The Clutha District Council should be able to make a profit with correct management of the 456ha of forestry land it has put on the market, the South Otago Farm Forestry Association says.
At a full council meeting last week, association member David Vollweiler spoke in the public forum, where he said the association was shocked and surprised the council had moved to sell valuable forestry land.
Clutha Mayor Bryan Cadogan and council chief executive Steve Hill have both stated in the past the forestry land owned by the council was costing too much for it to be strategic for the council to continue to own.
Association president Barry Gray told the Otago Daily Times better management could make a huge difference.
Members of the association were "outraged" the council was selling the land instead of harvesting the logs.
It was decided in a public-excluded council meeting on September 24 last year the land, which includes about 100ha with trees planted before 1990, would be put on the market.
Separate from the association, David Pearson also spoke to the council about his concerns with the sale.
He said, based on his experience with forestry land, it could turn over a healthy profit for the council of about $1million.
He said the council could harvest the trees at a "conservative" estimate of $25,000/ha.
Even if it started by harvesting 25ha and then continued to harvest 10ha a year after that, the council could return a sustainable profit.
He was also concerned the council would end up selling the land at a "25-40% discounted rate" to allow for risk.
Mr Pearson said it was a surprise to discover the land was advertised for sale with no public consultation.
Mr Cadogan said the council had been as open and "transparent" as possible with its approach to selling the land.
It was identified in the council’s long term plan last year that a request for proposal process would be initiated to identify the best return available for the council’s forestry assets.
He also said managing the land was costing the council money and had created about $1.4million in debt.
Mr Hill told the Otago Daily Times a forecast gain from the sale of forestry assets was identified in the council’s 2016 annual plan.
He said public consultation was not required on decisions relating to the forestry land.
The land was considered an investment and was no different from any other form of investment the council held, he said.
The decision to sell was based on the best return to the ratepayer after consultation with forestry industry experts.
The council noted the concerns raised in public forum.
The land will remain on the market.
Mr Hill said the sale would depend on the price the council received to determine the best economic return to the ratepayer.
A previous attempt to sell had not resulted in an offer the council felt it could accept.
The South Otago Farm Forestry Association is a branch of a national association whose members are involved with small forestry blocks and include farmers, forestry investors, growers and managers.
