In Ireland Forestry displayed the lowest volatility of returns of all asset classes over the last 10 years. In addition to the underlying rationale for investment in forestry in general, there are additional reasons why to invest in Irish Forestry in particular and these include:
a) Generous grants and premium payments
b) Fast growth rates
c) Favourable tax regime
d) Proximity to major markets
The Forest Service administers the state funded Afforestation Grant and Premium Scheme. This provides grant aid in two instalments to those who plant forests. The grant covers the full cost of establishing the forest crop and maintaining it for four years. In essence investors will get their forest planted for free, thus limiting their investment to the capital cost of the underlying land.
Investors are entitled to annual forest premiums for a period of 15 years with the rate varying depending on species and area. Up to this year, farmers received a much higher rate of premium but now the annual premium is the same for all, increasing the attractiveness of forestry as an investment for those previously classed as non-farmer.