A referendum of forest owners is being sought by the Forest Owners Association which is proposing an industry-wide compulsory levy order under the Commodity Levies Act, to replace largely voluntary annual donations.
However, the New Zealand Farm Forestry Association which represents 2200 members with mainly small holdings on farms, is not enthusiastic about the proposal, backed mainly by big forestry owners.
The voluntary contribution to the FOA raises $3 million to $4 million annually, but an annual levy could raise several million dollars more from the one-third of forest owners who do not give voluntarily.
A range for a levy of between 24c and 28c per cubic metre of harvested wood is understood to be the starting point for discussion.
Between February 7 and 17, the FOA is undertaking nine regional roadshows, from Balclutha to Whangarei, in a consultation process with forest owners.
About two-thirds of the entire industry, measured by planted area, are FOA members.
FOA chief executive David Rhodes, contacted yesterday, said aside from the present voluntary contributions, some forest owners also paid levies for biosecurity measures or research.
"One of the questions is whether one levy will bring all these together," Mr Rhodes said.
However, Farm Forestry Association Southland-Otago committee member Allan Roulston said when contacted the proposal was "just another tax".
While he was aware the levy would be imposed only at harvest time, Mr Roulston said, "It's still going to add up. Costs are rising on the farm and everyone wanting their tax is making farming unprofitable. It's becoming a nightmare of red tape." Other forestry sources said gaining the approval from the Farm Forestry Association's 2200 members would be "crucial" for the levy proposal to succeed.
Mr Roulston said if members did not want to go ahead, the FOA could find itself "with a major problem on its hands".
The proposed levy would be on all harvested logs from plantation forests that were either exported in log form or processed in New Zealand, including all species and all production which leaves the forest as logs or chips, but not products such as domestic firewood, bark or Christmas trees.
Benefits of a commodity levy on all forest owners included research into pests, diseases, fire, wind and other threats to forest estates, and promotion of forestry, wood and wood products domestically and internationally, including improved or novel products and as a lobby group, input into government initiatives such as its agreements for biosecurity and carbon policies and issues.
Mr Rhodes said a compulsory levy on log production would be equitable for all, as eventually the majority of forests were harvested, and the levy would be imposed at the time of greatest cash input for the forest grower.
"A complication is the industry is not about an annual production cycle, but a 30-year cycle," Mr Rhodes said.
The FOA's website briefing papers says its 119 members own just over 65% of New Zealand's plantation forest estate. There are "thousands" of other forest owners, the majority being small forest areas, of which more than 2200 belong to the New Zealand Farm Forestry Association.
Under the FOA umbrella, growers are able to pool financial resources, which is already under way in research, market promotion and biosecurity surveillance and response.
The FOA is also able to apply for government funding, not available to individual forest owners, to support research and development projects.
Forestry sector
• In 2010, New Zealand plantation forest consisted of a net stocked forest area of 1.73 million hectares, contributing 2.9% to GDP, with exports of $3.9 billion and employing about 16,800. Harvest is projected to increase by almost 70% by 2025.
• Two-thirds of forestry estate (by area) owned by 119 growers in Forest Owners Association. Remainder includes more than 2200 small forest owners in the New Zealand Farm Forestry Association, and thousands more owners of small-block holdings not affiliated to either association.
• If vote was successful, referendum would be held from late February until mid-March. Successful referendum would enable a levy order application to be submitted to the minister by late March for implementation in July.
SOURCE: Forest Owners Association
