Farmer warns carbon farms threaten rural communities, says National's crackdown on foreigners buying farming land won't work

Critics say the National Party's plan to ban foreign investors from buying land to turn into carbon farms won't have much impact because most conversions are being done by local corporates.

But people who live in rural communities say the practice is threatening their way of life.

Farmer Lincoln Grant said a steep terrain on his neighbours' land near Pahiatua will soon be covered in pine forest for carbon credits and he's worried.

"Pretty obvious, I mean events of the last couple of months have shown us what happens to pine trees and pine debris on steep slopes. It ends up in the stream and with catastrophic problems in times of floods," Grant said.

Grant said residents of northern Wairarapa are already feeling hemmed in by the widespread conversion of farming into forestry.

"The communities over there are just getting hollowed out. There's loss of jobs for all the rural support sectors," Grant said. 

"It's just ripping the guts out of heartland New Zealand really."

Under National's plan, foreign investors won't be able to claim carbon credits but Grant said neighbours are selling out more to local corporates than foreign investors - with dire consequences.

"It really doesn't matter whether it's happening with locally driven investment companies or overseas. The end result is still devastating for the rural communities," he said.

Forest Owners Association CEO David Rhodes said members, including foreigners, own 70 percent of the planted forests in New Zealand and he believes none are in the business of carbon-only farming. They are instead only planting to harvest.

But Rhodes said it's not the death knell of rural New Zealand.

"Overall, the net impact of forestry is actually net positive, economically positive but there may be different patterns of employment. So we can't necessarily guarantee that you're going to have the same community makeup that you might have had before forestry," Rhodes said.  

The Government said it closed the door to foreign investment in carbon forests last August. 

Foreign investors can only invest in wood that will be harvested.

"The reality is that many New Zealanders are investing in buying those farms, very hard call, and National will have to explain whether it is prepared to stop New Zealanders buying farms for the purposes that they want to use them for," Agriculture Minister Damien O'Connor said.

After Cyclone Gabrielle, a government review of pine forestry will report back to ministers at the end of the month.