Thursday, April 25, 2024

B+LNZ calls for carbon farm limits

Neal Wallace
Competition from carbon farming is driving up land prices and pushing first-farm buyers out of the market, says Beef + Lamb New Zealand. Chief executive Sam McIvor says a commissioned report compiled by BakerAg calculates carbon farmers bought an estimated 31,000ha in the four years since 2017, 34% of the 92,118ha of the sheep and beef farms purchased for conversion to forestry.
A lower carbon price not only reduces the financial incentives for businesses to cut emissions, but also reduces the cash raised for the government to spend on other things.
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Competition from carbon farming is driving up land prices and pushing first-farm buyers out of the market, says Beef + Lamb New Zealand.

Chief executive Sam McIvor says a commissioned report compiled by BakerAg calculates carbon farmers bought an estimated 31,000ha in the four years since 2017, 34% of the 92,118ha of the sheep and beef farms purchased for conversion to forestry.

“One of the interesting aspects which is parallel with housing, is the fact that carbon farming is driving land prices up, which is putting farms out of reach of young people,” McIvor said.

While timber prices have boosted demand for land, the report attributes a significant reason to climate change policies making revenue from a combination of forestry production and carbon, or carbon-only, more attractive.

“We anticipate this trend will continue as the carbon price continues to increase,” he said.

Carbon prices are currently around $46 per tonne, but McIvor says with the Climate Change Commission (CCC) forecasting prices hitting $140/t in 2030 and $250/t, competition is only going to get more intense, evident by increased activity this year.

Forestry is a legitimate land-use and has a role in climate change, but McIvor says carbon farming locks up land forever, allowing carbon emitters to offset their emissions without reducing the source of those emissions.

The report calculates the conversion of farmland to forestry and carbon farming meant the loss of 700,000 stock units from 2017 to 2020.

Included in the 92,118ha being converted, was 14,300ha for mānuka honey production.

Between 2018 and 2020, an additional 47,382ha was planted under the billion trees programme or Crown Forestry joint venture, of which three-quarters was for exotic trees and the balance native.

B+LNZ disputes claims the land going into trees is unproductive, saying while 90% is classed 6 or 7, 64% is of low to moderate erosion susceptibility and primarily used for lamb and calf breeding.

McIvor says he has been meeting with ministers and the forestry sector to air their concerns, particularly at the scale and pace of whole farm purchases and its impact on rural communities.

B+LNZ wants limits on the volume of offsets available to participants in the Emissions Trading Scheme (ETS), such as in California where it is 8%, and restrictions on the quantity of New Zealand Units (NZUs) issued to forestry participants for post-1989 forests for carbon sequestration.

The Forest Owners Association says the report asks more questions than it answers and lacks sufficient rigour for the Government to impose restrictions.

President Phil Taylor says the current forestry estate is still 162,000ha less than it was 18 years ago.

“Our concern on current figures would be that the CCC’s reliance on an expansion of the exotic forest area by another 380,000ha by 2035, to meet the 2050 greenhouse gas target, is going to fall well-short,” Taylor said.

“On top of that, the CCC anticipates there will need to be more use made of wood in construction and its extensive utilisation in biofuels to replace fossil fuel.”

“That means any government restrictions on afforestation will risk New Zealand not meeting its carbon targets.

“By the time that shortfall becomes clear it will be too late to fix it.”

Taylor adds that it is wrong to assume that farming will always be a better and more productive land-use than forestry.

“On the tougher hill country, B+LNZ are now demanding that even if livestock can barely survive on that land, then tree planting should still be restricted,” he said.

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