Friday, March 29, 2024

Treasury to review forestry policy

Neal Wallace
The Government has approved the sale of 32,644ha of farmland to foreign buyers since 2018 for conversion to forestry under its special policy that encourages overseas investment into the sector.
Reading Time: 2 minutes

Information provided by the Overseas Investment Office (OIO) reveals it approved through the forestry test the purchase by foreign investors of 30 livestock farms for conversion to forestry, and a further 35 existing forestry blocks covering 111,517ha.

The special forestry test was introduced in 2018 as part of the Labour-NZ First coalition agreement, which effectively streamlines the OIO process for foreign entities wanting to invest in forestry.

The policy is about to be reviewed by the Treasury, says an OIO spokesperson.

A spokesperson for Associated Finance Minister David Parker says the terms of reference will be released by the Treasury in the coming weeks.

The sale of livestock farmland for conversion to forestry has angered many rural communities, claiming it will result in the loss of jobs, people and services.

The OIO figures show that Hawke’s Bay (seven sales), Northland and Wellington (five each) are the areas where most farmland has been sold for conversion to forestry to date.

The latest information from the OIO reveals a company owned by European interests has been granted approval to buy three North Island livestock farms to convert to forestry.

Kingheim Ltd, jointly owned by Austrian and Irish interests, has been granted approval under the special forestry test “one-off purchase” process to buy nearly 1500ha class 6, 7 and 8 land for conversion to forestry in the King Country and Waikato.

It has also approved under the same conditions the sale of the 430ha Bay View Station in Hawke’s Bay to German investors for conversion to forestry, saying the land is predominantly class 6 and 7.

The volume of sales to foreign forestry investors does not surprise spokesperson for the lobby group 50 Shades of Green Andy Scott, but he says it is not the greatest threat to livestock farming.

The rising price of carbon and the Emissions Trading Scheme (ETS) pose a greater threat to food and fibre production and if foreign owners were prevented from buying the land, it will be bought by local investors instead.

At the current price of $37 a tonne of carbon dioxide, he estimated an investor in the ETS can earn $1500/ha a year.

Climate Change Minister James Shaw has said a carbon price of $50/t is needed to change the behaviour of emitters, a figure Scott fears will have dire consequences for land-use change.

“The ETS is the elephant in the room,” he said.

In the OIO’s latest decisions, approval has been granted to a majority Taiwanese-owned business to buy a 118ha Waikato dairy farm, which it intends spending $3.5 million converting to the milking of goats.

The shareholding ministers declined two further applications from foreign investors involving the primary sector.

One was for a meat and animal by-products business that intended to “expand the export of NZ meat products, provide greater financing to NZ farmers, and introduce new supply chain technology”.

Details were heavily redacted due to the proposal not being announced.

The second was for an American couple seeking to buy 131ha in Hawke’s Bay, on which they wanted to plant 60ha in manuka to produce honey for export.

In both cases the relevant government ministers, Damian O’Connor and Megan Woods, were not satisfied the proposed investment would result in substantial and identifiable benefit to NZ.

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