Forestry needs to pay its way

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The current affairs programme Q & A, which played on October 23, raised some important issues regarding forestry that deserve local debate. It featured the dominance of foreign ownership in forestry, which they suggest is at 80 percent, and that these large multinationals are breaching their harvesting consents, protocols and obligations under the Overseas Investment Office to process in New Zealand. Hikurangi Farms got special mention for not honouring its commitment to build a processing plant and its unwillingness to supply logs to the ECT joint venture at Pacific Pine.

The environmental and social downside of forestry, with harvesting now in full swing, is hitting home to ratepayers. The growing number of forestry trucks congesting our roads, the damage from forestry slash blocking our streams and rivers and piling up on our beaches, logging trucks driving up the Motu river and stream beds, trashing the Old Motu road, and the contamination from log yards polluting the harbour are all clear evidence of this.

Is forestry so important to our local economy that we continue to allow them to breach their consents and subsidise the cost of their roading?

A snapshot of our regional economy suggests beef and sheep farming contribute $630 million of value-added revenue, horticulture/produce from our arable land contributes $338m and forestry is third at $280m. The employment created from each of these sectors suggests a similar trend, with horticulture forecast to create twice the number of new jobs as forestry.

Why then is our regional economic action plan, being led in Wellington by MBIE, likely to focus primarily on funding for forestry roads and bridges?

Tairawhiti Roads has presented an estimate of $25m to the council to fund the next stage of forestry rural road upgrades, most north of Tolaga Bay. Unlike horticulture, forestry already enjoys significant incentives from Government, from planting subsidies under the East Coast Erosion Control project ($1500/hectare) to carbon credits ($200/ha/year) and of course the $60m already spent on upgrading rural roads and bridges for forest harvesting.

GDC spent $26m on road maintenance last financial year, with 65 percent ($17m) spent on rural roads. The variable rating system, whereby they charge forestry blocks extra, only generated $1.1m last year while farming and horticulture were charged $2.65m. With forestry responsible for 85 percent of the tonnes carted on our roads it should be contributing more like $14m. The geology in our region is so unstable we have the highest cost of road maintenance in the country, three times the cost per kilometre in Hawke’s Bay.

The distance from a processor, or a port, is critical to the viability of forestry. With harvesting, cartage, port charges costing anything from $60 to $90 a tonne, the return to distant landowners is marginal. Cartage is approximately 25-32 cents/ km/tonne, so a 100km trip will cost 20-30 percent of the value of the logs carried.

Prudent forestry investors, like Roger Dickie with 92 forests in the Hawke’s Bay and Tairawhiti, will not invest in forestry further north than Tolaga Bay because of the distance to port. Fortunately now, with the manuka honey industry boom, there is an opportunity to permanently-retire much of this land, not viable for forestry, back to indigenous forest. The potential for landowners to receive carbon credits and revenue from beekeepers is a real game-changer for our region. It has been suggested that the combined net revenues from this option will outperform both pines and beef and sheep, especially on land north of Tolaga Bay.

Our council needs to seriously review how it funds rural roads and how it will ensure forestry meets its environmental and social obligations.

  • Rick Thorpe, Chairperson, Tairāwhiti Residents Assn.
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