A report on the forestry sector by economist Mr Peter Bacon has said it is "highly regrettable" that the Government has cut funding for 2003 by 27 per cent when compared to funding for 2002.
In a report commissioned by the forestry sector, Mr Bacon's consultancy firm concludes that it makes economic and environmental sense for the Government to stick to its 1996 commitment to fund the development of 20,000 hectares of new forest on an annual basis.
Mr Bacon concludes that for every €1 invested in the sector there is a return to the economy of €1.59.
In that context, he says, the reduction in State support to the sector in 2003 cannot be justified as the returns from forestry compare favourably with many other areas of capital investment by the State.
Only 12,000 hectares of forest are to be planted this year.
The report, Forestry: A Growth Industry in Ireland, also concludes that the environmental benefits from forestry are "vast" as forests take in carbon dioxide from the air and produce oxygen.
If the government's targets on forestry were achieved, it would go some way towards the Republic meeting its greenhouse gas emission targets, the report states.
The report states that the two areas of economic benefit - timber production and greenhouse gas "sequestration" - are often in conflict, as forests are often felled for timber before their maximum environmental potential has been reached.
Targets for afforestation for the period to 2030 were set out in a report published in 1996. The main method for promoting afforestation is grants to the private sector.
The report criticises the decision to cut back on the level of funding for this year, arguing that "a stop-go approach" could increase the cost of incentivising investment in forestry in the future.
Policy should be amended to take greater account of forestry's role in "CO2 sequestration", and in particular a method of "green credits" to reflect the value of forests should be developed.
The report concludes that, viewed from the point of view of society, "the proportion of total value that is accounted for by non-timber benefits will rise as the economy develops and, over a sufficiently long period, the value of non-timber benefits could eventually outweigh the timber values of forestry".
Because the non-timber value of forests has been hard to quantify, the timber value has tended to dominate the official view as to where the value of forestry lies.
According to the report 9 per cent of all land was covered in forest in 2000, with 40 per cent of this being private forests and the rest forests managed by Coillte.
Conifers remain the main type of tree being planted and accounted for just under 85 per cent of new planting in the period 1997-2002.
