Southland District Council forests drop 3.7pc in value

Southland District Council-owned forests have dipped 3.7 percent in value in the past year.

The council owns more than 1500ha of mixed-age conifer plantations on four separate blocks -- Dipton, Gowan Hill, Ohai and Waikaia Forests.

The valuation was carried out on June 30 and found the tree crop was worth $9,857,720, down from the previous year's total of $10,241,640.

Forest manager Roger Washbourn told councillors at a meeting of the council's Forest Committee yesterday reasons for the dip in value including changing company tax rates, changes in log prices, more land being used for lower-yielding tree crops and increases in harvesting and overhead costs.

The Emissions Trading Scheme had not had an effect on the forests' value because there was no procedure for the scheme yet, and so no adjustment made to the valuation, he said.

However, Mr Washbourn said the market was beginning to factor in ETS costs in the price paid for land.

"The ETS constrains the sale of land in such a way that for most forests, the highest and best land use valuation criterion is no longer relevant, as the land use is effectively constrained to forestry only."

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