By Colin Jacobs
OPINION: There’s strong consensus now, including from the rural sector, that responsible forestry on the right land can support rural communities, boost farm incomes and improve farm environmental performance.
There’s also a strong consensus that blanket planting of productive land and the ‘lock up and leave’ approach to so-called ‘permanent forestry’ are damaging for rural communities.
However, we support rotation forestry with high-quality timber as a product and believe that without responsible forestry we don’t stand a chance of meeting our Paris Accord 2030 climate change commitments.
Using trees to absorb carbon from our atmosphere buys New Zealand time to cut our carbon emissions and decarbonise our economy. Forestry is the bridge to a low carbon economy, not a solution in itself.
However, with the price of carbon more than doubling in the last 18 months, there has been a concerning international ‘goldrush’ for farmland to convert to forestry.
While offshore buyers have been prohibited from buying rural land, the ‘Forestry Pathway’ under the Overseas Investment Act provides an exemption. This exemption was designed to ensure we had adequate forestry investment to deliver against our commitments, but it is now having negative unintended consequences.
Close the path
The ‘pathway’ provides an almost automatic acquisition approval for international parties and overseas buyers are now flooding to invest in NZ farmland for forestry. In 2021, we estimate that approximately 20,000 hectares of farmland was sold to foreign investors for forestry conversion.
We cannot see the rate of foreign land purchases slowing down.
In fact, we expect it to continue to increase as countries and companies from around the world look globally for solutions to their own emissions.
We support offshore investment. Our farmers, in particular, rely on trusted trading relationships with the rest of the world. However, the use of the Forestry Pathway is now beginning to compromise the future of pastoral farming in NZ.
Farmers who want to continue to farm productive land are being ‘shut out’. It is the offshore buyer that is now setting the price, with prices for rural farmland skyrocketing over the last 12 months. Yes, of course, that benefits the farmer who is selling, but not for the next generation of young farmers looking to progress their family’s livelihood.
The time is right to close this exemption to protect rural communities. Offshore entities wishing to purchase land for forestry should be required to demonstrate tangible national benefits to New Zealand under the more rigorous provisions of the Overseas Investment Act.
Recently, for example, Drylandcarbon and a local farmer jointly bid for a 1,600 hectare property. The farmer would have retained 1,200 hectares for continued sheep and beef farming and 400 hectares of the steep, less productive land would have been subdivided for rotation forestry.
This is what we mean when we talk about forestry being complementary to current farming practices and the right tree being planted on the right land.
Unfortunately, the joint venture lost out to an offshore buyer that will plant almost the entire property. That’s more than 1,000 hectares of food production lost to forestry.
We routinely walk away from transactions because we judge the land to be too good for trees.
Where we buy a steep block with pockets of productive land, we look to subdivide and retain good land in farming. The offshore buyer is proving less discerning and, based on our observations, is much more likely to be planting land that we believe should stay in profitable, productive pastoral farming.
We are also concerned that the offshore buyer will use the carbon credits generated through carbon forestry for their own benefit and not assist New Zealanders to meet their climate change obligations.
Past its use-by date
We don’t need the Forestry Pathway anymore. The domestic industry is capable of meeting NZ’s climate change and timber requirements and, for the most part, is demonstrating a more sensitive approach to forestry that supports farmers and rural communities and will leave a viable farming industry for future generations.
The Forestry Pathway was introduced with good intentions, but it’s now redundant and doing more harm than good to our rural economy and communities. The time has come for the pathway enabling offshore parties to buy farmland to then plant in forestry to be closed as a matter of urgency.
- Colin Jacobs is the general manager of farm forestry partnership, Drylandcarbon.