Saturday, February 24, 2024

Danny Simms: Threats to New Zealand’s Agricultural Export Industry

In New Zealand we are seeing a seismic shift in land use. If it was based on straight economics, we should accept it. However it is not. Vast areas of productive farmland is being taken out of production and planted in pine trees.

This is being driven exclusively by industry using our land to offset their carbon emissions.

 The carbon credit subsidy driven rush to plant tens of thousands of hectares of productive farmland in pine trees must stop.

There are serious costs to communities and the whole country that are not being met by the owners of the forests and the forestry companies.

I will focus here on fire and floods. However, there are many other costs. Rural communities lose people, businesses fail, schools close and more.

Extract below from Ministry for Environment and Ministry for Primary Industries discussion document. (Managing exotic afforestation incentives)

• Long-term environmental outcomes. Large areas of exotic planting with little ongoing management poses long-term risks of animal pests, disease, fire and wilding conifer spread.

Over time, fast-growing, heavy forests planted on steep, erosion prone land are also at risk of instability through heavy rain and windthrow, which can present long-term risks to downstream communities and for landowners.

 The recent effects of cyclone Gabrielle were multiplied manyfold by the impact of forestry on steep hill country. The slash and detritus carelessly left after harvesting with no consideration, and with total disregard to potential disaster caused much of the worst flooding damage.

Much of the silt came from the practice of cable hauling logs to collection points. This effectively ploughed the steep hillsides and left the soil loose and the heavy rain washed it down into the rivers and onto the land below.

The slash built up on bridge piles and turned bridges into dams and the rivers swept through farms, market gardens, orchards, houses, and farm buildings. Silt meters high full of forest detritus buried farms orchards houses and cars.

Once beautiful beaches are covered in forestry slash and trees.

Hundreds of millions of dollars, paid for by rate payers and taxpayers are being spent in attempts to clean up. A year later these remain attempts as any survey of the situation will show, and even more money has to be allocated.

If when land is taken from farms to forestry, this risk reality was sheeted home to those buying and planting the land with the requirement to pay the costs of future cleanup it would bring a reality check. Why should the general public pay?

Wild Fire.

The wildfire near Nelson is in pine forestry blocks. The Port Hills wildfire near Christchurch is in pine forest and cut over forest reverting scrub land. The chief fire officer said a big part of the problem is the forestry slash and felled logs and pine stumps that are very hard to extinguish.

Again, why should the general public pay when the organisations responsible for the plantings are creating, first the risk, and then inevitably the wild fire.

The vast areas of pine plantings used to achieve carbon credits that are proceeding at incredible pace are multiplying the risk. In the South Island, this former sheep and cattle pasture is in regions that are prone to fire risk with hot dry summers.

When in pasture the risk is minimal, and if dry pasture does catch fire, it is comparatively easy to control.

 On land planted in pine trees the risk is catastrophically high. We will in the future see wildfires on the scale seen in North America.

There will be huge cost to the New Zealand taxpayer. Again, this should be sheeted home to those planting the forests.

Then a proper business case could be made factoring this in. This would effectively stop these plantings. And so it should. Already it is the huge subsidy from carbon credits that is fuelling this rush.

Why should an even bigger subsidy of avoiding responsibility for the cost of wildfires and floods be given.

Ironically, many trees planted to give carbon credits and profits to companies are now and will in the future be burnt releasing all the CO2 they had sequestered.

The fire trucks and equipment, diesel fuelled, fighting the fires are releasing CO2. The dozens of helicopters fighting the fires burn fossil fuel and release CO2

And the biggest irony of all - the wildfires will be reported as being caused by global warming while in fact they are caused by stupidity.

The colossal stupidity of subsidising the planting of pine trees on productive farmland and creating a serious fire risk where once food was produced, and communities flourished.

And this planting would not have occurred without the carbon credit subsidy distorting the market. And likewise had the cost of firefighting and clean up after slash induced flooding been made to lie with the forest owners the plantings would never have happened.

And New Zealand boasted to the world that we had no subsidies.

Based on current NZU spot prices of around $70 to $80, investment returns for permanent exotic forests significantly outperform competing land uses, with an estimated investment return of ~$30,000 per hectare. This compares with returns in the order of ~$4,500 per hectare for sheep and beef farming and ~$20,000 for production  forestry. The profitability of permanent exotic forests in the NZ ETS relative to other productive land-uses will increase as the NZU price rises over time (source Ministry for Environment and Ministry for Primary Industries discussion document. Managing exotic afforestation incentives)

Compared to sheep and beef, solely through the carbon pricing and nothing to do with productivity, the returns are 6 times greater for the permanent never harvested forest and four times for the production forest. You do not need to be a mathematician to work out what our land will be used for, and it will not be for any productive purpose.

