3. Timber Potential

3.1 Determination of Productive Potential

In order to derive meaningful and useful information from this work some restrictions on what is deemed to be of economic significance are required. If this is not done the study will show numerous small blocks of land that have insignificant timber volumes, which only serve to mask the areas where real potential exists.

The restrictions that have been incorporated into this study are detailed below. Once the forest areas have been defined and typed, a series of reductions are applied to remove from the gross resource those areas that are not available or are not practicable within the framework of the study. These include very small areas of forest, areas that are too remote from infrastructure to be economically viable, and areas not available due to reservation in various forms.

While this process has the potential to capture a significant proportion of the official reservations and removals, it cannot account for unofficial removals from the potential resource, such as the desire by a specific owner not to harvest their forest, but equally not to impose any form of formal reservation on that forest. There is a wide range of reasons for such a move, the majority of which are likely to be purely personal.

3.2 Area Restriction

The Forests Act (see Section 1.3.2) places a requirement on forest owners seeking a Sustainable Forest Management Plan or Permit to harvest no more than a prescribed volume (or percentage of the standing volume) of timber from the land within given timeframes. The volumes allowed by the Act are deliberately small to ensure that the timber potential of the forest is not diminished over time, nor are the ecological values denigrated.

The prescribed volume permitted to be harvested is calculated for each forest, and in broad terms is no more than the annual or periodic increment.

For the Ministry to approve a Plan or Permit, the owner or their agent is required to undertake some intensive inventory and planning work, which generally incurs significant cost. For this reason, and the fact that for most indigenous forest the standing volume of merchantable timber is not high, an arbitrary area restriction of 10 hectares has been incorporated in the analysis. It is considered that an area of 10 hectares or less would not justify the costs incurred in obtaining a Sustainable Forest Management Plan, and would not provide a meaningful volume of timber.

Thus blocks that have an area of less than 10 hectares have been excluded from the data analysis. However, as shown in Table 3.1, the area represented by these small blocks is in some regions a significant proportion of the total area of Māori owned indigenous forest, and thus collectively may support a significant indigenous timber volume. The total area included in these blocks is 47,371 hectares, as shown below.

Table 3.1 - Area Of Māori Owned Indigenous Forest on Land Holdings of Greater than 10 Hectares

Region	Nthlnd	Aklnd	Wkto	BOP	Gisbn	H/Bay	Tnki	Mwtu/ Wang	Wgtn	Total
Total Area ha)	76,185	2808	120,802	193,771	93,347	99,405	3520	68,288	4163	662,289
Area of blocks < 10ha	6	351	9392	16,159	9652	4941	494	6149	497	47,641
% of total area in blocks 10ha	0	13	8	8	10	5	7	9	12	8
Area of forest on land holdings >10ha	76,179	2457	111,410	177,612	83,695	94,464	3026	62,139	3666	614,648

In addition to the simple economic and timber volume issues surrounding small blocks of land, there tend to be far more emotional and philosophical matters to deal with. People who have only a small area of forest are often far more inclined to seek its permanent preservation than to develop it as an economic asset, especially if the economics are at best marginal.

On the other hand, those owners with larger holdings are often more inclined to wish for some development of the asset to overcome the holding costs, and because in many cases this asset is a very significant part of their asset base. Larger blocks also have significant economies of scale when it comes to developing a Sustainable Forest Management Plan or Permit.

An arbitrary cut off of 10 hectares does create the situation where there could be several sub-ten hectare blocks which are contiguous but with different owners. The interrogation of the databases will have excluded each block as an individual ownership. The owners, however, may be happy for their several blocks to be treated as one for the purpose of developing a Sustainable Forest Management Plan, giving them the necessary economies of scale, and the necessary timber volume to justify developing a Plan.

The number of blocks where this situation occurs is not considered to be high. The implications to the overall outcomes of the study are not considered to be significant.

