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Allan Barber challenges Shane Jones to consider the unintended consequences of his headlong rush into forestry, as well as to disclose where all these logs or added value timber will be sold

Allan Barber challenges Shane Jones to consider the unintended consequences of his headlong rush into forestry, as well as to disclose where all these logs or added value timber will be sold
Forestry Minister Shane Jones plants a tree.

There’s an irony about the combination of the Provincial Growth Fund funded one billion trees programme, sheep and beef land being sold without needing Overseas Investment Office (OIO) approval for conversion to forestry, the sharp fall in Chinese log prices, and Shane Jones ranting about log traders being intoxicated by high prices.

According to Jones, these log traders should have supported the domestic timber processing industry, although it’s not immediately obvious how domestic sales would have compensated for log exports to China which exceeded $3 billion over 12 months.

The history of tree planting, well before it was seen as essential for meeting greenhouse gas reduction (GHG) targets, is no different from any other commodity. After an exciting start too much of anything inevitably provokes indigestion; think oil, dairy, sheep meat, wool, angora, alpacas, logs – you name it, there is always a cycle; the world may even turn away from New Zealand Sauvignon Blanc one day. China features strongly as a market which has a habit of dominating purchasing patterns, driving prices up before turning the tap off, although this was more of an issue when the state rigidly controlled all purchasing.

While Chinese demand for beef and sheep meat appears guaranteed because of the growth in the middle classes and a shortage of animal protein, meat exporters must be careful not to burn their bridges with the rest of the world. At least red meat exports to China are moving away from commodity supply towards meeting increasingly sophisticated consumer demand for added value product forms, although there is still the risk Chinese importers will switch to further processing at their end of the supply chain.

In contrast, logs are essentially a straight commodity with added value being limited to log type and specification. Lots of other countries have introduced tree planting programmes, so Jones’s scheme is not unique, nor is it clear where the markets for further processed timber will be developed. Without knocking the need for GHG reduction, it’s hard not to conclude it might have been a good idea to work out where the billion trees are going to find a home, admittedly in 30-40 years time. Estimates of the time for demand from China to recover fully range from weeks to six months to 10 years, so it’s clear nobody really knows.

It’s a bit rich for Jones to criticise those log traders for taking advantage of a ready market for trees which were planted a quarter of a century ago in the last great forestry boom, when Japan was the major market. As with other commodities New Zealand doesn’t have a large domestic consumption base, which means we must either export in raw form or find ways to add value before exporting. There are no commodity based businesses that can survive on the domestic market alone.

Jones is just another in a long line of politicians who invest large sums of taxpayer money into trying to get us to do something noble, otherwise known as altering behaviour or distorting normal market forces. In the case of GHG reduction, it is such an emotive topic politicians must be seen to take action, to appease both foreign governments and voters at home, as well as those who haven’t yet reached voting age, but are increasingly vocal. As an additional factor, the composition and modus operandi of our current government make it possible for a minority party to push its own agenda backed by taxpayer funds without proper oversight of the effectiveness of the investment.

Given a stable environment without sudden swings in incentive programmes the market usually gets things fairly right. Land and commodity prices respond to the relative demand between sectors reflecting, in New Zealand’s case, the international marketplace for what we produce and to a lesser extent changes in government policy. Since WW2 several key events have had a striking impact on the level of global demand for our exports and, as a consequence, land use. These events include among others: huge demand for wool during and after the Korean War, followed by an inexorable decline in wool prices, Britain joining the European Common Market, SMPs, removal of subsidies in 1985 causing collapse of sheep meat prices leading to growth of forestry in late 80s and dairy conversions since early 90s. The impact of free trade with a wealthy, modernising China and climate change are the two most important factors which currently present both opportunities and threats to which the sector must respond.

The most noteworthy change in land use during the last fifty years has been the conversion of sheep and beef farms to dairy, forestry, deer, grape and horticultural production, as well as urban sprawl. This has been driven by the returns obtainable from the conversions, all of which have been better than farming sheep and beef. Ironically, the effect of political pressure to encourage tree planting and a streamlined OIO approval process to attract overseas forestry investment coincides with the highest ever lamb prices in the international market.

While Shane Jones doesn’t give the impression he tolerates anything contrary to his world view, it would be helpful if he were to consider the unintended consequences of his headlong rush into forestry, as well as a careful look at where all these logs or added value timber will be sold. A look at past experience might be useful.

Current schedule and saleyard prices are available in the right-hand menu of the Rural section of this website. This article was first published at Farmers Weekly and is here with permission.

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Ethiopians recently had a national tree planting day ... they planted 350 million in a mere 12 hours ...

... getcha spade out Jonsey . . and start planting !

That’s a mind boggling number but I found a company in UK who claim they can plant 400,000 trees a day with two operators and drones.
They fire a germinated seed with nutrients, inside a capsule, into the ground.
Intending to plant mangroves as they capture carbon rather well.

But until some bright spark using clevver software and IoT manages to get them Drones to Vote NZF, that idea is a complete non-starter.....
Whereas all a them Planters, fed, housed and entertained on the PGF Dime, are unlikely to vote for anyone else (if at all...). It was never about Harvesting Trees - that's too many electoral cycles away - it's about Harvesting Votes.....

