Frequently Asked Questions
You join the Co-op by buying shares. The Co-op uses the share capital to purchase land for planting native woodlands by availing of government afforestation grants. The grant premiums support the functioning of the Co-op and the return of dividends to shareholders for the period of the grant scheme. As the land bank and the forests grow we develop other more sustainable forest-related income streams. We aim to plant native trees, create jobs and issue dividends to shareholders!
A cooperative, or co-op, is an organisation owned and controlled by the people who use the products or services the business produces. Cooperatives differ from other forms of businesses because they focus not only on profit, but also to bring other benefits for their members. In our case, we look to return a profit to shareholders, along with all the great benefits that come with planting native trees and establishing new forests.
Our Co-op has been set up and is supported by The Irish Co-Operative Organisation Society. ICOS have been supporting the development of co-operatives in Ireland for many years, building on the cooperative movement that kicked off in 1889 with the establishment of Ireland’s first co-operatives in Doneraile, Co. Cork and Dromcollogher, Co. Limerick.
When you buy into a co-op, you become a member and shareholder. Every member has one equal vote in the co-op. Before you become a shareholder, you will have the opportunity to review the Co-op handbook and see the full rules that we are governed by.
Shares are issued at €1 increments. You can join for as little as €25 (25 shares). Shares are purchased in multiples of €25.
The Board decides which shareholders can join and will issue a “call” for when we wish to raise share capital. This will typically be done when we are looking to purchase a new site to establish a new native forest.
You can purchase as many shares as you like, however there are specified limits on the maximum number of shares one person can own as specified in our Handbook. These limits typically are for large share purchases of over €100,000.
Each member (irrespective of the number of shares they hold) has only one vote in the Co-op.
Shares in a co-op work differently than in a private or public company. Unlike shares in companies, the share price in a co-op is fixed (in our case, at €1 per share). As a shareholder, you have the right to receive the profits of the coop, known as dividends.
When it comes to exiting the investment, your shares are not actually sold like in a company. Instead, The Board will issue new share capital to another member, and redeem (or cancel) your shares, returning your original investment upon exiting.
When you buy shares in An Dúlra Co-op, we use that money to purchase land. Once that land is purchased, we can work with Forestry Management Companies who utilise Government Grants to plant the native trees on our behalf.
The cost for of planting is covered through the Grant scheme and carried out by the Forestry Management Company which means we effectively use the majority of capital raised to pay for the following items:
- The cost of buying land.
- The stamp duty on the land (which is 7.5% on commercial land)
- Land registration costs
- Related solicitor fees.
Other than that, the only other fixed costs that the co-op has is accounting and auditing fees, and the cost of insurance.
Because the majority of the capital raised is used directly to purchase an asset (land), which then generates income (from the forestry grants and other projects), purchasing shares in the coop is relatively low risk.
The Co-op receives income from various sources. The primary income is from the grant premiums paid by the Forestry Service. This grant is paid every year for 15 consecutive years and typically works out at a gross return of between 5-6% on the original price of the land purchased.
We then have additional income that we will receive, such as:
Income from The Woodland Environment Fund. This is an additional once off grant that can be attached to a standard application under DAFM’s existing Native Woodland Establishment Scheme. It is paid from various corporate sponsors who work with us and the government to encourage us to grow native woodlands. This is a Government initiative and the sponsors receive tax benefits by sponsoring our forests.
In the long term, we plan to find sustainable uses for our land to derive an income long term, including:
- Firewood from thinnings
- Carbon credits
- Producing Forest fruits and products / fungi / other crops
- Free range deer farming / forest farming
- Tourism & recreation (camping, glamping)
- Commercial forestry with continuous forestry practices
- Biodiversity (and leveraging future grants)
- Environmental protection opportunities (e.g. sanctuaries)
- Woodland burial grounds
- And more!
Our goal is to deliver a minimum tax free return per year to shareholders of 4%. The gross grant income on the forests we purchase typically works out between 5-6%, so we aim to deliver a net 4% return after costs.
