Regional Council RTRP project lead Michael Bassett-Foss says the partnership between Hawke’s Bay Regional Council and The Nature Conservancy could be profound for the region.
A new project is looking to bring farmers and private investors together to plant trees on marginal land while still retaining productive pastoral farming on those properties.
The Hawke’s Bay Regional Council is partnering with global environmental organisation The Nature Conservancy (TNC) in what it believes could be a game-changer for the region in addressing erosion and sediment problems in waterways.
The two groups are working together to potentially leverage investment in the council’s Right Tree, Right Place (RTRP) project to deliver what they see as enhanced economic and environmental benefits for both farmers and the environment.
Regional Council RTRP project lead Michael Bassett-Foss says the partnership with TNC is an exciting opportunity and a New Zealand first.
“The results of our partnership with TNC could be profound for the region. TNC brings global investment market credibility, environmental research expertise and valuable networks to the project,” Michael Bassett-Foss said.
“TNC’s initial assessment of the RTRP project indicates it could attract investment and deliver a large-scale tree planting programme to address the region’s significant erosion issues as well as to accelerate the adoption of regenerative agricultural practices on productive pastoral farmland.”
Bassett-Foss says the regional council will invest $4.8 million to trial the RTRP concept on up to five farms and it will offer a funding arrangement to landowners to plant trees to earn a return on economically marginal land, which is often erodible.
The tree species being considered are those with the greatest potential to deliver a long-term farm return through biodiversity outcomes as well as revenue from carbon, timber and mānuka for honey.
“The trials will show how farmers can get an alternative revenue stream from marginal land, allowing them to develop their pastoral farming operation. This will show a viable alternative than whole farm afforestation,” he said.
TNC NZ director of conservation Carl McGuinness says the partnership is an exciting opportunity to support farmers and deliver enhanced environmental outcomes for Hawke’s Bay by providing viable economic options for farmers, financing to support change and implementation on a scale that delivers economic and environmental benefits across the region.
“We are looking forward to progressing this opportunity in partnership with the regional council and working alongside the Hawke’s Bay’s farming community,” McGuinness said.
“We’re not talking about whole farm conversion here. We’re just talking about planting somewhere between 5-20% of the total farm area, focused on marginal land that is at higher risk of erosion.
“That’s totally the farmer’s choice as well.”
The aim is to use impact investment to fund a scaled-up programme, leveraging the council’s initial $4.8m investment and potentially scaling this to a $50-$100m broader investment in tree planting and regen ag. The impact investment provides the capital to enable farmers to make the on-farm changes they want, now.
Impact investors want to see a financial return on their money, but they also want to see a social or environmental benefit or ‘impact’ from that spend.
“It’s like green investment,” he said.
“You’re investing in something to do good and get an environmental benefit and also to get some of your financing back.
“A key for an impact investment is there needs to be some additional increase in revenue because that’s the money that allows you to repay an investor.
“So just like anyone investing, you need to repay over time, but we’ll be committing to delivering both on conservation benefits and how we measure that, like improved freshwater quality or carbon sequestration, but also the financial benefit.”
McGuinness says it’s very early days for the project and there is a lot of work to be done before they know exactly what the structure of the arrangements will look like.
“We need to identify what farms will be in as part of the pilot, what are the actual on-the-ground activities that they will be interested in testing and trialling (and) how will we monitor that?” he said.
“Then you’ve got the other side of it. Who will be interested in investing in it because they can see the benefit both economically and environmentally?”
He says there are a lot of different funding platforms and repayment approaches that need to be tested.
The plan is to spend the next nine to 12 months doing due diligence and working through details so everyone is very clear what the value proposition is.
“We’re looking to make sure that it’s fully aligned. It’s taking the Right Tree, Right Place and looking to scale it across Hawke’s Bay and to also look at a whole farm system approach, by bringing in aspects like regen ag. We believe the integration of the regen ag aspects, alongside the tree planting component, is critical. This provides a ‘whole of farm’ solution to farmers, looking at their entire operation not simply one component of it, along with a broader range of environmental outcomes and a more attractive set of offerings for impact investors,” he said.
He says the next steps include seeing who in terms of farmers could be interested in taking part, how their properties are currently being run, what the benefits would be of tweaking those approaches and how that stacks up in regard to lessening erosion, improving freshwater quality and sequestering greenhouse gas emissions.
“While we are doing that, we’ll also be looking at sourcing and identifying potential investors into that marketplace. There will be a role for a broad range of capital providers, including the banks,” he said.
“Based on our initial preliminary assessment we believe there is definitely potential.
“We just need to work through all those things to understand what that looks like.
“Obviously it’s contingent that there are farmers out there who are wanting to do this and wanting that support from investors to come in and enable them to do it now.”
