Reading Susan Harris’s article last week left me little perplexed. While she quoted facts that on the surface seemed to reinforce her view that farmers were shouting about a storm in a tea cup over the conversion of good land into forestry somehow, I was still left feeling something wasn’t quite right with the picture she was painting.
There were probably three things that didn’t quite add up to me;
- that there was far more land in the ETS back in 2008 and therefore what’s the problem now.
- that it’s is only marginal land going into trees so what’s the problem
- that as well as carbon farming, bee keepers in the form of Manuka honey gatherers will also be looking at their farmland to purchase so farmers should be pleased and what’s the problem.
Looking at the land going into forestry I’m not sure farmers would be overly concerned whether it was going to be carbon farmed plantations or production forestry (which can also join the ETS) it’s largely that productive farmland is going into forestry that is the problem. Real estate agents, off the record, have also told me that what appears on the OIO document I.e. The forest is going be logged, eventually, doesn’t always match what they are hearing from the purchasers. This aside, the areas of land Susan Harris mentions do not seem to line up with data I can find. Ignoring forestry outside the ETS she states that (only) 140,000ha of land has been added to the ETS stock in the last 10 years and at that rate (14,000ha annually) it will take until 2579 before all of New Zealand is covered (now that is something to look forward to).
MPI data shows that they estimate new plantation plantings (Note, not necessarily Carbon Farming but then those numbers are in doubt) for 2020 were 34,000ha, and anecdotally it has been more since then with the rate held up by the ability of nurseries to supply seedlings. At that rate we will see the last blade of grass disappear in 223 years’ time. In the Orme report it actually says over 52,000ha of pasture land was purchased for forestry and while only 39% was earmarked as carbon farming that still comes to over 20,000ha. It probably isn’t important about how much land was registered with the ETS back in 2008 but despite spending the better part of an evening searching I couldn’t find the 750,00 ha mentioned by Susan Harris as that number. The best I could come up with was:
Between 1990 and 2019 it is estimated 769,702 hectares of that farmland was converted to forest, as follows:
- 1990-1999 – 490,101ha
- 2000-2009 – 167,989ha
- 2010-2019 – 111,612ha
So, between 1990 and 2009 potentially 658,090ha but not all of that was in the ETS. It should also be remembered that in 1988 the East Coast had Cyclone Bola and as a result of that one estimate of 141,581ha of Gisborne /East Coast land was planted in pines. In addition, parts of Northern Hawke's Bay and even the Manawatu had additional soil conservation plantings. So, the high rates of planting over that period can at least in part be explained. Also, there was a lot more land crying out for trees (still are). Also, the conversions from forestry in the Central N.I. and Canterbury Plains to dairy in and around 2013 (Gov’t policy to allow dodgy foreign units to be used) to dairying also impacted upon numbers. Although it could be said that this land has been shown it was (with improved technologies, arguably) too good for forestry. Another interesting collection of government numbers’ shows that land in forestry registered for ETS was:
- 2018 325,307ha
- 2022 419,699ha
- 2023 540,000ha
An average of nearly 43,000ha increase annually over the latest five year period.
The comment regarding that it is marginal land I.e. Classes 6,7, and 8. Classes 7 and 8 certainly could meet that description but be wary about using hard and Class 6 in the same sentence. Some may be but most is where our sheep and beef farming is done. There are even vineyards on class 6. As the accompanying map shows a large part of Hawke's Bay would disappear under trees if all Class 6 was to be planted.
Source: https://gis.hbrc.govt.nz/ (Hawkes Bay Regional Council)
The Orme report makes the point that carbon farming plantings have moved onto more productive land. “LUC Classes 2-5 (identified as highly productive for pastoral or horticultural farming) have grown from 9.5 percent of purchases with the intention to transition into (carbon) forestry from 2017-2019 to 15.5 percent of purchases from 2020-2022. While more than 50 percent of conversions took place on Land Use Class (LUC) 6 land1, this land is still highly productive for food and fibre production via sheep and beef farming.”
Finally, if these farmers are not happy about selling to carbon farmers then apiarists will likely come calling. Well it could be a long wait. Certainly, there have been plantings of manuka for the purposes of honey production but these are limited. Manuka seedling sales have gone back from a high of 9.2m in 2016 to 6.1m in 2021. Pine seedlings conversely have gone from 32.2m in 2008 to 91.8m in 2021 and likely cannot meet demand. Industry reports are that the honey industry in New Zealand is over supplied and needs to “pare(s) back production to a more sustainable level” but profitability will not reach the previous heights.
