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Plantation Land Sales Interest Resumes
Posted Sun Jun 30, 2013 PHOTO: John Hewitt says interest in timber plantation land sales is returning (Jack Hewitt) AUDIO: John Hewitt at Harcourts Rural is seeing a revival of interest in plantation land (ABC Rural) MAP: Launceston 7250 The failure of three managed investment schemes with hardwood plantations in Tasmania gutted the market for timbered land in the state. But confidence is starting to return to the sector, as woodchip exports resume. That’s the view of John Hewitt, a director of the rural real estate firm, Harcourts Rural. He says another positive factor is the Macquarie Group’s continued interest in securing plantation assets from Forest Enterprises and Gunns MIS schemes. Macquarie has been looking to take over the plantation assets of Gunns and resolve issues around ownership and liability for the schemes. And John Hewitt says Macquarie is offering landholders with Gunns plantation leases between $20 and $50 per hectare to terminate the forestry rights. “The land owners will get their land back unencumbered and they’ll own the trees,” he said. “It’s up to the land owners to assess what’s in their best interests. “It’s a tangled web as we all understand it “But because there’s a bit more confidence in the industry with some sales going ahead, when we get some clarity about which way the land will be sold, whether it goes to Macquarie or the MIS is carried on and some land owners opt out of it, or some opt in, or they’re all in or all out, it will be clearer. “But either way, there will be some land that becomes unencumbered and land owners will own their trees. “There will be interest in that land. “We’d be interested in putting together a list of those properties so we could market them to the people who are coming to us.” Continue reading
Tanzania: Agro Forestry Greatly Improves Food Security
BY ORTON KIISHWEKO, 30 JUNE 2013 IN his publication, “Is agroforestry a suitable response to climate change”, the Regional Director of the Environment of Bas- Sassandra, notes that he exploitation of natural resources – land, water, biodiversity is reaching saturation point and this is compounded by expanding population growth. “The degradation of the natural forests is aggravating the impact of climate change,” he notes. But the most important point, he adds is “Agro forestry systems, can contribute to the mitigation of the effects of climate change, mainly by improving the microclimate and the biodiversity and the attainment of food security goals.” According to available scientific information, climate change is already affecting forest ecosystems and the services they provide including ecosystem sustainability and the maintenance of biodiversity. It is also expected to have increasing effects both positive and negative on the ecosystems and socio-economic development in the future. For example, while deforestation is responsible for about 18 per cent of greenhouse gases, forests currently still absorb more carbon than they emit and an increased tree growth is foreseen in some regions bringing new opportunities for forest industry and forest-dependent communities. To succeed in a better integration of trees and human activities on city outskirts is thus an issue for the future: improving the urban dweller’s quality of life, increasing revenues from cultivated plots in periurban areas, product diversification, etc. The tree then serves as a biodiversity reservoir in increasingly urbanising areas and could also be a factor in limiting pollution caused by leaching and runoff of chemical fertilizers used by farmers, a significant problem with peri-urban agriculture. As such, urgent efforts are required to make political decision makers understand that agro forestry is both a tool to be distributed widely as well as a different way of production. The move to strengthen this natural phenomenon was boosted this year when Vice- President Mohammed Gharib Bilal paved the way for further regional collaboration on agroforestry projects to address climate change and food security issues. He went to the World Agroforestry Centre’s Nairobi campus to learn more about our research and development activities. “We are truly honoured and humbled by the effort you have made to join us ,” said Director General Dr Dennis Garrity. In a short presentation about agroforestry and the Centre’s work, Dr Garrity highlighted partnerships with Tanzania over two decades and opportunities which exist for the future. He touched on the areas he knew were of particular interest to the Vice-President, namely climate change and food security. Dr Garrity spoke about the Centre’s work on climate change adaptation in Morogoro and about Shinyanga, Tanzania where 500,000 hectares of land are now under improved agroforestry systems. “Over 20 years, we have seen a transformation in the landscapes of Shinyanga,” he said, “this highly successful project is an example of community-based natural resource management in coland it has been hailed a global success story”. Dr Garrity went on to explain the concept of Evergreen Agriculture and his vision for the widespread integration of fertilizer trees species – Gliricidia, Tephrosia and Faidherbia albida – to provide farmers with a continual and permanent supply of fertilizer on their farms to improve crop yields. He proposed a range of opportunities for collaboration, including up-scaling Evergreen Agriculture and reigniting the Kilimo Kwanza Programme (Kiswahili for Agriculture First). Dr Garrity called for reinvigorating Tanzania’s National Agroforestry Committee to investigate applying agroforestry science across the country. The Centre’s Tanzania Country Representative, Aichi Kitalyi, added detail about some of the local issues and the need to learn from what has happened in order to develop actions for the future. Partnership Coordinator, Professor Temu, elaborated on climate change and how the integration of trees on farms can help the poor, especially those in rural villages in his native Tanzania. In his response, Vice- President Dr Bilal spoke of the goodwill that has been generated by the Centre in the country. “The environment is everything,” he said. “Your organisation is looking at the problems of food security and the environment. “The work of your institute is very important,” The Hon Bilal continued, posing the question “How can we use your knowledge and experience for strong and tangible activities that will help Tanzania and other countries in the region?” The Vice-President requested the Centre to advise his office, and keep them informed of developments in such work. He said this was of particular relevance now as they struggle to address climate change in the wake of the COP 15 meeting which failed to reach a binding agreement at the end of last year. As the discussions wrapped up, participants looked to future collaboration and maximising opportunities