A new report warns the rising price of carbon has underpinned the conversion of 92,000ha of farmland to forestry and carbon farming, resulting in the loss of 700,000 stock units.
A report by BakerAg for Beef + Lamb NZ estimates 92,118ha of whole farm purchases previously grazed by sheep and beef has been converted to forestry in the four years since 2017.
It estimates 31,000ha of those purchases, or 34%, was for carbon farming and will never be harvested.
Included in the 92,000ha was 14,300ha bought for conversion to manuka for 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.
The cumulative conversion of all land from livestock farming to forestry between 2017 and 2020 is estimated at 139,500ha.
B+LNZ calculates that between 2017 and 2020, the shift to forestry has resulted in the loss of 700,000 stock units from 90,000ha.
The organisation disputes claims this land is unproductive saying while 90% is land use class 6 or 7, 64% is of low to moderate erosion susceptibility and primarily used for lamb and calf breeding.
The report attributes the growing interest in forestry to recent climate change policies and changes to the Emissions Trading Scheme (ETS).
“There has been some increase in pine prices, but a significant proportion of the increased activity has been the result of climate change policies, in particular the Zero Carbon Act and reforms to the ETS, and other policy changes that have made the purchase of pastoral farmland for a combination of forestry production and carbon (or carbon only) revenue more attractive.
“We anticipate this trend will continue as the carbon price continues to increase.
“Carbon is currently trading around $46/tonne.
“The Climate Change Commission in their May 2021 advice to Government modelled prices rapidly rising to $50/t, further increasing to about $140/t in 2030 and possibly reaching $250/t by 2050.”
While acknowledging an increase in the price of carbon is a tool to reduce emissions, it advocates limits be placed on the amount of forestry that can be used of offset emissions, saying further conversion of land will not result in lower emissions.
After a dip in sales last year due to Covid, the report says real estate agents have noted heightened interest from forestry investors this year.