That is the recommendation from Beef & Lamb NZ when considering the political appetite for planting trees. The Productivity Commission's report on a Low Emission Economy identified that 2.8 million hectares of hill country should be planted in trees. That would take 30 per cent of all sheep and beef country out of production.
The report also assumed that, since sheep numbers have continued to shrink from their peak, sheep must be a sunset industry.
Nothing could be further from reality. No other sector in New Zealand's economy can match the productivity gains made in the sheep industry. Since 1990, our sheep flock has halved, but today we produce only 5 per cent less lamb for export, and its value has doubled. The productivity gains are from higher lambing percentages and heavier meatier lambs, remarkable since during this time 1 million hectares of our most productive land was lost to dairying and lifestyle blocks.
Sheep and Beef farm GHG emissions are 32 per cent lower than the 1990 baseline, something New Zealand should celebrate but has yet to do so. A recent report by Professor David Norton of University of Canterbury highlights that there are 1.4 million hectares of forest on sheep and beef farms, which are already playing a role in carbon sequestration.
The profitability in the sector is at an all-time high, generating $7.5 billion in exports for New Zealand. Export earnings is the money coming into New Zealand's pot, to be circulated around our economy, and is so vital to support our standard of living. The new medicines we expect Pharmac to fund are all from overseas; money going out of the pot must be balanced with what's being put in.
There is plenty of scope for additional plantings of indigenous and exotic trees on sheep and beef farms, but let's be careful what land we are taking out of production. The right tree in the right place is about targeting the less productive and environmentally sensitive areas on farms. Planting these areas is the right result on all considerations.
With the current subsidies, and the special status given to trees under the current overseas investment rules, we are seeing multiple farms in our region being taken out of livestock farming. This land will never be cleared again, and some of these farms are not on the marginal land. Not enough consideration has been given to how this land-use change will impact on our region's economy.
The "wall of wood" has arrived in the forestry sector, after a 25-year wait from the surge of plantings in the 1990s. Forestry returns are the best that they have ever been, but how much of that money is being circulated locally? The closure of Waverley Sawmills is a devastating blow for the town's community and businesses, as it is to Peter Martin and his many shareholders, who have been so passionate about pine trees and looking to add value to them.
Pitzac, our local fence post producer, has also ceased production. It is obviously very difficult to profitably compete with exporting the logs to China, and it is local jobs and our communities that miss out.
Manuka honey is an exciting new industry and an alternative to forestry for land that is being taken out of livestock farming. It is experiencing rapid growth in volumes and we have yet to see if the market development is keeping up. The agriculture industry is littered with many booms that were followed by bumpy rides, hopefully manuka honey doesn't join the list.
Carbon farming is the backstop for much of this land that is being retired, and the financial return with a $25/ ton carbon price looks attractive to investors. The downside is that shutting the gate on farms to sequester carbon is taking productive land out forever.
Sheep and beef farming directly and indirectly supports the permanent jobs of 80,000 New Zealanders, most of these in regions.
The industry is being proactive, identifying how to reduce its environmental footprint. Our greenhouse gas emissions are at the national target, and it has a proven and proud history of being the economic powerhouse of this region. We need to keep this at the forefront of our minds when we are choosing the right tree for the right place.
Mike Cranstone is president of Federated Farmers Whanganui.