They welcomed the Government mandate for Crown Forestry to lead the charge in ramping up forest plantings.
Cabinet gave the green light to allow the agency to enter into new commercial arrangements to plant trees on privately owned land and to provide $14 million to support planting this year and seedling supply for 2019.
Over the past decade the agency has been largely a low profile operator managing forests on Crown land.
Wood Processors and Manufacturers Association chief executive Jon Tanner said any Government initiative that gave forest planting more impetus would be welcome but processors also had to grapple with the here and now of markets not always conducive to encouraging imports of New Zealand-processed wood products.
“Looking out over a forest planting cycle it is good to know the Government is once again behind plantings, as are governments all over the world.
“However, it is also beholden on the Government to turn logs into jobs by getting trading conditions right for our processors.”
He cited three major markets where wood supply is tightly regulated or processors are subsidised to manufacture.
Canada controls its log exports closely and subsidises supply into its domestic market, Russia has an export tax on logs and China provides subsidies to wood manufacturers.
That has helped create the hot log market foresters face today with Chinese buyers able to bid up the price of raw logs, knowing they have subsidies at home to cheapen the processing costs.
“So the industry has been urging the Government to keep working in the background on getting such issues sorted and have everyone on a level playing field as processors.”
NZ processors face numerous non-tariff trade barriers with the World Trade Organisation estimating the number of restrictive measures was three times greater in 2015 than in 2010.
Forest Owners Association president Peter Clark said he had no doubt plantation nurseries can gear up to produce the 100 million seedlings required each year to meet the Government’s goal.
But a focus to assist forest expansion also needed to include skills training and regional road improvements.
“The Government could then get considerable leverage from private sector funding into forestry itself through a positive operating environment.
“This would especially be through making the Emissions Trading Scheme more attractive to participate in.”
Clark and Tanner agreed engaging with farmers would be critical to meeting the required land area target for forestry and there would need to be some incentive.
“Having the Government involved is very much back to the future for NZ after the experiment 30 years ago to privatise forestry.
“Tax incentives and carbon value will both be important to get the private sector engaged again in planting forests,” Tanner said.
