Forestry can be your best fit

Forest360 Managing Director, Dan Gaddum

A more thoughtful critique is warranted for forestry investment and management – an industry that’s full of complexity and adding plenty of value to the nation.

Think forestry and you tend to think, carbon trading, New Zealand’s Emissions Trading Scheme and management of marginal land. At a stretch, you may be aware of the various forestry services, such as harvesting management.

Our forestry consultancy Forest 360, one of the largest forest management companies in the country, provides a broad, informed perspective to the spectrum of landowners, processors and investors.

Forest 360’s role is advising and bridging the gap between the asset (the land) and the solution (the trees) and in a number of ways turning stranded assets (marginal land) into productive / regenerative forests.

Our goal is to always maximise the potential of the land in a sustainable way, in a way that benefits the greatest number of people party to a project. Sometimes, that means choosing not to plant trees, or opting for a blend of pastoral and forestry on a particular property.

Often we find ourselves able to provide clients with a solution that offers the best of both worlds, by maintaining a balance of pastoral and farming land use.

Forest360 like to lean on facts before coming to conclusions. That’s why we looked closely at a report by PWC comparing the financial attractiveness of plantation forestry, permanent carbon forestry and sheep and beef farming. The accountancy firm suggests that for some land types (in this case hard hill-country), forestry generally offers greater returns, which are enhanced by carbon unit revenue.

Within this analysis, plantation forestry and permanent carbon forestry offer comparable returns over the long term, but significantly different economic impacts, with permanent carbon forestry having comparatively low economic impacts, compared to sheep and beef and rotational forestry.

The split of the value between returns to capital and returns to labour shifts almost completely in favour of capital: almost no employment impacts are generated from permanent carbon forestry, by comparison to sheep and beef and plantation forestry.

Forest360 is heartened to see regional authorities like Hawke’s Bay Regional Council independently research answers to these questions. Drawing on conclusions of commissioned reports such as “Community perceptions and values: Land-use change in the Wairoa district” (part of a “Right Tree

Right Place” project), reports like these piece together what’s missing and where we need to go in terms of land-use planning.

Like the journey of a tree to market, there’s complexity in forestry management and it does no-one any favours to boil down the analysis of land-use options to a set of simple slogans. Speaking for ourselves, we love the challenge of managing planting, harvesting, and maintaining forestry over many generations. Rather than seeing forestry as an economic or social menace, forestry could be regarded as the best fit for certain land types, farming and agri investment.