Carter Holt Harvey is placing 29 dairy farms on converted Waikato forestry land on the market, asking $224.5 million in the largest single offering of farming land ever seen in New Zealand, according to Bayleys Real Estate, which is marketing the properties.

Ranging in size from 218 hectares to 726 hectares, the farms were converted with substantial investment in modern machinery, roading and residences ahead of Kyoto Protocol rules that came into force in 2008 requiring that cleared plantation forests be replanted rather than converted to another use.

All farms are being sharemilked at present and are supporting 20,000 cows. None have a farming record longer than 18 months and the most recent began operations in June last year.

It appears likely that the properties will also be marketed internationally, once a domestic marketing campaign has been undertaken, thereby satisfying Overseas Investment Commission rules.

Each farm comes with a new dairy shed configured for farm size and a mixture of herringbone and rotary systems. The farms are based on an assumption of three cows per hectare, have deep water bores and pressure water systems, and new residences.

"Each of the farms has been designed for optimum efficiency, with approximately 1,500 metres being the longest walking distance for the cows, centrally located, top-of-the-line dairy sheds and three architect-design homes located for both convenience and views," Bayleys says.

Some 15 of the properties are on adjoining land around Tokoroa, and the process of placing each on a single title has yet to be completed.

Many of the properties contain land which still has sections of forest planted, suggesting the potential for "carbon farming" offsets in the future as emissions trading matures.

CHH sold substantial land holdings in the area in the late 1990's, but retained 30,000 hectares with the best contour, soil type and locality to be developed as dairy farms.

Kyoto Protocol rules that came into effect in 2008 prompted many forestry landholders to clear and convert to farming land prior to the new rules coming into effect.

"There's a $25,000 a hectare tax now if you want to drop trees and grow grass," said Bayleys senior agent Mike Fraser-Jones. "In the present political climate, Carter Holt won't be doing any more conversions."

New Zealand is seeking changes to the land use and forestry rules which, under the Kyoto Protocol, allow no flexibility for changes in land use after deforestation.

While the rules are intended are to penalise logging of native forests for conversion to farming, they fail to recognise the role of plantation forestry in carbon sequestration and the impact of the rules' inflexibility on commercial decisions about land use.

Climate Change Negotiations Minister Tim Groser said this week that the government was "optimistic we'll get a result."

Significant progress occurred in this technical area during the December global climate change summit in Copenhagen, despite the lack of advancement on a new overarching climate change deal.