The decision to invest in an afforestation project with the primary aim of producing timber may involve many personal and environmental factors alongside financial considerations. Adoption of a forestry enterprise within a farming unit represents a change in land use and a long-term investment of land, labour and resources. Financial evaluation provides a structured and objective means to inform the decision and allows comparison of afforestation with other economic uses of land.
Afforestation projects can take a number of forms, from planting steep areas or wet corners of a farm to integrating timber trees with agricultural production or establishing plantation woodlands. Some afforestation projects such as commercial plantation woodlands have the potential to produce quality timber products alongside diversifying farm incomes and providing other environmental benefits such as carbon sequestration and flood risk mitigation.
This series of guidance notes provides practical information for farmers and other landowners interested in investing in forestry. It is designed to help develop a first understanding of economic evaluation of afforestation projects. The six guidance notes of the series introduce the basic steps involved in the assessment of such projects to allow some preliminary due diligence when considering an investment in forestry. This does not replace a full assessment and advice by a chartered forest manager.
BRIEFING PAPERS →
Afforestation
More and Better Home-Grown Timber—The financial case for existing landowners to plant woodland
From the TV presenters of Countryfile to the ever-escalating claims of political parties in the last UK elections, it seems everyone wants to plant more trees. Reasons vary from carbon capture, amenity, and biodiversity to production of usable timber, as do levels of ambition.
Amongst the most widely quoted targets, The Committee on Climate Change (CCC) say that UK needs 30K Ha of new woodland a year to 2050 as part of a suite of land use changes to meet the UKs commitment to become Zero Carbon. This afforestation is predicted to account for the largest share of the forecast £39 Bn cost, the majority of that being spent on land acquisition. This presumes that either we expand the public estate or encourage land acquisition by external investors.
Experience from solar and wind farms suggests that this will be expensive, slow, and unpopular with some existing landowners, particularly farmers. Nonetheless there is considerable pressure on farmers from Brexit and existing financial challenges particularly of upland farming are severe in Wales.
Based upon the above, our approach is to solve two problems together. Woodland creation for a range of benefits, providing the means for farm transformation, while avoiding the expense and social disruption of land acquisition.
Promising lower costs of delivered woodland and a wide range of associated benefits, the approach has much to recommend it, subject to its financial viability.
This report reviews opportunities and challenges through the lens of financial viability.
DOWNLOAD GUIDANCE
