Farm-to-forest conversions continue despite Government restrictions - Beef + Lamb NZ

A report commissioned by Beef + Lamb found the returns on forestry land could be twice those of sheep and beef farms, but forestry created fewer jobs. Photo / RNZ, Kate Newton

By Gianina Schwanecke of RNZ

Whole farm-to-forest conversions continue, according to a new report released by Beef + Lamb New Zealand.

The research, carried out by Orme and Associates on behalf of Beef + Lamb, found that close to 40,000 hectares of sheep and beef farms had been sold for forestry since September last year.

The report also confirmed that 29,518ha were sold in 2023 and 30,483ha in 2024.

It brings the total amount of farm-to-forestry conversions since January 2017 to more than 300,000ha.

Beef + Lamb estimates this has resulted in the loss of more than two million stock units since 2017.

Chair Kate Acland said the data underpinned longstanding concerns about whole farm-to-forestry conversions.

“The numbers show whole-farm sales for conversion to forestry for carbon credits are continuing at pace,” she said.

“What we’re really concerned about is whole farms, really good productive land getting planted into trees.”

The research showed Hawke’s Bay, Wellington, and Wairarapa remained preferred locations, while Southland had also seen a notable increase.

There was a significant slowdown in the Gisborne region, likely due to the environmental impacts of adverse weather events such as Cyclone Gabrielle and tightened harvesting conditions being set by regional councils.

Acland said they were not against incorporating forestry within farms, adding that if most farmers planted 10% of their least productive land in trees, they could still maintain production.

“We’re very supportive of incorporating trees within farms, and I think there’s a real opportunity here for farmers to be part of the solution.”

This week, the Government introduced new legislation to restrict farm-to-forest conversions on Land Use Classification (LUC) 1-6 land.

Under the changes, which will retroactively take effect from December last year when the policy was originally announced, up to a quarter of farms can be planted in forestry for the Emissions Trading Scheme (ETS).

There will also be a ban on full farm-to-forest conversions entering the ETS for actively farmed land and an annual cap of 15,000ha for forestry entering the ETS for lower quality farmland.

Acland said while the Government’s restrictions around whole farm to forest conversions were positive, she wasn’t sure they went far enough.

“Anecdotally, we’re still hearing of a significant number of farms being sold this year, despite the Government announcing the limits last year.

“We’re concerned that some sales are continuing on the basis of intent to purchase land before the limits were announced.

“We urgently need the Government to tighten the criteria around proof of intent to purchase.”

Additionally, she was particularly concerned about class 6 land, which she said was “some of the most productive sheep and beef breeding country”.

Acland said carbon forestry had a comparatively “short-term return” when compared to sheep and beef.

“I think we need to recognise the importance of the red meat sector for the economy of this country.”

Federated Farmers national president Wayne Langford echoed some of the concerns, saying the country was approaching critical mass for sheep production.

He said the new forestry conversion rules were moving “slowly”.

“We’re gonna see more processing plants close, we’re gonna see a lot more communities close down unless we do something about this issue across the country.”

The legislation is before Parliament and is to come into force in October. 2025.

- RNZ