Perhaps rural schools have not closed yet although Mata school at Huiarua Station must be due to close soon as a result of the station's purchase and imminent planting. However small country schools run on a knife edge and even a single family leaving can have consequences which result in the school closing or a teacher leaving.
I’m not against farmland going into forestry but in my ideal world it should be because it’s not suitable for food production, not because an overseas investor sees a buck to be made.
Perhaps something to consider is that New Zealand feeds approximately 0.51% of the world’s population (40m) but (only) produces 0.17% of world GHG emissions. Emissions need to come done but we need to be aware of what the consequences are.
25 Comments
No - food is energy, which had to come from somewhere That is usually the sun, but more than most folk realise, it is from ancient sun via fossil fuels. Those labs need to scale using energy. What do you think it will be? Electricity? Enough more grid to supply the food calories? I don't think so. Ex Haber-Bosch, we won't be feeding 8 billion; perhaps 3.
Great article, though - this is what has to be debated. Needs to go further though; who said exporting is a given, ex fossil energy being applied to food? So why accept as one, Guy?
"Perhaps something to consider is that New Zealand feeds approximately 0.51% of the world’s population (40m) but (only) produces 0.17% of world GHG emissions. Emissions need to come done but we need to be aware of what the consequences are".
I have been saying this for some time. I see articles from journalists such as Rod Oram putting the boot into NZ farming and of course, from the Greens, but never with any mention of what the financial consequences would be of a substantial destocking.
Improving our transport emissions would yield a far higher emissions reduction, without jeopardising our much needed export revenue.
Whatwillhappen,
Sadly, he was a very good financial journalist, but now he keeps saying how far behind NZ farmers and asks them to look to Nestle as an example to follow. Now, Nestle, like most big businesses, talks the talk wonderfully, but will do whatever it takes to make a buck-by whatever means. Nestle's record is pretty awful.
For example, the NewClimate Institute and Carbon Watch have compiled a report on the carbon claims of 25 of the world's largest companies. They concluded that none of them achieved a high standard and I quote; "while the 11 companies that ranked the worst showing 'very low integrity' included Nestle".
I think the point to be made here is a humanitarian one, not an economic one. What happens to people in those countries who receive our exports when prices rise / production falls. Trying to say we should continue to destroy the environment for the sake of the "Economy" (whatever that is) is a weak argument, there is no economy without our natural ecosystems to support it.
I suggest you touch on the core problem. There are many humanitarian problems associated with the impacts of climate change and the solutions needed to address them. These problems create conflicts between what needs to be done and the welfare/equity of the people impacted. The wealthy will always be able to buy or influence the political outcomes so they are not impacted, at least initially. But then if they are seen to not be picking up their share of the burden, then politically the outcomes can be come interesting.
This is not just the economy but also food production. Most of those overseas are going to notice the lack of availability or increase in the price of milk powder long before the environmental impacts. Who's going to care about the environment when there's no baby formula?
Perhaps the government should limit carbon farming exclusively to classes 7 and 8 country. Then take another look at class 6 and split out the food producing bits and add it to class 5 then add the 6 back in again? Thanks for taking another look at this as like you her numbers did not seem to ‘add up’ in my mind as well. Painted a very rosy pro carbon farming ‘nothing to see here’ narrative for the reading public when there are very genuine concerns about how much food producing land we are losing every year currently.
All very nice Guy
Please explain why I am being flooded/inundated with land for sale direct from farmers and agents around NZ - you would say good productive land.
Just had another 3 farms totaling over 4,000 ha offered as a group with the farmers banding together to try and sell it as a big lot to forestry today.
These are generational farms who don't seem to care for the productive bit as they want the profit bit. Its not carbon only but timber with some carbon on these.
Don't blame forestry - look in your own tent at the lack of profit - thats why these people are baling as fast as they can.
Don't worry most forest buyers have closed the door so farmers can be happy trading amongst themselves.
Jack. Why do you think forest owners have 'closed the door'? I presume you mean stopped buying land. Is it planting stock availability, planters, funding or are they getting jumpy about the rules changes? If its rule change nervousness then they have clearly not been paying attention. Thanks. Alan
Bit of all - yes stopped buying land
1. Everyones booked up for the next 2 years
2. Overseas buyers are gone so big spenders are out
3. People who wanted into the game are already in or have what they want
4. Finance is getting very tough world wide - most people have no idea how hard it is to get debt on international markets at the moment - hence getting funding here is not easy - buckle up!!
5. Bad press - East Coast being applied all over NZ - the review there will be interesting as the questions are about landuse and farming maybe in for a rude shock.
6. The potential rule/ETS changes aren't unexpected at all - they have been forecast for years and no one believes we can just plant our way out of climate change.
