For most rural councils, their major expense by far is roading. Roading is almost exclusively funded by rates and a funding assistance rate (FAR) administered by the New Zealand Transport Agency (NZTA). In most rural districts rates are based on land value, and the FAR is funded in part by road user charges (RUC) and, in part, from the consolidated fund.
Land classified as being production forestry has a lower value than if it were in meat production or dairy. This is a trend that seems to be getting worse. For example, the latest valuations in Kaipara, the district in which I live, where the average valuation has gone up 17.5%; forestry has gone up 5.4% and pastoral 7.5%.
This trend is not surprising, as land value is based on the likely sale price of your land should the land be vacant. Land in production forestry trends lower because it has less versatility. This throws up a number of anomalies which councils have to deal with. If your farm is predominantly dairy, then that is how it will be rated – if you have substantial woodlots on that farm, so long as the predominant use is dairy, that’s how it is all rated. Same for meat and wool farms. So, woodlot owners generally pay considerably more in rates for their forested land than do pure forest stands.
As a percentage of the rate take, without adjustment by way of targeted rate, production forestry pays not much, and it is getting less. So as the wall of wood moves inexorably on, and pressure on the roads gets greater, forestry contribution through rates is getting less.
One of your correspondents asked if a tonne of wood is any different to a tonne of meat. The answer is no, but what tonnages are we talking about? In the north, forests will grow at up to 25t per hectare per annum. That doesn’t all go on the roads of course, the slash gets left behind at harvest, but you will still have 20t per hectare per annum. A meat and wool farm producing 400kg of meat per annum, which goes out as 800kg liveweight, add in some input tonnage like fertiliser, and you’ll struggle to get to one tonne per hectare per annum. Five percent of the tonnage of weight put on the system is forestry. Because of rating valuations, pastoral farmers pay more in rates than forestry. If a district is using a uniform annual general charge (UAGA) per rateable unit, it will skew the figures even further in favour of forestry.
Dairy farms, because of the amount of water in milk, produce more tonnage than meat and wool farms, but about 45% of that produced by forestry. But remember that dairy farms pay considerably more rates.
In Northland, according to the Northland Regional Council’s (NRC) 10-year transport plan, 60% of all heavy transport is wood or wood-related products. I suspect the same trend is true for most rural areas. However, the contribution from log transport through RUC is 75% of that paid by other heavy traffic configurations. This is because they “piggyback” their trailers on return trips. It is not illegal for them to do this, but it does diminish their contribution to the pool of money administered by NZTR and distributed to district councils by way of FAR.
The current situation with regards to contributions from forestry towards roading is clearly not sustainable and, with the increases in planting, it will only get worse. In the absence of any real reform in how roading is funded, councils have to take some measures to protect the network and ensure some equity of funding. It seems to me that is what they are doing, and good on them.
Personally, I consider forestry an integral part of the rural matrix, and my wife and I are farm foresters, all I ask is that they pay their way in roading, and act responsibly at time of harvest.
Who am I?
Richard Alspach is a Northland farmer who has been involved in Federated Farmers and local body politics, and was a close observer of the last time forestry fever hit the province.
