New Zealand has about 12.1 million hectares in farmland and 1.7 million in forestry, following a decline in forestry which was at 2 million hectares in 2002.
McAnulty said the election promise was to "protect our elite soils".
"While 90 per cent of forestry planting for ETS purpose happens on less productive soils in classes 6-8, we want to ensure all planting happens away from our most valuable soils 1-5," he said.
"Forestry is not bad: we need the right tree in the right place, but we also need the right mechanism to ensure this.
"Communities know best about their local sectors and should be able to determine whether forestry should be happening on their productive pastoral land."
In the past decade, 70,000ha of forestry was converted mostly to dairy.
A total of 22,000ha of farmland has been converted to forestry in 2019, with up to 43,000ha estimated to be planted some years to reach the One Billion Trees target in 2028.
"People always have a choice about who they sell their farms to, and foreign investment has always been part of our landscape – forestry has been two-thirds foreign owned for many decades," McAnulty said.
"We've seen land use redistribution across the decades but it will always remain heavily weighted in farmland's favour. This is even more important as we grow our way out of the Covid economic crisis and ensure we can keep exporting the very best, and nutritious, food and fibre to the world."