Clarky's Comment - A billion trees – The plan?

The plantation forest sector already plants about 50 million trees a year, mostly in restocking following harvest. If we count these towards the 100 million trees a year, the new ambition is for an additional 50 million a year as new planting. That is entirely achievable. In the mid-1990s the private sector planted up to 100 million trees/annum as new planting, on top of restocking. But since then pastoral land values have doubled and in some cases trebled. That creates a challenge as the cost of land has a major impact on the investment returns from forestry.

Step 1. Be clear on the objectives.

Any tree anywhere is not a plan that will meet my understanding of the main objectives, being:

  1. Regional development and employment.

  2. Helping to meet NZ’s Paris Accord commitments, particularly in the 2020 – 2030 decade.

  3. Land use change that supports water quality improvements.

Step 2. Put in place initiatives to address the blockages.

Land, labour and tree stocks are the 3 main blockages to overcome. Of those land is by far the most challenging. To qualify under the Paris Accord the new forest must be on pasture land. Plantation forest owners do own pasture land. The Crown has some that may be suitable but by far the bulk is owned by farmers and iwi. These private landowners must be convinced that planting trees on their lands is a good idea.

Entry of agriculture in the ETS is a good start. That gives farmers a good incentive to look at the tree planting solution. Now with the ETS, especially if averaging is introduced, there is no need to wait 25 or more years for a cash return. Averaging increases the “safe carbon” on conversion of pasture to forest, and provided harvested trees are replanted it removes both the harvest payback liability and the risk of NZU repayments following a catastrophic loss. Cash can flow after 5-6 years. Most hill country farmers do not yet appreciate that in addition to offering a natural hedge against a rising carbon price, well-located and managed woodlots are a more profitable land use than stock on that same land. Provision of information and extension services to farmers and iwi would be a good use of some Crown funding.

Labour for planting is in short supply. Adding an additional 50,000 ha cannot be achieved in year 1, even if we had the land and the tree stocks. There will need to be a build-up. In the meantime some introductory forestry training for young adults that teaches not only planting skills but also healthy living, work ethic, in some cases literacy, and keeps those young adults drug-free could be supported by the government. Planting takes place over 4-5 months during winter. There are some all-year jobs in thinning and pruning of trees but this will not accommodate all those involved in planting. In addition to full-time roles for kiwi workers I anticipate a need for some seasonal workers from the Pacific Islands during the winter months.

There will not be many extra seedlings available for 2018 planting as the 2018 seedling crop was already sown at the time Labour announced the billion tree policy. But nurseries can gear up to double production within 1 – 2 years so we can have seedlings available in 2019 and 2020 onwards. But nurseries will only invest so much on speculation of sales; that also depend on land being available and ready for planting. They need firm orders before buying and sowing seed the year before planting. The government has a role to coordinate land availability, put landowners in touch with nurserymen or otherwise contract seedlings to be grown to ensure sufficient supply of seedlings.

But what about seed supply? What species and what genetics? The first 2 objectives suggest that most of the new planting should be in species that will:

  1. Provide a good commercial return to the landowner and owner of the trees (if different).

  2. Eventually support expansion of, and additional employment in, wood processing.

  3. Contribute materially to carbon sequestration during 2020-2030.

That means fast-growing commercial species of the best genetic parentage known and available. Natives will have their place, especially for the water quality objective, and where commercial timber extraction is not viable or would risk serious loss of soil, such as on much of the land zoned red for erosion susceptibility under the new National Environmental Standard for plantation forestry.

Step 3. Support biosecurity, regional infrastructure, R&D, industry skills training and careers promotion.

Landowners will gain restored confidence in the sector and in establishing forests on their land if they see the government supporting those activities that improve the profitability of growing trees. In particular the regional roads in Northland and East Coast and to a lesser extent other regions, are broken. So is the funding model for these roads. Taxpayer spending on these roads and other fundamental enablers benefits the whole regional economy. It is money better spent than on being a long-term owner of trees. There is private capital available for planting trees if the investment is profitable – from landowners and investors, including foreign investors. Owning trees is very capital intensive. The Government has legitimate roles in showing leadership by planting some trees itself, and certainly in enabling the support infrastructure, but should have an exit plan for any trees it does establish using taxpayer funds. The greatest leverage on taxpayer funds employed will be in setting up the investment environment and encouraging the private sector to invest in tree planting.