IFA Calls on Government to Introduce Income Averaging on Forestry Income to Address Inequity

IFA Farm Forestry Chairman, Michael Fleming has said that the High Income Earner Restriction (HIER) is unfairly discriminating against farmers with forestry, who are not high earners but realise the majority of their income from the forest at the end of the long growing cycle.

“In the upcoming budget I am asking the Government to allow forestry income to be declared over a number of taxable years. Forest income from clearfell, is a once off payment at the end of up to forty years timber growth and should not be treated the same as other income that falls within HIER”, said Mr. Fleming.

“It is unfair that forest income can be captured by the HIER especially when you consider that is it at least 20 years following clearfell before the farmer will generate any significant income from the forest again. Farmers are legally obliged to replant after clearfelling and there are no financial supports during the subsequent rotations”, advised Mr. Fleming

The forest sector is a €2.2 billon industry and the HIER is negatively impacting on timber production as well as leading to inefficiencies in the supply chain as farmers choose to stagger harvesting operations to avoid the higher earner threshold.

“Ireland is currently importing 30% of our timber requirements to satisfy demand in our sawmills”, said Mr. Fleming. “The Government needs to remove barriers such as the HIER to support farmers to realise the full economic potential of their forest and create additional rural employment. I believe income average would be very positive and practical measure to address the treatment of forestry income”.