Thursday, August 30, 2018

Clive Bibby: The Forestry Industry - Saviour or Scourge

I have never claimed to be an authority on anything much but, just like a number of this column's readers, l have endured many experiences over a varied career that have helped to fashion some of the more informed opinions l now hold.

It is also true that my most strongly held convictions are based having had the opportunity to witness all sides of an issue, argument, event - call it what you will.

That is as it should be.

The development of the Forestry Industry in this country is the best example l know where our opinions are formed depending on how we are personally affected by its introduction to the area where we live.

Unfortunately, this relatively immature sector is gaining a life of its own and it is becoming hard to keep up with events that will shape its future - and ours!

What's more, in most parts of rural New Zealand, the industry hasn't yet reached puberty but is showing all the signs of a teenager demanding to be satisfied beyond it's parent's ability to cope.

My own experiences of the forestry industry's impact on a region are varied enough to help form a balanced view of how we should control and if necessary, stabilise or stop its growth.

I am a farm forester myself, having personally overseen a significant part of the farm being planted in pine trees as an adjunct to the economic development of our property.

I have become knowledgable of all aspects of the farm forestry cycle - planting, pruning, thinning and harvesting to the extent than l understand the ramifications of making this choice. I was so involved that l almost knew each tree by name.

The following are the pluses and minuses of allowing this rabid dog through the gate!


* I have certainly benefitted financially due to the extra income generated from this part of our farm.

However the financial rewards are a qualified benefit and need to be looked at in net terms after the cost of establishment are deducted. See negatives.

* Over the 27 yr life of the rotation, we have enjoyed much improved returns from what had been a relatively unproductive part of the property (steep, erodible hill country) that had traditionally supported quite low stock numbers.

* Our productive unit has contributed much more to the number of local job opportunities which is important in the context of a community that normally experiences higher than average unemployment numbers.

* The financial benefits from our forestry operation are not limited to our property.

The regional economy benefits from the returns generated by our forestry block in a number of ways and as a result, the industry has become an important contributor to the well being of the community.


* The establishment costs on this type of virgin marginal country are high.

Based on my own experience, due to the difficulty in gaining the services of scrub cutters, roading contractors, planting and thinning crews when you want them - for those contractors who are established in the area, it is almost a license to print money.

Consequently, the return on capital investment has to be based on the costs associated with the development over the whole of the 27 year cycle and any comparison with other forms of investment should be assessed on the net returns during that time.

* It is advisable to get a handle on the cost of cartage to the nearest export port before deciding to include forestry as one of your cornerstone investments. This item is probably the largest fixed cost for the average forester operating on the marginal hill country areas of his or her farm.

There is a rough formula that is widely used to calculate the profitability of forestry blocks and the most important ingredient in the calculations is usually the distance from the export port. For that reason alone, there are a number of large forestry estates in our area that, in a year when export prices are at a 5 yr average level, are uneconomic.

The only way to change that situation is to build an export outlet or some form of processing plant closer to the harvested property. For most faced with that dilemma,  it will never happen.

However, that type of scenario is the subject of the most intense regional development debates being held as we speak between land owners of some of the more remote areas of the country and the Regional Development Ministries representing the crown.

* The establishment of the forestry industry on this marginal hill country is usually associated with extremely high annual infrastructure (roading and drainage)  maintenance costs that have the capacity to threaten the existing local pastoral economy and the problem can only get worse if a decision is made to extend the plantings of the existing estate in the area.

* Local authority policing of the existing harvesting consents is another factor that needs to be addressed before we add a single tree to the nation's plantings.

Our property was at the epicentre of the recent Uawa/Tolaga Bay floods that have decimated large parts of many of my neighbour's properties leaving slash and silt on paddocks that would normally be an integral part of the more productive farming operations. Yet it is obvious that much of this devastation could have been avoided if the Council had been more vigilant policing the conditions of the consents that describe in detail the obligations imposed on the forestry owners.

* Unfortunately, communities like the Tairawhiti on the East Coast where l live have their own decision making problems when looking at their region's suitability for either a restricted activity or an expansion of existing plantings. Each region must weigh up the above opposing factors when deciding whether to include this industry in their Long Term Plans for economic development.

Which leads me to the question l posed when beginning this discussion.

Is the Forestry Industry either the saviour for areas that are in economic decline or a potential scourge that should only be tolerated if it can be strictly controlled?

I guess the answer to that question will probably be determined by the success of Shane Jones's overtures to those who own the last remaining tracts of land suitable for planting his One Billion trees before the next election.

Not only is time running out for deals to be negotiated that transfer the control of enough dirt to accommodate his ambitious proposal but unsurprisingly, he is finding the going tougher than expected even when dealing mainly with Maori groups. Their modern leaders are pretty smart boys and make no secret of wanting top of the range compensation in exchange for their signatures.

Good on them but l personally hope Minister Jones fails to achieve his objectives. l sympathise with Iwi's attraction to this super salesman but the antidote he is trying to sell them as a supposed cure for their local economic problems is only marginally better than snake oil. It is encased in a bottle disguised as the Provincial Growth Fund and while it may initially benefit the selected groups with single issue difficulties, it will do more harm than good for the bulk of the people in these communities who are starved of even the basic facilities needed for a quality of life they currently only dream about.

Oh, how we do need Shane Jones's money but, with the greatest respect for his current generous offer, it needs to be spent restructuring our neglected infrastructure - not on more trees. A decision along those lines will do much more for the remote communities we have identified where the gains have a greater chance of being permanent.

I'm hopeful that other regions looking at similar problems will have come to the same conclusions.

Clive Bibby is a commentator, consultant, farmer and community leader, who lives in Tolaga Bay.

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