16 August, 2013
Māori Forestry Forum
E aku rangatira, tēnā koutou katoa. Ka nui te honore ki te mihi ki a koutou.
Good morning everyone and thank you for the kind welcome and for inviting me to speak today.
Thank you to Dr Ken Kennedy for the kind welcome. Thank you also to Scion and Federation of Māori Authorities, for inviting me to speak here today.
I would also like to thank the other organisation supporting this event today – Waiariki Institute of Technology, Te Puni Kokiri, and Te Arawa Primary Sector Inc.
Finally I would also like to acknowledge my fellow speakers today who come from a range organisations and backgrounds, but all have a common interest the subject today of “Unlocking the potential of Māori forestry”. I will not mention them all by name, but they bring much experience to the forum today.
I welcome today’s forum, the first of its kind ever held. Forests are a significant land use of Māori land. With more than $2 billion in forest assets, whānau, hapū and iwi already stand out as key players in the forestry sector. That influence can only grow in the coming years.
This important and timely forum is a great opportunity to share ideas and aspirations for Māori forestry now and in the future. It also represents a milestone in the development and growth of your industry. It will provide a platform for Māori land and forest owners to come together and influence the future direction of their industry.
I expect that what is discussed here will also influence the overall direction of New Zealand forestry in the coming decades.
Māori forest industry
Today, Māori stand out as major players in the forestry sector, as land owners, investors, and employees.
Māori owned land under plantation forestry currently stands at some 520,000 hectares, representing around 30 per cent of the total planted exotic forests. When all Treaty settlements are finalised in the next ten years, this could increase to 785,000 hectares or close to half of the current forest estate.
The Ministry for Primary Industries is currently assessing the extent of the indigenous forest resource on Māori land so it can work with landowners to explore opportunities to increase returns from those forests.
There is also significant scope to increase economic returns from other currently unproductive Māori land. The Government is reviewing the Te Ture Whenua Māori Act so as to reduce current barriers to Māori land owners in making commercial decisions on their land. With the proposed changes to the Act it will be easier for Trustees to make long-term investment decisions such as establishing a forest crop.
Primary Growth Partnership
The Government has made a significant contribution to funding forestry and primary sector research and development over a long period of time.
But more recently, Government has been playing its part in driving innovation activity through the flagship Primary Growth Partnership (PGP) projects.
The PGP is about harnessing innovation to lift both productivity and profitability across the primary sector, including forestry and wood products. Projects depend on commercial partners coming forward with workable ideas.
An example which may be of interest to you is the Steepland Forest Harvesting project being led by Future Forests Research Ltd. Running over seven years; the project aims to unlock the massive potential of the standing crop on the hillsides of New Zealand, and to improve the safety of workers operating in these areas. The safety of forestry workers is certainly front of mind in the sector right now. Everyone wants to know their loved ones will come home from their jobs in our forests.
One of the aims of this project is to create novel remote-controlled machines that can work on the harvesting slope, and to develop high-speed cable extraction systems. Building technical capability in harvesting and machinery development will help ensure the industry’s future, improve safety, and further reduce the environmental footprint of harvesting.
This work is likely to be of great interest to Māori landowners, many of whom I know have established forests on steep land and who also contribute significantly to the workforce who face the day to day challenges of working in these areas.
The Government and industry have agreed to fund up to $6.5 million, with the programme expected to produce estimated total net benefits of over $100 million by 2025.
The Government has also just approved funding to study the feasibility and economics of making liquid biofuel from forest harvest and milling waste that currently has no economic value.
In what is known as the “Stump to Pump” project, the Government is partnering with Norske Skog and Z Energy to determine the commercial viability of establishing a test plant at Kawerau to process New Zealand forest waste into transport fuel. This is a new innovation and opportunity to explore a value chain that could deliver large volumes of biofuels for New Zealand over in the long term.
The Government and industry has agreed to fund $6.75 million each over a period of fourteen months to complete this feasibility study.
These initiatives help make this the ideal time for the forestry sector to submit bids for PGP funding. The forestry sector’s slice of the PGP ‘pie’ is currently small and does not reflect its significant contribution to New Zealand’s exports.