The grant income is only payable on each woodland we establish for a period of 15 years, so it is important that we establish other income streams for our forests in the long term. Viability of a properly regulated Carbon Market would definitely help, however, the plan is to add on sustainable forestry related income streams as part of the Co-op development plan.
Like all investments, your capital is always at risk, however overall we feel an investment with An Dúlra Co-op is a good one, for the following reasons:
1. Capital is used to purchase land directly. As such, capital raised is used to purchase an asset, which has a value and will likely increase in value long term. It is a relatively low risk investment.
2. The land is purchased specifically for creating native woodlands and availing of grant schemes which typically have a fixed return period of 15 years, after which the land is required to be maintained as woodland. You are investing in native forestry for the long term, at a time when native forests, biodiversity and carbon sinks are more important than ever with regard to the global climate crisis.
3. The Management of the Co-op consists of a 7 person board. The Board are volunteers and are elected by the shareholders themselves in a democratic manner. Every shareholder in the Co-op has one equal vote and The Board is elected every year at the AGM. As a result, The Management is actually made up of Shareholders themselves, and as such the interests of The Management are typically inline with that of the Shareholders.
4. The Accounts of the Co-op are audited every year by a third party and shareholders are entitled to receive a copy of the Accounts every year. This allows for full transparency into the accounts of the coop and ensures that everything stays above board.
It is important to note that with a co-op, rather than shares being sold, they are actually redeemed (or cancelled) and your original investment is then returned to you.
In practice, The Board will raise new capital from other shareholders and use that capital to redeem your shares - so the transaction itself works the same as if buying and selling shares.
Your shares can be redeemed at any time, however unlike a sharemarket (where there is a lot of liquidity), it may take time to redeem your shares. One of the differences between shares in a co-op and that of a sharemarket, is that with a co-op the share price is fixed. This means that when exiting your investment, you will receive your original money back that you used to purchase the shares.
What this means in practice, is that by investing in the co-op, you are gaining the right to receive dividends. These dividends are paid annually and can either be paid out into your bank account, or compounded by being reinvested into more shares instead.
We do encourage our shareholders to think long term when it comes to forestry investments. Forestry is a long term investment and receiving annual tax free dividends should be appealing to most investors.
When you wish to exit the investment please notify The Board by emailing [email protected].
The Native Woodland Grant supports “the establishment of new native woodland on open ‘greenfield’ sites”. This refers to land that has not been built on before – that might be open countryside, agricultural land, gaps in rural areas, land on the outskirts of villages or between existing houses etc. We will preferentially purchase land that has already been granted an afforestation license where possible.
Planting and ongoing management of woodlands can be expensive - however the government afforestation grants we are availing of cover the cost of tree planting and some years of service, depending on the specific grant. The grants are worked through Forestry Management companies, which handle all the planting of the trees on our behalf. The planting of the trees themselves is completely hands off from our point of view (however there are options to do the planting ourselves down the road, if we wish to go that way). This means there is effectively no cost to us for planting native trees.
There are a series of government afforestation grants. Of particular interest to us are the Native Woodland Grant Schemes. These “fund the establishment of new native woodland on open ‘greenfield’ sites; and the appropriate restoration of existing native woodland (including the conversion of nonnative forest to native woodland), through the provision of financial support to forest holders towards the cost of appropriate works”. A Short overview of the grant scheme is available here.
In short yes, permission needs to be granted by the Forest Service, under the Department of Agriculture, Food and the Marine. There are strict conditions on the type of land, type of trees, and type of applicants for planting - which are linked to eligibility for Forestry Grants. This is a core aspect of how the Co-op generates an income.
We work with both Forestry Management companies and auctioneers to find suitable land for planting and any offers we make on purchasing land is always subject to getting planting permission on the land.
