Forestry ISSUE 1 SUMMER 2018
MATTERS
Resilience: the new model for woodland planting
l Making woodlands future-proof
l The growing market for carbon assets
l Broadleaved woodland’s hidden opportunity l Five reasons to buy a woodland
WELCOME
A good time to be in forestry welcome to the inaugural edition of Forestry Matters. The forestry industry is currently enjoying a renaissance and our own forestry team is bigger and busier than ever. Now is the
CONTENTS
6
Making woodlands
Strategies for tree safety. COVER STORY: The move towards resilient forestry.
We must learn from the past if we are to create plantations that will survive the test of time, says Paul Schofield.
4 How to profit from the new Carbon Code.
perfect time for us to share our views on
8-11
industry developments and we hope that
Case studies: Planting and managing on four Scottish estates.
you find the publication both interesting and informative. It is likely that a period of change lies ahead, with the new Forestry and Land Management (Scotland) Bill devolving control over forestry to the Scottish Government and, of course, the unknown future of Brexit. Despite this, timber prices are strong and there is increasing interest among investors for woodland and planting land both for
12 How new technology is changing the face of forestry.
traditional forestry purposes and for environmental gains.
13
Scotland looks set to meet its annual new
Forestry Grant Scheme update.
planting target in 2018/19 for the first time and, amidst the uncertainty of future agricultural subsidies, more marginal farmland is being considered for planting. Now is a good time to be working in the forestry industry as it grows and flourishes. We hope that you enjoy reading
14 Keeping abreast of tree health threats. Broadleaved woodland’s hidden opportunity.
Forestry Matters and look forward to the developing success of the magazine. Philippa cliff Head of forestry
16 The commercial potential of silver birch.
17 Training for a forestry career. GALBRAITH is Scotland’s leading independent property consultancy. Drawing on a century of experience in land and property management, the firm is progressive and dynamic, employing more than 250 people in offices throughout Scotland. We provide a full range of property consulting services across the commercial, residential, rural and energy sectors.
18 The right tools for the job. Five reasons to buy woodland.
Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.
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Join us on LinkedIn: www.linkedin.com/company/galbraith
This may seem self-evident but however carefully we think through our decisions, it’s difficult to predict what the outcome will be many years into the future and it will almost certainly be someone else dealing with the consequences. Accepted norms can turn out to be unreliable or just plain wrong and innovation always entails a level of risk. With the benefit of hindsight though, it’s possible to spot miscalculations made in the dim and distance past and learn valuable lessons from them. Understanding what didn’t work as well as what did work helps us to avoid making similar mistakes in the future. Everything we do when we establish a new woodland or replant an existing one affects the condition of the wood as it matures. Choosing species that are suited to the site is perhaps the most important decision of all. Due to oversupply in its nursery, one south Scotland estate chose to restock more than 100 hectares with Douglas fir in the 1980s. Unfortunately, the sites were poorly drained and too exposed and most blew over mid-rotation with the consequence that the income from clearing the timber fell well short of the restocking cost. The estate effectively lost half a rotation on the affected area, significantly denting future productivity. Although this is an extreme example, it highlights the importance of getting species selection right. Nowadays, climate change is also an important consideration. Eastern Scotland is projected to get significantly drier over the next 50 years so caution is required when selecting species on well drained sites. Sitka spruce, for example, is vulnerable to drought crack and on drier sites it is becoming increasingly susceptible to green spruce aphid Elatobium abietinum, which can substantially reduce growth rates. Ground preparation is also an essential part of successful tree establishment and affects everything from the growth rate and stability of the crop to when it will eventually be harvested.
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GrowinG good quality timber is a uniquely long-term proposition and the choices that we make now about a wide range of different aspects, including species selection and provenance, site suitability, ground preparation, drainage, planting density and thinning, directly affect the result decades down the line.
Forestry Matters is produced by Galbraith, and designed by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.
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For many years, deep double mouldboard ploughing was the industry standard for establishing trees in almost any soil conditions, eventually falling out of favour because it encouraged poor root development and increased the risk of windthrow. Ploughing was
future-proof
replaced by excavator mounding which became the ‘one size fits all’ solution for most ground prep needs. However, although mounding provides flexibility on a wide range of site types, it also has its disadvantages, particularly on restock sites. At Elderslie Estate in Renfrewshire, for example, some mid-rotation stands of Sitka spruce have established on top of large mounds and are poorly rooted, limiting management options by making thinned stands more vulnerable to wind damage. Hinge mounding produces a large hole with a mound next to it. When this is combined with old stumps from a previous crop, the uneven terrain can make the going difficult for smaller scale harvesting machinery. As the forwarder lurches from side to side, the bolsters at the back can scar remaining trees and the random spacing that mounding produces makes it difficult to cut racks through the crop in the usual way, sometimes resulting in the removal of too many trees. Spoil drain mounding is a widespread practice and on the face of it has a range of potential benefits on wetter restock sites with heavy brash, improving drainage and brash management and making it much easier to achieve the uniform tree spacing necessary for growing good quality timber. However, this method results in deep trenches scattered across the site which can seriously hinder future harvesting operations. On
some Forest Enterprise sites in the Highlands, stands cannot be thinned and even clear felling may present a challenge in the future. Mounding may fit the bill on some sites but there are an increasing number of alternative treatments which can be tailored to particular site requirements. These include scarifying and shallow continuous mounding which are significantly cheaper on restock sites where brash conditions allow and also work well for many new planting sites. Nowadays, thanks to the increased demand for wood fuel, thinning is a profitable activity again and, if conditions are suitable, the advantages are so overwhelmingly positive – increased volume, improved timber quality and improved crop stability, not to mention considerable biodiversity and amenity benefits – that it makes sense to plan ahead and ensure that thinning can be carried out efficiently when the time comes.
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Everything we do when we establish a new woodland or replant an existing one affects the condition of the wood as it matures.
By thinking through the process and considering how each stage is linked we can help to promote woods that are more productive, adaptable and vibrant in the future – and in the process hopefully avoid being cursed by the next generation of forestry managers.
paul.schofield@galbraithgroup.com 01738 456 064
galbraithgroup.com | Forestry matters | Summer 2018 | Page 3
NEWS The Forestry and Land Management (Scotland) Bill was passed unanimously in March. This heralds the devolution of Forestry Commission Scotland, which will unfortunately fall one year short of its 100th birthday. The devolution process will see both Forestry Commission Scotland (FCS) and Forestry Enterprise Scotland (FES) transitioning into two separate agencies for the government. The decision for FCS to become an agency rather than a sub-division of the government has been regarded as a positive one, retaining expertise and experience in the regulatory sector.
The UK Woodland Assurance Standard (UKWAS) is reviewing its fourth edition, set to go live in June. The standard has undergone a thorough revision process since 2013. The edition has now been approved by the Policy and Standards Committee, stipulating the need for fair representation of economic, environmental and social interests in accordance with FSC requirements.