7. Carbon price - its simply the market acting rationally as there's to much volume in the market via Governments from the past few years. This will swing the other way in a year or so. All those "speculators" so called are finding out about supply and demand. Look at supply and demand 3 to 5 years out - I feel like Im in the "Big Short" movie at the moment - the numbers don't add up ie massive shortfalls coming unless we agree to radically reduce MY own emissions - no sign of that.
The land market is reacting as interest, costs, returns hits farms and older farmers who want out - just look at farms for sale on trademe with many others on the market but not listed.
We are being, unsolicited, offered land at nearly 50% less than 12 months ago - no buyers sorry - farmers market now.
"Food or trees? the land use debate"
AKA Food or Climate Homeopathy? debate. Though it it is moot if you can debate with ideologues who believe in climate homeopathy. I guess it makes more money than old school ritual child sacrifice to change the weather.
Add to this the Production Forestry or Carbon Bludging? debate. Growing amount of forestry blocks being taken out of production/export receipts/employment for carbon bludging.
Tell that to the farmers who seem desperate to sell to forestry but as above forestry has pulled right back so all good - keep on farming and find a farmer buyer. Nearly all of these types selling arent interested in food, climate, landuse or trees - they are trying to escape as the reducing numbers show many have for the past 30 years.
It's really where capitalism has taken us - put simply, there's no money in growing food. Add to that, there's no money in providing accommodation. Add to that, there's no money in providing education.
But there's plenty of money in money lending, speculating on thin air (i.e., the movement of numerical digits) and arms manufacturing.
Jack Lumber. Interesting - your comment that the forestry buyers are finished.
In Northland one of the largest overseas buyers is still flat out signing up farms. And small local buyers are still signing up smaller better contoured properties, cutting houses, blocks off on the way to planting..
And I dispute all farmers are selling solely on price. I personally know of a recent sale where the vendor would only sell to another farmer. Tricky when the purchaser can always on sell to whoever.
Maybe some of the heat has come out of the over hyped rural market but its not returned to pre "Carbon Market" days.
Under the fast track approval process bought in by Shane Jones overseas buyers could not plant permanent forests solely for carbon farming. They had to agree to commercial harvesting at maturity. They can claim the carbon credits on the way through like any forester.
My concern is who is going to enforce harvesting if they have onsold the credits and left NZ. There are some large overseas investors who have ethical mandates in their decision making processes - its the here today - gone tomorrow types that concern me.
I don't work in Northland/CNI so you will know better than me there. In the lower/EC NI and SI where I work we are seeing a huge dropoff. I agree some farmers will make choices on who to sell to and good on them but they are the minority especially if the kids are involved in getting the most money out - you only get one chance!!
I have heard of 2 overseas buyers who got rejected at OIO so its getting harder for them and I cant see them anywhere near the same level. Many also tell me they are out of the new land game now.
Wheres the market going to go? I suppose I'm being very cautious at the moment as I feel we havn't seen the end of financial worries as interest rates need to keep rising - my friends in finance at the top level are also very nervous.
I believe good land for farming and timber (Forestry dosnt want the hard, steep eroding land - its uneconomic and high risk) will always hold its own in value.
Other places will not hold value and if we start to have rules based upon environmental risk both farming and forestry will not want this land - who does then? Would you buy a farm smashed to bits on the NI EC when we know its going to happen again and it maybe regulated you have to retire large proportions to forest cover, permanent, of some type?
Anyone planting just for carbon at high land prices is a very brave person in my view - we havnt seen much of this and I think the problem is people perceive any planting as just for carbon when its not in the majority of cases.
My understanding is demand has disappeared for farmland 150-200km or more from port but demand still there for land suitable for land based harvesting at 50km from port. Normal commercial considerations such as cost of freight and cost and type of harvesting are back in fashion.
Your comments on OIO are interesting - the prevailing view was the new rules were solely window dressing and the market would only hiccup for a couple of weeks and then carry on as usual. As to motivation for planting we wont know for sure until 25-30 years in the future.
No my overseas friends are clear its real and much harder - many have withdrawn from the market. Some may have a standing consent to buy a certain land area still in place.
The commercial forestry types are still around and if anyone wants to plant forests they need to get all the production costs right - this stuff in the middle of nowhere is crazy stuff and as I said buying just for carbon at high prices is very high risk.
If anything the EC issues have refocused everyone on risk and will put the light on gentle land (Ground based logging), close to markets, low erosion risk and easy roading.
There will be competition for this better land on all fronts as its the stuff where everyone can make a profit on - the never never will be again become the never never.
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