​Unintended consequences of changing land use

With significant advances in new technology, shifting market regulations and changing government policies here and abroad, I have become increasingly interested in the unintended consequences of policy-driven land-use change - where the outcomes being sought are often not those foreseen and intended by that purposeful action.

So when I reflect on the Government's policy to plant 100 million trees per year over the next 10 years under its Billion Trees Planting Programme, I wonder what the effect will be on future agricultural land-use on-farm.

A key objective of the programme is to create more jobs and training opportunities for people in the provinces, which is a commendable goal, particularly in regions facing high youth unemployment and stagnant growth. As well as contributing toward carbon sequestration objectives, the programme represents a big boost for the forestry sector where planting rates have been steadily declining. The Ministry for Primary Industries (MPI) reports that new planting of trees occurred on just 3,700 hectares in 2016 down from around 60,000 hectares/year in the 1990s.

To understand the sheer scale of planting involved, estimates suggest that up to one million hectares would be required to plant a billion trees if all the trees were commercial radiata pine. Of this MPI estimates 500 million trees are expected to be delivered through current planting rates by landowners, commercial foresters, regional councils and others.

Moving half amillion hectares of land into forestry over the next 10 years would be a considerable shift in land-use within the agricultural sector. To put this into perspective, the amount of land occupied by farms, forestry, horticulture and other agriculture in New Zealand in 2016/2017 is estimated at 14 million hectares. The largest component is sheep and beef farming land at 7.9 million hectares, [1] with land for dairying at 2.3 million hectares [2] (Beef + Lamb New Zealand Economic Service).

To help kick-start the Billion Trees Planting Programme, Crown Forestry (a business unit of MPI) is looking for land on which to plant trees. It wants to talk to landowners considering commercial radiata pine plantings to lease land or enter into a forestry joint venture for a one rotation (30-year) term.

According to information provided on its website, Crown Forestry will cover all the costs of the forestry including establishment and management costs, rates and ongoing costs of crop protection over the lifetime of the crop, and they will pay a negotiated rent to the landowner. Rentals will reflect local conditions and the need for a commercial return (i.e. quality of the land and proximity to ports or processing plants). Farmers who have already entered into Emissions Trading Scheme (ETS) would also be entitled to eligible carbon credits.

So what are the unintended consequences of 500,000 hectares of current agricultural land holdings being planted in exotic or native trees? This is a question that has occupied my mind recently. I was keen to hear the debate and discussion occur on this question, but very little is coming through at this stage.

From my perspective, for farmers considering Crown Forestry's offer, the opportunity to receive a passive taxpayer-backed income stream for the next 30 years seems like a very attractive option. This is particularly so for farmers looking for a steady and diversified income without the stress (or risks) of establishing and managing the crop.

I also expect that priority areas for regional development will be where there are a large number of sheep and beef farms rather than being evenly spread across the country. This has the potential to impact significantly on the future supply of animals to the red meat sector in certain regions, and will most likely affect meat processing capacity and lower the level of support services (e.g. shearers, truck drivers, farm supply, etc) provided within the sector as pastoral farm land is removed. So how might the meat industry articulate its 30-year vision and strategy to assist farmers in their decision-making process on their land-use options in the future?

I am sure that readers will be able to identify further outcomes, both intended and unintended, of land-use changes within the agricultural sector in the future. By considering such questions, and following different lines of inquiry, we are ultimately better placed to explore what the future challenges and opportunities are for you and your clients.

[1]Excludes area occupied by dairy grazing replacements.

[2] Includes dairy grazing replacements area off the milking platform.