NZIER Report on forestry - strong economic and environment contributions

Published Forestry Bulletin 31 March 2017

The NZIER Report into plantation forest statistics puts our forest sector ahead of beef or sheepmeat export values, but suggests the biggest value of our industry to New Zealand lies in its ecological benefits.

The picture painted by the New Zealand Institute of Economic Research Report of the New Zealand forest industry is like an iceberg.

Above the surface, the economic returns from forestry place it as an increasingly vital primary industry for New Zealand.

Below the surface, there is evidence of tangible but insufficiently quantified environmental benefits. These may come to outweigh the narrower economic factors.

Forestry is a significant land-based industry. It ranks obviously behind the erratic returns of dairying. But then, so does everything else in this country.

New Zealand forest product export receipts will outstrip the more glamorous horticulture export returns for some years to come. By 2020 the forecast for forest export earnings is $6.15 billion.

Total meat and by-products and wool export returns are still ahead of total forest product export income. But, now, for the first time since 1882, the value of forest product exports from New Zealand is exceeding the value of meat exports.

Regionally, forestry and logging can be even more economically vital. For Gisborne - Tairawhiti the forest industry represents nearly 5.5 per cent of GDP and is growing rapidly, likely to make it the province’s most important primary industry.
But it is in the ‘below the waterline’ environmental area that NZIER has the most far reaching recommendation for the way the forest industry is perceived.

NZIER suggests that a satellite account for forestry be established so that the beneficial effects of forestry on the environment can be brought into a national accounting system. This would more properly reflect the industry’s importance and ensure a balanced understanding of industry value. Such a satellite account already exists for tourism.

For instance, the NZIER Report cites a conservative value of $300 million a year from the value of capture of carbon from the atmosphere. It identifies $420 million from the contribution plantation forests make to taking contaminants out of water courses.

Reduced soil erosion is estimated at $208 million per year nationally. But that could be extremely conservative. For instance, farmland on the Manawatu Plains was seriously flooded in 2004 and then again in 2015, with huge costs in lost dairy and crop production and then land restoration. But no in-depth study has been done on how less serious the floods might have been if the back-country hills had a forest rather than a pasture cover.

These conservation values are extremely difficult to quantify in monetary terms. It is obvious, to most people at least, that trees, either as riparian planting or more extensively, have a raft of environmental advantages over unmixed pastoral agriculture. But a consistent framework needs to be developed to properly understand and quantify the economic value of forests to New Zealanders.

If the research and sums are done, then the long-term value of our plantation forests may turn out to be much more valuable that we already know them to be.

The Plantation forestry statistics Report covers other important aspects of the forest industry, from portable sawmills to recreation and tourism. It addresses forestry labour force requirements for instance, again with the concern that little information is available.

Copies of the Report are available on-line at the FOA website or hard copies by request to FOA.