3.3 Distance from Roads

The second restriction placed on the data is the distance from infrastructure. In any consideration for developing an economic asset based on the extraction of timber, there is a need to consider the cost and means of physically extracting the wood from the growing site.

As with anything involving the economics of an activity, there is always change through time. What was economic once may not be now and vice versa. With indigenous timber extraction the economics have changed dramatically over the past 50 years, and that rate of change has accelerated over the past 3 years, as more accessible resources are no longer available.

In particular, the recent Government decision to end all harvest of indigenous timber from the Crown estate has dramatically changed the economic viability of many areas of forest. The Crown harvest (through Timberlands West Coast Limited) made up over half the native timber harvested in New Zealand in recent years. Its removal from the market in mid 2001 has seen a scramble by timber users and processors to obtain their resources from the non-Crown estates, with consequent rises in the value of the resource.

For the purpose of this study, a limit of 2km from the nearest road has been used. Thus any area of Māori land that supports indigenous forest, which is greater than 2km from a road, has been excluded from the study area.

The use of any figure for distance is open to debate and there is no blanket distance that can be defended in every circumstance. What is known however is that the economic haul distance (i.e. the extraction distance to a road) has been increasing over time. Further, whereas previously the haul distance was a measure of the over ground distance from stump to road, inclusive of topographical obstacles, the measure today is more commonly a map distance due to extraction by helicopter for most indigenous forest harvests.

The current environment would preclude haul distance of greater than 2km except for the most valuable of products. For example mature kauri may be able to tolerate haul distances of greater than 2km due to its value, however the volume available is so low as to make this very much the exception rather than the rule. At present a distance of up to 1km would be considered economic, with many operations working between 1 and 2km haul distance quite economically, provided the trees are of sufficiently good quality.

A distance of 2km has been used to allow for possible changes in the near future and to give some indication of the resource size that exists. For comparative purposes the area of forest within 5km of a road has also been extracted from the data. This provides some indication of the sensitivity of the distance parameter and an indication of what resource could become economically available in the future if the cost structure of the industry changes.

Table 3.2 - Breakdown of Forest Area that is Greater Than 10 Hectares and within 2km and 5km of the Nearest Road

Region	Nthlnd	Auck	Wkto	BOP	Gisbn	H/Bay	Tnki	Mwtu/ Wang	Wgtn	Total
Area of forest on land holdings >10ha	76,179	2457	111,410	177,612	83,695	94,464	3026	62,139	3666	614,648
Area within 2km of a road	65785	2424	95397	151,635	73,835	44,471	1954	34,109	2588	472,198
% of area within 2km of a road	86	99	86	85	88	47	65	55	71	77
Area within 5km of a road	68,053	2457	109,360	165,810	82,928	75,526	2151	47,974	3666	557,925
% of area within 5km of a road	89	100	98	93	99	80	71	77	100	91
Area between 2km and 5km of a road	2268	33	13,963	14,175	9093	31,055	197	13,865	1078	85,727

As can be seen from the table, for most regions a large percentage of the total estate is within 2km of a road and almost all the estate is within 5km of a road. It is considered that at this time and in the foreseeable future, any area beyond 5km is not an economic proposition.

What the data is not able to tell us is the condition of the road from which the distance has been measured.

In many areas roads that were built in the 1950s, '60s, '70s, and '80s to harvest timber from indigenous forests are now falling into disrepair or are no longer passable. Examples of these are common in the Urewera forests where large areas of Māori land were logged in the 1960s and 1970s. Access to these stands was developed for the harvesting operations at the time. Once the harvest was finished, the roads were in many cases no longer maintained, and many are now in a very poor state of repair.

Some of the access to these blocks of land crossed Crown land and access had to be negotiated. In recent times the management of these areas has transferred to the Department of Conservation. In some cases the Department has closed off the access in a reasonably permanent manner. Whether this can be reinstated would need to be examined on a case-by-case basis.

The issue and cost of access will have a significant bearing on the economic viability of some blocks and needs to be borne in mind. However, for a study of this nature it is not possible to determine what overall impact access could have.