Norbord has officially opened its new £95 million manufacturing line near Inverness. The ceremony was carried out by First Minister Nicola Sturgeon. In a positive move for the industry, the production capacity for oriented strand board (OSB) has been increased from 350,000 cubic metres to 640,000 cubic metres. The investment was aided by £12 million funding granted by Highlands and Islands Enterprise.
Forestry Commission Scotland (FCS) has issued a briefing note guaranteeing Forestry Grant Scheme payments through to 2021, provided applications are made by 2019 with the same claim year. The note stipulates that payments will be made within the claim year and up to the following two years. With the promise of Brexit looming, this guarantee offers some comfort to landowners in uncertain times.
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Carbon assets: a growing market The Woodland Carbon Code offers a new income stream for newly-created woodlands, says Philippa Cliff.
The woodland carbon code (wcc) is a UK Government initiative aimed at quantifying and verifying the amount of carbon that will be captured by new planting. It authenticates the carbon captured by new woodlands for use as a formal carbon offset tool by industry. It is still in relative infancy, but the WCC potentially offers landowners an additional tax-free income stream to sit alongside more traditional forestry revenues. The code offers landowners different mechanisms to trade the resulting carbon asset and there are benefits and drawbacks to each option. Once a new woodland planting has been accepted into the WCC, a landowner will be issued with Pending Issuance Units (PIUs). These are an estimate of the total volume of carbon that will be captured by the woodland across its entire growth period. PIUs can be traded but cannot be used to offset emissions until they are converted to Woodland Carbon Units (WCUs). This conversion occurs at various ‘verification’ dates throughout the woodland’s life. These take place five years after planting and thereafter every 10 years. A woodland owner can choose to sell the PIUs upfront, with buyers effectively banking the PIUs for use as they are gradually converted to carbon units across the lifetime of the woodland. Alternatively, the woodland owner can hold on to the PIUs and sell them as WCUs in batches throughout the woodland’s lifetime as the verification dates are met. The advantage of selling PIUs upfront is that it provides the landowner with an upfront cash injection. It appeals to the notion that ‘a bird in the hand is worth two in the bush’, as the landowner is realising the carbon asset upfront and in one go. Should carbon offset become a thing of the past at any point in a woodland’s lifecycle, the owner has still obtained the value from the carbon at the outset. On the downside, trading the PIUs upfront will preclude the owner from any uplift in the value of carbon units in the future. There is speculation that the value of carbon may rise as more industries are covered by legislation requiring them to reduce or offset their carbon emissions. Perhaps more importantly, when selling PIUs upfront, the owner commits to
deliver that amount of carbon through the lifetime of the woodland, which could be up to 100 years. The owner is therefore required to continue to audit and verify the carbon captured at the verification stages for this entire period, and if he decides to sell the woodland, the buyer would have to facilitate this burden without any of the financial reward. It is yet to be seen what impact this burden will have on the value of woodlands. The alternative model is to trade the WCUs on verification. The advantage of this is that the owner benefits from any increase in carbon demand and value as
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The code offers landowners different mechanisms to trade the carbon asset and there are benefits and drawbacks to each option.
the market develops. Of course, the value of carbon may also fall and this must be considered too. Perhaps the biggest advantage is that only verified carbon units will have been sold, so there is no long-term commitment to a buyer as there is when selling PIUs. If an owner chooses to no longer be part of the scheme, there is no ongoing verification burden, providing the woodland remains in situ. Alternatively, if the owner chooses to sell the woodland, the purchaser can benefit from the ongoing carbon income, which makes the burden of verification less of an issue. The downside is that the income stream is a longer-term gain and does not represent immediate returns. However, this appeals to some investors as it sits more comfortably alongside the longterm nature of traditional timber returns. Whichever way you choose to manage and trade your carbon asset, the WCC offers a genuine opportunity to improve the returns from forestry planting, and should be given consideration when planning any new woodland.
phillipa.cliff@galbraithgroup.com 01463 224343
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For The past 40 years Scottish forestry has to a great extent focused on two main planting models.
Taking tree safety seriously
The main commercial model has been even aged Sitka spruce plantations with limited biodiversity and clear financial targets. The alternative model which has been very much incentive-led since the early 1990s is the restoration and expansion of native woodland with clear environmental gains but little or no productive outputs.
Louise Alexander explains the value to landowners of a tree safety strategy. FallinG trees or branches kill five or six people every year in the UK. Managing the risk from trees is the responsibility of the owners and managers of the land on which they grow. Risk management can be undertaken only by understanding the trees and their value to people in the context in which they grow. The requirement under health and safety legislation is to have a suitable and sufficient risk
strategy. The estate wanted to take a proactive approach to managing the large number of mature trees close to public roads and estateowned properties. The first survey identified more than 100 trees where work was required and this was carried out over a three-year period using a local contractor. Annual surveys continue to be carried out to ensure the trees continue to be proactively managed as they naturally decline and die.
Tree surveys for development work When carrying out any building work or development near trees, local authorities require all potentially affected trees to be surveyed by a qualified arboricultural surveyor in accordance with BS 5837:2012 Trees in Relation to Design, Demolition and Construction. The survey will ensure there is a ‘harmonious and sustainable relationship between trees and structures’. The standard is required whether or not planning permission is required. We are finding that more and more planning applications have not addressed this issue until it has been raised by the local authorities during the decision process. This affects the timescales and ultimately the design of the application as changes will inevitably be needed to ensure the trees become an integral part of the design.
High-risk zones along well-used public footpaths require assessment and maintenance.
assessment, and to apply measures that are reasonable and practicable. Our team can produce a tree safety strategy to identify areas requiring survey and prioritise these into risk zones. Once identified, all trees within the survey area will be inspected to determine if any represent a foreseeable hazard requiring remedial action. The firm has recently been working with Dallas Estate in Moray to produce a tailored tree safety
To avoid this it is important to involve all parties throughout the design process. A tree survey should be carried out at preapplication stage in conjunction with the designers to identify any conflicts that may arise, and will include a retention/removal plan. Depending on the scale and impact of the application a further tree protection plan and arboricultural impact assessment may be requested, evaluating the direct and indirect effects of the proposed design and where necessary the recommended mitigation measures.
louise.alexander@galbraithgroup.com 01463 245 381
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It is becoming clearer that these models are limited in scope and no longer meet our environmental or forest industry requirements. Emerging pests and diseases, carbon sequestration and safeguarding and enhancing the wider environment dictate that we need to consider further diversification to create forests better fitted to land managers’ requirements, delivering a wider range of objectives and resilience. The range of appropriate diverse broadleaved and coniferous species is site-specific and very much depends on climatic and silvicultural conditions.
