The Irish Timber Council has warned that the proposed sale of Coillte's harvesting rights could lead to the closure of sawmills and the loss of jobs.
A report published by the council into the potential impacts of such a move coincides with an upcoming Dáil vote on the issue.
Speaking on RTÉ's News at One, Timber Council Chairman Pat Glennon said Coillte supplies 80% of the raw materials processed by the ten sawmills countrywide.
Mr Glennon said this amounts to 100% of Coillte's annual supply of 1.5 million cubic metres.
He said: "We could sell off these harvesting rights, but if we do that we stand a serious risk of putting 2,500 people out of work."
Mr Glennon said boosting what he says are already premium prices paid by its members for the timber or restricting supply would have devastating effects on the industry.
"If a new investor comes in he'll have to get a return on his investment, so this will actually have the net effect of sending prices higher in Ireland."
He said: "This undoubtedly will have the consequence that sawmills will close and we will loose jobs in our industry."
Mr Glennon said that while the sale of harvesting rights could raise money for the Exchequer, the Government cannot ignore the negative impact that this may have on rural communities.