3.4 Nga Whenua Rahui

Nga Whenua Rahui covenants were developed as a means of "preserving" significant indigenous ecosystems that existed on Māori land without a change of ownership or other difficulties.

The covenants operate in a similar manner to the QE2 Trust process that can be applied to any land in NZ. The land remains the property of the owner but with restrictions on what modifications the owner can make to the indigenous ecosystem being protected. In the case of Nga Whenua Rahui, the owners can also seek compensation for income forgone by implementing the protective covenant. For example if the land supports merchantable indigenous forest, the owners can be paid "compensation" for the value of the timber on the land that they would otherwise have been able to harvest. Generally the covenant has a "life" after which the owners can reconsider their options.

For the owners, the covenants offer significant benefits. The owners get to retain ownership of their trees and to derive some of the economic benefits that would have accrued from harvesting them. Further the risks associated with harvesting are forgone as the owners get a lump sum, up front payment. There is no risk of not being paid at harvest time, of not being able to extract the timber due to any number of reasons, of market downturns etc.

The covenants impact upon this study in that areas that have already been covenanted must be excluded from the potential area of merchantable forest on Māori land. In addition, forest that is already well advanced in the covenant process should be excluded at this time as being unlikely to be available.

For land under consideration for a covenant, considerable work will have been done to quantify the timber volumes available and the value of that timber on the land in order to negotiate the quantum of compensation. It also shows that the owners have considered the option of harvesting the timber. Should the negotiations for a covenant fail, there is a reasonable likelihood of the owners progressing an indigenous harvest plan themselves or in conjunction with a sawmiller or harvest operator. Thus the issue of indigenous forest on Māori land not being utilised as an economic asset is overcome.

Currently there are a small number of covenants in place where there is significant merchantable timber, although some of these have considerable timber resources and may, in terms of regional timber resources on Māori land, be important. In addition there are a small number of applications currently under negotiation, although again, some of these are significant in the context of the region they are situated in.

The majority of large covenants are in the eastern Bay of Plenty and in Gisborne. In addition there are a small number in Northland, Waikato and the Manawatu areas. These include the Aorangi-Awarua Block (5000 hectares) in the northern Ruahine Range, although not all of this has merchantable forest cover.

In the eastern BOP and Gisborne areas over 30,000ha is covered by covenants.

A further 20,800 hectares is under negotiation, with the majority of this in the Gisborne Region.

The current reserved areas have been deducted from the potential harvestable resource figures, but the area under negotiation has been retained in the data, as there is no guarantee that they will ultimately be reserved.

3.5 Forest Types

During the 1940s and 1950s, the New Zealand Forest Service undertook an extensive survey of the indigenous forests of New Zealand to primarily to determine their timber potential. This survey, known as the National Forest Survey (NFS), took 10 years to complete, but gave a very detailed picture of the timber resources the country had, and to the present day remains one of the most comprehensive surveys undertaken by any country in the world.

From the extensive network of plots put in around the country, a range of forest types (known as the NFS type) was developed. These were a description of the species present in that type from a perspective of their timber potential.

The Nicholls classification system used in this report (Appendix 1) was developed through the amalgamation of NFS forest types into a smaller number of classes with a brief description of each class. As Nicholls developed the maps to accompany his work, he updated the information to take into account areas that had been modified between the time of the NFS and the time he was producing his maps.

The Nicholls maps were published from the early 1970s through to the mid 1990s. Therefore the most recent maps are relatively up to date; however timber harvesting may have modified the forests shown on the earlier maps further.

3.6 Forest Area by Forest Class

Using the information outlined earlier in this report, Table 3.3 below shows the forest area in each region by Forest Class. These areas are those that are greater than 10 hectares in area and within 2km of a road.

