TALKING POINT
TALKING POINT
Committing land to
trees makes sense in
these diversifying
times. So why
arent farmers
getting into
woodland, asks
James Croxon?
WITH the traditional tree-planting season well under way it seems a good time to reflect on how growing trees has helped my farm flourish. When farmers are, at every turn, urged to diversify there seems to me no better way to secure an income while lifting the value of the capital asset.
Yet, Im told, not enough farmers are taking up the available grants such as the Woodland Grant Scheme and Farm Woodland Premium Scheme. Both have helped me make economic sense of growing trees. Perhaps it is the uncertainty of future government policy and long-term returns that stops farmers and landowners committing their land to trees.
Although tree planting grants may not compare favourably with other subsidies at present, it looks likely that this will change. Growing trees could be a new option for hard-pressed farmers. The grant system may be unfamiliar to many so I suggest that you take professional advice as I did. Only then can you make an informed judgment as to what advantages may accrue – such as knowing what your return will be for the next 15 years. That could be a real help for any present cash-flow problems and increase your diversification payments.
Tree planning can earn extra points towards an agri-environmental scheme, help educate the public and improves your green credentials. And dont forget the sporting angle.
It was a glorious day when I first saw the South Dairy Farm. I was looking for a property that I and my sons could enjoy while watching nature produce a small income and build up a tax-friendly environment. This seemed to be the perfect choice; the 214-acre farm lies in attractive countryside close to the Pembrokeshire Coast National Park and had a house with great potential and is only five hours away from London, on a good day.
But before signing on the dotted line I had to be sure that farming trees here stood a chance of being profitable. The advice from Tilhill, a national forestry management company, was Yes. Once the deal was done the company designed plans to capitalise on the variety of tree planting grants available. The previous owners, now retired, kept livestock. I am now successfully farming trees with the help of one of the largest Farm Woodland Premium Scheme developments in Wales.
Development of the woodland brings positive cash-flow for the first 15 years and provides a significant capital benefit for the longer term. The original farmhouse and outbuildings are being converted as holiday accommodation and are greatly improved by being encircled by trees.
In total more than 150,000 trees were planted during the 1999/2000 planting season. Of those, 51% are broadleaves which maximises the Farm Woodland Premium Scheme funding for a 15-year period. The combination of Woodland Grant Scheme, Farm Woodland Premium Scheme grants and Better Land Supplement, particularly on the 40 acres of arable aided land, has more than paid for the initial establishment cost. It has even created a surplus which is helping with the upgrading of the buildings.
Farm Woodland Premium Scheme payments, paid annually over the next 15 years, should also provide a healthy surplus over expenditure. By 2015 or thereabouts, the new woodland will be well established thus increasing the capital value of the farm. Trees not only provide a profit, they increase the capital value of a holding in the longer term and, for simple pleasure, there is nothing to beat them. So why not take early retirement, stay on the farm and watch trees grow?