Keith Woodford: On sheep, carbon and forestry

Wednesday 1 Jun 2022

With decades of experience in agrifood systems in New Zealand Keith Woodford is an excellent commentator on rural land use. He will be speaking at our Carbon Forestry Conference in August as carbon farming is a growing rural land use, not without controversy.

In his latest column the main focus is changing landscape for sheep farming. Here is an excerpt from his astute and insightful analysis:

The forestry situation is complex and some might say crazy. As I write this, the Government is giving serious consideration to pulling so- called permanent pine forests from the Emission Trading Scheme. If this happens, all new pine forests will be for short-cycle production forests, typically of 28 years or in some cases a few more years. The irony is that this will encourage tree planting on the softer country which is easier to harvest and with a preference for land that is well-located relative to ports. Yet it is on hard erosion-prone hard hill country, far from ports, where land should be going into long-term pine forests.

Assuming that the Government sticks to its latest proposals, pine-production forests will stay within the ETS, but with carbon credits limited to the first 16 years. Depending on location, these credits will, at current carbon prices, be worth about $30,000 per hectare on most North Island farms but less in most parts of the South Island. That is enough to blow sheep farming away on most of the better sheep farming land. Of course, if the price of carbon rises much higher as the Government has said it wants to happen, then these returns will further increase. But it’s a game where the Government sets the rules and those rules can change.

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