Friday, April 12, 2024

‘Third wave’ land use shift on the way

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MyFarm seminar to unpack the change it says will wash over rural NZ.
MyFarm head Andrew Watters predicts the lower North Island will look quite different within 10 years following a ‘third wave’ of land use change in New Zealand.
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A third wave of land use change is about to wash through much of rural New Zealand as a combination of economic, demographic and climatic impacts conspire to shift pastoral hill country farming within 10 years.

So says Andrew Watters, founder of MyFarm. Watters said the changes can provide as many opportunities as challenges for farmers, particularly within the lower and central North Island, and he is urging farmers to be curious about what they could gain from them.

The company is hosting a carbon and mānuka honey seminar on November 28 in Palmerston North to provide farmers, landowners and industry a forum to constructively examine the opportunities and how additional income streams can be leveraged from them.

“In my time we have seen the conversion of marginal land to sheep farming through the Muldoon era, and the second was the growth of dairy farming from 1990 to 2014 with cow numbers going from 2.4 million to over 5 million.” 

He said he foresees the third phase of land use change to be less pasture on North Island hill country, replaced by more exotic and native forests.

Farmers may not always like aspects of such changes, for example the large-scale arrival of dairying in Southland at the start of the dairy wave, he said.

“There are some unintended consequences of such land use changes.”

Most recently this had been in the form of concerns over increased plantings of forestry in traditional sheep and beef regions, and particularly carbon forestry. 

But the underlying causes could be sheeted back to a lack of cash surpluses from pastoral farming and an aging farmer population. Related to this the difficulties of managing the equitable succession of farm ownership from one generation to the next.

“If carbon is an investment, and it has a value, then suddenly a new income driver is there to consider.”

He anticipated anywhere from 500,000ha to 700,000ha of new forestry being planted in the next decade, some as native, some as exotic and hybrids of the two.

“With many hill country farms, you have income coming down and costs coming up and interest rate costs alone have doubled. Farmers can usually make their way through to the other side of that cycle. But when it comes to succession issues, the days of just being able to leave the farm to the oldest son are gone.”

Having a value on carbon presents an opportunity for families to consider options, whether they are to cash up and sell to forestry or consider the prospect of integrating forestry into existing land uses to support the needs of the farming family.

Other options the seminar will encourage farmers to consider include the planting of native mānuka on parts of the farm. The fast-growing native has a better carbon sequestration rate than most natives, and can provide a base for higher value mānuka honey production.

He is also anticipating in a decade or more there will be a form of biodiversity credit to bring additional value to land that is planted in such natives.

Farmers will have the opportunity to examine the spectrum of land use options such markets present, with input from the likes of Pāmu’s chief investment officer, Andrew Sliper, and Comvita’s chief operating officer, Tracy Brown.

Watters said not all hill country farms are suitable for wholesale forestry conversion, and Afforestation Partners GM Andrew Buswell will outline what does and does not constitute a convertible property.

“Whilst the core audience for this seminar is MyFarm investors, we have opened the doors for interested farmers and service providers to gather information,” Watters said.

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