John de Bueger
There was an interesting front-page story in the Taranaki Daily News last Friday concerning the objections of Federated Farmers to the projected sale of several eastern Taranaki hill- country farms to a foreign buyer for forestry purposes; the application for change of land use is currently with the Overseas Investment Office (OIO).
Their meat and fibre chairman, John McMurray, complained about the conversion of pastoral land into the "monsters of forestry and carbon farming".
He made the valid point that coastal finishing units depend on a supply of store stock from the inland properties, and with meat processors already unable to fill export orders, every inland conversion has serious ripple- down consequences for the whole industry.
This is undoubtedly true, but the situation is not quite as black- and-white as Mr McMurray paints it.
The fact is that these properties have been offered for sale several times in recent years, and potential pastoral buyers have had ample opportunity to snap them up.
Presumably, the reason for the lack of interest is that backcountry farming is barely marginal. It offers backbreaking, ill- rewarded toil in exchange (if you are lucky) for a once-in-a-lifetime chance of a windfall capital gain when you sell on retirement. Not unreasonably, sellers like to realise sufficient funds to be able to buy a town or coastal retirement block with sufficient residual to live on. This usually has the effect of pushing the cost of the property above its true earning potential, and making it next to impossible for young couples to buy in. The whole chain of ownership transfer is totally unsustainable.
This is a serious threat to the supply system upon which, as Mr McMurray rightly points out, this country is so dependent. Whether a capital gains tax would help is highly questionable.
It isn't just forestry ventures that Mr McMurray should have in his sights. Without a decent wool cheque, many inland sheep stations are unprofitable, and one might well ask why Federated Farmers has allowed wool marketing to degenerate into its current shambles?
In addition, the main reasons for recent reduced stock-kill were horror weather during lambing and because many of Federated Farmers' own members have voted with their feet and switched, not to trees, but dairying.
A couple of years ago, Jeremy Thompson - who is involved in the current sale - invited me to visit his property on Croydon Rd. We spent the afternoon driving around on his six-wheeler "quad" in typical Taranaki mid-winter weather - a howling gale interspersed by frequent squalls. My recurring memory of that afternoon is looking down a hillside over a neighbouring property. It was a wind-swept "green desert" of grass with barely a tree in sight. The cattle had "weather-vaned" against the gale and were huddled up in a waterlogged corner looking about as cheerful as emperor penguins hatching eggs in 60 below. The contrast with Jeremy's property could hardly have been starker.
As a forestry manager and advisor, Jeremy has a great deal of credibility. He was one of the early adopters of the agro-forestry concept in Taranaki. He put his money where his mouth is and took the brave step of slowly switching his own property over to full farm-forestry mode. The initial plantings on the least valuable land started over 30 years ago. Now every year, in addition to traditional store-stock sales, this property enjoys an annual income from logs. With serious shelter in every paddock, the whole situation is much better from the aspect of animal welfare. Regrettably, many farmers think trees take up grass space, while overlooking the simple fact that without shelter, stock need more feed to keep warm - at exactly the time when winter feed is shortest.
When the Taranaki Regional Council tries to persuade hill- country farmers to convert unsustainable steep slopes into the more profitable forestry option, they use a computer mapping/ cash flow model developed from Jeremy's records. The programme calculates projected cash flows for various possible options for the property over the 25-30 year "bridge" - before annual log-sales kick-in. It is not surprising that when the TRC wished to show the Prime Minister a more profitable and sustainable vision for this country's backcountry pastoral future, they took John Key around Jeremy's property. He can hardly fail to have been impressed.
The potential foreign buyer has stated his intention to plant high- value specialty trees. This is quite different to planting out good pasture with "dagg-wood", and locking it up for ever for carbon credits. If the buyer has the good sense to be guided by Jeremy's vision, it is hard to see anything but positives for this initiative, which is as different from the Crafar debacle as chalk is from cheese.
If the OIO allows the Crafar sale, we are merely hastening the process of becoming peasants in our own country by exporting our key export base. There is no reason why this eastern Taranaki project cannot be set up to continue to produce store lambs as well as high value timber, but I am not familiar with the potential buyer's plans. No doubt, the OIO will rule on such matters.
Instead of bemoaning the "monster" of forestry, I suggest Mr McMurray does a bit more homework, and starts to realise that you can (eventually) have your cake and eat it too when hill- country farmers put steeper, marginal land into trees while retaining their best land in pasture. It's called win-win.
* Disclosure: The writer is a member of the Taranaki Farm Forestry Assn, and along with 25 other (mainly) local investors, has been involved with Jeremy Thompson in a forestry syndicate in the Waitotara Valley for several years.
- Taranaki Daily News