Resilient forests: alternative planting models Industry and environmental demands mean the face of forestry needs to change. Willie Beattie looks at the options.
The Forestry Commission has developed an online interactive viewer tool which will give an initial steer as to climatic suitability for various woodland types, funding eligibility and enhanced funding opportunities, which can be found at http://scotland.forestry.gov.uk/supporting/commu nication-consultation/map-viewer-guidance At present, one of our clients is trialling enriching upland restocking sites with a variety of species including Norway spruce, western hemlock, noble fir, Scots pine and hybrid larch in both intimate and group mixtures with Sitka spruce, which will remain the key productive species. These restocked sites also contain a high percentage of upland broadleaves offering enhanced biodiversity and landscape values as well as acting as long term retentions within the productive matrix. On richer sites the broadleaves can obviously form part of the productive matrix, at a minimum being part of a biomass crop. We are also about to roll out this model on to upland new planting sites where the owner’s objectives are much wider than timber outputs. Long-term shelter, enhanced landscapes, sustainable biomass production and carbon sequestration are key aspirations. Where owners previously saw large scale felling and restocking
of monocultures not meeting their requirements we can design diverse and resilient woodlands that complement other rural land use activities. A much more intimate and varied approach can be taken to harvesting with much smaller coupe sizes tailored to client needs. We have a client who requires about 1,500 tonnes of biomass material every two years on a sustainable basis. This was difficult to achieve with even aged monocultures but by careful species selection and design we can achieve these specific requirements on a 35-40 year rotation. The range of funding models available through the Forestry Grant Scheme gives us opportunities to create mixed new woodlands by combining a number of woodland creation options on each site. This also enables us to better target species to micro-site while also maximising the funding potential. Ironically, these diverse woodland mixtures are reminiscent of those created by our predecessors in the early part of the 20th century.
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We need to consider further diversification to create forests better fitted to land managers’ requirements, delivering a wider range of objectives and resilience.
willie.beattie@galbraithgroup.com 01463 245 388
galbraithgroup.com | Forestry matters | Summer 2018 | Page 7
Thinning 70-year-old Scots pine at Mellerstain.
CASE STudy
Managing the woodlands at Mellerstain Estate It’s all about getting the basics right, says Paul Schofield. eiGhT miles north of Kelso, mellerstain estate covers 3,486 hectares and includes farming, forestry and sporting interests in addition to mellerstain house, a notable visitor attraction designed in the 18th century by robert adam. The woodlands are long established and integral to the local landscape, particularly around Mellerstain House where they merge with the surrounding grounds and radiate outwards, forming part of the historic designed landscape that appears in Roy’s Military Survey of Scotland 1747-1755. The woodlands comprise 468 hectares of conifer plantation, mixed policies and shelterbelts set within a rolling arable landscape. Scots pine is by far the most common commercial species with few other conifers planted before the 1960s. Following extensive timber harvesting during the Second World War there was a sharp increase in re-planting activity during the 1950s. Sitka spruce has performed well as a successor crop in some areas since the early 1970s but some stands have been affected in recent years by green spruce aphid Elatobium abietinum indicating a trend towards drier conditions. Mixed
policy woodland and shelterbelts account for 20% of the total woodland area. Beech is common in the policies and has also been planted as a commercial crop. Galbraith has been involved with the woods since 2014. The Long Term Forest Plan, approved in 2016, helped to refine the approach of managing the woodlands as a profitable commercial enterprise while remaining sensitive to their historic character. Thinning has been carried out regularly over the years so most areas are reasonably wind firm. Management has so far focused on resuming a regular thinning cycle to generate income and maintain crop stability. Infrastructure will require gradual upgrading to provide turning and loading facilities for lorries and this will be done in-house using stone quarried on the estate. Mature stands will be felled gradually with a view to regularising harvesting income and restocking expenditure as far as possible. Replanting will aim to gradually improve species diversity, mindful that some areas may become increasingly drought prone over the next 50 years. In addition to spruce, pine and Douglas fir, oak and sycamore will be
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planted at productive densities. Although there is an established annual roe deer cull on the estate, it is likely that fencing will be needed to protect all species other than Sitka spruce. Other than for some broadleaved crops, it was decided that continuous cover management was not the most appropriate way to deliver improvements in species diversity and maintain long term productivity given the current crop composition and unsuitability of fertile soils for natural regeneration. The productive area will be increased over the next few years by planting an area of relatively good quality land with Douglas fir. A tree safety survey carried out next to public roads identified a number of hazardous trees that have been removed. Policies and shelterbelts will be ‘micromanaged’ to establish new trees as gaps appear and re-space natural regeneration to maintain canopy cover. The management of estate woodlands involves getting the basics right – planning and scheduling routine work such as thinning, replanting, beating-up and weeding at the right time and maintaining continuity over many years. At Mellerstain, Galbraith is building on previous management and working with the client and staff to maintain the productivity and heritage value of the woodlands and ensure that they make a positive contribution to the estate enterprise.
paul.schofield@galbraithgroup.com 01738 456 064
CASE STudy
Creating a 200-hectare wood Louise Alexander explains the two-year process that culminated in approval for an upland planting scheme.
ScoTTiSh Government policies have significantly pushed forestry and in particular new woodland creation up the agenda through their climate change targets. Forestry Commission Scotland has an ambitious target to extend woodland cover in Scotland by an additional 100,000 hectares over the period 20122022. To facilitate this, £252 million has been made available for woodland creation projects, with £40 million in 2018/19. In early 2016 a client contacted the Inverness team to assess the viability of planting his unimproved hill ground. He had previously hoped to put a wind farm on the area but planning consent was refused so he was looking at an alternative investment plan. After discussions with the client it was decided the long-term vision of the estate should be to establish a diverse mixed woodland
The survey results allowed us to split the scheme into two main areas: native Scots pine and birch woodland on the higher, poorer quality ground and a commercial mix of Scots pine and Norway spruce on the lower slopes. The lower ground’s good existing road access made the case for commercial species stronger. In total more than 277 hectares of hill ground was to be fenced off, with 204 hectares of plantable ground. To improve public access and aid future extraction and management of the woodland, an application was submitted to Highland Council to create a hill road to allow both 4x4 and timber vehicle access. Fully complying with the UK Forestry Standard and the FC grant conditions meant all site-specific constraints and features had to be surveyed. These included a local bird survey, an archaeological survey and a detailed soil
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Involving stakeholders at an early stage can avoid unexpected issues arising during the formal consultation, when they can dramatically slow the approval process.
creating a sustainable local timber supply, strong habitat network linkages, improved public access and enhanced local landscape values.
and vegetation survey. These surveys identified the presence of a Scheduled Ancient Monument and a local black grouse population.
A desk-based assessment using the FC Climatic Site Suitability programme and Ecological Site Classification system, determined the site was suitable for a mixed commercial and native woodland. This was followed by a site survey to identify the soil and vegetation types.
