About the FIDA
Background
The forest industry is New Zealand's third largest merchandise exporter, with exports in the order of $3 billion to $4 billion per year. Notwithstanding its size, the industry is subject to periodic downturns, which highlights its commodity nature and high exposure to cyclical external factors such as exchange rate and shipping costs.
Ensuring a vibrant and internationally competitive forest industry is important for New Zealand given the industry's importance to many regional economies, rapidly expanding available harvest, potential to be a major driver of future growth and positive contribution to many environmental outcomes, including climate change.
Government involvement in forestry
The forestry sector has an important part to play in meeting a number of the Government's key objectives, for example:
- climate change mitigation; and
- limitation and prevention of water nitrification and soil erosion.
One of the main reasons the Government is engaged with the forestry sector is to ensure the sector is commercially sustainable and internationally competitive so it can deliver these Government objectives
Objectives of the FIDA
The high level objectives for the FIDA are to:
- ensure the forest industry can make its optimal contribution to New Zealand's sustainable development; and
- develope a strategic approach to identifying and overcoming barriers to the industry's future development;
- allocate government and industry funding for agreed initiatives and projects; and
- monitor achievement of the goals and specific project milestones.
The FIDA has been running since April 2005 and is an extension of the Wood Processing Strategy (WPS) that ran from 2000 to 2003. The WPS addressed many roadblocks to investment that the industry had identified, but not all. Discussions indicated more work was needed in some areas and, based on these, programmes and budgets were developed. Cabinet allocated $18.2 million (GST excl) to the FIDA process through to July 2009, shown in the table. Industry co-funding is required for some projects.
Funding
FIDA Funding ($ million GST excl)
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A bid process for the Market Development fund resulted in a number of wood processing and forest growing projects being accepted, and that part of the fund is fully subscribed. Projects range from promoting wood products to new ideas for building houses with solid wooden walls to reducing the use of pesticides in forests.
The Market Access initiative is funding projects addressing non-tariff barriers affecting wood exports over and above the work normally carried out by the Ministry of Foreigh Affairs and Trade (MFAT).
Bio-energy is looking to develop the use of woody residues as a bio-energy source
Labour and Skills is funding development of facilities at the Radi Centre in Rotorua for wood processing training.
The Excellence in Wood Design has been a real winner with two professorship positions at Auckland and Canterbury being set up.