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NZFFA Media release 1 April 2011.

Government rob small forest growers of hundreds of thousands of dollars worth of carbon from their trees

Small forest growers are outraged with the contempt shown by Government towards them in its recently announced decision on the Field Measurement Approach (FMA) in estimating carbon sequestration in their forests.  It has denied many owners of smaller post 1989 forests the opportunity to sell a large part of the carbon actually stored in their forests.  The Government is now effectively sanctioning two distinct types of forest investment in this country.  Those growers with more than a 100ha can maximise returns from their investment in new forests while growers with less than 100ha have their investment return significantly restricted by Government.  Under the FMA owners of forests of 100 ha or larger are required to measure, but there is no opportunity for the smaller grower, under 100 ha, to do so.  These smaller forests are often on better sites and will have higher sequestration rates than the look up tables supplied by MAF which they must use.  This will cost these owners a considerable amount of money over the life of their forests as the look up tables seriously understate the actual amount of carbon stored on the better sites.

Under the Southern North Island figures in the tables a 30 year old forest stores 852 tonnes of carbon.  The actual amount may well be 20% higher= 1022 tonnes. With the current price of carbon over $20 this is an additional $3400.  On some sites the difference is far higher.

For a one Hectare block in the Wairarapa and in the Marlborough Sounds the following table gives an indication of the difference between the MAF tables and what actual measurement predictions look like using Industry growth predictions for the same blocks.

2008 - 2012
MAF Sequestration tables
Growth Model predictions for same period
% diff between reality and MAF allocation
Cost to client/Ha at $20/NZU
Wairarapa 185 264 79 units/ha
Marlborough 148 235 87 units/ha

Given that in the Marlborough Sounds example given above there is in excess of 100 Ha of continuous forest made up of several different land owners the anomaly is very clear.
Assuming 100 Ha of forest, the amount of carbon sequestered during the first Commitment Period appears to be 100Ha x 235NZU/HA = 23500 NZU – valued at $20.00/NZU amounting to $460,000.

Given the separate forest owners are all less than 100Ha they will only be able to claim the MAF amount of 100Ha x 148 NZU/Ha = 14800NZU – valued at $20.00/NZU amounting to $296,000.

The difference in realisable value being $460,000 - $296,000 = $164,000

The cost of measuring is considerable and may put many growers off, but why should the owner of a 100 ha forest be able to sell the exact amount of carbon sequested, while the owner of a 99 ha forest can’t?  Surely owners should be given the chance to decide.

MAF contend that the look up tables will align with the actual over time but they have also stated that once the first Commitment Period has passed there is no chance to redress any inconsistencies in retrospect.

Given that there may well be in excess of 12,000 forest owners with less than 100 Ha of forest eligible to enter the scheme, the loss to them personally and to the country nationally should demand a review of MAFs position on the stance taken.

The New Zealand Farm Forestry Association believed Government were sincere in their desire to see large tracts of eroding hill country planted, as trees are the best weapon we have against soil erosion and have the additional advantages of improved water quality and slowing of steam bed aggregation.

If Government are sincere about doing this, why take away one of the advantages the small forester has?

John Dermer,
President NZFFA.

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