An important aspect of the application process is stakeholder consultation. The FC has placed particular emphasis on this element of the application as it allows both the applicant and the FC to identify key factors that need to be considered and to take into account local interests. Involving relevant stakeholders at an early stage can avoid unexpected issues arising during the formal consultation, when they can dramatically slow the approval process.
A long history of management, including artificial drainage and grazing by both deer and livestock, had resulted in relatively species-poor plant communities. The soils mainly consisted of peaty surface water gleys and upland brown earths.
The consultation list for this site included: Scottish Natural Heritage,
RSPB, Historic Environment Scotland, Scottish and Southern Energy, local community councils, Forest Enterprise, Highland Council and SGRPID. All consultees were invited to a site meeting in January 2017 to go over the proposals. The main issues identified were landscape fit, impact on the local bird population, visual and hydrological impact of new hill tracks, archaeology and protection of the Scheduled Ancient Monument. To address these issues, a full landscape appraisal of the woodland, new fence lines and the hill road was carried out. The information gathered from the bird, archaeological, soil and vegetation surveys was used to redesign the woodland scheme. The planting areas were adjusted to create more open ground and reduce hard edges through the use of species like willow to encourage nesting birds. A 20-metre buffer zone was formed to protect the Scheduled Ancient Monument. The soil and vegetation data meant a more in-depth Ecological Site Classification survey could be developed and this allowed for a wider variety of tree species to be selected. After these revisions the application was submitted to the FC for the final formal consultation in November 2017 and approved the following month. The final approval was for 203 hectares of woodland creation comprising 35 hectares of commercial woodland and 168 hectares of native Scots pine and birch woodland. The total value of the grant was more than £750,000, with a profit over six years of £146,000. Work on ground preparation, the hill road and fencing began in January, and the site is due to be planted this September.
louise.alexander@galbraithgroup.com 01463 245 381
galbraithgroup.com | Forestry matters | Summer 2018 | Page 9
CASE STudy
Forestry on a mixed estate Communication is the key to keeping different land users happy, says Claire Wightman.
BalancinG the competing land uses on a multi-purpose estate can be one of the most challenging parts of forest management and as a result it can also be one of the most rewarding. This estate on the Black Isle shows how, with careful planning and good communication, forestry can work alongside other land uses to deliver benefits for all. There are no formal designated areas on the estate, but a high number of protected species live in and around the woodlands. Birdlife is particularly rich and is a big draw for people visiting the estate and in order to remove any impact on the breeding cycles of protected species almost all forestry operations take place between September and January.
Thinning work within a mature Scots pine stand.
The drawback of working in winter is that it increases the potential for ground damage as the soil is generally wetter, so to minimise ground disturbance and protect the diverse woodland flora, we harvest as much as possible along previously used routes. The general policy on the estate is to concentrate on thinning with only small areas of clear felling where necessary. This means the pace of change in the woods is slow, allowing wildlife to adapt. The small clear-fell areas keep an element of recently cleared ground within the woodland so that all stages of woodland (from cleared areas to young crops and mature stands) are represented on the estate. This diversity of stands and species helps to future-proof the estate against the potential impact of climate change while also maximising the ecological niches it provides. Sporting activity on the estate, which includes roe deer, pheasant and woodcock, is leased on a long term basis. The woodlands are crucial to the sporting value of the estate as most of the stalking and beating takes place in them. The pheasants are reared in the woods and most of the shoot species use the woodlands for shelter and foraging.
Sweet chestnut coppice site.
complicated but with a bit of discussion an opportunity can generally be found.
The sporting tenants also require woodlands that are accessible and have sufficient light penetration to encourage ground vegetation for food and warmth. Thinning activities are therefore beneficial for the sporting value of the area – except that we do the work in winter, which is peak season for the shoot! The solution is simple: good communication. The shoot put significant effort into the drives in spring and summer so it is important they know as soon as possible if a drive is not going to be useable in winter due to harvesting activities.
Tidying up after putting harvesting machinery across a field is vital to minimise disruption caused, but in general there are additional benefits to farming tenants too. Access for forestry machinery often requires fence removal, so the tidying up afterwards generally includes fixing and upgrading fences and in some cases the creation of new gates and access points. These can clearly benefit the farm as well as future forestry access.
As with many mixed estates, access to some of the smaller woodland blocks is through farm fields. Again the solution to this is good communication. On arable fields, there is generally a window in the winter when the field can be used depending on the crop rotation. For grazing fields the situation can be more
Most of the farm tenants have a very positive attitude to the trees and woodlands on the estate, but there is no doubt that trees can be a mixed blessing, particularly when they start to fail or blow over. In arable fields in particular, tenants are always keen to make sure that any trees that fall into the fields are dealt with quickly. We make
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CASE STudy
Planting for the future Paul Schofield reports on a new wood on marginal upland grazing land. aS landownerS look to make sound decisions about future land use on their properties, some are considering afforestation schemes where the site conditions and financial factors align.
this a priority and try to get to them as soon as the ground or crop allows. Active management is key to maximising the benefits of trees and minimising potentially negative effects. In grazing fields, tenants are usually keen to retain the shelter provided by the hedgerow trees and surrounding woodlands; conversely they don't want to have trees continually falling over their fences! We try to balance these competing interests by dealing with hazardous trees as they develop alongside maintaining tree cover wherever we can. This is a particular challenge at present as we are still dealing with Dutch elm disease which means a small number of elm trees die every year. Ash dieback has also been discovered locally and may also have an impact. The estate borders a few small villages and one larger town so the woodlands are very well used by the general public for recreation. This requires careful thought when we are planning operations to try to make sure that we can safely carry out our work. We try to keep the woodlands open as much as possible and provide public notification signs and diversions whenever possible. We also carry out an annual survey of the trees near tenanted houses and public roads to make sure that we deal with any potentially hazardous trees in good time.
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Forestry is a very visible part of a mixed estate. It forms a frame and a stage for almost everything else that happens there.
