Plantation forestry more competitive if farming made to pay for pollution
Plantation forestry and logging make a bigger contribution to GDP than either sheepmeat and wool, or beef, and are "hugely important" to the environment, a new report says.
Forest Owners Association president Peter Clark said pastoral farming, and especially dairy, were avoiding paying for pollution, to the disadvantage of forestry.
"We commissioned the report because we feel New Zealand is at a crossroads environmentally, and forestry is under appreciated and unloved," Clark said.
Focusing just on logging and forestry, and not timber processing, the New Zealand Institute of Economic Research (NZIER) report says the plantation and logging sector accounts for $1.39 billion of New Zealand's GDP, while its environmental value is at least $2b a year.
Clark forecast a crisis in several decades because of a lack of investment into planting. New plantings have plummeted from 100,000 hectares a year in the mid-1990s to 3000ha in 2015.
"What we need is equal treatment across all land uses. Land prices have risen fuelled by the fact that competing land uses are not facing their environmental degradation costs."
"That's the elephant in the room and it needs to be addressed. The rest of society will get tired of the polluters," Clark said.
Forestry needed a separate department within the Ministry for Primary Industries (MPI) and a minister rather than an associate minister, as at present.
"We don't feel we get sufficient love and attention from MPI. There is a lot of staff churn and the emissions trading scheme returns are not being processed on time."
Plantation forestry production is worth $3.8b, which includes the GDP contribution. This includes $301 million in salaries and wages, $1.1b on capital and land, $2.4b on contractor services and $171m on freight.
The sector generates 9500 jobs and is "extremely" important to the regional economies of the Waikato, Bay of Plenty, Gisborne, Northland and Nelson.
Clark sounded a warning about the deforestation of plantations, which was occurring at the rate of 13,000ha a year.
Plantation forests had been relegated to "some pretty hard country", which caused environmental degradation and erosion during harvesting and storms.
In the future there would be restrictions on planting on steep, highly eroding land, and forestry would shift to easier and more fertile country.
Forestry did not need subsidies, because once other land users were forced to pay the true cost of their operations, forestry would better be able to compete.
While there were a lot of individual, small forestry holdings, the largest owners tended to be from overseas.
"Most of the economic activity from forestry is in the services associated with it - logging, trucking, management, port services - heaps of inputs which stay in New Zealand.
"These forests tie up a lot of capital for a long time, does New Zealand have the capital to divert into forestry which could be deployed into small and medium enterprises," Clark said.
Plantation forests use 1.8 million ha of land, or 7 per cent of New Zealand's surface. Radiata pine dominates with 90 per cent of planted area, followed by Douglas fir, eucalypts, cypresses and redwoods.
The report was commissioned by FOA and the Farm Foresters Association.