Exploring forestry options with Maori landowners: an economic assessment of radiata pine, rimu, and manuka

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 collaboration with members of Ngati Porou, an indigenous Maori tribe. The three scenarios were: (1) “business as usual” (i.e. intensive management of radiata pine); (2) continuous-cover forestry management of the indigenous coniferous tree species rimu (Dacrydium cupressinum Lamb.); and (3) intensive production-scale forestry of the indigenous scrub species manuka (Leptospermum scoparium J.R.Forst. & G.Forst.). Using a 120-year timeframe, discount rates and opportunity costs were applied and a flat- and steep-land comparative analysis was performed (for radiata pine and rimu).

Results: The Net Present Value (NPV) was calculated for each scenario and showed that, on flat land, only the manuka scenario is profitable. However, applications of discount rates can result in a negative NPV, as is the case with the radiata pine and rimu scenarios. On steep land, both the radiata pine and rimu steep-land scenarios have improved NPV returns due to a lower opportunity cost. On steep land, radiata pine is generally profitable with a discount rate of 6% or lower and a stumpage rate of over $100 m³ and rimu is generally profitable with a discount rate of 2% or lower and a stumpage rate of over $650 m^-3.

Conclusions: This analysis demonstrates the importance of strategically considering what tree species to plant, what slope of land to plant them on, and what forest management technique to utilise. Furthermore, this analysis highlights the importance of choosing appropriate discount rates and the effect of other inherent assumptions, such as opportunity cost.