Including agriculture in the emissions trading scheme (ETS) would be a "really bad thing to do", forestry professionals were told last week.
Edwin Jansen, who has worked in the forestry, property and agricultural sectors for many years, said when it came to the ETS, the forestry industry and the Ministry for Primary Industries needed to have a "rational debate".
Mr Jansen was addressing an Institute of Forestry conference in Dunedin last week.
For the past 17 years, he has been involved in managing the rural investments of Ngai Tahu Forest Estates, which has involved buying and selling land and forests, developing water storage and irrigation, clearing and converting 16,000ha of pre-1990 forests on the Canterbury Plains to irrigated dairy and beef farms, ETS trading and forest offsetting.
The policies must encourage investment in forests and wood processing and aid New Zealand’s climate-change response, Mr Jansen said.
However, including agriculture in the ETS would be a mistake at this stage.
The agricultural sector had bigger priorities, he said.
Including agriculture in the ETS might not result in the price of carbon increasing, a high carbon price would not result in a stronger forestry sector, and it would not fix the forest sector policies, he said.
Mr Jansen raised the question of why people were investing in agriculture, not forestry, saying dairy conversions across the South Island averaged 36,500ha a year between 2007 and 2015.
People invested in farming because it allowed them operating cash flow "straight away", gave them a development margin and capital growth and a shorter investment timeframe.
There were exit strategies, moderate risks and no contingent liability.
"It’s a bankable investment."
Ngai Tahu’s conversion of the former Eyrewell Forest to dairy would result in 20 farms, 60 houses, 57 centre pivots and 6000ha of irrigated land, employing 65 full-time staff.
It would involve $25 million worth of cows, $35 million worth of Fonterra shares and $270 million worth of land.
The conversion aimed to create a sustainable farming system — to enhance the rural landscape, demonstrate best-practice management of natural resources and improve water quality outcomes.
Ngai Tahu was going to spent "a lot of money" on trees, shelterbelts and ponds, he said.