As reported in AgriHQ Pulse last week, the sale of forestry tree seedlings at NZ nurseries fell in 2015 to their lowest level in six years, and FOA technical manager Glen Mackie regards this as part of a post-2000 trend.
“From 1955 to 2000, the area of NZ’s plantation forests grew from 344,000 to 1,769,000 hectares, an increase of 31,667ha a year.
“Since then the planted area has declined to 1,720,000ha, a decline of 3267ha a year.
“In addition, in 2015 there were 9300ha of harvested forest lying fallow, awaiting a decision from the landowner whether or not to replant,” Mackie said.
This finding contrasts the upbeat assessment of the sector by Trade Minister Todd McClay, who identified forestry to be a big winner in the Trans Pacific Partnership agreement.
McClay said regional NZ would reap the benefits with economic growth and jobs.
“Once TPP is fully implemented, all tariffs will be eliminated across the 12 parties, saving the forestry sector $11 million every year in tariffs, and that is mostly on value-added timber,” McClay said.
Mackie is in no doubt that forestry in the long-run is profitable, more so than sheep and cattle on a lot of second-class hill country.
“This is particularly so for established growers with good infrastructure, as well as for new forest owners on land that has good road access and is near to a port or processor.”
However, Mackie said government policy will always have a big influence on forest planting rates. More incentives appear to be needed than the prospect of lowering trade barriers.
“The review of the emission trading scheme might provide an incentive to address falling rates.
“If, as mooted, the 50% subsidy on existing emitters is removed this will increase demand and underpin prices for carbon credits.
“Reliable income from carbon credits – $15 a tonne or better – plus averaging of credit income through the life of the forest could help overcome these hurdles and be a game-changer for forestry,” Mackie said.
