of lands on which forestry grant was paid takes account of the provisions of the Scheme, especially that if the buyer does not take over participation in the Scheme, all grants and premiums already paid from the date of planting must be repaid to the Department by the previous owner . See also paragraph 12.4 of this Guide.

I wonder what would happen though if a person was selling their plantation to a new owner. The new owner indicated that they were willing to continue but a few years later changed their mind..........seems like a big risk to the original owner!



My guess is that in this case, as there has been an intermediate owner who didn't seem to have any interest in the trees and just bought the land, there is a chance that this might have been already taken care of with the previous transfer.

timfromtang

Donald Trump wrote: »

Great. Thanks for all the help/info. I appreciate it.

If I am interested to proceed, I'll have to get a forester in to do an assessment and advise

Howdy Donald,
Sounds like a nice job for a hands on lad to me.



I'd be using my forester to answer questions regarding department regulations, regarding premiums, paybacks, replanting after clearing etc.
for example....
You can be well paid for your time if you undertake a first thinning operation yourself with a saw on the ground, you claim the grant, and you get to sell all of the wood, i.e. you do all the work and get nearly all the money (your forester is gonna want a little cream you can be sure)

Broadleaf forests will regrow on their own after harvesting if the felling is done correctly, tis called "natural regeneration" and since self set trees have a better root to shoot ratio it results in a healthier more windfirm forest second time round if managed correctly.


Id be using my forester to answer questions regarding what treatments the crop needs to maximise yield and fulfil my objectives.


At the heart of it are your objectives for the forest, you may not yet have a clear idea of what these objectives may be,



I'd be using my imagination and a bit of self education to determine these objectives.



I'd suggest have a wikipedia read on each of the species you know are growing on the site, what are they used for, who wants what species, etc



I use the larch (planted as a nurse and removed at thinning) we grow here to make fence posts, and as fuel for cooking the charcoal we produce for example.


Ash is easily sold as firewood, most profitably when its "cracking dry" if you sell cracking dry ash you will have loyal customers who will pay good prices for your wood. A poly tunnel is an effective and cheap way to dry firewood to cracking dry in one season, I'd suggest winter felling, and processing and stacking in the tunnel in spring, for sale the following september october.


Perhaps you'd like to build a pretty wooden shack in a pretty section of the forest and rent it out on airbnb?


To sum up,
I suggest that ultimately the utility of any stand of trees comes down to what the trees can be used for, that production from such a forest can be managed on a continuous cover basis potentially indefinitely, and that grants and other bollox are just a distraction from what forestry is FOR!
Its about growing trees and producing other secondary and tertiary outputs and benefits from sections of managed woodland.


tim

accidental forester

Hi Donald,

Paragraph 17.3 of the previously mentioned Teagasc document alludes to a new owner being able to pick up the premiums where they left off. If the parcel was in fact planted 15+ years ago, it would have been under one of the older schemes that generally ran for 20 years if you can qualify as a farmer or revert to 15 years if you don't. Still worth looking into.

Another item of possible interest is that after 10 years, you can no longer buy your way out of the scheme. I can't find it in the 2014 rules but believe its enshrined in the 1946 Forestry Act. If the premiums ceased after year 3, you may still be within the window if they are counting the years by premiums paid.

Regarding where the requirement to replant comes into play; it will be one of the conditions of the required felling license. The penalties for not doing so are punitive although I have never come across any reference to an attempted, much less a successful prosecution.

I would have to second Tim's mail, It sounds like a potentially valuable asset. Even if unmanaged for the last number of years, given some time and energy, you can knock it back into shape if you enjoy that kind of work. We bought an unmanaged chunk of largely sitka five years ago and have made major headway bringing it somewhat under control (no thanks to two hurricanes). I would have to suggest that if you do plan to work it yourself, the closer it is to your base the better.

Donald Trump

accidental forester wrote: »

Hi Donald,

Paragraph 17.3 of the previously mentioned Teagasc document alludes to a new owner being able to pick up the premiums where they left off. If the parcel was in fact planted 15+ years ago, it would have been under one of the older schemes that generally ran for 20 years if you can qualify as a farmer or revert to 15 years if you don't. Still worth looking into.

Another item of possible interest is that after 10 years, you can no longer buy your way out of the scheme. I can't find it in the 2014 rules but believe its enshrined in the 1946 Forestry Act. If the premiums ceased after year 3, you may still be within the window if they are counting the years by premiums paid.

