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Part two: The Forestry Grant Scheme and how to navigate it

Apr 19, 2021


David Kennedy has vast experience across the forestry sector, working in both the public and private sectors. Before joining the Forest Direct Ltd team, David spent 25 years with the Forestry Commission advising on grants, licences, woodland management, community woodlands and woodland creation. David is passionate about quality woodlands that utilise best forestry practice. Here he uses his vast knowledge to help break down the complexities of the Forestry Grant Scheme.

Some important points to understand BEFORE you start.

Having discussed woodland creation proposals with hundreds of farmers over the years, the following are typical issues that need to be understood from the start of any project;

  • Woodland creation – you continue to get your Basic payments.
  • It is a grant, and unless you have a sizeable area to plant, the grant may not cover the total cost of planting and maintenance.
  • The grant is paid at the end of the project once the work is complete and the claim is submitted and approved. You may need to borrow from the bank or have sufficient funds to finance the project upfront yourself.
  • Currently, a completed fence can be claimed separately from the final claim.
  • A new Scottish Forestry initiative ( March 2021) provides a loan scheme for woodland creation, offering up to 50% of the grant upfront. This is for schemes of up to 50ha in size; the loan is based on the first 20ha.  This may be equivalent to a loan of £50,000 approximately.  There are conditions behind this offer, but it is to help cash flow for farmers.
  • The scheme is scored by Scottish Forestry and is competitive. Small and expensive schemes may not get approval unless some of the capital items are self-funded.
  • There is an assumption that Sitka does not need deer fence protection, so the design may need to take this in to account.
  • There is a general move away from plastic, for example, tree shelters. Blocks of about 2ha of broadleaves in tree shelters may well prove cheaper to Scottish Forestry than a deer fence (not necessarily cheaper to you).
  • The grant is paid in two ways – once the capital works are completed, eg fences, mounding, planting, and a five-year maintenance grant that you claim on your SAF every year, which starts the following year.
  • Although the Forestry Grant Scheme is funded by different woodland types, called ‘options’, it is possible to mix most options. So do not panic about options; focus on the woodland type that fits your business objectives, and secondly fits the grant structure. Forest Direct can help with all of this.
  • Your proposal will need to be notified to the local Community Council and neighbours. Therefore, it is wise to get on with your neighbours and keep them informed as the project develops, especially if it impacts them directly. A key element to this is private water supplies and overshadowing.
  • It is possible for you to do some or all of the work yourself, such as fencing, mounding and planting, but beware, quality control and working to the agreed specification and area of the approved scheme is critical if you don’t want to have expensive arguments and delays of payment with Scottish Forestry.
  • You need to consider all the potential impacts that may be affected by the proposal. This is listed as “impact on human health and population, cultural heritage, soil, water, air, biodiversity, landscape, climate, land, material assets”. Currently, the two key stumbling blocks are peat and waders. 
  • Remember that the first three years are critical to a good woodland establishment, so front-load the maintenance and focus on quality.

To discuss the potential for woodland creation on your farm please get in touch with the Forest Direct team.