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Forestry Investment Action Group

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About the Forest Investment Action Group (FIAG)

The Forest Investment Action Group [FIAG] was formally constituted at the April 2015 NZFFA AGM. Active members, who have been meeting frequently in Wellington since then, are Howard Moore, Julian Bateson, Don Wallace, Glenn Tims, Bruce Bulloch and myself with encouragement and occasional direct participation by Dean Satchell.  A report for the year ended 31 March 2016 was presented at the Hoikitika AGM in Hokitika where we were represented by Councillor Lynn Wallace.

Background

Perhaps as many as 100,000 people invested in radiata pine afforestation either directly, or as shareholders in partnerships, trusts or companies, during the 1990s. A couple of thousand new members joined the FFA then, but after the successful establishment and tending of their forests they let their FFA membership lapse. Over the next couple of decades these forests required little attention, but they are now close to maturity and their owners should be receptive to getting relevant information about the approaching phase of intense operational activity, which, in general, will coincide with the arrival of the ‘wall of wood’.  To this end members of FIAG, and Howard Moore in particular, developed a comprehensive postal address list of forest-owning entities that are proprietors of forests greater than 5 ha in size, and FIAG aims to connect with them. Interaction should be mutually beneficial to all small-scale forest owners, and the wider forestry sector.

Aims of the Forest Investor Action Group

These are:

• To share information that will increase the profit of small-scale forest owners, particularly during the harvesting and marketing phase of pine plantations.
• To strengthen the political voice of the forest sector. This could, for example, lead to less onerous compliance, the better recognition of, and payment for, off-site eco-system services provided by private forest owners, and better recognition of the currently unvalued advantages of using wood as a building material.
• To provide quantifiable returns for the FFA’s funded contract with the Forest Growers’ Levy Trust to set up systems to communicate with currently unaffiliated levy payers.
• To increase FFA membership.
   

