Most of the New Zealand Government's commercial forestry assets are managed by Crown Forestry.
Quick facts 2018
- A current harvest of around 805,000 cubic metres – a little under 3% of the total new Zealand harvest.
- Estimated revenue for 2017/18 is $107.7 million, with an expenditure of $76 million.
- Projected annual trading surpluses of about $30 million will remain steady until about 2021.
About Crown Forestry
Crown Forestry is a commercial trading organisation managing the Crown's commercial forestry assets. Its role is to prudently manage and administer this portfolio of forestry assets to achieve the best return for the Government and also meet the Crown's legal and contractual obligations. As a direct participant in the New Zealand forest industry, Crown Forestry stands apart from the fundamental policy, regulatory, and service delivery roles of MPI.
The assets which Crown Forestry administers includes:
- the Crown's forestry leases on Māori land
- Crown forest on Crown land
- forestry leases by other businesses on Crown forest land
- a forestry loan portfolio.
Government's One Billion Trees Programme
To meet the Government’s target of planting one billion trees, Crown Forestry is seeking to enter new commercial arrangements (including lease and joint venture contracts) to develop plantation forests on privately-owned land.
Forests on land leased from Māori or in other tenure
There are 15 forests in the North Island and one in the South Island. The total planted area is 12,128 hectares as at February 2018.
Most of the forests are planted on Māori-owned land (90% by area). The remaining forests are on land under other tenure types, including land returned under Treaty of Waitangi settlements.
Harvesting, financials, and projections
Harvesting will produce an estimated annual cut of 0.8 million cubic metres in 2017/18.
The level of harvest will remain over 0.7 million cubic metres a year until about 2021. After 2021, it will steadily decline as the mature forests are harvested and leases surrendered.
Crown Forestry's assets also include 6 afforestation leases. This is Crown-owned land leased to other forestry companies who pay rent to the Crown.
Forestry Encouragement Loans
The former New Zealand Forest Service granted loans to local authorities which were repayable on harvest. As at April 2017, there is one loan to City Forests Ltd which is owned by Dunedin City Council. No new loans have been made since the mid-1980s.
Policy to exit from commercial forestry
Crown Forestry will continue to divest the Crown of its forestry assets (which may include any new forestry assets at a point in the future) on commercial terms. Crown Forestry considers selling a forest when the potential sale price matches the financial benefits from ongoing Crown ownership.
A positive impact of the exit policy is on Māori economic development. For example, non-assignable leases can be varied to reduce the term of the lease so that Māori landowners (the lessors) can become forest owners earlier than would otherwise have been possible.
In the case of Crown-owned land, the land (and sometimes trees) are transferred to successful claimant groups as part of Treaty of Waitangi settlements.
The Crown Forestry team
The Crown Forestry team is based in Wellington and Rotorua. Staff carry out strategic, business and financial planning, modelling and auditing of the forestry assets. The day-to-day operational management of most of the forest estate is outsourced to forest management companies.
The team consults with stakeholders and interested groups such as leaseholders, iwi, the Office of Treaty Settlements, and commercial forestry companies.
Crown Forestry was created when Māori forest lessors wanted to retain direct links with the Minister when the Government proposed assigning their leases to the then newly-formed Forestry Corporation in the late 1980s.
Other Crown forestry assets were subsequently added to Crown Forestry:
- in 2001, when the residual business of the Forestry Corporation was wound up
- in October 2008, when the Crown purchased forestry rights over 2 forests from Matariki Forests (both subsequently sold)
- in January 2009, when the assets and business of the State Owned (SOE) Enterprise Timberlands West Coast were transferred prior to the SOE being wound up (the West Coast plantations were subsequently sold to landowner Ngāi Tahu Forest Estates Ltd in August 2014).
Who to contact
If you have questions about Crown Forestry, email firstname.lastname@example.org
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