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Sacred cows and cursed trees

Sunday, March 20, 2016, John Ellegard's blog

News that the forestry industry is likely to fall short of its aim to treble the value of wood exports by 2022, (as revealed on page 5 of the latest Logger magazine), may come as a shock to some, but the cards were always stacked against it.

And what makes this situation so much harder to swallow is that our very own government has been largely responsible for undermining the industry's growth efforts.

In spite of what various government ministers — and the PM himself—have espoused about the importance of forestry to this country since coming to power, they have actually been working against the interests of forestry when you analyse their actions.

Our government has encouraged the wholesale chainsawing of the best forestry assets in the central North Island and made it much more difficult, if not impossible, for future investors to secure sufficient wood to supply processing plants of significant scale. Don't believe me? Look at Landcorp, a government-owned business that is right at the forefront of converting forests to farms, despite facing millions of dollars in losses on its dairy operations.

Dairying is currently a cot-case and could remain so for many years to come. But this government is so in love with dairy cows it cannot see that.

Ministers have gone even further to help farmers, at the expense of forestry, by shielding them from the ETS and then deliberately driving down the value of the carbon credits it gave to forest owners. Such policies have boosted the price of farmland and made it too expensive for anyone in their right minds to think about planting new forests.

And the argument that allowing market forces to determine where farms and forests go is the best approach, is a joke, because the government has tweaked the policy levers to make sure it isn't a level playing field.

Consequently, market forces are distorted and forestry cannot win in the face of such overwhelmingly favourable treatment of farming. Why treat forestry different? Maybe it's a perception forests are all overseas-owned, which is not true - New Zealanders own more plantation forests than foreigners.

The government tell us it is working hard to boost the use of wood and attract new investment into our industry. How naïve. Sure, it is trying to encourage foreign investors to build new high-tech mills in the central North Island to turn the wave of exported logs into value-added products. But there's no guarantee they'll get the supplies they want at prices they can afford. Government policies and actions have seen to that.

It only serves to demonstrate this government has no understanding of how forestry works.

Forestry is unique. It works in 25-plus year cycles and cannot be treated like any other agrarian business. It requires policies and actions that reflect its uniqueness. It requires strategies devised for the long term, not the next election. What we are seeing now is the result of shonky thinking and actions at the national level.

Take forestry seriously, treat it right and it will achieve great export returns. Better than dairy, in fact.

Who is going to make that happen?

John Ellegard
New Zealand Logger

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Disclaimer: Personal views expressed in this blog are those of the writers and do not necessarily represent those of the NZ Farm Forestry Association.

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