One Billion Trees Programme

The New Zealand government has set a goal to plant a billion trees by 2028, what does that mean for you?

 

What is the one billion tree project and how can it benefit my farming business?
Much has been made of the Governments goal to plant one billion trees by 2028. Feasible or not, there are some great funding initiatives for farmers to take advantage of, be it to complete the planting of riparian strips on farm to assist on farm compliance with the Southland’s Water and Land Plan or registration of full forestry rights, which can be very useful tools in succession planning as well as future-proofing your farm if undertaken correctly.

 

Funding options and criteria
The one billion tree fund has a substantial $240 Million in grants and funding available for landowners, organisations and communities, of which only $27 Million has been taken up as at 31 December 2019. This article focus’s on the main source of funding available to landowners which is through the Direct Grant Scheme.

There are 4 Direct Grant categories available, with additional top-ups in special cases (to help with fencing, land preparation and planting on erosion plane land). These 4 categories are for:

  1. Native planting: up to $4,000.00 per hectare – includes riparian planting;
  2. Native Reversion: up to $1,000.00 per hectare to assist in the reversion of your land to permanent native forest cover;
  3. Manuka/Kanuka Planting: up to $1,800.00 per hectare to plant these species only; or
  4. Exotic forest planting: up to $1,500.00 per hectare

 

The differing amounts reflect the differing costs between each planting activity and you can apply for a grant in more than one category. It is important to note the funding is to contribute towards the cost of the planting not to cover the total cost, to assist landowners in integrating trees into their existing land uses and to clear land for farming.

As with any grant scheme there is certain criteria to be met, the key ones of which are:

  1. having the right to plant on the land and commit to maintain the area for at least 10 years, be it as an owner, lease (under a signed lease), or through a forestry right;
  2. The particular land must not be ‘forest land’ at the time of application or within 5 years prior to the application;
  3. Forest land has a specific definition of being at least 1 hectare in size, consisyinh of tree species reaching 5 metres in height and with a collective crown cover (at maturity) which would cover 30% or more of that hectare and have a width of 30 metres or more on average;
  4. Not already be involved in another related government scheme i.e. Afforestation Grant Scheme, Erosion Control Funding Programme and the like;
  5. Involve trees with the ability to reach 5 metres in height at maturity, Native plantings having provision for smaller tree species, shrubs and other plants as part of the planting mix;
  6. Minimum planting requirements of 750 stems per hectare (SPH) (successfully established), with an exemption for Native Planting where a minimum of 300 SPH must be tall tree species (minimum of 5 metres or greater in height at maturity)
  7. With the exception of riparian strips, the planting must have the capability of having an average canopy width of 30 metres at maturity, and cover at least 5 hectares. Native planting has a minimum requirement of 1 hectare.

 

How can this benefit my farming business?
With Southland’s incoming Water and Land Plan (Plan) as well as proposed policy from central government making on Farm Environmental Management Plans (‘FEMP’) mandatory and a requirement for any resource consent application, the implementation of riparian planting can be an important tool and is sometimes a requirement of any approval.

Riparian planting is specifically noted as part of good management practise in the Plan, due to it being accepted generally it assists in limiting nutrient losses into water ways as well as assisting general in decreasing water degradation.

Another factor for consideration is, more and more we are seeing and advising prospective purchasers of farms to complete enhanced due diligence when deciding whether to purchase a farm. In specific reference to the Plan, there is greater focus and obligation on farmers and the environmental affect their business may have on the environment. This requires investigating all environmental factors which may require capital spend, such as fencing of water ways, minimum set backs, riparian strips and and the like, as it all impacts on the overall financial viability of the farm and the return on investment.

Implementing this work now can go some way to getting you ahead if a purchaser is weighing up your farm against someone else’s.
As we alluded to in the beginning, the implementation of a forest on farm can also assist both with succession and the future proofing of the farming operation, if completed correctly.

Due to the increase in farm values, it is often not possible for farming assets to be distributed equally between children, whilst maintain the financial viability of the farming operation. That is why ‘off farm’ assets or assets which can be left to non-farming children become valuable tools in a successful succession plan. A Forestry right provides another income stream/asset which can be used as such, and if funding can be provided by a third party to assist in this regard then it is an option which can be considered. Of course landowners will need to have suitable land for this; such which the current economic return from that land does not outweigh the benefit of any proposed forestry right. 

On top of this, new forests funded through Direct Grants can immediately register with the Emissions Trading Scheme (ETS) to start earning Carbon Credits if the forest planted is ETS eligible, with the exception of radiata pine which cannot be registered for 6 years. We have already seen the risk (through the current government) of farming coming within the ETS. If a qualifying forest is registered, a landowner can reserve themselves through the forestry right, all rights to the carbon credits to offset carbon emissions from the farming operation. If this does not eventuate, then the credits can fall to the non-farming child who would be able to trade/sell them freely, or hold them to offset any deforestation.

Whilst the one billion tree scheme will not suit all, there will be some who may receive substantial benefit from utilising the grants and implementing appropriate plantings on farm.

Please note this article does not constitute legal advice; if you wish to understand the potential implications of the one billion tree scheme (including any proposed changes to related legislation) for your particular farming business, please get in touch.

Chris Menzies

PARTNER

 

PHONE: 03 236 7000
EMAIL: chris.menzies@awslegal.com