Activities so far and forward plans

1. Review of FFA communication systems.  Howard Moore leads this major project and he has written a separate report on its progress.  Some of the matters in that report overlap with this one.
2. Provision of articles and organization of workshops on relevant topics, such as pre-harvest inventory, compliance with local authority requirements, construction of roads and skid sites, harvesting systems, logistics, health and safety obligations, taxation, insurance, ETS opportunities, forest certification, cut-over, stream and fence rehabilitation, contract law, establishment of the next rotation, and estate planning.  So far the following relevant articles have been published (a) ‘Economies of Scale in Forestry’ by Hamish Levack, and (b) ‘Options for achieving economies of scale in forestry’ by Howard Moore in the May 2015 Tree Grower, (c) ‘Is your forest insurance cover still suitable?’ by Jo McIntosh in the August 2015 Tree Grower, (d) ‘What could have been the future of forestry?’ by Hamish Levack,  (e) ‘Kapiti Proposed District Plan’ by Don Wallace, (f) ‘Some good news and some bad news [re Health and Safety]’ by Julian Bateson in the November 2015 Tree Grower, (g) ‘Risk and Insurance for your forest” by Jo McIntosh, (h) “The air is different –another view of New Zealand’s response to climate change” by Howard Moore, and (i) “Road Shows about the forest grower levy” by Hamish Levack in the February 2016 Tree Grower, (j)  ‘Liability for forest owners’ by Jo Macintosh, (k) ‘Will forestry be a winner from the emissions trading scheme review?” by Hamish Levack, and (l) “Do we want carbon credits from harvested wood products?” by Howard Moore in the May 2016 Tree Grower.
   Wellington-based FIAG members assist the Editor of the ‘Tree Grower’ with forward planning for the journal.
3. Providing quantifiable returns for the NZFFA’s funded contract with the Forest Growers’ Levy Board to set up systems to communicate with currently unaffiliated levy payers.  FIAG has been responsible for organizing four ‘road shows’ to engage with currently unaffiliated forest owners & others. They were held in Whangarei, New Plymouth, Christchurch and Dunedin before Xmas 2015. These were reported on in the February 2016 ‘Tree Grower’, and another set, starting with roadshows in Gisborne and Napier are planned for 2016.
4. Increasing NZFFA membership. The postal address list of forest-owning entities that are proprietors of forests greater than 5 hectares in size has been further developed and cleaned and is being used to invite all forest owners within a 200 + km (?) radius of each Forest Growers’ Levy Board road show to attend. At the same time these owners have been offered incentives to become members of the NZFFA. A number of people have taken up the offer of initial free membership.
5. Mission and objectives of the NZFFA. FIAG notes that if it is to encourage unaffiliated forest owners to become NZFFA members it has to be clear what the NZFFA’s mission and objectives are. There are18 objectives laid out in the NZFFA’s current constitution but most of them are really subsidiary guides to implementing the first two:
   (a) To promote the wise integration of trees, particularly in the form of shelterbelts and woodlots, into the New Zealand landscape, for profit, amenity purposes, sustainability and conservation.
   (b) To take all reasonable steps to support soil conservation and erosion control, the protection of environmental values, and conservation of indigenous ecosystems and biodiversity: which can probably be boiled down to one,
   i.e. “to promote the wise use of trees for profit, amenity, sustainability, and the conservation of environmental values.”
   In the interim, FIAG is proposing to use this, or similar wording, when corresponding with unaffiliated forest owners.
6. Submissions to Government and press releases.
   -FIAG developed a press release in September pointing out that, contrary to Minister Goodhew’s assertion at the XIVth World Forestry Congress, New Zealand’s forest resource was not being managed sustainably
   -FIAG led the FFA Submission to Ministers on ‘the Government’s Climate Change Contribution Consultation document’ and the ‘ETS Review 2015/16 –consultation document’. FIAG, particularly Howard Moore, developed a technical opinion, that Harvested Wood Products should be devolved to growers as a deferred liability. This was adopted by FOA, WPMA and subsequently WOODCO.
   -FIAG also prepared a paper for Minister Goodhew on ‘forestry taxation improvements that are needed’, which she forwarded to Michael Woodhouse, the Minister for Revenue, for comment.  This resulted in an heartening response from Jim Gordon, the IRD policy manager, who agreed that, together with officials from MPI, we should explore the idea of allowing small scale forest owners to aggregate their cutting rights to obtain scale economies without the current ‘cost of timber’ provision being invoked.  Meetings to progress this with MPI staff Steve Wilton have begun.
7. Develop a strategy to market radiata pine in a coordinated way.  Little work has yet been done on this difficult task, but for example the Government of British Columbia has recently announced that it is investing US$6.2 million to support the forest sector in expanding global markets for B.C. wood products. Research into such models would be a start. New Zealand’s Ministry for Primary Industries is supporting a plan to help M?ori get the most out of their undeveloped land. The forestry group, Toit? Te Waonui, aims to create a new approach to the development of forestry on M?ori land. It is proposing a Fonterra-style co-operative model. This scheme is designed to include non-M?ori small-scale forest owners as well.  The Action Group intends to examine the advantages and disadvantages of FFA members participating in such scheme.
8. Visit by Japenese academics.  On 22 /02/16 FIAG was revisited by Japanese academics Norio Matsuki, Dr Naoki Yasumura (Tokyo University) and Dr Satoshi Tachibana (Tsukuba University) to learn more about small-scale forestry in New Zealand.  FIAG has developed the view that actually Japan has much more to teach us about the management of small-scale forests. [Who is interested in a tax-deductible study trip to Japan?]
9. Interaction with Scion.  Scion is concerned to ensure that forest research results reach small-scale forest owners. This aligns with FIAG’s objectives and FIAG members have participated in useful ad hoc meetings, chaired by Graham West, with Scion staff, MPI officials and other interested parties. A survey of the 3000 SSFOs, that we have email addresses for, showed that information on harvesting and marketing was what was most wanted.  A strategy is being developed to tailor relevant data and decision support tools for SSFOs via appropriate communication systems. FIAG is working to support a Spenser Hill- Scion bid to get funding for the development of a lower cost harvesting system for small forest holdings.  The ad hoc group that has been involved in this has been formalised into “Small and Medium Enterprises joint committee” that parallels other joint FOA/FFA committees. Several FIAG members are also members of SME and the exact relationship between the Small and Medium Enterprises joint committee and FIAG is yet to be clarified.

Hamish Levack July 2016

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