for agroforestry to directly benefit Tanzania. Dr Bilal toured the World Agroforestry Centre’s stateof- the-art soils and tree seed laboratories and planted a Faidherbia albida tree at the grounds. The Faidherbia tree – the tree is being advocated for Evergreen agriculture from Zimbabwe and Southern Tanzania in an attempt to improve soil fertility. Under such arrangements, villages have good crop harvest year-in year-out whether the rains were good or bad. The farmers enjoy a bumper harvest when there is a lot of rain as the crops also benefit from the fertility below the trees. “During drought,” he continued, “the tree canopy and mulch from leaf fall reduce the amount of water evaporating from the soil. This ensures that sufficient moisture remains in the soil below the trees to enable crop growth and ample harvests. The falling albida pods and leaves, it is said, were like earthworms. “They improve soil fertility,” he said. In such cases, farmers do not buy fertilizers for their field crops. This is because “applying fertilizers to crops under the F. albida trees spoils the crops as they become excessively vegetative and unproductive”. In addition to its fertility- enhancing qualities, F. albida has other uses that the villagers value highly. There is potential for enhancing crop productivity through agroforestry at the farm level. Some trees can enhance on-farm productivity and improve livelihoods of the smallholder farmers. Agroforestry is a profound investment vehicle to alleviate poverty and build environmental resilience, particularly in remote areas. It could realize the vision for creating an Evergreen Agriculture in Africa through fresh approaches to agroforestry, Farmers and policy makers have so far not taken advantage of the potential of agroforestry to contribute to poverty alleviation, to soil fertility to increased crop yields, to protection of watersheds, biodiversity, to climate mitigation through increased carbon sequestration. The role that agroforestry can play in restoration of degraded lands, in helping to reduce carbon emissions (by taking the pressure off indigenous forests) and contributing to climate mitigation through increased carbon sequestration. Such investment would build on the ongoing analyses of potential target areas for restoration being researched by WRI. In 1999, ICRAF began a project on “improved land management in the Lake Victoria basin” in collaboration with the Kenyan Ministry of Agriculture and Rural Development (now the Ministry of Agriculture). The project has generated new insights into the state and causes of land degradation as well as the opportunities for farmers to improve both their incomes and the local environment through the use of new crop varieties, agroforestry and simple water harvesting techniques. Also, a major new study indicates that farms and forests may not be as incompatible as we often assume. Using detailed satellite imagery, scientists from the World Agroforestry Centre (WAC) found that on almost half of all farmed landscapes around the world, landowners are either sparing some existing trees or planting new ones, leading to what the study calls “significant” tree cover. Continue reading
Active vs Passive: The Pros And Cons
When it comes to exposure to the agriculture sector, could exchange traded products be the better choice? By Laura Mossman | Published Jul 01, 2013 The appeal of the agriculture sector for investors is easy to understand – long-term drivers of growth and short-term opportunities make it a compelling option. Indeed, with the United Nations anticipating the global population could reach 10bn by 2100, the demand for food coupled with pressure on the amount of farmland look set to drive up the price of agricultural commodities and necessitate more investment in technology to improve efficiency. While the fundamentals are convincing, the best way for an investor to access agriculture is not as clear-cut. From opting to take a direct bet on an individual stock through to investing in a passive or active fund, the choice can be bewildering. Neil Jamieson, head of UK sales at ETF Securities, says the best way to navigate the options is to examine the motivation for the investment. “Investors need to consider whether they are investing for diversification and optimisation of returns in their broader portfolio or… to tilt their equity exposure towards a particular theme,” he says. “While equities are geared to the business cycle and driven up and down by underlying sentiment, agricultural commodities do not, on the whole, behave like that.” The key benefits of going for an exchange traded product are fundamentally the same as those that underpin passive investments in general: they are available at a much lower cost, they tend to perform in line with the average actively managed fund over the longer term and there is a wide choice. “For broad exposure, a basket of, say, 30 commodities will generally rise a little faster than the MSCI World index, but also fall a little faster, too,” Mr Jamieson adds. “Equally, agricultural commodities also afford some tactical options.” In the actively managed fund space, there are a number of options for investors who are willing to take on the risk and reward associated with the equity market. “Within [equities], agriculture looks attractive,” says Mike Horseman, managing director at investment specialist Cockburn Lucas. “We tend to use active managers, utilising the good managers there are in that space, then perhaps blending in some passive building blocks.” Mr Horseman cites the Sarasin AgriSar and Baring Global Agriculture funds as the leaders in the sector, offering good performance and diversification. The former has secured an annualised return of 5.1 per cent since it launched in 2008, while the latter has returned 7.8 per cent on an annualised basis in the past three years. Other strong offerings include the Allianz RCM Global Agriculture Trends, First State Global Agribusiness, Eclectica Agriculture and JPMorgan Natural Resources funds. Henry Boucher, manager of the Sarasin AgriSar fund, suggests seeking to understand the definition of agriculture each manager is working to. “For a lot of funds, the focus is large-cap North American agriculture stocks,” he says. “Instead, we look not only at the production of food in the developed world, but also the consumption of food in the emerging markets. It provides a wider spectrum of choice, and goes further than simply looking at how different stocks are going to perform in line with different commodity prices.” Overall, much of the choice boils down to each investor’s views on active versus passive funds, plus their desire to gain exposure directly to commodities or via a broader equity portfolio. The passive options stand up well, but a number of outstanding active managers in the space have proved their ability to add alpha over the long term. Laura Mossman is a freelance journalist Continue reading
