Forestry Conversion A Concern for Farmers

More Southern farmland is set to be turned into forestry after a Swiss company was given consent to buy a nearly 500ha farm in South Otago for forestry conversion.

The Overseas Investment Office approved the sale of Clutha farm in Hillend to 100 percent Switzerland-owned company Corisol New Zealand Ltd.

Corisol paid nearly $5m for the farm.

The consent stated that Corisol intended to subdivide and sell about 71ha of land and convert about 400ha into commercial forestry, with planting expected to start in winter next year.

Sheep and beef farmer Stephen Jack, who operates just 10km south of the farm sold for forestry, said the sale was a shame.

Jack feared the government had not considered the consequences of its New Zealand Emissions Trading Scheme, which encouraged the planting of trees.

Rising carbon prices were a serious threat to rural farming in New Zealand, with many farmers being offered large sums to sell their land. Jack expected the forestry industry would be the death of sheep and beef farming.

Rising carbon prices had Jack planting trees on his 400ha farm. He'd even considered planting his entire farm because carbon forestry is more profitable than sheep and beef farming. However, the risk would be if the government changed its rules and the carbon income disappeared, leaving an oversupply of timber.

Jack had many concerns about forests taking over farmland, including the forests posing a fire risk.

Although some international investors were buying farms for commercial forests, he feared some trees would stay in the ground longer than consented because it would be uneconomic to harvest them.

Farms converted to forestry would reduce downstream employment opportunities and negatively impact companies, such as meat processors and rural service providers.

In July, the sale of Clutha farm was one of five sales of land for forestry conversion in New Zealand to overseas companies approved by the Overseas Investment Office.

Last week, Ingka Group - one of 12 groups that own Ikea - was given consent to buy 5500ha sheep and beef farm for forestry development.

New Zealand Forest Owners Association spokesman Don Carson said the effects of forestry expansion was positive.

On average, a PricewaterhouseCoopers report stated a forest had three times the value chain impact than a sheep and beef farm. Less than half the amount of people are employed on a farm in the same area of forest. Perhaps the issue is the perception of forests as unproductive.