You can’t eat trees

Mike Bolan The threat to our food production industry

THE FEDERAL 2020 Vision tree plantation program prepared by the timber industry in collaboration with government, aims to increase Australia’s plantation estate to over 3 million hectares (30,000 sq kms) by 2020. It was developed without costing the potential impacts of the program on other industries or communities and without the participation of such industries and communities. By failing to explore the impacts, the program represents a plantation growth scenario that appears entirely positive and thus easily captures the commitment of governments and the recipients of whatever new monies are generated.
The 2020 Vision program intended to remove all impediments to the growth of the plantation estate, including legal, cultural, social and environmental impediments. What the authors of the program failed to pursue, was the idea that many of the impediments were there for good reasons, many of which had to do with protecting existing industries or resources by maintaining a balance. The effect of the program was to ignore, change or work around the system of checks and balances that everyone else in the country was required to comply with.

The 2020 Vision program has clearly been very successful in expanding the plantation estate and may have produced a range of positive benefits for certain stake holders. Unfortunately there are problems and their effects are becoming more severe as our climate dries and heats up and the plantation estate keeps expanding.

In Tasmania, the plantation estate is already over 650,000 hectares (6,500 sq kms) comprising over 400,000 ha of private timber reserves and 250,000 ha of public and other plantations, totalling nearly 10% of Tasmania’s land mass. While this could be beneficial, the 2020 Vision program does not prohibit using our best soils for trees, and since trees grow much better on high quality land, plantation operators are very happy to buy up farms whenever possible.

While the 2020 Vision program makes much of the ‘investors’ in the plantations, in fact most of the investment is made by taxpayers who are allowed 100% tax deduction for investing in trees – financial impediments having been removed by highly favoured tax treatments.

The amounts paid to plantation operators for plantation development were also generous, given that the actual cost per hectare is around $3,500 while the deduction has been around $9,000. The difference of $5,500 has meant that plantation operators make enough to purchase more land after putting the money through their books. The result has been described by farmers as a tax fuelled land grab because plantation operators are able to offer higher prices for land because they have such a huge economic advantage provided by the tax payer. It is the huge advantage provided to one industry by the tax subsidies that is distorting the free market and exacting a growing penalty on rural Tasmania.

When there is a competition for scarce resources, as there is for Tasmania’s 107,000 ha of crop lands (Class 1, 2 & 3), then plantation operators can always dominate that competition mainly thanks to the federal tax schemes. So there is a progressive shift in land use from food production to tree production, and that shift is threatening serious consequences.

Food production activities for 2005 were reported by ABS (Yearbook 2007) as producing about $800 million at the farm gate, with a further $1,600 million (approx) in downstream processing for a total of $2,400 million dollars in that year. This production was reported by ABS as from 86,000 ha of irrigated food producing land. Thus we see that food production can earn about $2,400 million from an irrigated 86,000 ha plus other non irrigated land and support 3,877 businesses in doing so.

Food production and its downstream processing activities are employment rich and productive activities that contribute significantly to Tasmania’s economy, particularly as so much of the money passes through rural centres and stimulates local economies.

2020 Vision failures

The 2020 Vision program fails in those areas where no cap has been placed to the takeover of food producing land by plantations; where other programs amplify the detrimental impacts of 2020 Vision; and where the free market is distorted by government intervention. The problems are exacerbated in Tasmania due to its small area and the relative scarcity of its food production soils.

Whenever a class of farming starts to suffer problems, the temptation to sell is going to increase. When other programs amplify the difficulties for food producers, then the temptation to sell may become irresistible. When a property goes onto the market, it is an opportunity for the plantation industry to expand it’s holdings and consequently can usually outbid others in the market such as other food producers. Once the land is converted to trees, it is both costly and time consuming to bring the land back into food production status.

All of this means that when tree plantations take over from food production, the process is largely irreversible, and therein lies the greatest threat of all. It is the conversion of vibrant existing rural centres into depressed areas surrounded by trees coupled with an increased failure to be able to feed ourselves from our own lands.

The threat to agriculture is that the distortions of the free market that occur with tax subsidised operations will overtake Tasmania’s food production capacities. A crop of trees takes 10 – 15 years to mature while food production produces crops each year. Furthermore most foods tend to produce a higher dollar return per hectare than trees and generate more employment. Shifting land use from food to tree production cuts overall revenues, reduces job opportunities and cuts the cash flow to rural communities, all undesired consequences of subsidising one industry in the competition for prime land.

Political failure

The political endorsement of programs that appear to have no downside (because they’ve been left from consideration) attaches our politicians to a fantasy that cannot be realised. If they buy into the fantasy, then it’s pretty hard for them to later say that they’re opposed to it. When the program is pushed through the entire bureaucracy for support, pressed on every level of government and supported by corporate lobbying power, it presents huge risks to everyone.

Small wonder that the federal Treasury head, Ken Henry, was sorry that government hadn’t listened more to Treasury advice, since Treasury recommends taking all costs into account. It is quite likely that this singular lack is responsible for runaway programs, like 2020 Vision and the Tamar pulp mill.

It’s almost impossible for the citizenry to get attention in this milieu, consequently political decision making can be totally distorted to favour one program, without there appearing any hope of reasoned and scientific deliberation returning a more sensible result.

If these things concern you, the reader, then please contact your local politician and anyone else who should care, and tell them of your concerns and, equally important, your voting intentions.