Thinning activities in woodlands can also be beneficial in high public use areas to keep the woodlands healthy. In one case, we carried out a small thinning of a high public use woodland which was suffering from frequent wind blow. By carrying out the thinning we were able to re-open the paths that had been blocked and stabilise the crop to reduce the likelihood of further failures. Forestry is a very visible part of a mixed estate. It forms a frame and a stage for almost everything else that happens there. Actively managing these woodlands is a great way to emphasise the connection between them and the rest of the estate. With a bit of effort from all sides, forestry can deliver benefits far beyond timber income.
claire.wightman@galbraithgroup.com 01463 245 690
We have recently completed a 40hectare woodland creation scheme at Remony Estate near Aberfeldy in Highland Perthshire, where an area of hill ground considered marginal for sheep grazing has been used to create a new woodland that balances both native and commercial elements. The site is located between 360 and 450 metres above sea level. The vegetation is predominantly heather, blaeberry and wavy-hair grass with some more herb-rich areas and some wet flushes where willow and rush dominates. The site survey indicated that native Scots pine would be well-suited to parts of the site, while other areas would support a commercial crop of Sitka spruce with small elements of Norway spruce and Scots pine. The scheme has been designed to enhance native woodland habitat by creating a permanent area of pinewood that will expand existing native woodland on adjacent ground to the north and enhance habitat for black grouse whilst also establishing a new area of productive commercial woodland immediately to the south. The scheme has secured funding using the Conifer and Native Scots Pine woodland creation models under the Forestry Grant Scheme and will generate a financial surplus at year five of around £30,000. In addition, the owners continue to receive BPS payments on the land and the productive conifer element will reach maturity in about 50 years’ time. Andrew Duncan Millar, whose family owns the land, recognises the range of benefits associated with the scheme. “We are always looking to the future and hope this plantation will provide a sanctuary for black game and a cash crop to help future generations manage the landscape in a responsible and environmentally friendly manner.”
paul.schofield@galbraithgroup.com 01738 456 064
galbraithgroup.com | Forestry matters | Summer 2018 | Page 11
RoboForester... technical innovation in the data age Mobile technology touches every aspect of our lives, and of course forestry is no exception. Claire Wightman looks at its impact on the industry.
The ToolS of the forester’s trade have changed little over the decades. a girth tape, a clinometer and a variety of jackets for all weather conditions are still very much the backbone of any forester’s kit bag. In part this is because the fundamentals of harvesting and planting trees do not change but it is also because much of the technical innovation is invisible. For example, while the advent of mechanical harvesting or the end of deep peat ploughing has a noticeable effect on the ground, the widespread adoption of mapping software is not visible to the public although it has perhaps had a more significant impact on the industry. Mobile data collection looks set to revolutionise the industry as data becomes increasingly available within the forest itself.
mapping software goes mobile Foresters have always relied on good maps to measure and quantify crops, to plan strategies and to communicate with others. Mapping software has been in use in the industry for about 20 years and is now considered an essential tool. More recently this technology has been combined with mobile devices to provide innovative solutions to on-site problems. James Jones & Sons has developed a system which warns lorry drivers of hazards when they arrive at a site. An alarm in the cab can warn a driver about the risk of an overhead powerline – a leading cause of deaths in the forest industry. Work is currently under way to look at fitting this technology in all UK timber lorries. John Deere has been upgrading the on-board computers in its harvesting machinery so that it can both record the wood products processed and also track the location of the machine and display this on a map. This means operators can track their progress in real time and provide accurate map updates for the forester. Site hazards can also be added to the map. Free apps like Avenza Maps allow foresters to share PDF maps they have created with contractors. The software uses the inbuilt GPS of a tablet or mobile phone to display the map with a location marker for where the user is. This technology has a wide range of applications including simple data collection but is most valuable as a much improved way to communicate operational plans with contractors. Combined with paper maps, this technology can give both foresters and contractors peace of mind that they are working in the right place without the need for time-consuming and confusing marking out of sites.
Tackling the black spots As many people in rural areas know, modern technology is wonderful… so long as you have good internet connection. For forestry applications, it is essential to find apps that work Page 12 | Forestry matters | Summer 2018 | galbraithgroup.com
offline, even if you need to upload or download data when you next get a signal. When working in remote locations with no internet or phone signal, it is also essential to have some means to summon help if required. InReach Explorer uses satellite technology to allow two-way communications in these areas. This is a major step forward from other systems where an alert is raised but there is no way to get further details of a potential casualty. This is particularly important now that emergency services are increasingly prioritising their response based on need. Alerts with no further information may not be treated as a priority. Other mobile phone apps can immediately give you the full grid reference of your location, which can then be passed on to the emergency services. People working in remote areas can also register their phone number with the emergency services so that they can communicate with them by text message where there is limited, patchy or emergency-only phone signal.
Going airborne Drones are increasingly being used for forest surveys. They can give an overview assessment of a forest crop far faster than a walk-over survey and potentially avoiding the need for dangerous walking through windblown crops. In combination with Lidar technology, they could soon make it possible to have much more frequent and more accurate forest inventories. Drones are also being developed to carry out chemical spraying. This again has the potential to be much faster than human application and would also reduce the exposure of individuals to harmful chemicals.
new technology, new questions New technologies are a double-edged sword. There are efficiency savings and health and safety improvements but also challenges and new questions. One of these issues is data protection. Data sharing technologies make communicating information much easier, but it also important to retain control over who has access to information and who can edit it. The forest industry is very segmented and has always worked in the past on
Forestry Grant Scheme: an update Willie Beattie details recent changes. Some significant changes have taken place recently in the current Forestry Grant Scheme, especially in woodland creation support. These changes have generally been triggered by the James Mackinnon report of 2016: ‘Analysis of Current Arrangements for the Consideration and Approval of Forestry Planting Proposals’. The commissioning of the report was to a greater part a Scottish Government reaction to the forestry industry failing to meet its ambitious new planting targets year on year.
January 12, 2018: central Scotland Green network contribution (cSGnc) update John Deere's on-board harvester computer can show products processed on a live harvesting site.
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For forestry, it is essential to find apps that work offline.
the basis of trust when information has to be shared between parts of the supply chain. Sharing digital information in a non-editable format may be no great change, but sharing raw data would be a new challenge. For instance, a harvesting company may carry out a drone survey of an area of woodland for a harvesting tender. If it does not win the tender, it may still hold a copy of the data that it produced. Is this a problem? The cost of producing data is also a consideration. Data, in terms of knowing where there are certain trees with certain qualities, is of most value to the mills who can then essentially treat woodlands like an extension of their log store, allowing them to respond quickly to customer requests. However the cost of producing good data is most likely, or most sensibly, to be borne by the owner. So how can we ensure that the value of that data is passed back down the supply chain? Once the data exists, there are also ways in which harvesting foresters, machine operators and even lorry drivers could benefit from it, so what would be a fair way to account for this value? To avoid unnecessary duplication, it would make sense to generate one set of data and then share it between all these parts of the supply chain, but how do we ensure that all these companies’ different IT systems are compatible? In general, attitudes to sharing information seem to be changing. How this can be balanced in a commercial setting against the rights to data protection, privacy and ownership of data is a challenge faced by many industries, not just forestry. In the long term, finding a successful balance will depend on the human networks that we develop around these technologies. Trust in the current system is built on familiarity and relationships up and down the supply chain. Trust in these new technologies can be built in the same way, through another invisible revolution.
