Changes to the rules surrounding converting farmland into forestry won’t benefit Northland and will reduce the region’s ability to feed the world, a Northland farming leader says.

A law change to ensure that forestry conversions by overseas investors benefit New Zealand has passed its final reading in Parliament.

Previously, overseas investors wishing to convert land, such as farm land, into forestry only needed to meet the “special forestry test”. This is a streamlined test, designed to encourage investment in production forestry.

Associate Finance Minister David Parker said the Overseas Investment (Forestry) Amendment Bill requires overseas investors to show their conversions will benefit New Zealand, by meeting the stricter “benefit to New Zealand test”.

In May the Northern Advocate revealed that seven Northland farms have been sold for forestry since the “special forestry test” began in 2018, including one in March this year.
Four of the farms sold for a total of $23.468 million but the prices of the other three were withheld under the Official Information Act.

The farms cover a total of 4662ha – the vast majority of which will be converted into forestry, much to the frustration of Federated Farmers Northland president Colin Hannah.

Parker said: “The existing rules did not give decision-makers enough discretion to determine the appropriateness of investment in a forestry conversion and whether it benefits this country.”

He acknowledged rural communities’ concerns about the potential environmental, economic and social impacts of farm land conversions to forestry and the economic importance of the forestry sector.

“I want to be very clear to the sector and to investors: production forestry is and will remain important, both to the regions and to support our climate change goals.”

The sector is a major contributor to the economy, jobs and rural communities. It employs about 40,000 and is the country’s fourth-largest export earner, he said.

The law change applies only to conversions and does not affect overseas investments in existing forestry land, which will continue to go through the special forestry test. Broader work is underway to investigate the impacts of forestry conversions more generally.
The Bill also includes minor and technical changes to improve the operation and effectiveness of the Overseas Investment Act’s forestry provisions.

But Hannah said the new bill is tinkering around the edges of the issue and will bring no practical benefits to Northland, the country or the world, which will be denied the food those farms currently produce.

Hannah said the “benefit to New Zealand test” is very nebulous and he was concerned about who would decide what the benefit to the country was and if it was more than it would have been if the land had remained as productive farming land.

”We have a duty to feed the world, and the world wants our high quality NZ-made food and dairy products because they are of outstanding quality. Reducing the amount of productive farm land, and turning it into forestry, is not going to help us to fulfil that duty and keep the world fed. You can’t feed the world with trees.

”In essence they are trying to turn Northland into one big forest, but that will have a big negative impact on the economy of Northland, and all those businesses and people who rely on farming will be at risk.”

He said the sales are already causing issues that will be compounded if more farms are sold for forestry.

“The forests will not create as many jobs [as farming] with work for planting, pruning – if they do any, and harvesting but most of that is done mechanically.”

Hannah claimed all the profits would be taken overseas by the foreign-based companies behind the conversions.

“As well, the companies will be earning big carbon credits for the forests but they will be selling those credits overseas so there’s no benefit to New Zealand.”

Hannah said before imposing the law change on the country the Government should have spoken to farming and forestry groups to get their input.

”We all have to work on this together, and I’m sure there is a practical solution, but if they don’t talk to those in the industries about it, we won’t get any solutions.”

He said it was interesting that both the Greens and Forest & Bird oppose the changes too.

”It’s not often you get the Greens, Forest & Bird and Federated Farmers agreeing like this.”