This is already having an impact on land sales. Real estate agents tell me that no sheep and beef producers can compete with those buying for ETS forestry planting and looking at the above figures it is obvious why. Many of these buyers are corporate and overseas investors.

And it is not limited to sheep and beef farms. In Northland many dairy farms are now going into trees. How long before the gold standard dairy factory at North of Whangarei faces serious through put issues.

As a former Dairy Industry Director I can tell you lack of throughput has a savage effect on the viability of milk processing plants

We are seeing our food producing land being planted in pine trees with the associated risks of wildfire, flooding and rural community collapse.

The meat industry will face serious issues with decline in sheep and cattle throughput at their meat processing plants. As the economics squeeze the companies will progressively close plants and truck sheep and cattle ever greater distances with those costs going directly to the farmers. This will accelerate the planting of ever more former productive farms in trees.

Unless this is stopped the inevitable outcome will be the demise of New Zealand export meat industry.

All that needs to be done is to stop the subsidy of artificial carbon pricing and credits

New Zealand has been a food producing nation in a world with burgeoning population and ever-increasing food needs. This may not be the case soon.

Danny Simms is a farmer and businessman and spent 21 years as a director of companies in the Dairy Industry and associated businesses. 


CXH said...

The author appears mistaken as the conversion of productive farm land to mono cultural pine forest is the best thing for us all. Why else would Iwi be demanding the right to keep the practice. After all they are totally concerned about the mauri of the motu and would do nothing to harm it, even for money...

KiwiBuzz said...

We must never forget that no matter how much we reduce our emissions, it will be too small to have any effect on world wide concentration of CO2. Therefore it cannot effect our climate.

It is a totally futile exercise and every penny will be wasted.

According to the Paris Agreement we should not do anything that reduces agricultural productivity.

Double madness!

Robert Arthur said...

What puzzles me is the carbon credit aspect of fires. Do credits have to be refunded? if not forthcoming does the state acquire the land? What if maori owned? I occasionally travel Tokoroa to Whakamaru. A decade or so ago I was astonished to see the pine forests stripped and with colossal expenditure of energy the stumps pulled and the land converted to dairy.
Where native bush is planted with pines, no attempt seems to be made to conserve the layer of rich topsoil.

Anonymous said...

Who is promoting the continuous diversion of taxpayer monies away from where they are meant to go, without imposing any measure of economic, environmental or public good cost-reward and accountability? Give control back to the people - let us vote where our taxes should go and we might have a chance of reducing the rorts and waste.

Rob Beechey said...

President Trump justifiably questioned this nonsense and withdrew his county from the Paris Agreement and the ideologues hated him for it. His stand took courage and the ability to overcome the brainwashed alarmism promoted by the corrupt MSM who peddle these lies.
Where is this leadership in New Zealand? When MP Maureen Pugh backed herself by questioning this nonsense our country ground to a halt. I was reminded by the little boy who asked why the Emperor was naked.
To sacrifice our precious arable land as an offering to the climate gods is a crime.

Pete said...

Oh dear, the Dunning-Kruger effect is strong in this writer. Perhaps some facts will help: forestry is a productive land use too, and returns are at least 3x those of pastoral agriculture on equivalent land classes. Even with out the carbon credits that the author is so disdainful of, it is far more productive, creating export earnings and tax income for NZ, so preventing the highest and best rural land use represents a subsidy to farmers from the NZ taxpayer. Plantations do not spread wilding conifers in significant quantities. In fact most of NZ’s wilding problems come from Pinus contorta and Douglas fir farm shelter planted over many years in the inland South Island. By contrast national plantation forestry regulations have strict rules around both species choice and planting location to prevent wilding spread, and while there has been the odd problematic block planted in the past, these are not the cause of the bulk of wildings. NZ already produces many times more food than our population can consume, and while the world needs food, it also needs timber, which we can grow almost better than anyone. In fact the total area of plantations is only just getting back to early 2000s totals, so hardly a takeover of the 12.5 mill ha of pastoral land. Employment in the forestry sector is actually least the equivalent of that from sheep and beef farming, so yep that argument fails too, and so on and so on. I could go on and on, but you perhaps get the point. Let’s argue from facts and not prejudices.

John S said...

And Danny - Exactly where and how did the Port Hills and Nelson fires start? Just asking

Richard said...

Not only do we need to cancel the emissions trading scheme, we also need to disassociate ourselves from the Paris accord, and repeal the legislation relating to "carbon zero" which emanated from that meeting.
Carbon zero is not only a "pie in the sky", it is unattainable and poses an unnecessary burden on the economic wellbeing of New Zealand.
Those who seriously consider that wind and solar will provide for our future energy needs are dreaming, and if we follow their dogma we will not only increase the financial pressures which every household in New Zealand now endures, but we will also waste so many of the resources which could be used for other more fruitful purposes.