Farm forestry surge from an ill wind

Press, 16 August 1985, Page 20

Farm forestry surge from an ill wind

The effects of the “big blow” which flattened much of Canterbury’s forests in 1975 have not all been bad. Private woodlot owners and farmers are reaping the benefits of a shortage of saw logs in Canterbury, accentuated by the big storm 10 years ago. Stumpage prices for Pinus radiata have averaged $36 a cubic metre this season, four times the price in 1980, according to the Canterbury Forestry Foundation.

For the five years following the 1975 storm stumpage rates had remained stable at about $lO a cubic metre, before doubling .in the two years to 1982, as the log supply got shorter. Prices have continued to climb higher since. About 75 per cent of the saw logs cut in Canterbury are now supplied from private forests and woodlots, including shelterbelts, and the balance comes from State forests. The lack of trees older than 25 years is the cause of Canterbury’s severe log shortage. According to Mr Robert Miller, the foundation’s manager,. Canterbury has never been self-sufficient in timber except in periods following severe wind blows.

This deficit is expected to increase into the early 19905, largely as a result of the 1975 storm, and the private grower will remain the dominant supplier of logs until the mid 1990 s when increased volumes of timber from State forests will come on stream.

The rapid rise in stumpage rates has boosted interest in private forestry as an alternative land use and, because of the high value of timber trees, several forests

By

consultants have set up business to advise growers. Previously the Forest Service had handled most queries from farmers on tree management. The foundation was formed in 1980 by the Central Farm Forestry association to assess woodlots and market logs on behalf of members, mainly farmers.

The foundation is a cooperative organisation with about 200 members and last year arranged sales of almost 24,000 cubic metres of wood. In recent months at least three other sources of forestry advice have opened up. J. E. Watson and Company, a Southland stock and station firm which operates a forestry division, has established an office in Christchurch, and two private consultants have set up individual practices — Frank Neither, of Waikuku, and Theo Russel, of Pigeon Bay.

The consultants offer advice on land preparation, tree management, forestry investment including joint ventures and taxation, and can arrange marketing. They report a steady increase in inquiries from farmers and city people, including companies, thinking of forestry as an investment.

Much of their work involves assessing and selling timber. Mr Russell estimates he has arranged the sale of 16,000 cubic metres of wood, mostly radiata but including some macrocarpa, in the last six months. Mr Miller said most woodlot and shelterbelt owners could relate horror stories, either first-hand or from their neighbours, of

DAVID LUCAS

being ripped-off by log buyers and of logging contractors who took the best logs and left behind a tangled mess of logging waste and damaged fences. To a large extent this is now a thing of the past and most of the rogues have gone from the industry, said Mr Miller. A sawmiller and his logging contractor must have a good reputation if they are to be assured of good wood supplies. Mr Hugh Jolliffe, of Watsons, believes forestry on land considered uneconomic for grazing stock can give an excellent financial return over a 30-year period, provided land preparation costs were kept to a minimum. Much of Mr Jolliffe’s work involves assisting farmers with forestry on farms in the Canterbury foothills where most farms have small areas of marginal land suitable for trees.

Establishment and management costs for forestry blocks are about $l5OO a hectare and mostly spread over the first 10 years. Properly tended plantations can return about $lB,OOO a hectare, said Mr Jolliffe, but unmanaged blocks could be worth only half as much. Most trees being milled from farms at present had not been tended properly and were regarded as being of poor quality. Mr Jolliffe said agroforestry could be a very worthwhile land use on many types of country, even good quality pasture land. Provided management was first class, agroforestry areas could be grazed in only the second year after planting. The Forestry Encouragement Grant scheme, which provided growers with a 45 per cent subsidy on qualifying expenditure, was abolished in the last Budget and replaced by a system of tax deductions. Costs eligible for tax deductions include those relating to the planting and growing of trees and for land development. According to the foundation, the new measures were introduced less than two years after major changes had been made to the forestry encouragement scheme. At least four such changes have been made in the last 16 years, making it difficult for anyone to invest in a long term project with any sense of secure financing.

For individuals, particularly farmers who have had other support schemes re-

moved in the Budget, the removal of the forestry encouragement scheme will make it more difficult for them to complete forestry programmes already started and less attractive to begin new plantings. Small forest growers (farmers, small companies and local authorities) will continue to be responsible for much of the forest planting in Canterbury, believes Mr Miller.

Canterbury has never been well regarded by forestry interests as an area with high potential for commercial forestry development and North Canterbury received the lowest priority ranking at the 1981 Forestry Development Conference, along with Taranaki, Manawatu / Wanganui, Wairarapa-Wellington, and the West Coast.

The hazards of wind and fire, low rainfall and slower growth rates had deterred large forest companies from investing in Canterbury and limited the scale of State forestry, said Mr Miller.

The Forest Service had made-its position clear at a recent seminar run by the Canterbury United Council

to discuss forestry development — there will be no new State plantings in Canterbury and logged areas would be planted only if they stood up to the Treasury Department’s exonomic criteria.

Virtually none of the private forests and only a small proportion of the State wood at present being harvested in Canterbury has been pruned or thinned, and there is a wide variation in log size and quality, said Mr Miller. Neither log buyers or logging contractors were particularly discerning when relating price to log quality.

Stumpage prices were not noticeably lower for a sale of smaller logs and premiums were not usually offered for large logs or pruned logs. Log buyers tended to work on average costings for “run of the bush” logs. An attempt by the foundation to introduce a grading system for unpruned sawlogs has largely been unsuccessful, with buyers often preferring to tender a single average sawlog price. However, the future is expected to be quite dif-

ferent, said Mr Miller. State forests were being intensively tended and many private growers were attempting to keep their woodlots pruned and thinned.

Logging operators who are used to cutting trees into sawlogs, chipwood, and posts will be forced to produce a much wider range of log types and this will mean more work, greater expertise, and presumably higher logging costs, he said.

Because Canterbury is a timber deficit region, native timber has been imported from Westland. However, changing attitudes to native forest utilisation will mean supplies from Westland will drop to very low levels in the next few years. Replacement sources of timber were hard to identify, particularly as most other regions were also facing timber shortages, said Mr Miller. Canterbury sawmillers and merchants have augmented supplies in recent years by importing saw timber and logs from Nelson and Southland and have expanded their activities into South Canterbury.

The emphasis within the Canterbury region has been to seek log supplies from { small growers at greater * and greater distances from ; mills.