10 IPCC: Ag escapes spotlight Vol 20 No 13, April 11, 2022
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Banks urged to step up Richard Rennie
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richard.rennie@globalhq.co.nz
N EX-RURAL banker and farm environment group trustee is calling on banks to dig deeper to support their farmer clients needing funding to help meet government freshwater standards and offset their farm’s carbon footprint. Wai Kōkopu Catchment Project Bay of Plenty trustee John Burke said as farmers sought advice across a range of expertise, including forestry and ecology, banks also needed to come to the party, giving clients greater capital horsepower to make the changes. The catchment project near Maketu is based around one of the country’s most degraded estuaries. It has secured $2.7 million funding to improve the catchment’s environment and communicate land management changes to local landowners. “You can look at restoration including trees for carbon as exotics, where the cost to plant is about $5000 a hectare. These projects can prove their business case. What banks could be doing more here is aligning loan repayments to timber and carbon flows,” Burke said. Typically, with exotic plantings, carbon credits can be claimed from year five, ramping up to peak at about year 10 and ending at year 16, still 12 years short of harvest. While exotic plantings do at least provide a relatively early cashflow, it is when native plantings and wetland
NEED HELP: John Burke estimates a 10% land restoration project across all NZ farms could be expected to cost on average $14,000 per hectare restored.
establishments are undertaken that pressure on farmers’ capital starts to really bite. Based on the Wai Kōkopu catchment experience, Burke and his colleagues have calculated the costs for land retirement and ecological restoration can be up to $23,000 a hectare, including fencing, weed and pest control and native seedling plantings. He estimates a 10% land restoration project across all NZ farms could be expected to cost on average $14,000 per hectare restored.
“That means farms can face a high level of funding needs to achieve that. You could be looking at between $400,000 to $800,000 per 400ha farm,” he said. Those figures tally closely with Federated Farmer figures in 2016 on the cost of meeting regulations. This put fencing costs alone on western Waikato hill country as ranging from zero to $500,000 a property. Wetland restoration projects are significantly greater in cost than trees alone, sometimes requiring land reforming and can mount to
Tāmata Hauhā partners with you the farmer, to establish permanent or production forestry projects on your land that align with your needs and your aspirations for your farm. You provide the land, Tāmata Hauhā provides the funding and forestry expertise and carries all the financial risk. As landowner, you will receive 50% of the carbon profits created from the forest for 16-20 years and then 100% after that. Such an arrangement provides you with great returns without having to dip into your own pocket.
$20,000-plus a hectare. Burke acknowledged there were some early efforts in play from banks. This included the ASB’s farm sustainability loans released at Mystery Creek last year. ASB general manager for rural Ben Speedy said the bank has acknowledged the value of forestry and carbon planting on farms by allowing clients to incorporate carbon income into budgets. Alternatively, the bank’s
As a team of ex-farmers we understand the sector and the need to keep our farms producing. We established ourselves to create tailor-made and adaptable solutions for all landowners, especially in a time of ongoing legislative changes. In addition to Tāmata providing the investment, we undertake the necessary land remediation, clearing/excavation, spraying, planting, thinning/ pruning, and pest control. We maintain a clear, transparent, and auditable process to ensure we act as true and effective partners in any arrangement.
We would be more than happy to visit your farm and have a discussion on our offerings and how they may be of benefit to you. Blair Jamieson - blair@tamata.co.nz / tamata.co.nz / 021908476
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That means farms can face a high level of funding needs to achieve that. You could be looking at between $400,000 to $800,000 per 400ha farm. John Burke Wai Kōkopu Catchment Project