Forestry harvest-time subsidy controversial

The New Zealand Farm Forestry Association - whose members hold the key to a proposal for a compulsory, industry-wide levy - will meet this week and discuss the issue.

The Forest Owners' Association (FOA), with 119 members, represents mainly large forest owners and wants a referendum held to propose the compulsory levy, while the Farm Forestry Association (FFA), with about 2000 members with mainly small forest blocks, holds sway with an overwhelming voting majority.

While the FAA is yet to establish an official position on the levy proposal, the Forest Industry Contractors' Association has come out strongly in favour of the levy, saying it would be "a huge strategic step forward" and benefit all in the sector.

The FOA has said the proposed levy, which could cost 24c-28c per cubic metre of wood at harvest time, could raise several million dollars more than the present $3 million-$4 million raised annually, and would be used for several purposes, including research and development, training and marketing.

Recently, a southern branch representative of the FFA said the levy was "just another tax" and a "nightmare of red tape" making farming more unprofitable.

In reply, the chief executive of the Forest Industry Contractors' Association, John Stulen, labelled the remarks as "short-sighted" and said the farm foresters had to understand how modern markets and industries operated.

"If the proposed commodity levy goes ahead, forestry as an industry has the chance to take a huge strategic step forward.

"The commodity levy will ensure that small growers pay their fair share of costs that are currently being borne by only the larger growers," Mr Stulen said in a statement.

FFA executive member Neil Cullen contacted the Otago Daily Times and said the association, which represents 2000 of the estimated 15,000 forest owners around the country, "has not taken an official position on the levy yet".

He said the executive was "in principle" in favour of the levy, but was otherwise "keenly interested" in more details from the FOA on how a levy would be set up and administered.

The FFA executive meets on Thursday and would likely take a position on the proposal.

"We will be examining closely the governance proposal for the levy to see what influence small growers would have on how the levy income will be spent," Mr Cullen said.

Mr Stulen said farmers of all types around the country had prospered from collective action, strategic vision and action which came from many small operators banding together.

"It is short-sighted and self-serving of any farmer with forestry to argue with the logic of a commodity levy. It is quite an affordable system, as all of the costs for industry standards for planting, growing, tending and harvesting a forest will only need to be paid for by a levy upon harvest," he said.

With a small amount of money pooled, that meant it ensured an industry would have risks covered and could meet market opportunities when they arose, Mr Stulen said.

Since the end of the government forest service, several decades ago, it was mainly large forest owners who donated their time of technical staff, organised and planned industry group responses to biosecurity risks, including co-ordinating industry and government responses to pest incursions.

"The wealth of knowledge that has been built up over the years in forest management, biosecurity and market awareness has come from the members of the NZ Forest Owners' Association's own voluntary membership fees," he said.

While the contractors association does not have any voting rights on the issue, Mr Stulen said he supported introduction of the levy, as it would have multiple benefits for all foresters.

Industry training for forestry workers has been funded, on behalf of everyone planting, tending or harvesting either woodlots or corporate forests, once again by the voluntary fees paid by FOA members, he said.

"Even workers who end up being employed in crews doing woodlot work have benefited from the training infrastructure paid for by a few of the big players," he said.

FOA chief executive David Rhodes has just finished a regional road show, with at least nine stops, to consult large and small forest owners on the proposal.

If foresters voted for a referendum, it would be held over the next few weeks until mid-March. If the referendum voted in the levy, it could be submitted to the minister by the end of March for approval, with implementation by July.

• The levy would encompass all logs for domestic and international sale; excluding only domestic firewood, Christmas trees and bark.



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