The Overseas Investment Office has given approval for the purchase near Puketapu. Photo / NZME
The Overseas Investment Office has given approval for the purchase near Puketapu. Photo / NZME
An overseas-owned company has plans to turn a 332ha farm near Napier into forestry.
But a farming advocate says the pace of change that farms are being converted is a growing concern for the region - with associated businesses such as veterinarians, farming stores, and freezing works likely to bebadly affected.
Austrian-owned Heilig Assets NZ Ltd has been given approval by the Overseas Investment Office to buy and convert a 332ha sheep and beef farm into forestry in Puketapu, just outside of Napier.
It will be the first time the company has bought a site in Hawke's Bay and it says it hopes to begin planting trees on the property off Apley Rd next year.
Once the planting is complete, most of that land (82 per cent) will be used as a commercial forest.
Under the Emissions Trading Scheme, forestry owners can earn carbon credits (effectively a payment) for their trees, as those trees absorb carbon dioxide and help New Zealand reduce greenhouse gas emissions.
That incentive is attracting more companies to plant forestry in New Zealand including across Hawke's Bay.
A Heilig Assets NZ spokesman said the project in Puketapu would help them "contribute to New Zealand's carbon neutrality strategy".
"The owners of Heilig Assets NZ are two Austrian holding companies that are investing in climate mitigation, sustainable timber production and renewable energy projects globally," the spokesman said.
"Heilig Assets NZ doesn't own any other property or forest in the Hawke's Bay area, but we are interested in expanding our forestry portfolio in line with the legislation for foreign investors in New Zealand."
Federated Farmers Hawke's Bay president Jim Galloway says farms are making way for more forestry in the region. Photo / NZME
Federated Farmers Hawke's Bay president Jim Galloway said he had serious concerns about a growing number of farms being converted to forestry.
"At the moment with the price of carbon [credits] it is actually quite profitable to buy a farm and convert it to pines," he said.
"It is certainly something that affects farming and there is quite a lot of it happening around.
"Over the last three to five years there has been more and more [farms being converted to forestry]."
He said that was happening in Central Hawke's Bay, Wairoa and Tararua in particular.
He said there were flow-on effects not just for farmers but associated businesses.
"It is a massive concern for farmers and our allied industries such as the freezing works, the vets, your farm supply stores, the motorbike shop - the whole industry that supports farmers.
"It is not just farmers [that are being impacted] it is our rural towns."
He said the Government's proposed agricultural emissions scheme could compound the issue further, which will charge farmers for their agricultural emissions from 2025.
"If you reduce profitability of farming and increase profitability of farming trees, what is going to happen?"
