Farmers criticise proposed forestry industry levy as 'just another tax'

Owners of large forestry operations are on a collision course with farmers over levy proposal. Photo / Alan Gibson

Owners of large forestry operations are on a collision course with farmers with smaller interests over a proposal for an industry-wide compulsory levy order.

"It's the big boys versus the little boys," one forestry industry source said, but declined to be identified.

In one corner, making the proposal, is the Forest Owners Association and its more than 119 members who cover two-thirds of the forestry estate by area.

However, the Forest Owners Association needs the agreement of New Zealand Farm Forestry Association's more than 2200 members, representing less than a third of the estate, to have a referendum on the levy proposal.

Forest Owners Association chief executive David Rhodes is at present on a nine-stop regional tour of the country to outline the referendum proposal, saying a levy would benefit the entire sector in numerous ways, including, research into pests and diseases, promotion of forestry domestically and internationally and would have input into government initiatives such biosecurity and carbon-related issues.

Any levy would be applied only at harvest time, and is understood to be in the range of 24c to 28c a cubic metre.

When told about criticism levelled at the Forest Owners Association by a southern representative of the Farm Forestry Association, claiming a levy was "just another tax" and making farming "unprofitable", Rhodes said he was aware of their concerns.

"Yes, it is absolutely critical to get the Farm Forestry Association's members on board. They have an overwhelming volume [in the votes per forestry block]," Rhodes said.

However, the regional roadshow had enjoyed a good turnout from smaller growers, including Farm Forestry Association members, who had been "positive" about the proposal, he said.

At present members of the Forest Owners Association voluntarily raise $3 million to $4 million annually for research and development, marketing and lobbying, which most of the smallholders in the Farm Forestry Association do not contribute to.

In a complicated setting the Forest Owners Association has enough votes, based on acreage volumes held, to easily get a minimum 50 per cent in favour of a levy; however also required is a minimum 50 per cent by number of forest owners, in which case the 2200 Farm Forestry Association members hold the balance of power and decision.

Rhodes said the way ahead was "tricky" in finding a balance, given some by acreage contributed 80 per cent of funding and what could be determined as equal voting rights by the remainder who contributed 20 per cent.

If the vote is successful a referendum will be held from late February until mid-March, and a successful referendum would enable a levy order application to be submitted by late March for implementation in July.

TIMBER FARMING

* 1.73 million hectares of net stocked forest area in 2010.
* 2.9 per cent contribution to gross domestic product.
* $3.9b of exports and employment of about 16,800.
* Harvest is projected to rise by nearly 70 per cent by 2025.
* Two-thirds of estate area owned by 119 growers.

- Otago Daily Times