NZ forestry gains higher profile
New Zealand needs continued foreign investment in forestry but it is unclear whether the new coalition Government will close the door on overseas investors, the Forest Owners Association says.
It estimates that upwards of one million hectares of New Zealand’s 1.7m ha plantation forests are either directly owned or managed by foreign interests.
Forest Owners Association president Peter Clark said New Zealand needed foreign investment, partly because the amounts needed were so big and for such a long time. ‘‘We’ve got $25-30 billion tied up in our plantation forests and if you restrict foreign ownership then it’s going to have to be New Zealanders,’’ he said. ’’We could do it with taxpayers’ money but you tie a lot of money up in forestry for a long time. That’s part of the reason why the government got out of forestry in the first place.’’
Potential sources of funding within New Zealand were Kiwisaver or other superannuation funds. Already the NZ Super Fund had significant investments in forestry.
Foreigners can own land but they also lease it, especially for forestry. Leading investors are from the United States, Canada, Australia, China, Japan and several European countries.
Forestry’s profile has lifted now with the announcement of a separate Forest Service headed by a minister. Jim Sutton was the last full minister until 2004; since the sector has been headed by associates.
Meanwhile export revenue has boomed to just under $6b a year, fourth only to dairy, tourism and meat.
But a major headache facing the industry is a potential shortfall of trees. New plantings have plummeted from 100,000 ha a year in the mid-1990s to 3000ha in 2015.
Under new minister Shane Jones, the government has set a target of an additional 50,000ha of planting a year, which Clark describes as ‘‘optimistic but achievable’’. ‘‘In particular we do need to build the labour force to do the planting. At the moment we are struggling to plant enough trees to maintain the present area. We hope that Shane Jones being Minister of Regional Development will help in that respect,’’ Clark said.
He welcomed the idea of a separate Forest Service, and noted it would still be connected to the Ministry of Agriculture and biosecurity. The latter would be important because a number of pests and diseases threatened forestry.