claire.wightman@galbraithgroup.com 01463 245 690
The CSGNC has proved very successful with the level of demand for woodland creation in Central Scotland increasing significantly since 2015. In recognition the CSGNC budget has been increased to £3 million a year. CSGNC grant rates and area limits have been modified to reflect the success: CSGNC rate/ha
Max area of CSGNC per application
CSGN core area
£2,500
40 ha
CSGN outer core area
£1,500
65 ha
£750
40 ha
CSGN fringe area
January 23, 2018: Budget categories and threshold scores update The proposed grant budget for 2018/19 is £46 million, of which £40 million will be allocated to woodland creation, with the remainder for woodland management. The current excellent funding rates mean interest in new planting is particularly high and new management proposals have been introduced to reflect this and assist with the timescales involved.
march 2018: woodland creation update Two new operational plan types have been introduced to improve the application process: • The Small Native Woodland Operational Plan for native proposals of three hectares or less. It recognises that these are less likely to have a significant effect on the environment and therefore require less information. • The revised Woodland Creation Operational Plan for all other applications: More emphasis on application lead activity, pre-consultation with all stakeholders, due diligence, issues logs for more complex cases, etc. It has been structured to try to keep applications flowing through the system wherever possible. It is clear from this year’s briefing notes and process changes that the Forestry Commission is focused on cleaner processing and delivery of woodland creation. Enhanced funding and tariff rates and locational premiums make the climate very favourable for new woodland planting. Combine this with the opportunities to trade ‘carbon credits’ and budgets can be very favourable not only in the initial phases but also in the medium to long term.
willie.beattie@galbraithgroup.com 01463 245 388
galbraithgroup.com | Forestry matters | Summer 2018 | Page 13
Keeping up the fight for healthy forests Hamish Robertson reviews some of the current health threats to UK trees.
SPHN is issued. As a registered, approved agent with the Forestry Commission I have experience of marketing and harvesting infected larch stands.
aS ForeST managers, we have to work with the constantly evolving state of tree health in the UK.
Elsewhere in Scotland, Dothistroma Needle Blight (DNB), caused by the fungus Dothistroma septosporum, has affected stands of pines, primarily Corsican and lodgepole pine. Although Scots pine is thought to be less susceptible than other pines infections have been found in and around native pinewood sites.
Global trade and a warming climate have brought an increase in pests and diseases, which can affect forest management decisions and economic returns and can have a significant impact upon highly valued landscapes. While the Forestry Commission and its agency, Forest Research, work tirelessly to survey the country and improve plant health regulations,
Examples of Phytophthora ramorum infection on larch trees.
forest managers and landowners need to be vigilant and proactive. Current threats include Phytophthora ramorum, a disease which in the UK primarily affects larch trees. Outbreaks were initially concentrated in the south west of Scotland, particularly Galloway, where significant areas of larch have been felled as a result. However, it has been discovered in other locations around the country including Perthshire, Aberdeenshire and Argyll, so the emphasis is now on trying to restrict the spread of the disease outside the Galloway Management Zone. Statutory Plant Health Notices (SPHN) are now only issued for infections outside the management zone.
Apart from removing infected or susceptible stands, the most successful way of countering DNB is likely to be thinning commercial stands of pine to increase air flow and reduce humidity levels, thus decreasing the distribution of fungal spores. There are restrictions on planting Scots pine in the vicinity of some of the native Caledonian pinewood remnants to reduce the risk of introducing the disease to these iconic woods. This can affect new woodland creation schemes and restocking plans. The effects of Chalara ash dieback (Hymenoscyphus fraxineus) can be seen across the country. If you own infected ash trees you are required to report it and to monitor tree safety and prune or fell trees where they pose a threat of injury or damage. Progress is now being made in the quest to find and selectively breed Chalara resistant ash trees, hopefully securing the continued presence of this valuable species in British forests. The Great Spruce Bark Beetle (Dentroctonus micans) is now turning up in some forests in south Scotland, where previously it was only found in England and Wales. Infestations of this beetle can substantially reduce vigour and cause tree mortality, and if left untreated this can affect the value of a spruce crop. However, it can be effectively managed by the controlled release of another beetle which is its natural predator, Rhizofagus grandis. The Forestry Commission will release this at infected sites free of charge. In all cases, catching signs of infection as early as possible is extremely important, as is good hygiene, rapid response and ongoing research. A sustained, collaborative effort is needed to maintain effective control. Although some of these pests and diseases can decrease timber worth, the UK timber processing industry continues to innovate to recover value. In addition, we need to be actively improving the resilience of woods. Increasing diversity of species and age in a woodland is key to reducing and distributing risk. Well-managed, increasingly diverse woods are likely to be a healthier, more resilient resource in the future. Forests remain a valuable asset and a worthwhile investment. A healthy and growing demand for timber, the rising value of forestry land and favourable tax treatment of commercial forests make forestry an attractive option for landowners and investors.
It is important for a landowner to act quickly if an Page 14 | Forestry matters | Summer 2018 | galbraithgroup.com
hamish.robertson@galbraithgroup.com 01738 456 072
The There’s never been a better time to unlock the potential of broadleaved woodlands, says Paul Schofield.
hidden opportunity in broadleaved woodland Broadleaved woodlands on farms and estates are an important and frequently under-valued resource with the potential to generate a wide range of benefits, including income from timber harvesting, improved game and wildlife habitat, shelter for livestock, improved water quality, flood management and landscape continuity. Over the past decade or so, the growth of the wood fuel market has provided the opportunity to bring woodlands back into management that may have been overlooked for many decades, allowing them to contribute profitably to the wider farm or estate enterprise. Broadleaved woodland varies greatly in character and composition. Examples include naturally regenerated birch and sycamore, mature oak and beech plantations or semi-natural and mixed policy woodlands. Conifers are often present, sometimes in small groups or as scattered individuals. Such woodlands are frequently small in area and sometimes occupy steep, wet or uneven ground which can constrain timber harvesting operations. They are often distant from public roads and lack the necessary access and infrastructure to enable lorries to uplift timber safely. Most sites are not without their challenges but in many cases these issues can be resolved with proper planning.