I encourage you all at this forum to consider developing projects that might fit with the PGP goals. MPI representatives are available to provide advice and help out with developing bids if needed.
As our third largest exporter, forestry provides $4.3 billion in annual export revenue. Making up three per cent of GDP, the sector directly provides 18,000 valuable jobs, particularly in rural and provincial areas. That number could – and should – continue to grow.
The Government’s Business Growth Agenda supports New Zealand businesses, and the broader community, by focusing on practical initiatives that enable growth and create jobs. The forestry industry is likely to be interested in and benefit from most of this work.
The Business Growth Agenda has a special focus on export markets. This Government has a goal of lifting the value of exports from 30 per cent to 40 per cent of GDP by 2025.
This translates to a doubling of the value of primary sector exports by 2025. We call this goal the ‘Export Double’. As our third largest primary sector export earner, forestry has a significant role to play in helping achieve it.
The Export Double will require significant changes in the way industries like forestry operate – to increase both the volume and the value of exports.
As far as volume is concerned, New Zealand is well positioned to increase returns from log exports. Wood availability is increasing, with the annual harvest having just passed 27 million cubic metres a year. Over the next ten years this figure is forecast to rise to 35 million. In recent years we have experienced strong demand from China for logs – and this is expected to continue.
Achieving the Export Double will also require the forestry sector to increase the value of exports. Greater levels of wood processing will provide a platform to do this. High-value products stand to play an especially important role here.
I note that a current WoodCo action plan for the forest and wood products industry places considerable emphasis on wood processing of this kind.
You, the industry people here today, are the ones who are in a position to follow through on implementing this useful and practical road map for the future of your industry.
Greater use of engineered timber products here and elsewhere, is a practical way to draw more value from wood products.
Engineered timber can be easily manufactured into large panels for floors, walls and roofs. It can be made into pre-fabricated structural components, such as long-span beams.
There could also be opportunities to develop and export high-value, pre-fabricated buildings or the technology to the Asia-Pacific region.
The Government is prepared to look at new ways to help promote greater use of these emerging and innovative technologies. But the industry must come to the party with funding as well.
Economy and the environment
The theme of this forum is “Unlocking the potential of Māori forestry – innovations and aspirations”. The Government attaches a lot of importance to innovations and aspirations of the primary sector.
The Government has had a long and active involvement in the sustainable development of our forestry sector. Over that time, it has been a significant investor in forest research and development. Scion, for example, is an internationally recognised leader in forestry science. Improving productivity, environmental sustainability and safety have always underpinned this investment.
The Government supports a number of innovative projects that are well suited to Maori forest land.
Permanent Forest Sink Initiative
The Permanent Forest Sink Initiative is one of the government’s niche climate change and sustainable land management schemes.
The scheme provides a mechanism for the restoration of New Zealand’s indigenous forests through natural forest reversion processes, as well as providing opportunities for establishing high value long term timber crops. It delivers carbon revenue to land were permanent forest sinks have been established for long term carbon sequestration.
The Permanent Forest Sink Initiative is currently being reviewed to find ways to increases its value and to strengthen environmental outcomes for marginal land. A significant part of the review will be looking at how to make the scheme more accessible for Maori owned land to join.
Sustainable Farming Fund
The Government has also supported, through the Sustainable Farming Fund, a number of innovative projects that are well suited to Māori forest land.
Two recent projects standout for me. One is growing ginseng under pine trees. Māori forest owners are investigating its potential as a commercial companion crop which will increase cash flows in the years before forest harvest.
The other is the development of a new forest enterprise in Northland. The aim is to develop a new forest system based on exotic and native forest species which provide a range of high value wood products coupled with recreational and tourism businesses.
Of course there are other commercial opportunities to be had in Māori owned indigenous forest and scrublands – some of which will be discussed later this morning.
All of this represents tremendous opportunities for wood processing investments and innovation for alternative uses of forest products.
I would like to end by reaffirming this Government’s overall commitment to the forestry sector. It is in our direct interest to ensure that all parts of the sector remain strong and continue to thrive.
I wish you every success for your forum. I hope you take this opportunity to share learnings, and consider the future opportunities in forestry.
Nō reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.