‘Short-sighted’ pine plan needles Feds
POLICY: Overseas firms buying up blocks for forestry is viewed as economic deadwood, Mike Dinsdale writes.
Selling Northland farms to foreign-owned companies to convert into forestry is not good for the region or the country, a farming leader says. Federated Farmers Northland president Colin Hannah is angry that more than 4660 hectares of productive farmland in the region have been sold to foreign-owned companies to convert into forestry under the Government’s special forestry test.
Farming groups have expressed alarm at the rate of farms being sold through the special forestry test introduced in 2018 to encourage more tree planting.
The Government is reviewing the test as the Overseas Investment Office (OIO) continues to approve sales. Seven Northland farms have been sold for forestry since the test began, including one in March this year.
Four of the farms sold for a total of $23,468 million but the prices of the other three were withheld under the Official Information Act.
The farms cover a total of 4661.527 hectares — the vast majority of which will be converted into forestry, much to Hannah’s frustration.
He said the sales are already causing issues that will be compounded if more farms are sold for forestry.
“The forests will not create as many jobs [as farming] with work for planting, pruning — if they do any, and harvesting but most of that is done mechanically.”
Hannah claimed all the profits would be taken overseas.
“As well, the companies will be earning big carbon credits for the forests but they will be selling those credits overseas so there’s no benefit to New Zealand,” he said.
In addition, Hannah spoke about the wider ramifications the sales had for the industries and towns that supply farms.
“There’ll be no new vehicles or sandwiches from the local cafe, no money spent on fertiliser etc.
“This is not good for Northland or New Zealand and it should stop. That’s all money coming out of the local economy while these companies take their profits back overseas,”
This is not good for Northland or New Zealand and it should stop. That’s all money coming out of the local economy while these companies take their profits back overseas — Colin Hannah, Federated Farmers
he said.
“Forestry blocks would also pay lower rates to the local council than farms, so the councils would need to recover that lost money from somewhere — generally other ratepayers.”
Hannah said taking away productive land took away the country’s ability to feed itself and the world.
“In 2017 there were 1135 dairy farms north of the Harbour Bridge. By the end of June this year there will be 800 and 20 per cent of the country’s beef comes from north of the Harbour Bridge. You can imagine what taking 4660 hectares away — that’s about 8000 animals — from that food production will do,” he said.
“We are really pissed off about it and this doesn’t add value to our region or country.
“This is very short-sighted and the Government should stop it or be taxing the hell out of these people.”
The Government announced in February that it was planning on making changes to the legislation by taking steps to ensure forestry conversions by overseas investors are of better benefit to New Zealand.
This will help ensure the right forest is planted in the right place for the right reasons, Associate Minister of Finance David Parker said.
“The changes to the Overseas Investment Act 2005, approved by Cabinet, mean proposals by overseas investors to acquire land for conversion to production forestry will be considered under the Benefit to New Zealand test, rather than under the streamlined ‘special forestry test’,” Parker said.
This change will apply only to forestry conversions, such as where overseas investors look to acquire existing farmland for planting into a new forest. There is no change to investments in pre-existing forests.
The Bill is expected to be introduced to Parliament in a few months. At the same time, some minor and technical improvements will be proposed to the Act to help with the operation and effectiveness of 2018 forestry-related changes.
National’s agriculture spokesperson Barbara Kuriger said she shared many of the concerns of farmers over the loss of productive farmland for forestry.
She said it was a fine balance, but she wanted to ensure that the right land was being used for the right purpose. She did not want to see the country’s most productive farmland converted to forestry.
The special forestry test is used when an investor is looking to invest in production forestry for harvesting. It was introduced in late 2018 in a bid to support the Government's forestry priorities, including more tree planting.
Farming groups have repeatedly called on the Government to urgently review foreign investment in forestry, saying too much productive farmland was being lost.
Figures provided by the OIO show between 2019 and 2021, 36,000 hectares of farmland nationally was been approved for sale to overseas investors.