Grant funding is available under the Forestry Grant Scheme to help with the cost of new access infrastructure in under-managed or inaccessible woodland up to 50 hectares. Capital grants are available for construction of forest roads, turning areas and loading bays. If achievable, most woodlands benefits from regular thinning. Thinning restores lost productivity and enables dormant woods to flourish, allowing the removal of larger volumes of timber in the long term by providing more growing space for the remaining trees. Thinning also improves timber quality and resilience to storm damage in addition to creating more favourable conditions for trees and vegetation to regenerate under the canopy. The type of intervention appropriate for a particular woodland is dependent primarily on species, age and location. For example, small-scale clear felling may be more appropriate than thinning in exposed areas or where undermanagement has resulted in over-stocking and poor tree stability. Regardless of the type of management proposed, woodland operations must be planned with care to avoid damage to soils, pollution of watercourses and disturbance of protected species. This must also be balanced with
minimising running costs and producing enough timber to make the enterprise worthwhile. In recent years, the availability of low-impact machinery well suited to the sensitivities of broadleaved woodland has increased. A wide range of options now exist to suit most situations, including small-scale harvesters and forwarders and even traditional horse logging. For existing businesses wishing to diversify and invest in their own machinery, the Forestry Grant Scheme offers grant support for new small-scale harvesting and processing equipment of between £2,500 and £35,000, based on a maximum contribution of 40 per cent. With improved markets for low-grade timber, wider availability of suitable equipment and well-targeted forestry grants, there has never been a better time to unlock the potential of broadleaved woodlands. For advice on the feasibility of managing broadleaved woodland, including management planning, grant applications and felling consent, contact the Galbraith forestry department in Perth or Inverness.
paul.schofield@galbraithgroup.com 01738 456 064
galbraithgroup.com | Forestry matters | Summer 2018 | Page 15
The commercial potential of silver birch New diseases mean foresters need to look for other species to grow. Paul Schofield has a suggestion. The generally positive conditions within UK forestry have not prevented the industry from suffered a shock to the system in recent years. Since 2011, larch and ash, two of the 10 principal forestry species in both the UK and Scotland, have been severely affected by the arrival of new diseases, Phytophora ramorum and Chalara ash dieback. In terms of planning new woodland and regenerating existing ones, these species are largely unusable for the foreseeable future and are no longer eligible for grant aid. Foresters are a practical bunch, but losing two major species in such quick succession invites the question ‘what next?’ Globalisation has intensified the risk of pests and diseases arriving in the UK and there is concern that future climate changes will increase the risk of their spread and impact. P. ramorum, Chalara and Dothistroma needle blight (which affects pine) are currently the highest profile tree health issues in Scotland. Other potentially high risk pests under close observation by the Forestry Commission include pine tree lappet moth and the great spruce bark beetle. We all have a part to play in remaining vigilant against both new and existing threats to our woodlands but what else can we do other than react cautiously every time we spot some browning foliage? In recent years, Forestry Commission Scotland has promoted the concept of resilient woods, encouraging a greater variety of exotic conifer species to improve resistance to tree health events that might arise in the future. If one species is badly affected by a pest or disease, there will then be others to take its place and maintain a functioning woodland. There is logic to this approach, but with Sitka spruce comprising 44% of Scotland’s forests, achieving a significant level of diversity is challenging and the question of what alternative species to plant is not straightforward. There are good reasons why minor conifer species such as western red cedar and giant sequoia haven’t become mainstays of the forestry industry over the past 100 years. However, Scotland’s most widespread native broadleaved species may provide part of the solution. Birch is a significant and under-utilised resource with major attributes as a timber producing species. It is an economically important tree in
Scandinavia but there is little tradition in this country of using it as a commercial species. This is because they rarely grow to large dimensions without regular, heavy thinning to maintain diameter growth and prevent over-stocking. If managed correctly, however, birch has the potential to become a productive tree on a variety of upland forestry sites. Silver birch is a hardy species that can be managed for timber production on a wide variety of well drained mineral soils up to an altitude of about 350 metres. It is fast growing for a hardwood and can typically achieve yield classes of 6-8 cubic metres (timber per hectare per year) on suitable sites on a 40 to 60-year rotation. It regenerates freely and is associated with few pests and diseases. In addition, birch has high amenity and biodiversity value and is an excellent soil improver. Birch produces versatile, fine textured timber with the potential for a wide variety of high-value uses. It also produces some of the best domestic firewood available for which there is now a strong and well-established market. Using FC Forest Yield models, a rough comparison was made of the productive and economic performance of birch and Sitka spruce on the same moderately fertile site over two different rotations. In a 55 year rotation, assuming that both crops were thinned every five years and felled at the same time, the return per hectare for birch is approximately 75% that of spruce. Although cumulative production of birch is almost half that of Sitka spruce, its value is much greater overall as hardwood firewood. If reliable markets emerged for good quality birch sawlogs, such as flooring for example, then this picture would improve. In an 80-year rotation where the Sitka spruce is felled at year 55 and the birch is retained until year 80, the return is about the same for both, taking into account the restocking of both sites. With a greater commitment to growing productive birch, the strong firewood market may in the long term provide the platform for developing a resource of good quality timber large enough to attract investment from wood processors. Although birch cannot match the productivity of Sitka spruce, its economic potential and numerous other benefits suggest that it could warrant a more prominent place in the commercial forests of the future.
paul.schofield@galbraithgroup.com 01738 456 064
Page 16 | Forestry matters | Summer 2018 | galbraithgroup.com
Gaining experience in the forestry sector Heather Coyle reflects on her training for work in the industry. The Scottish forestry sector has ambitious targets. The current aim of 10,000 hectares of new woodland per year is set out in the Scottish Government’s Scottish climate change adaptation Programme. This is set to increase to 15,000 hectares a year by 2024.
still a huge amount of learning on the job as some things can only be learned through experience. Tutor John Christison, who has witnessed students come through the college over many years, said: “The Scottish School of Forestry has been producing forest industrial workers and managers for more than 36 years and it is fair to say that the vast majority have found employment in the forestry sector within six months of qualifying.
This spotlight on the industry has piqued national interest, but it also raises the questions of who will carry out the work and who will regulate it. Part of the answer is to be found at the Scottish School of Forestry, in Balloch, Inverness, which delivers courses in forestry and arboriculture, ranging from beginner level to PhD. This is the principal institution for forestry training and education in The Scottish School of Forestry. Scotland, and has a history of providing forest Over the years there has always workers and managers for been a demand for our students, both the public and private sectors especially the graduates, but the of the industry. current industry demand sees some Its principal, Elizabeth Barronof our students being snapped up Majerik, told me: “We have while they are still completing approximately 120 forestry students their studies.” per year and are in the process of registering students for the new Modern Apprenticeship in Trees and Timber.” The college has gained recognition for its practical approach, ensuring that students gain at least one year’s employment when completing their HND. I have been fortunate enough to have been in employment since enrolling at the SSF. I entered the course in conjunction with the Cairngorms Skills Project, which helps students gain experience while studying. This meant I was able to work in the industry for a day a week throughout the year, gaining practical skills and also extra qualifications such as the Deer Stalking Certificate 1. I also gained survey work experience with both a consultancy firm and a private estate during my second year before entering my placement year with Forestry Commission Scotland, located in Grampian. Now, in the last year of my bachelor’s degree, I work as a forester for Galbraith. I am nearly qualified from college, but there is
The forestry industry is founded on work-based experience and in a positive move for the industry, eight Modern Apprenticeship placements were created by Forestry Enterprise last November. Successful apprentices will be based in the south of Scotland and receive onthe-job experience and training with a Forest Enterprise Scotland team. It is clear that a new generation is stepping forward in the forestry industry, boosted by the availability of education, vocational courses, placements and volunteering. The forestry companies that take on graduates and give them the opportunity to develop their skills on the job are crucial to the development of the industry. I am incredibly fortunate to have been offered a role with Galbraith and work with a team willing to put in the time and effort to give me the experience and training I require.