Regarding where the requirement to replant comes into play; it will be one of the conditions of the required felling license. The penalties for not doing so are punitive although I have never come across any reference to an attempted, much less a successful prosecution.

I would have to second Tim's mail, It sounds like a potentially valuable asset. Even if unmanaged for the last number of years, given some time and energy, you can knock it back into shape if you enjoy that kind of work. We bought an unmanaged chunk of largely sitka five years ago and have made major headway bringing it somewhat under control (no thanks to two hurricanes). I would have to suggest that if you do plan to work it yourself, the closer it is to your base the better.

I don't think I'd qualify as a farmer. At least not right off. Not sure whether I could "convert" to one later if I got the necessary in order. I presume herd number etc. would be needed. My family have land but I don't. I don't have green cert or anything like that. Would do it if I thought it would be worth it.



I will have to find out the details as regards planting date etc. I am guessing the vendor would have to provide these, but if not, I would guess there would be some method to find out in advance. Although maybe I could not find out under data protection!


The question of "value" is relative. I would be happy, and interested, to knock it back into shape and maintain it to hopefully get a return on it. The question would be for me to value the trees. I would need to forester to advise me on that. The fact that it might not ever be able to be converted back to farm land might decrease its value. (Land in the area is good land - surrounding fields have tillage- corn, potatoes etc. Although currently not quite close enough to the nearest town to have hope value for development, if the Celtic tiger II took off I'd say that within 20 years it could be touching that category. But land in the area would be being valued at around 15-16k an acre. It doesn't change hands too often and for a smaller plot like this, there could be an extra premium.



Of course you can't know the value of the trees as is, but do you think there are *any* circumstances where an acre of 12 year old trees could be worth 16k? The "value" might be in being able to purchase it at a much lower price, and then converting own labour and work into a return. But if some idiot bids it up to 16k an acre, there might be no value in it for the purchaser regardless of how well it could be turned around.

accidental forester

Hi again,

If the property is with an estate agent, they should have the details from the Forest Service. If the current owner hasn't provided it, they will have to request it from the FS. There will be a Contract No. (should start with "FP___") that will identify the plantation to the Dept..

You mention figures in the €16k range. Unless there is something to make this site particularly desirable, this sounds well off the scale. There is no faster way to depress the value of land than to put forestry on it. A quick scan of a site like Forestry Sales will show that most plantations have an asking price of between €3000 and €6000 per acre. If you're thinking about proceeding, have a forester value it for you. With a written survey/valuation in hand, you will have a surprising amount of leverage in negotiating a price. Most residential estate agents have little or no experience with forestry. They quite often throw on a price based agri or residential values (not to mention unlimited optimism).

Just in case anyone gets the wrong idea, I am not a Registered Forester, just a guy who likes trees and is fortunate enough to a lot of them to look after.

Donald Trump

accidental forester wrote: »

Hi again,

If the property is with an estate agent, they should have the details from the Forest Service. If the current owner hasn't provided it, they will have to request it from the FS. There will be a Contract No. (should start with "FP___") that will identify the plantation to the Dept..

You mention figures in the €16k range. Unless there is something to make this site particularly desirable, this sounds well off the scale. There is no faster way to depress the value of land than to put forestry on it. A quick scan of a site like Forestry Sales will show that most plantations have an asking price of between €3000 and €6000 per acre. If you're thinking about proceeding, have a forester value it for you. With a written survey/valuation in hand, you will have a surprising amount of leverage in negotiating a price. Most residential estate agents have little or no experience with forestry. They quite often throw on a price based agri or residential values (not to mention unlimited optimism).

Just in case anyone gets the wrong idea, I am not a Registered Forester, just a guy who likes trees and is fortunate enough to a lot of them to look after.

Thanks for that. That is useful information. I will see whether I can access the relevant documents



My figure of 16k was just in relation to comments that it could be a valuable asset. I was making the point that the forestry, as you pointed out too, most likely devalued the land greatly compared to what it would have otherwise been. I didn't think that there would be any scenario where the value of timber on the land would be enough to bring it back up to what it would have otherwise been worth if the trees had never been planted.



So any "value" would depend on getting it for a fair price as forestry and converting labour into a return by whipping it back into shape