Horticulture in search of growth capital
Despite its good market returns, growth capital is limited for the horticulture sector.
A fund has been set up to generate carbon credits through growing pine plantations on steep North Island hill country.
The CQuest Forestation and Carbon Fund, managed by MyFarm, is embarking on a fund raising drive, seeking an initial $15 million of investor equity to buy up to 1,500 hectares of land to plant in pine. It has secured contracts for the first two properties for purchase.
MyFarm chief executive Andrew Watters says most sheep and beef farmers will have land that is suited to planting trees and be able to directly gain exposure to increasing carbon prices. But for dairy farmers, acquiring suitable land is more difficult and not part of their core business.
CQuest offers an income from carbon credits and a hedge against the increasing price of carbon.
"We know that some form of emission charge is coming - either through the work being done by He Waka Eka Noa or the Emissions Trading Scheme. It makes sense for dairy farmers to plan ahead for this."
He Waka Eka Noa is the primary sector umbrella organisation that is tasked with building the knowledge on farm emissions and formulating and implementing an alternative plan to agriculture entering the Emissions Trading Scheme (ETS). This plan needs to be agreed by government by December 2022.
If the He Waka Eka Noa plan is not agreed, agriculture will enter the ETS in 2025, initially having to account for 5% of its emissions (increasing 1% p.a. thereafter).
Watters, who is also a dairy farm owner, says at today's carbon pricing and a 5% exposure to the ETS dairy farmers could face costs of 3 to 4 cents/kgMS - and higher at higher prices.
He says via CQuest, price exposure for 5% of emissions can be held at 1 cent/kgMS.
"While it's unclear what the impost of future carbon schemes will be, an investment in CQuest Fund is a simple way to mitigate the risk of rising carbon prices."
The fund envisages sequestering around 520 tonnes of carbon per hectare through the planting of pine trees, generating carbon credits at a cost of $20-25$/tonne.
As the trees grow to maturity, CQuest will sell the credits on the secondary market where carbon credit prices have been trading as high as $59/tonne.
The CQuest Carbon and Forestation Fund offer is open to wholesale investors with a minimum of $50,000 to invest. The offer closes Friday, October 8.
The Government is calling on rural New Zealanders to share their views on proposed regulations designed to improve the management of farm plastic waste.
For many urban New Zealanders, stepping into Pāmu’s Pinta dairy farm near Taupo last month was the first time they had had the chance to experience farm life up close.
After tasting 240 New Zealand made cheeses, judges have bestowed medals upon 199 of the entries.
Bay of Plenty’s top share farmers Andre and Natalie Meier are no strangers to the New Zealand Dairy Industry Awards winning circle.
Afimilk, a global dairy farm management solutions provider, has appointed Justin Miller as the new general manager for New Zealand and Australia.
Investing in your people and in your own leadership skills is the path to success for a farming business, says economist Shamubeel Eaqub.
OPINION: Is it the beginning of the end for Greenpeace?
OPINION: The good times felt across the dairy sector weren't lost at last week's Beef + Lamb NZ annual meeting.