Value of forestry underestimated

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By David Porter

The forestry and logging sector is worth $1.4 billion to GDP, making a substantially larger contribution than either the sheepmeat or beef sectors, says a new report released in Rotorua today.

The report was commissioned by the New Zealand Forest Owners Association and Farm Forestry Association from NZIER.

Forest Owners Association chairman Peter Clark said the public had underestimated the forest sector's role and importance.

"Our sector is growing faster than horticulture," he said. "For the first time since 1882 ... the value of our forest product exports is now exceeding the total value of red meat exports. That represents a sea change in our primary export mix."

The Ministry of Primary Industries forecasts that New Zealand forest product export returns will reach $6.15 billion by 2020, from $5.14 billion in 2016. Increasing returns from sawn timber, wood panels, pulp and paper, would all contribute to the growth.

However, NZIER noted the fact that the significant environmental contribution of forestry was not usually factored into its economic value, and the lack of a ministry or department dedicated to forestry, were both constraints on the industry.

NZIER recommended the establishment of a "satellite account" to reflect the growing importance of this sector. Satellite accounts extend existing information on industries to include social and environmental values, and would assist in reflecting forestry's wider benefit to New Zealand, the report said.

Mr Clark said currently everybody, including NZIER, was making assumptions based on some studies in some regions.

"The Government's Biodiversity Action Plan 2016-20 set 2017 as the target date to investigate the need and potential to produce New Zealand environmental-economic accounts," he said.

"So in implementing this undertaking, we'd love to see the Government put the environmental ruler across our forest sector."

Rotorua mayor Steve Chadwick said Rotorua Lakes Council was the first and so far only local body to promote a Wood First Policy.

Continued below.

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She noted about 40 per cent of the country's wood was harvested within a 100km radius of the city. And she was fully supportive of NZIER's suggestion that a satellite account for forestry be established.

"The industry needs positive support from Government and for that to happen, the industry needs to be able to quantify its worth," she said.

Forest Owners Association chief executive David Rhodes said the report's release was timely, given the increasing interest in environmental issues, and the Government's focus on regional development.

"The contribution the forest sector is making in some regions is quite significant," he said. "We are hoping to get across through the report that there are a whole bunch of things that forestry delivers, which aren't being reflected in the market statistics and GDP figures."

According to the report, wood production has risen from 10 million cu m of timber in 1989, to 28.7 million cu m last year.

However, Bryce Heard, chairman of the Forest Wood Action Group, part of Bay of Connections, said wood supply was being forecast to diminish as a result of conversion to dairy and lack of replacement planting.

The wider Bay of Plenty region was cutting around 12 million cu m a year, which was expected to drop to around 10 million cu m by the year 2030 on current projections, he said.

"We're busily trying to get people to invest in processing, but they look at 10-15 years out and ask where the wood's going to come from," he said. "It's not a good scenario for increasing processing."

Economic contribution

Services such as carbon storage, erosion control, water quality, biodiversity and recreation could provide $9.6 billion of ecological and social value from plantation forestry to New Zealand every year, the report says.

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6 Comments

Sgt. Schultz

- Auckland
07:21 pm Wednesday 22 March 2017
Greg - big changes are underway.
But because there are many affected parties, there's been considerable consultation over the last 2 years with many improvement proposals coming from industry to the EPA.

New EPA rules based on the much tougher Australian format, will require NZ industries to focus on environmental protection - as separate from the HSNO Act which will also have new teeth regarding the protection of people and employees.

Historically, NZ industry responsibilities for both environment and people came under the one protection umbrella, causing inefficiency and stalemate. This was identified and is being changed as we speak. So, not going backwards but acceleration may not be fast enough for some...

Any NZ government must comply with these new NZEPA rulings - which were originally developed in the heart of 'Green legislation' - the UK.
(Trump's appears to be the only administration that is bucking this...)

Greg

-
07:21 pm Wednesday 22 March 2017
On the topic of subsidies and paying your fair share of costs, how about: not having to pay for pollution of fresh water from fertilizer and animal waste run-off; not being in the emissions trading scheme (so everyone else has to cover your greenhouse gas emissions); getting a $400 million subsidy for irrigation schemes; getting "drought relief".......so agree, along with any anomalies in roading, let's "address the distortions"

AndrewSheldon.info

- Whanganui
01:00 pm Wednesday 22 March 2017
It just occurred to me that the forestry industry commissioned that report at a time when forestry products are priced very high, and other farm products, not so high. That said, I tend to think everyone is important, and economic mercantilism is not the basis upon which industries should solicit support, or 'special privileges'.

AndrewSheldon.info

- Whanganui
01:00 pm Wednesday 22 March 2017
Given that an industry's "worth" or viability is ultimately tied to the amount of unsustainable subsidy it gets - or not - the issue is whether the industry pays its costs. The reality is that the council has an unsustainable model for road cost recovery that needs to be resolved, and councils around the country are not addressing it. There is no sound argument to make until that is resolved. Citing the importance of the industry, and how rapidly its growing, only highlights the fact that, this distortion in economic subsidy should be addressed sooner rather than later.

Greg

-
01:00 pm Wednesday 22 March 2017
Good to see an report that captures the value of economic, environmental & social benefits.

Would be interesting to look at dairy using same methodology, mostly we only see analyses that give the economic value, but don't subtract the environmental costs.

Greg

-
06:23 pm Tuesday 21 March 2017
Unfortunately the positive environmental contributions from forestry can't make up for the environmental costs of intensive agriculture (which everyone else pays), so net, we're still going backwards.....and that won't change under this government......

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