Table 3.3 - Regional Māori Indigenous Forest Area by Forest Class

Region	Nthlnd	Aklnd	Wkto	BOP	Gisbn	H/Bay	Tnki	Mwtu/ Wang	Wgtn	Total
Beeches	0	0	3548	950	295	11512	0	244	59	16608
General Hardwoods	269	820	11601	8491	618	6114	0	6231	91	34235
Highland Softwood Beeches	0	0	87		779	0	0	0	0	866
Highland and Steepland Softwood Beeches	0	0	1148	4087	127	111	308	0	0	5781
Rimu-general hardwoods- Beeches	0	0	1390	2004	602	5380	0	918	20	10314
Kauri Softwood Beeches	14792	429	8136	45	0	0	0	0	0	23402
Rimu General Hardwoods	217	0				0		101	295	613
Rimu-tawa	516	49	8395	8016	2468	413	386	3610	12	23865
Rimu Tariare Tawa	3833	107	0	0	0	0	0	0	0	3940
Rimu Matai Hardwoods	0	0	1897	11999	0	1564	0	1062	0	16522
Tawa Beeches	0	0	51	13833	3742	0	80	1137	0	18843
Rimu Tawa Beeches	0	0	0	52207	4945	436	669	4142	0	62399
Softwoods	0	0	225	55	0	266	0	30	0	576
Tawa	0	0	14025	22810	2110	169	292	4370	0	43776
Taraire Tawa	1182	0	84	0	0	0	0	0	0	1266
Others	22530	383	16405	18495	4851	5827	43	3295	95	71924
Scrub	22445	635	28409	8640	53297	12677	176	8968	2015	137262
Total	65785	2424	95397	151635	73835	44471	1954	34109	2588	472198

Notes:

Some amalgamation of Nicholls’ classes has occurred due to the very limited areas involved. For example Kauri-Softwoods-Hardwoods-Beeches has been included in the Kauri Softwood Hardwood class as there are only 14 hectares of the former on Māori land.
Scrub is not a Nicholls class but has come from the LCBD work. This is a very significant area that in many cases will develop into high forest containing a range of merchantable species over the next 100 - 200 years. At present however it has no timber potential.
The class defined as "other" has been identified in the LCBD as high forest, but had not been classified by Nicholls. A number of possibilities exist to explain this, including the possibility that as the forest is not on Crown land, permission to survey the forest during the NFS was withheld, or that the vegetation that is now forest was regenerating scrub when surveyed by the NFS. In the intervening period (of up to 50 years) the scrub has been succeeded and replaced by high forest species. These areas offer long term timber potential as many of the species present will be timber species, but they do not have any short-term timber potential. The evidence points towards the latter being the explanation for the majority of the area. Thus for the purposes of calculating timber potential it has been assumed that this area has no significant volume currently available.

An explanation of the various forest classes is given in Appendix 1.

3.6.1 Maps

Appendix 2 contains maps by Regional Council area of the forest on Māori land by forest class. These classes have been incorporated into the tables shown in 3.6 - 3.17.

One of the most significant classes (by area) shown on the maps is titled "undescribed". This classification includes that shown in the tables as "scrub" and "other".

Nicholls’ work did not classify these areas, as discussed in Section 3.6. It has been the re-definition through the LCDB, which has allowed this classification to be further, subdivided within Table 3.3, using the definitions provided in Section 2.3. Both "scrub" and "other" are considered to have no potential for indigenous timber production in the foreseeable future, and as a result have not been refined further. It should however be noted that these two classes total as much area as the "productive" forest classes on Māori land. As such, they offer the potential for substantially increase the sustainable yield in the medium to long term, if the growing stock of timber species can be protected or even enhanced.

The Nicholls classes are reasonably broad and thus cover a wide range of smaller forest types. For some classes, there are large differences in the types that have been amalgamated. For example, "beech" covers everything from lower altitude, high volume stands of red and silver beech, to montane stands of silver and mountain beech that offer no potential for a sustained yield of timber.

These variations have been accounted for in the regional tables by lowering the weighted volume (m3/ha) used to derive the standing volume.

