Could woodland creation benefit your farm business?

Woodland creation is an increasingly attractive option to farmers and landowners considering ways to improve their business resilience and diversify income streams.

In Scotland in particular there are several grants available to help, while the recent simplification in accessing expert advice for potential tree planting schemes will be an additional boost.

The Farm Advisory Service has lifted the pre-requisite in offering grant funding for specialist advice in woodland creation, management and conservation support. As of May 1^st, farmers and crofters in Scotland can now apply for up to £1,000 of grant support to fund a business specialist advice report, without having necessarily completed an Integrated Land Management Plan (ILMP). Click here for more details.

We have in recent times seen a continuing rise in farmers considering tree planting, but now, as we look towards a future the other side of lockdown, it is a particularly interesting proposition for those worried about the impact of Covid-19 on enterprises such as holiday lets.

Forestry plays an important role in mitigating climate change and offers a host of environmental benefits such as reducing flood risk and encouraging biodiversity. Additionally, it provides opportunities for diversification that can build resilience into wider businesses, rarely more important than in the face of this global pandemic. It is also tax efficient, benefiting from favourable tax treatment with regards to Capital Gains Tax, Inheritance Tax, and Income Tax.

As such, we expect to see the trend in favour of woodland creation continue, underpinned by strong public support for tree planting and the UK Government’s ambitious planting target of 30,000 hectares a year by 2025.

The Scottish Government, aiming to increase woodland cover from 19% to 21% of land area by 2032, operates a very positive tree planting agenda with significant grant support. Scotland is leading the charge on the UK’s woodland creation programme, with 84% of new woodland created in the UK in 2018-19 being planted in north of the border. Interest in establishing new forests is high yet it is really only active in Scotland; in 2018-19, new woodland creation in Scotland extended to more than 11,000 ha, exceeding its 10,000 ha target and representing the highest figure since 2002. Challenging conditions in the first half of this year, from a very wet winter to the Covid-19 pandemic, have hampered woodland creation but planting levels are strong nonetheless.

Whilst the planned 1^st April publication of the “Scotland Forestry Strategy Implementation Plan” was postponed due to the pandemic, it is clear the Scottish Government remains committed to woodland creation.

The Scottish Government’s Forestry Grant Scheme (FGS) supports woodland creation and the sustainable management of existing woodland. The Woodland Creation Grant Scheme supports the creation of new woodland that will provide economic, environmental and social benefits; applicants can apply for an initial planting payment plus annual maintenance payments for up to five years, in addition to capital grants for fencing and tree protection. Rates vary, depending on the species and location. Although the current SRDP Forestry Grant Scheme is due to end on 31^st December 2020, there is a strong expectation that a successor scheme will follow due to the current scheme’s success and the UK Governments’ continued interest in supporting woodland creation as a means to further offset carbon emissions.

For details on the various funding options available, please click here. Farmers may be particularly interested in agroforestry grants which support the creation of small scale woodlands on sheep grazing pasture, thus providing shelter for livestock and timber as well as increasing biodiversity and enhancing the landscape.

Additionally, the ‘Sheep and Trees’ initiative is designed to highlight the opportunities woodland can bring to farmers and land managers through a combined woodland creation and infrastructure grant. This is available to upland livestock farmers where sheep continue to be a principal part of the farm business.

Some applicants will also be eligible for the Central Scotland Green Network contribution, an additional bonus payment for woodland creation within a key target area for woodland creation across the Central Belt of Scotland.

For support options for existing woodland owners, click here. Grants are available for a range of woodland management operations. There is also support outwith the FGS grant scheme. We have seen a rise in carbon credit sales for woodland creation and, as carbon trading increases within the UK, we expect forestry to play an increasingly significant role within this evolving market. It has the potential to be a valuable new source of income for forest and woodland owners as the market matures.

Our Forest Market Report outlined a positive outlook with a 23% year-on-year rise in average forestry values in 2019 and a 21% increase in the total value of the forestry market. The market context is positive with the sector showing continued buoyancy. The growth in value and security of real assets despite political and economic uncertainty is clear; this has been demonstrated through the sustained interest in the forestry market throughout the Coronavirus crisis. This, combined with political support for forestry aligned with a new impetus for woodland creation driven by growing climate change concerns, should give confidence to those considering tree planting options.

It is vital, as ever, to plant the right trees at the right time in the right place. Taking advice and careful planning is key. At John Clegg & Co, we can offer full support and guidance for our clients through the whole woodland creation process, from initial consultation and feasibility study, right through design, planning, contract/funding procurement (including grants and carbon sales), and finally operations and contract management to deliver the creation of your new woodland. 

Please contact us  to explore how our specialists can help your business reach its’ full potential.