Planting more trees is not saving mills

Dave Read

Opinion

The Juken New Zealand mill in Gisborne is the 56th mill to close in the past 20 years. We need to ask why our government has promoted the planting of more land when the result has been lost jobs.

Forest expansion without investment in wood processing has turned the industry into a trader of whole logs with the associated boom and bust cycles faced by all commodity traders.

The losers are loggers and mill workers whose jobs are now precarious and their families who face an itinerant life.

Gisborne is set to lose 80 jobs. Additionally, the East Coast has recently seen the lay-off of numerous logging crews in areas such as Wairoa. The lack of local sawmills plus the large distance to ports has made remote forests uneconomic to harvest unless log prices rise faster than transport costs. There are too few successful mills such as Red Stag in Rotorua.

A lot of farms were planted in trees during the 1990s, but this did not result in more jobs. The proportion of logs exported has almost doubled over the past two decades. Whole logs create jobs in other countries. In New Zealand over 4700 mill jobs have been lost over the past two decades.

A key influence on the conversion of farmland to forestry has been the 2020 Price Waterhouse Cooper (PwC) report commissioned by Te Uru Rakau (the forestry arm of the Ministry for Primary Industries). One of the headline conclusions of “Economic Impacts of Forestry in NZ” was that forestry resulted in more employees per 1000ha than sheep and beef farming.

The report achieved this result by choosing to include support contractors as forestry workers, but not including sheep and beef support contractors. Similarly, pruners were included for forestry but shearers were not counted among sheep and beef workers.

The report went on to make farming look worse by including the large area of high-country sheep farms with very low employment density. These are on iconic landscapes few people would want to see planted. In fact, we spend millions cutting out wilding pines on this land.

If the data had been correctly interpretated, the report would have come to the opposite conclusion and it would show that converting sheep and beef farms to forestry was bad for direct employment.

Moreover, the report ignored the fact that new plantings would produce additional logs. Unless there was matching additional investment in processing capacity, these logs would have to be exported whole, so half the jobs predicted in the report would not eventuate.

The PwC report has had a big influence on national land use policy and is frequently quoted in local body consultation meetings. It will be increasingly used by overseas buyers of farmland wishing to plant trees. As long as no one is aware of its erroneous conclusions, it is tailor-made to satisfy the Overseas Investment Office’s “benefit to NZ” clause which requires increased employment.

Forestry is an important player in our economy — its place should not be dependent on constant expansion. More land is not needed for a stable industry, since every existing forest can be re-planted once it is harvested. A stable supply of domestic logs would mean investment in wood processing could be better planned and mill workers and their families could have a secure future.

We don’t need more forests, what we need is investment that will add value to our existing forests.