Overseas investors snap up land for forestry
Nearly 12,000 hectares of sheep and beef farmland has been sold to overseas investors over the past four months to be planted in forestry, Land Information New Zealand data shows.
Most of the land would be converted into permanent plantation forests. One sale was to a company that specialises in selling carbon credits to oil and gas companies.
Tui BidCo owned by shareholders in Australia, Canada and Japan, was granted approval to buy 2600ha of land from a Chinese owner for $1.9 billion.
In February, Cabinet agreed to make it harder for overseas investors to buy land for forestry.
Associate Finance Minister David Parker said at the time changes would be made to the Overseas Investment Act to ensure forestry conversions by overseas investors were of greater benefit to New Zealand.
A recent report, produced by consultancy Orme and Associates for Beef + Lamb New Zealand, found that over the past three years afforestation areas from whole farm sales averaged more than 40,000ha each year.
With more than 175,000ha of whole farms sold for afforestation since 2017, the country could expect a decline of around 1 million stock units of sheep and beef, the report said.
But a group of farmers is raising $45 million to keep a large central North Island station out of foreign hands and save it from potentially being planted as a carbon forest.
Leader of Forever Farming NZ, Mike Barham, said if the bid was successful the 5000ha Mangaohane Station in the central North Island would continue as a livestock station.
‘‘We’ve seen a sharp rise in the number of grazing properties being sold and planted for carbon credits so it’s time to make a stand against it,’’ he said.
The station is owned by the same family that previously sold Huiarua Station to overseas investors to be converted into carbon forest.
Mangaohane Station was for sale by international tender.
Barham said the group hoped to set up a syndicate to raise the money needed to buy the farm. A share in the syndicate would sell for a minimum of $250,000.
Barham said interest had been high, and one person had pledged $500,000.
According to the Bayleys website, the station produced 26,000 lambs a year.
It was ironic that foreign investors could not buy a sheep and beef farm, but could buy a sheep and beef farm and change it to forestry, Barham said.
The Orme and Associates report found export markets drove the sheep and beef farm sector, with 90% or more of production exported.
Based on last year’s export prices, if the 12,000ha was lost to afforestation it would result in export losses of $245m a year, the report said.
Afforestation switched land earnings from export revenue to trading of carbon credits, which were paid in New Zealand dollars, the report said.
Carbon-only farming produced virtually no jobs as there was no wood harvesting or exports, the report said.
New Zealand was the only country in the world to allow 100% offsetting of fossil fuel emissions within the emissions trading scheme. The EU only allowed 10% forestry offsetting, and California allowed 8%, the report said.
Beef + Lamb wanted short term policies in the Overseas Investment Act that curbed the sale of sheep and beef land.
Limits on overseas investment in forestry was needed as wealthy investors were taking advantage of New Zealand’s regulatory loopholes to make money, the report said.
The report said foreign companies hoped New Zealand’s ETS would eventually be linked up with the EU’s ETS, and New Zealand credits to offset their emissions.