An Economic Assessment of Radiata Pine, Rimu, and Mānuka

Pizzirani et al. New Zealand Journal of Forestry Science (2019) 49:5 https://doi.org/10.33494/nzjfs492019x44x E-ISSN: 1179-5395 Published on-line: 20 June 2019 Research Article Open Access New Zealand Journal of Forestry Science Exploring forestry options with Māori landowners: an economic assessment of radiata pine, rimu, and mānuka Stefania Pizzirani*1,2,3, Juan J. Monge1, Peter Hall1, Gregory A. Steward1, Les Dowling1, Phil Caskey4, Sarah J. McLaren2,3 1 Scion, 49 Sala Street, Rotorua, 3046, New Zealand 2 Massey University, Private Bag 11222, Palmerston North, 4442, New Zealand 3 New Zealand Life Cycle Management Centre, Massey University, Palmerston North, 4442, New Zealand 4 New Zealand Mānuka Group, 525b State Highway 30, Awakeri, Whakatane, 3191, New Zealand *corresponding author: Stefania Pizzirani: [email protected] (Received for publication 9 November 2017; accepted in revised form 6 May 2019) Abstract Background: A quarter of New Zealand’s land area is currently covered in indigenous forest although only indigenous forests on private land can be harvested. In addition, planted exotic forests (~90% Pinus radiata D.Don) cover a further 7% of the land, and these form the main basis of New Zealand’s forestry industry. However, some landowners are seeking to plant a more diverse range of species (including New Zealand indigenous species) that can be managed in different ways to produce a range of products. Methods: A “cradle-to-gate” life cycle-based economic assessment of three forestry scenarios was undertaken in (i.e. intensive management of radiata pine); (2) continuous-cover forestry management of the indigenous coniferous tree speciescollaboration rimu ( withDacrydium members cupressinum of Ngāti Porou, Lamb.); an and indigenous (3) intensive Māori production-scale tribe. The three forestry scenarios of were:the indigenous (1) “business scrub as species usual” Leptospermum scoparium J.R.Forst. & G.Forst.). Using a 120-year timeframe, discount rates and opportunity costs mānuka ( Results:were applied and a flat- and steep-land comparative analysis was performed (for radiata pine and rimu). The Net Present Value (NPV) was calculated for each scenario and showed that, on flat land, only the mānuka scenario is profitable. However, applications of discount rates can result in a negative NPV, as is the case with the radiata pinea and stumpage rimu scenarios. rate of over On $100steep m land,3 both the radiata pine and rimu steep-land scenarios have improved NPV returns due to a lower opportunity-3. cost. On- steep land, radiata pine is generally profitable with a discount rate of 6% or lower and and rimu is generally profitable with a discount rate of 2% or lower and a stumpage Conclusions:rate of over $650 m what slope of land to plant them on, and what forest management technique to utilise. Furthermore, this analysis highlights the Thisimportance analysis of demonstrates choosing appropriate the importance discount of rates strategically and the effect considering of other whatinherent tree assumptions, species to plant, such as opportunity cost. Keywords: Dacrydium cupressinum, discount rate, life cycle-based economic assessment, forestry scenarios, Leptospermum scoparium Pinus radiata , NPV, © The Author(s). 2019 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. Pizzirani et al. New Zealand Journal of Forestry Science (2019) 49:5 Page 2 Introduction Case study with Ngāti Porou Reforestation considerations are relevant in the Waiapu catchment in the eastern Gisborne region of New Zea- exoticNew Zealand’s forests cover natural an additional indigenous 1.71 forests million cover hectares 6.8 (netmillion stocked) hectares (7% (26% of ofthe the land land area)area) while(Ministry planted for Porou tribe (iwi). Extensive erosion is an ongoing prob- Primary Industries 2017c). Natural indigenous forests lemland’s in North the catchment Island (Figure as a 1),result and ofis homedeforestation to the Ngāti and contain a wide variety of native hardwood and softwood pastoral farming on relatively young geological soils species, while planted forests predominantly contain the exotic softwood species radiata pine (Pinus radiata the Waiapu river basin containing extremely high sedi- D.Don) (Ministry for Primary Industries 2017c). Natural over a number of decades. This erosion has-1 resulted in indigenous forests are widely perceived to provide t km-2 year-1) (Hicks et al. 2000). Previous work by Scion more forest-based biodiversity and recreational values forment the yield Ministry rates for(approximately Primary Industries 35 Mt yearhas