As discussed in Section 3.4, a number of areas are either under Nga Whenua Rahui covenant, or are under consideration for covenanting. These have not been specifically identified on the maps, but the forest classes associated with them have been deducted in Table 3.4. Thus the total area shown in Table 3.3 includes all productive and non-productive areas greater than 10 hectares and within 2km of a road. Table 3.4 then removes areas known to have no timber potential, or to have been formally protected, leaving the productive forest class areas shown in the regional tables (Tables 3.5 - 3.11).

While the area shown on the maps is considered to be accurate, some of the forest classes shown for a given area may contain inaccuracies. Several reasons can exist for this including changes that have occurred since the mapping was last updated, and the inability of the scale of the maps to accommodate small areas of a different forest class.

Around the Bay of Plenty in particular there are a number of blocks that have been heavily cut for firewood in the very recent past and now contain little or no merchantable forest. In the Urewera there are a number of blocks that show on the maps as being rimu-matai-hardwood class, when in reality some parts of these blocks have had some of the softwood component removed are could more correctly be described as hardwood forest. In the overall scheme of things these changes are not major, but need to be considered.

3.7 Previous Forest Modification

Throughout New Zealand many of the more accessible forests have been subject to various levels of timber extraction over the past century. Most of the forests logged in the early 1900s were later cleared for farming, but from the 1950s on, many forests were logged purely for their timber, and were not subsequently cleared and converted to farming. Much of this activity, ie harvesting merchantable species and leaving a residual forest, occurred on Māori land in the North Island

Other tenures of land (private and Crown especially) were commonly harvested and subsequently cleared for farming or converted to plantation species. During the 1970s and 1980s large areas of previously logged forest were re-logged and then cleared for other land uses. Significant areas of Māori land were treated in this manner also, but large areas continued to be left in their post harvest state.

Many forests have also been subject to multiple harvests through time. In these cases the tendency is for each return harvest to extract increasingly poorer quality trees and/or species, and to increasingly severely damage any natural regeneration present.

Māori owned forests have been treated in much the same manner, resulting in a wide range of forest "quality", from unmodified to extremely heavily modified, due to several episodes of logging.

For a study such as this, it is important to be able to accurately reflect the level of modification the forest has undergone.

For many areas this has been done through the forest typing work completed by Nicholls. In particular, Nicholls developed several "new" forest types to reflect the impact of harvesting. For example, forest that had originally been classified as rimu-general-hardwood forest was reclassified as general hardwood forest due to the almost complete removal of the rimu (and sometimes some of the hardwood) component through logging.

The effect of this harvesting is to either reduce (or completely remove) the most valuable softwood component and in many cases diminish the residual hardwood value through damage to the remaining stems. Combined with these adverse effects, there is often the introduction of plant pests that can have an impact upon the regeneration capability of the forest. This harvesting, while destructive in the short term, does in many cases provide the sites necessary for the next crop of timber species to grow. These trees will take many decades to become part of the standing volume, but it is important to recognise that previous harvesting does not necessarily result in the permanent destruction of the forest.

For the purposes of this report, areas that have been heavily modified are considered to have no timber potential in the short to medium term.

In addition to harvesting there are also natural influences that have severely reduced the ability of a forest area to contribute a sustainable yield of timber. Some very good examples of this are the cyclone-damaged forests of the Urewera and East Cape areas. Cyclones in the 1980s (Bernie in 1983 and Bola in 1988) had considerable impact on the large trees that were present resulting in widespread wind throw and hence standing volume reduction. Where possible these effects have been recognised in the standing volumes calculated.

3.8 Forest Classes with no Immediate Productive Potential

From the table and the information in Appendix 1, several classes can be eliminated from further consideration, as they contain no merchantable timber at the present time. This is often due to past harvesting activity, and in many cases this land is supporting an actively regenerating forest cover, that given sufficient time and protection (from fire, clearing and pests) will once again become a forest capable of supporting a timber harvest.

The classes that can be removed from the study and the area they occupy on Māori land are shown in Table 3.4 below.

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