The latest analysis of farm sales data confirms the increasing price of carbon in the Emissions Trading Scheme (ETS) is driving the conversion of whole pastoral farms into forestry, particularly for carbon farming.
Beef + Lamb New Zealand (B+LNZ) is tracking data on farm sales for conversion into forestry as concerns continue to grow over the unbridled ability of fossil fuel emitters to offset their greenhouse gas emissions by planting trees on productive sheep and beef farms.
These policy settings are estimated to have helped drive the loss of around 800,000 stock units. There are also worrying signs that carbon farming interests are spreading into new areas and onto more productive land.
The latest independent report by Orme & Associates released today shows that in the first six months of 2021, 14,219 hectares of sheep and beef farmland were purchased with the intent for planting into trees (11,585 hectares of exotic planting and 2,634 hectares of planting of natives for honey).
This data is provisional and is expected to be higher, given there is a long lag in farm sales being formalised and more sales are likely to have occurred in the first six months of the year but have not yet been formally reported.
Over 80 percent of the whole farms sold into forestry were in clear pasture, compared to 65.7 percent across the 2017-20 period. Additionally, there has been an increase in the amount of land sold in the Low and Moderate Erosion Susceptibility Classifications. The report also shows sales moving into new areas, including clusters of sales starting to emerge in regions such as Otago.
In addition, a further 8,832 hectares of sheep and beef farm sales in 2020 were formally finalised since B+LNZ’s previous report in August, adding to previously-reported data making up a total of 28,159 hectares purchased in 2020, 24,864 hectares of which was purchased for exotic forestry. This data shows that even with the effects of COVID-19 on sales, there is still significant momentum.
The report shows that the continued rise in the value of carbon is seeing demand and price points trend steadily upwards.
In 2017, 3,965 hectares of whole sheep and beef farms were sold into forestry. This increased to 20,227 hectares in 2018 and 36,824 hectares in 2019. This updated report shows a decline in 2020 to 24,864 hectares, most likely as a result of COVID-19. Based on discussions with real estate agents, land sales across 2021 are expected to surpass those in 2019 – meaning the amount of exotic planting will again far exceed what the Climate Change Commission has projected as a sustainable amount (25,000 hectares) per annum.
B+LNZ been calling for urgent changes to the ETS to stop the wholesale conversion of productive sheep and beef farmland into carbon farms.
Sam McIvor, B+LNZ chief executive, says the proportion of these farm sales to carbon farming companies is continuing to grow and the Government must take urgent action.
“The proportion of land sales into carbon farming in the last 12 months was 37 percent, up from around 34 percent in our previous report.
“We’re extremely concerned the sale of sheep and beef farms into forestry will only accelerate as the carbon price increases, and fossil fuel emitters will continue to receive a ‘get out of jail’ free card and not reduce their emissions.
“The carbon price is inarguably distorting the market with an increased effect on land values, but it’s also changing the type of land sold and where. That’s a major concern.
“There’s a much better way to increase planting to improve environmental outcomes and that is the integration of trees on farms. Farmers know their land best. We’re not anti-forestry – exotic planting can be integrated where appropriate – but it’s about planting the right tree in the right place.
“Our sheep and beef farms are already home to 1.4 million hectares of native woody vegetation – and land-use changes over the past 30 years have added two million hectares to the country’s conservation estate, the largest private sector contribution to biodiversity in New Zealand.
“This issue is important to our rural communities who are concerned about the wider impacts of large-scale conversion of sheep and beef farms into carbon farming, which does not support the same number of regional jobs. By my calculations, losing 100,000 hectares of sheep and beef farmland equates to the loss of well over 1,000 jobs, and our economy simply can’t afford that.
“New Zealand is the most sustainable producer of beef and lamb in the world and the Government risks undermining this position and gutting rural communities – unless it takes action now.
“It’s not just farmers who are concerned. Environmental NGOs including the newly-formed Native Forest Coalition have called for changes to the ETS, the need for joined-up and long-term thinking across Government policies to tackle climate change, the prioritisation of native afforestation over offshore projects, and the weaving of native forests into rural and urban landscapes.
“It’s time the Government listened – and acted.”
The report is available on B+LNZ’s website here.