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Commodity levy for forest owners?


Tuesday 4 October 2003

Commodity levy for forest owners?

Forest owners may be asked to pay a commodity levy to fund research and other activities which benefit the whole sector.

Speaking at the annual meeting of the Forest Owners Association in Wellington today, president Peter Berg said all plantation forest owners benefit directly from the association’s national biosecurity, training and research programmes.

“We have been working with the Forest Industries Council and the Farm Forestry Association on the introduction of a comprehensive industry levy to more fairly fund these activities.”

Mr Berg said the industry was currently at the bottom of a cyclical downturn.

“A number of factors have coincided to dramatically reduce returns from our businesses. But coincidences don’t last forever and cycles eventually self-correct.

“Important new markets and re-awakening of demand mean the outlook for forestry is still good. The doomsayers who come out of the woodwork every time there is a downturn will be proved wrong.”

The big challenge, he says, is for the industry to get out of the commodity cycle.

“The majority of our harvest needs to be processed into added value products in New Zealand, if the industry’s full potential is to be realised.

“Shortages of skilled labour, infrastructure problems and the uncertainty and delays associated with the RMA and other legislation are all major barriers to the investment the industry desperately needs.”

Mr Berg said the association was supporting programmes that will facilitate value-adding.

Its partnership with the Government through the Wood Processing Strategy and recent negotiations about Kyoto carbon sinks were targeting the same objective.

“All these activities benefit forest owners, whether or not they choose to belong to an industry association. A comprehensive industry levy would mean that we would not only be funded by all growers, we would be accountable to them as well.”

Mr Berg said the industry had a policy of constructive engagement with Government, with the aim of achieving the best possible outcomes for forest owners.

“The Wood Processing Strategy has been win-win for both parties. However there are still some major issues needing to be resolved with regard to the Kyoto Protocol.

“We consistently opposed the Government signing the protocol in advance of our overseas competitors. But now the agreement is signed, we must accept the political reality and work to achieve the best possible solution for our members.

“We believe our property rights have been infringed by the decision to nationalise forest carbon sinks. We are therefore negotiating for arrangements under the Forest Industry Framework Agreement which will compensate forest owners for this.

“One positive outcome is that the Government now has a very big vested interest in the bio-security and viability of its biggest Kyoto asset: the nation’s plantation forests.”


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