MyFarm is promoting an offer to investors involving the transition to native species of permanent regenerating forests currently planted in Pinus radiata.
It seeks to raise $20 million in Terra Verde Investments Limited Partnership in minimum investments of $50,000 to acquire then lease out four permanent forests.
Three existing pine forests already cover 530ha in different regions to diversify risk and a fourth 460ha forest will be planted.
Two forests are near Gisborne, at Ormond and Ngatapa, and the third existing forest is at Pongaroa in southern Hawke’s Bay. The planned planting site is near Murchison in the South Island.
MyFarm is forecasting 8.5% annual return initially with inflation-adjusted rentals thereafter.
The lessee, New Zealand Carbon Farming (NZCF), meets all establishment and operating costs.
MyFarm chief executive Andrew Watters has sent out an explanation of what he describes as a well-structured permanently regenerating forests approach to carbon sequestration, using pines as a cover crop for native plants.
Although New Zealand needs large-scale carbon farming to meet climate change targets, establishing native forests from scratch on poor quality farmland is not practical, he said.
Native forests absorb carbon at a rate less than one-third that of Pinus radiata over the first 25 years and therefore three times the amount of land would need to be planted to achieve a desired sequestration.
“Secondly, a native forest can cost five to 10 times more to establish than a pine forest.
“This is because of plant and planting costs and the intense management required to release the plants from competing weed species and to manage deer and other animals that like to forage on young native plants.
“On balance, managing stands of pines with the aim of promoting native regeneration, is one of the best answers that we have to these issues.”
The Ministry of Primary Industries has published a review of the state of knowledge on transitioning from exotic to native forests.
“The stand scale, forest age and structure, microclimate and shade tolerance are of high importance to the structure and composition of native understorey regeneration.”
Climate is also a key factor in natural regeneration, with warmer, higher-rainfall areas close to seed sources being optimal.
MPI also pointed out that this management approach is relatively new and research has not been carried out into the weed and pest control measures that will be necessary.
The information memorandum for Terra Verde says in the established North Island forests being purchased, natives are already present and re-establishing as strong undergrowth in gullies and around natural water sources.
“NZCF will manage the exotic trees as a nurse crop with careful management and planned interventions to create the environment for a transition to a biodiverse native forest.”
NZCF has had an independent team of forest scientists working on its regeneration programme for the past four years.
It has established a series of lightwell gap optimisation trials throughout the conservation estate.
NZCF directors are Matthew Walsh and Bruce Miller, both also behind New Zealand Forest Leasing and its recent $60m purchase and long-term lease-back agreement with NZ Rural Land Company.