It depends on the site. To get a license and submit a grant application you must work with a licensed NWS Forester. They carry out the initial assessment of the land to assess the most appropriate native woodland type, using the Native Woodland Establishment Framework provided. The Framework involves the NWS Forester appraising the site in terms of soil, location and main habitats / vegetation, and matching it to one of four scenarios. From this assessment flows the most appropriate native woodland type to promote, a prescribed planting mixture consistent with that woodland type. An ecologist or other specified type of ecological assessment is not a standard feature. However there are specific additional criteria which apply for some categories of land with additional protections (e.g. if the land is on or near a Natura site / includes the habitat of various protected species.
Yes. Each Forestry grant has specific criteria relating to site requirements, allowable species, provenance of trees and more.
The Co-op plants native Irish species on the land that we purchase for our current and foreseeable projects. The types of trees we can plant are specified in the relevant Forestry Grant Categories.
Of particular interest to us are the Native Woodland Establishment and Conservation Schemes, specifically the Grant and Premium Categories (GPC) 9 and 10, which allows us to plant the following native trees (see complete list in the scheme manual by clicking here):
Trees that we plant include:
- Downey Birch
- Sessile Oak
- Scotts Pine
- Cherry, Crab apple
- Guelder Rose
The scheme specified that the most appropriate native woodland type should be identified by the NWS Forester during the development of the grant application, using the Native Woodland Establishment Framework provided. The Framework involves the NWS Forester appraising the site in terms of soil, location and main habitats / vegetation, and matching it to one of four scenarios. From this assessment flows the most appropriate native woodland type to promote, a prescribed planting mixture consistent with that woodland type.
In addition “All tree species proposed for planting under Native Woodland Establishment GPC9 & GPC10 Native Woodland Establishment must be: (i) native to the island of Ireland; (ii) representative of the native woodland type or types being promoted on site: and (iii) acceptable to the Forest Service. Under GPC9 and GPC10, these requirements are met by the outcome of the Native Woodland Establishment Framework”
And on top of all that under Native Woodland Establishment GPC9 & GPC10, there are also rules about removal of non-native trees. So it is very much directed at Native Woodland.
We do remain open to government and policy requirements in this matter and other GPC options may be utilised for future projects as suitable and within our boards remit. However our intention is to focus entirely on native trees.
Yes the provenance of the trees is regulated under the relevant grant schemes. In the Native Woodland Scheme it is specified that all planting materials are traceable and sourced in Ireland, with some exceptions for example if there are stock shortages (see below).
Planting Material Specifications from the Native Woodland Scheme Manual
“In order to promote the conservation of genetic biodiversity, all planting material used under Native Woodland Establishment GPC9 & GPC10 must be:
(i) derived from suitable seed sources from within Ireland; and
(ii) fully traceable from seed collection to the planting site.
All planting material used under GPC9 and GPC10 is subject to EU and / or national requirements, to ensure suitability for use and traceability from source to final planting site.
(* Note that the Forest Service may occasionally permit material from other defined sources in order to alleviate planting stock shortages, specifically oak. Such changes are announced via periodic Forest Service Circulars (e.g. Circular 1/2015).)
One of the great things about the forestry grants in Ireland, is that by utilising the Native Woodland Grant Categories, it means that the forest cannot be cut down in the future.
This doesn’t mean that some thinning can’t take place and is required. This will happen overtime. In fact, as part of the maintenance cycle for a forest this does involve removing a percentage of the smaller trees after the first 18 years, this is solely to make room for the larger trees to expand and mature. There are grants for this and resulting timber is available to the Co-op as saleable produce: firewood, biomass etc.
But overall, the growing technique is known as continuous cover forestry, where the majority of trees will remain forever, and some trees taken out as needed for the good of the overall forest.
We work with forestry management companies that are experts in their field. There is an approved list of NWS foresters, who have to carry out Native Woodland Scheme Training to be certified to operate this scheme. They will plant and maintain our forests along with bearing some responsibility with regard to pests and frost for example, which could cause failure to thrive. In these cases they are responsible for replanting.