heather.coyle@galbraithgroup.com 01463 245 355
galbraithgroup.com | Forestry matters | Summer 2018 | Page 17
Woodland is a high-performance investment, yet there are few investors, say Anna Henderson and Philippa Cliff. commercial forestry has been the top performing asset in the UK in the past 15 years, with the best woodlands generating returns of more than 10% a year. Despite the impressive performance and prognosis for UK woodland, very few investors are active in the market. Instead it is dominated by a handful of long-established woodland investment companies, and an even smaller handful of private investors, many of whom are foreign. The reason for this is not clear. It seems to be due largely to nervousness about an asset class of which few people have experience, but with professional help every step of the way any investor who is willing to take a long-term view can become a woodland owner.
Size does matter Claire Wightman looks at the importance of using the right machine for the job. Scale is a critical factor in forestry, both in terms of the size of harvesting sites and the size of the machines that work them. The trend over the past 30 years has been for harvesting machinery to get bigger and bigger. Technological advances have also increased the ability of these big machines to work on steeper and steeper slopes, but there is now increasing interest in smaller-scale machinery to work on smaller sites and sensitive areas. The drive to develop bigger machines has largely been fuelled by the desire to increase the efficiency of their work on largescale clear-fell sites. This has been very successful and has also delivered improvements in terms of minimising the impact of these big machines on the ground. For example, with larger booms the reach of the machines is increased which means there is less need to track up and down a site. However the standard machines have now become so big that they are becoming unsuitable for more intricate sites, particularly for thinning, which went out of fashion in the 1990s but is now a much more attractive option as there is high demand for the small roundwood products that it generally produces. For thinning operations the harvesting machinery works up and down cut routes known as ‘racks’.
Ideally these are created by removing one line of trees to help ensure that the remaining crop is left in a stable condition. Larger machinery may require two lines of trees to be removed, increasing the potential for windblow after thinning. Large machinery is also less manoeuvrable and more likely to damage retained trees. For highly sensitive sites there are very small-scale options such as hand felling and extraction with extra-small machines which extract four tonnes or less per trip. Horse logging is a rarely used option but there are some specialist operators who still undertake this work. These options are very slow and generally appropriate only where environmental protection is the priority and profit not a requirement. More and more harvesting contractors are now investing in smaller machinery to help meet growing demand from foresters. The wide range of options available includes smaller versions of standard machines and excavatorbased machines which are generally efficient enough to generate a good return to the landowner for the material produced and deliver high-quality thinning which will lead to good returns in the future.
claire.wightman@galbraithgroup.com 01463 245 690
Page 18 | Forestry matters | Summer 2018 | galbraithgroup.com
Here are five of the best reasons to consider buying woodland:
The supply of timber cannot keep up with global demand A strong past performance can signify a peaking investment opportunity and an impending fall, but the immediate and long-term prospects for UK timber owners are good. Timber is currently the fourth biggest UK import – we bring in more than 80% of our timber requirement – but a weaker pound has pushed up import costs and demand for home-grown material has increased, fuelling an immediate rise in timber prices. On top of this, there is growing demand for wood as bio-fuel and as a sustainable construction material. In the longer term, global demand for timber is expected to increase by a third by 2050, but in the same period the availability of UK timber, whether publicly or privately owned, is expected to fall owing to a lack of planting from 1990 onwards. Further price rises seem inevitable, which is good news for investors wishing to buy standing trees, or plant new ones.
woodland carbon code The Woodland Carbon Code (WCC) provides a means of adding value to planted land. The WCC is an initiative run through the Forestry
5
reasons to buy woodland
Commission that quantifies and validates the amount of carbon captured by new woodland planting. This process enables the subsequent trading of the carbon asset for offset of carbon emissions by industry. The Code can therefore be attractive to any woodland investor who can benefit from the additional income from trading woodland carbon units, but may also specifically appeal to an investor who has business interests elsewhere that require an element of carbon offset.
Planting land is relatively cheap to buy Arable land is the most expensive in the rural environment, with prices up to £35,000 per hectare for the best land, though more commonly around £17,000 per hectare. Increased demand for timber has driven a rise in forestry land values from just over £2,000 per stocked hectare in 2006, to an average value of more than £8,600 per stocked hectare in 2017. Planting land is currently worth less than £5,000 per hectare despite a rapid rise in value in recent years. With sheep farming facing increasingly tight margins and timber offering a better long-term prospect, large tracts of the Scottish hills are being converted to forestry. Scotland is the most wooded country in the UK although only 17% of its total land area is growing trees. Worldwide more than a quarter of land is forest, and in the rest of Europe more than a third of all land is covered in trees, so it is no surprise that the Scottish Government has stated its vision to increase the planted area in Scotland to 21% by 2032. With payment rates of £3,840 per hectare for diverse conifers, £5,520 per hectare for commercial broadleaves, and £3,200
per hectare for native broadleaves, plus enhanced rates in target areas, growing trees can offer better prospects than sheep farming.
Tax After two years of ownership, commercial forests are entitled to 100 per cent Business Property Relief from Inheritance Tax, and no Income or Capital Gains Tax is payable on the sale of timber.
You can literally watch your asset grow For some people, owning an asset they can experience, touch, see and smell is not something they would ever have contemplated; for a select few it is a must. Most people who invest in woodland have some experience of asset ownership already, usually in the form of other property, but for those that are used to seeing their asset values reported on paper, investing in something that makes that paper can seem challenging. With the help of a professional firm like Galbraith, it is possible to venture into this new asset class. Our comprehensive coverage of the industry gives us the ability to guide a newcomer through the unfamiliar territory of woodland ownership. Galbraith has been buying, selling and valuing woodland and planting land for more than 100 years. Recent transactions include: • Sale of 230 hectares of planting land in the Scottish Borders for £4,500 per hectare • Private sale of a 200-hectare woodland on the East Coast • Private purchase of a 150-hectare woodland in the Highlands • Purchase of a 430-hectare Perthshire estate for planting • Sale of 80 hectares of woodland in Aberdeenshire • Sale of a portfolio of woodland on behalf of the Forestry Commission, bringing the total sold on their behalf since 2010 to 5,500 hectares • Numerous Woodland Carbon Code applications.
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Global demand for timber is expected to increase by a third by 2050, but in the same period the availability of UK timber is expected to fall.
phillipa.cliff@galbraithgroup.com 01463 224343
anna.henderson@galbraithgroup.com 0131 240 6988
galbraithgroup.com | Forestry matters | Summer 2018 | Page 19
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