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Marginal hill country owners in happy position of having multiple industries competing for land

Updated: Mar 21, 2023

First published at: on 21 March 2023.

Over the past two years there has been a stream of articles, commentary and even prime time television ads claiming that carbon forestry is taking over good farmland, reducing the production of food, and causing rural depopulation and rural school closures.

This seems odd when the total area of land in registered carbon forest is now 190,000 ha less than the 750,000 ha originally registered in 2008. A large drop in the price of carbon credits in early 2013 saw the removal of 350,000 ha from the NZETS, leaving 400,000 ha remaining. According to MPI’s latest figures, the total New Zealand registered carbon forest estate is 540,000 ha (MPI March 2023). The last ten years has seen an addition of 140,000 ha to the NZETS at an average of 14,000 ha per year. If carbon forestry expansion continues at this rate, it will occupy all 7.8 million ha (Pearson 2020) of New Zealand grassland by the year 2579.

However, one might concede that this analysis is somewhat superficial. Haven’t conversion rates accelerated recently? The Orme & Associates report Land-use change from pastoral farming to large scale forestry Update August 2022 (draft version 3) contains some timely analysis of recent trends. Its summary shows that conversions of pastoral land to carbon forestry from 2020-2022 Q2 (pro-rata Q3 and Q4 as for Q1 and Q2) comes to around 13,124 ha/year, very close to MPI’s registered 14,000 ha/year.

Adding the 2% annual increase rate reported by Orme’s, carbon forestry could occupy all grassland by 2150. With MPI figures, conversion is done by 2148 (MyCarbon® projection 2023). Forestry OIO investments are excluded from this analysis, as they are solely for production forestry, not carbon forestry (LINZ 2023).

The Orme’s report also makes a critical observation that carbon forest investors are targeting marginal land for their purchases: “It is also interesting to see that the traditional “carbon” and “honey” companies still favour land with less productive classifications.” Ministry for the Environment records confirm that 88% of carbon forest is on hard country – Land Use Classes 6, 7 and 8. Thus the claim that carbon forestry is driving farmers from good farmland and reducing food production has little basis in fact. Rather, marginal country farmers now have options to make that marginal country pay.

The allegation that carbon forest is depopulating rural areas is also overstated. The Ministry of Education has informed us that they have never closed a rural school because carbon forestry establishment has caused rural depopulation. School closures, and openings, occur according to a group of socio-economic factors, not just one (pers comm MEd 2022).

The key conclusion from this assessment of verifiable facts is that owners of marginal hill country are now in the happy position of having multiple industries competing for their land. The carbon cash does not immediately disappear off-shore in our experience. It is used to pay down debt, invest in more livestock and other improvements for pastoral areas, and for the purchase of adjoining properties. Other investments include new ventures in tourism, boutique commercial forestry, native forest re-establishment, and climate change protection.

Remember there is still 190,000 ha less registered carbon forestry land in New Zealand than in 2008, so it is completely absurd to proclaim that carbon forestry is taking over good farming country and significantly reducing food production.

This is the complaint of unsuccessful competitors for marginal land use. They need to look to their knitting. Carbon forestry will shape into its right place in the rural environment over time as one of several different revenue streams for farmers. It will never march across the country and occupy every single square metre of New Zealand grassland by 2148.

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