There’s a saying that there are two good times to plant trees: 25 years ago, or today. Timber values certainly underpin the merit of having mature woodland, with standing softwood prices up 200% during the past 10 years. Plenty of landowners are fortunate enough to own wooded areas planted by previous generations. For others, making the long-term decision to convert to woodland seems a step too far. Things need to change if the UK is to get anywhere near its tree-planting ambitions.

First, there are financial disincentives to woodland creation. These derive from the poor interaction between land use policy support and the economics of sustaining active woodland management. In England, Common Agricultural Policy payments are lost when land is converted to forestry, and the regulatory status of mixed-use systems like agroforestry is unclear. In Scotland, the regulatory framework is better, but grant availability and economic returns do not always align with environmental ambitions.

Improving the range of markets for forest products to encourage planting diversity, and forest management that supports public access and biodiversity, could help reduce the long time period before income returns from woodland creation. Favourable income tax rules that previously drove substantial (although not always appropriate) investment into tree planting have also been lost.

Second, woodland creation requires prior planning approval as a change of land use from agricultural production. The planning process is complex with large afforestation projects often taking well over 12 months to reach approval. A permissive system that created a bias in favour of woodland creation would help speed up decision-making and investment. Woodland creation is also a permanent change: at the end of a production cycle, woods need to be restocked rather than reverted back to farmland. As many farms seek economies of scale to reduce overheads, finding new space for forestry could mean major restructuring of farm businesses.

Finally, the availability and suitability of planting stock remains a concern. Tree health is a long-term bet against the uncertainties of climate change, pest control and border biosecurity. Choosing resilient varieties that also meet the needs of timber customers is not straightforward, and nurseries have been cautious about setting large numbers of plants in an uncertain market. Government may not care about longevity provided planting targets are met – but for woodland investors, risks have to be minimised.

Climate change

Of course, all of these problems exist before we even consider the influence of the climate crisis and emerging demand for carbon offsetting. There is a new sense of urgency to tree-planting ambitions as a result, but there are issues with this becoming a viable option for land managers. Currently, a sale of carbon credits from forestry or peatland accrues to the benefit of the purchaser, not the grower, and agriculture has to get its own carbon impact in hand first. The availability of generous grants and the ‘additionality’ rule in carbon accounting mean most planting schemes don’t claim the carbon credits, and the Woodland Carbon Code is too expensive for small-scale schemes. The market for carbon-accredited timber also needs clarification. The recent Carbon Guarantee (for England only) supports a carbon price, but will be ineffectual at driving new planting unless the other barriers are addressed.

The danger is that single-issue targets drive inappropriate land use outcomes. Until the issues are tackled in a collaborative and integrated policy approach to land use, tree-planting targets may remain little more than political bluster. Nevertheless, overall market sentiment is clear: competition for UK land use is becoming fiercer, with an increasing role for environmental service delivery challenging traditional productive norms. The diversity of income streams available may be increasing, but the role of the farmer in keeping everyone happy is unlikely to get any easier.

_{Read the articles within UK Cross Sector Outlook below.}