The decision by the Minister for Communications, Marine and Natural Resources, Mr Ahern, to cut Government spending on forestry development by 22 per cent next year represents a gross political and economic misjudgment.
Forestry development represents a long-term national objective that successive governments have subscribed to and, in recent years, the industry was gradually becoming more efficient and productive. Now, much of that painstaking progress - along with many hundreds of rural jobs - has been placed in jeopardy by a slash-and-burn response to demands for savings from the Minister for Finance, Mr McCreevy.
The extent of the miscalculation can be gauged when set against established Government policy. Mr McCreevy is adamant that one per cent of GNP will continue to be invested in the National Pensions Reserve Fund, even as this cutback takes place. The Fund has returned a net loss on its foreign investments and that pattern may well continue as Irish forestry, regarded as an attractive long-term investment, is starved of capital.
By engaging in an about-turn on its forestry policy, the Government will also forfeit an estimated €10 million in grants from the European Union. This is crazy economics. It is not as if Forestry had been gobbling up resources and exceeding its spending estimate like other Departments. Capital and current spending will rise by four per cent this year, as targeted, while Government spending in other areas is expected to increase by at least 15 per cent. This discipline shown in managing the industry will, however, be punished by a 22 per cent reduction in its budget. And because 94 per cent of that money goes on capital grants, the outcome will be: extensive job losses; a huge cut-back in planting; a reduction in the proper management of existing forests; the ploughing under of millions of nursery saplings and the closure of key businesses within the sector.
Forestry figures prominently in the Rural Development Plan (RDP) and it provides sustainable development and employment in areas suffering from agricultural decline. Only nine per cent of the land in this State is under forest, compared to an EU average of more than 30 per cent. An increase in the level of afforestation would, according to the Government's RDP, contribute to long-term national, economic and social well-being. And yet, in spite of these obvious benefits, a decision has been taken to slash capital investment by 22 per cent next year. The Government should revisit that decision in advance of the Budget.