What a difference: Land use change from Farmland to Forests

A dairy farmer planning on growing manuka scrub says Federated Farmers lobbyists are mounting a vocal campaign against the farmer accountability for greenhouse gases, but failing to back landowners who want to "farm" carbon credits.

There is a solid business case to be made for converting hill-country sheep farms to forestry, said Neil Walker, chairman of the Taranaki Regional Council's policy and planning committee.

Federated Farmers was "huffing and puffing and being worked up about the ETS" while back-country farms were failing, he said.

Mr Walker -- who has paid $588,000 for 300ha of land and a four-bedroom house -- is planning his own investment in carbon credits.

He has planted part of the land in pines and eucalypts,and is looking to buy more land to grow manuka.

"The government is looking at doubling the carbon units from manuka," he told the Carbon News website.

"That means if you plant manuka on 100ha, over 20 years at a carbon price of $25 a tonne you'll get a return of $300,000."

And with the right plantings, manuka can underpin a honey business, with top-grade active manuka honey fetching $50/kg and ordinary manuka honey selling for $12/kg.

A forestry consultant, Simon Young, told Carbon News many hill country farms were not making money and could do better with forestry, which would qualify for emissions credits.

"There are opportunities there for income generation from the hill country in excess of whatever they are making at the moment," he said."I would really urge Federated Farmers to look more closely at what could be done on the hill country."

The former head of forest policy at the Ministry of Agriculture and Forestry, Bryan Smith, said that calculated on the basis of a carbon price of $22/tonne, a farmer could pay $8000/hectare for hill country, and still make an 8% return.

"Most hill country farmers are making less than 1%."

Federated Farmers president Don Nicolson said the organisation had seen a variety of money-making schemes come and go over the past century, and in recent decades had backed efforts to axe subsidies.

"What we see in the ETS is nouveau-subsidy to achieve wealth redistribution away from pastoral farming," he told NZPA.

As a small-scale forester himself, he said that industry has seen a "mass of privilege" such as establishment grants and tax breaks.

"For 'carbon foresters' like Mr Walker to make money, it must take money from me as a sheep farmer," he said. "In what way does the New Zealand economy grow?"

Many farmers were already involved in farm forestry, and in his own case, the motivation was the value of logs.

The government could achieve the same sort of carbon sink by paying for trees to be planted on crown lands, rather than having the ETS "set-aside" hill country land.

Mr Nicholson said a risk for carbon farmers was that their investment might "implode" in a couple of decades.

"History tells us to be cautious," he said. "The Kyoto impetus from 1990 could well be in reverse by 2030."

It was likely that efforts to curb the growth of greenhouse gas emissions would founder on the need to feed a rising global population.