shown or 20,520 that while planted exotic forests are generally managed much of the Waiapu catchment has considerable poten- to maximise economic returns through provision tial for forestry (Ministry for Primary Industries 2012). Initiatives within the catchment (e.g. East Coast Forestry Projecti (ECFP)) have resulted in reforestation but these bothof wood types and of fibreforest. (Maclaren For instance, et al. natural 2001). indigenous However, plantings have predominantly consisted of radiata pine forestsevidence are suggests known tothat provide such valuablebenefits timber can apply (subject to to the harvesting provisions detailed in New Zealand’s Forests Act 1993; Allen et al. 2013) and planted exotic as(Bayfield employment & Meister but local2005). people are also interested in de- forests have been shown to provide several recreational velopingRadiata planted pine forestry indigenous provides forests. economic Information benefits exists such opportunities (Yao et al. 2013). on the growth potential of certain indigenous species - (PardyTwo etmajor al. 1992), surveys followed of planted by indigenous a further survey forests fromhave eral(e.g. lackPardy of knowledgeet al. 1992; regarding Trotter et the al. economics 2005; Tane’s of plant Tree- been undertaken. The first occurred in the mid-1980s ingTrust indigenous 2011; Bergin forests & Kimberley for timber 2012) production but there or non-tim is a gen- a synopsis of the extensive kauri (Agathis australis (D. ber forest products. A participatory research project was Don)2005 toLindl.) 2015 plantings (Tane’s Tree established Trust 2011). by the These New followed Zealand thirty individual species that had been planted both developed with three members of Ngāti Porou from the privatelyForest Service and (Halkettby governmental 1983). These agencies surveys for found a range over ScionWaiapu (the catchment primary institutionto address involvedthis knowledge in this research) gap. The onthree a largerNgāti Poroucollaborative members project were already(Warmenhoven working etwith al. the plantings were composed of the major indigenous 2014) and were each interested to contribute to further coniferof purposes species (including either intermixed production). with The an majorityindigenous of research efforts in their Waiapu catchment. All three nurse crop or as single species stands. Most planted were considered to be leaders within their community, stands were less than one hectare in size, and the and have collective expertise in sustainable-resource total area of planted indigenous forest, including the planning and management, commercial investments, en- extensive kauri plantings, was estimated to be less than vironmental restoration, and community development as viewed through an indigenous peoples’ lens. forests have harvesting restrictions (i.e. no more than5,000 10% hectares of the (Halkett standing 1983). indigenous Although timber indigenous may be extensive deliberation and included: (1) intensive man- agementThree forestryof radiata scenarios pine; (2) were continuous-cover developed following forest forest management permit), the Forests Amendment management of rimu; and (3) intensive management Actharvested 1993 stipulates on the area that of land planted specified indigenous in the sustainableforests are to note that radiata pine is currently cultivated in the planted indigenous forests are an additional forestry Waiapuof mānuka region for andessential-oil so represents production. the “business It is important as usual” optionnot subject alongside to the planted same harvesting exotic forests requirements. in New Zealand. Thus, forestry option. Rimu is an indigenous softwood species However, such indigenous forests will only be planted if that, compared to radiata pine, is slower-growing and longer-lived. However, it has potential as a long-term or otherwise). forestry resource utilising less intensive forest-man- there is sufficient benefit in doing so (economic benefit agement techniques (i.e. an alternative to the option of forestry scenarios in a catchment in New Zealand’s clearfelling) probably managed by more than one gener- NorthThe Islandobjectives using of athis “cradle-to-gate” study were to life compare cycle-based three ation of foresters. Mānuka is a relatively fast-growing but economic assessment, in collaboration with members contains a valuable essential oil which can be harvested scenarios were: (1) intensive management of radiata annually,short-lived and (30 so to this 50 years)forestry small option indigenous can be managedtree that pine;of indigenous

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