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Letter to the editor - Afforestation Grant Scheme

John Simmons, New Zealand Tree Grower August 2009.

Dear Sir,

Afforestation Grant Scheme

I would like to express my views as an Association member and frustration as an applicant on behalf of the Waikato Branch acting for a consortium of landowners over the Afforestation Grant Scheme (AGS).

Whilst the concept is great and New Zealand needs as much incentive as possible to plant trees especially in such straitened times, the government and ministry appears to have dropped the ball on this scheme.We know that the election and political views on ETS have created uncertainty, but the AGS is a great vehicle to get trees in the ground. However the planning horizon is too short, the tender process is flawed and what we are likely to get as outcomes will be a product of expediency.

In my view it is a missed opportunity, that should have been non partisan and apolitical. The incentive was for government to get carbon credits that will offset national liabilities for the first Kyoto agreement period, and as a consequence the tenders approved to date are for short rotation softwood crops. As a country we should be investing in our exotic hardwood and indigenous timber plantation estate, to provide long term carbon sequestration, sustained yield forests and niche manufacturing from high quality hardwoods.

My understanding of the AGS is that the grant is for government buying the carbon, rather than funding the establishment of a forest. Therefore there will be one grant for fast carbon forests and one for slow carbon forests. The pool of grant funds is split between MAF and regional councils – the latter provides a very good linkage to landowners at a local level and is seen as more likely to gain traction with grant uptake.

For the Regional Council pool the grants will be $2,400 and $1,000 plus GST per hectare respectively for the 2009/10 financial year. These grants will be paid out once the establishment is complete and signed off by the scheme administrator. The Regional Council pool was open for a round of new applications until 20 April 2009, then subsequently 31 October 2009 and 31 March 2010 as future closing dates.

As part of the governments ‘line by line’ review of spending, they have taken the axe to the AGS. The funds available per year for the next four years have been reduced from $5 million to $3.5 million per year for both the council and MAF pools. For 2009/10 the Regional Council pool has about $1.25 million still to allocate.

The Waikato Branch has been actively involved in surveying the remnant stands of lowland forest, particularly the symbolic and majestic kahikatea stands within theWaikato region, and have sought an application approval via the AGS to supplementary plant over 200 hectares, as part of a protection and enhancement programme with landowners. To establish kahikatea, totara and pukatea, which are great species to sequester carbon long term, costs may run up to $10,000 per hectare, and an AGS bid at $8,340 per hectare was unsuccessful.

We have subsequently revised the area downwards and sharpened the costing by reducing the crop trees to $3,160 per hectare, yet still will not be able to contemplate the project as the maximum grant is only $1,000 per hectare.

The deficiency in the AGS is the short term nature whereby government is purchasing carbon for a 10-year establishment period only. For a long term inter-generational project like replenishing the kahikatea lowland forests, another more suited grant or incentive scheme ideally administered by MAF or regional councils is needed. Maybe there is a philanthropic organisation or benefactor that will read this and be interested in investing in such a project?

As we look back and reflect on previous grant schemes, the old Forestry Grant Scheme actually achieved great outcomes – it introduced forestry to a large number of landowners, converted a lot of marginal land to forestry and provided a platform for forestry extension. Has MAF ever bothered to undertake a cost benefit analysis of the FGS, to ascertain the national benefit derived? If so it should be dusted off and referred to the current government as a model investment mechanism to get New Zealand planting again. The motivation for planting should not be carbon – it should be specialist timber production, catchment protection, and sustainable land use. These are old principles for sure, but proven to be good in the past and applicable for the present.

Please can the Executive note − reinforce the need for a more applicable forestry encouragement scheme at every opportunity you interact with government.

John Simmons

Secretary, Waikato Branch, NZFFA

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