The shotgun loaded with tree lucerne seeds fired into the clay bank was long ago perfected by Neil Barr. Wood Pigeons love Tree Lucerne. I am having an extended contest with the last rabbit on my property, but have never dared to load the shotgun that way. But it would be good that every time I missed, (yet again) that some trees resulted.
Maybe I should just ask Shane for a million bucks to do some ammo reloading.

One could add to the issues above:

  • What is the plan for managing the thinnings, slash, etc of plantings and their management through to harvest - the dreadful example of the north-of-Gisborne log-jams springs to mind. Firewood for the nephs on the dole?
  • What is the plan for managing sediment generation and catchment effects, which will undoubtedly be more than minor on steep slopes and/or highly erodable soils?

Given that the PGF is effectively an NZF Re-Election Jam-jar full of taxpayer cash, I would not bet the farm on any such Planning having taken place....except the obvious Plan for the campaign....

Strongly agree with you on all three points Waymad.
Sadly, as the article points out, there is the Shane Jones world view. Any rationale contrary to that he dismisses through buffonary and on an assumption that if he throws in a few strangely used words and terms he will be accepted as being wise and intelligent. The man is totally egocentric.
Needless to say I won’t be on his party invite list.

"He was also concerned about land-based activities such as commercial water users, and forestry which was a major cause of sedimentation in the Sounds"

Forestry reduces sediment and smooths catchment water flows. The issue is that harvesting creates a five year window where a storm event can cause heavy sedimentation and debris if logs are left behind. It is likely that many or most of the PGF planted trees will never be harvested, i.e. planting is primarily for carbon sequestration.

I am really sorry to see that NZ regional economic development is essentially hijacked and dictated by a selfish, narrow minded, and vision-less minority party or just a guy.

Would the program include planting native trees? I'm not clear what the supposed plan is. If the intention is commercial forestry there is a lot of money that needs to be poured in on an ongoing basis, with a fair bit of manpower to carry out the work.

I get the feeling that this is just another KiwiBuild where there's no viable plan or design behind the hot air.

.. the plan hasn't been fully fleshed out ... as Labour only had 9 years in opposition to nut out some policies... and 9 days in discussions with Winston Peter's to come up with a bribe ...

Native trees are included , and a huge amount of research and planning is been done by MPI to administer the scheme. all 3 parties are behind it , Just Jones get all the media atention.

I trust that NZF strategists are reading these comments.
As NZF slip in the polls below the threshold for another term, they are going to need to work out where they are going wrong. Winston’s smugness and arrogance, Shane’s buffonary and regional slush (vote NZF) fund, and Ron Marks support for veterans using tax payers money but with the explicit vote NZF tag with it, do not sit well with Kiwis.

NZF = New Zealand Forestry ... or NZ Fakers ... tee heee ...

Can we raise it a little?

The4 reality is that farming was the activity which denuded the biodiverse landscape in favour of monocultural food production, reliant on fossil fuels (about 27:1, oil calories to meat/milk, arguably much more). So they need to relinquish some of the unsustainably-cultivated land?

Tough. Reality time, methinks. We've all been drawing down the planet, piling up digits in return and thinking ourselves rich. T'was stupidity and it's coming to an end exponentially fast. Forestry incursion is the least of current farmer's worries.

Is it rewilding time? -

I’m not convinced forestry is a great investment for nz. Grass produces a much higher amount of oxygen than trees. We can also farm it.

Many moons ago I used to audit forestry prospectuses. The ROI, is generally overstated. It also fluctuates enormously dependent on economic conditions, and price. It is also a very very long term investment. What sort of science has Shane Jones performed before going off on his tree planting crusade?

How much oxygen does our 200km exclusion zone produce? Is this taken into account with respect to our emissions? (The oceans create 70% of the worlds oxygen)

Or is this just a very expensive way to get his “nephs” off the couch. Or worse still, should the auditor general be following the money trail?

Planting trees with a lot higher enventual value than Pine would seem to be a solution to short term price schemes. Unlike produce and animals, you can just leave a tree growing till the prices go up again. Its the logging and process /transport companies that are hurt by price swings.

How many rotations of trees can you grow on the 1 property.
Does there come a time when after so many rotations the land is no longer viable for tree planting.

Not really. The pines grow with abit of artificial fertiliser , but aren't a hungry tree. Nor are most natives. Most natural forests are perpetual.

Lets get real. The world doesn't need any food from NZ - we only produce enough to feed NZ and Sri Lanka. Its sad to see some of these comments in articles - it really shows a lot of people are very narrow in what they believe will work or should be done. The fact is over 50% of all hill country farmers make no money - what a fun job (NOT). Forestry produces 300% more in export income per ha than hill country farming. More people are employed per ha by forestry than farming. I can easily remember times when we couldn't sell any sheep from NZ - they got slaughtered in the street, Butter mountains. Its a big world out there and all markets for all products will ebb and flow. Most of all Climate Change is real and we need to do something - its going to be a big change in the world in the next 20 years for everyone.

I see the dairy auction has resumed its downward slide - what is the future in being in dairy? Should we question all the dairy expansion that has taken place? Westland Dairy - sold to China, Fonterra $6 to $7 billion of debt, share price down putting more strain on farmers balance sheets and bankers sweat a little more . As I noted earlier markets change and as noted in the article there has been a continuing decline in traditional hill country farming due to other options being more profitable. The trend is continuing and as profitability struggles over time other landuses/options will arrive and take over if returns are low. Combined with demographic changes already locked in there really needs to be an opening of the eyes, be brutally honest and changes made to business as usual.