Dairy leader looks to make money from ETS

Dairy leader looks to make money from ETS, says Federated Farmers failing to lead.

A dairy farmer planning on making money from farming carbon says Federated Farmers is failing to provide leadership on the issue, Carbon News reports this morning.

Former Fonterra executive member Neil Walker is so confident of his assessment that he’s putting his money where his mouth is, investing in hill country farms and planting trees to harvest carbon, timber and honey.

“I went to the annual meeting of Federated Farmers here and they had all this huffing and puffing and being worked up about the Emissions Trading Scheme,” he told Carbon News (www.carbonnews.co.nz) the country’s specialist information service on the carbon markets.

Walker, the dairy chair of the Institute of Food, Science and Technology and chair of the Taranaki Regional Council’s policy and planning committee, says that there is a solid business case to be made for converting hill-country sheep farms to forestry.

“Whether you like the ETS or not, the fact is that the back-country farms are failing.”

Walker’s move into carbon started with 200ha.

“I’ve bought 500 acres of poor land at the back of Waverley,” he said. “I paid $477,000 for that 200 hectares, including a four-bedroomed house. Then I bought another 100 acres for $110,000.”

He’s planted part of the land in pines and eucalypts, and is looking to buy more land to grow manuka.

“The Government is looking at doubling the carbon units from manuka from three per hectare to six,” he said. “That means if you plant manuka on 100ha, over 20 years at a carbon price of $25 a tonne you’ll get a return of $300,000.”

Farming manuka opens up another business opportunity – honey, he says, with top-grade active manuka honey fetching $50kg and ordinary manuka honey selling for $12kg.

Carbon forestry consultant Simon Young, of Karo Consulting, says there is growing interest in carbon farming, particularly on hill country farms which are not making money now.

“There are opportunities there for income generation from the hill country in excess of whatever they are making at the moment.”

Young says that people are starting to realise that the development of the carbon markets helps to create a low-risk entry to forestry, and he urged Federated Farmers leaders to look seriously at the opportunities.

"I would really urge Federated Farmers to look more closely at what could be done on the hill country," he said. "I don't believe that the ETS is all doom and gloom for farmers, by any stretch of the imagination."

The former head of forest policy at MAF, Bryan Smith, says that using a carbon price of $22 a tonne, the Land Evaluation Value, or LEV, of forests is around $8000.

"That means that you can pay $8000 a hectare for hill country farmland and still make an 8 per cent return. Most hill country farmers are making less than one per cent.

"A carbon price of $50 a tonne gives a $1500/ha LEV."

ENDS

© Scoop Media