January 11, 2022

The surge in ‘carbon farming’, driven by the increasing price of carbon in New Zealand’s Emissions Trading Scheme (ETS) is taking valuable land away from beef and lamb farmers according to a report released last month.

The analysis of farm sales data was commissioned by Beef + Lamb New Zealand (B+LNZ), the organisation representing New Zealand’s sheep and beef farmers. It confirmed that conversion of whole pastoral farms into forestry – particularly for carbon farming – is happening at a rapid rate.

The report shows that in the first six months of 2021, 14,219 hectares of sheep and beef farmland were purchased for planting trees. It also shows that the continued rise in the value of carbon through the ETS is seeing demand and price points trend upwards.

Call for New Zealand government to act

B+LNZ CEO, Sam McIvor, said: “The proportion of land sales into carbon farming in the past 12 months was 37%, up from around 34% in our previous report. We’re extremely concerned the sale of sheep and beef farms into forestry will only accelerate as the carbon price increases, and fossil fuel emitters will continue to receive a ‘get out of jail’ free card and not reduce their emissions.”

New Zealand ETS
Carbon prices are surging in New Zealand and around the world (source: New Zealand Carbon Farming).

Current government policies are estimated to have helped drive the loss of around 800,000 stock units and there are also signs that carbon farming interests are spreading into other more productive land as drives to cut emissions step up. In 2017, 3,965 hectares of whole sheep and beef farms were sold into forestry and in 2020 it was 24,864 hectares. In 2021 estimates suggest the losses will be much higher.

B+LNZ is calling for urgent changes to the ETS to stop the wholesale conversion of productive sheep and beef farmland into carbon farms. McIvor said: “The carbon price is distorting the market with an increased effect on land values, but it’s also changing the type of land sold and where.

“There’s a much better way to increase planting to improve environmental outcomes and that is the integration of trees on farms. Farmers know their land best. We’re not anti-forestry – exotic planting can be integrated where appropriate – but it’s about planting the right tree in the right place.”

B+LNZ says that every 100,000 hectares of sheep and beef farmland lost to carbon farming equates to the loss of well over 1,000 jobs. It is not just farmers who are concerned. Environmental NGOs have called for changes to the ETS and for more coherent, joined-up thinking on policies to tackle climate change.

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