Significant expansion of farm forestry, where commercial tree crops are integrated into agricultural systems, has not yet occurred.

According to David Thompson project manager for Northern Inland Forestry Investment Group at Armidale, between two per cent and 17pc of total planted forest across different States is considered "farm forestry" with a national average of 9.2pc.

Included in these estimates is part-leasing of farms by Managed Investment Schemes (MIS) investors.

"It is estimated farm forestry contributes perhaps just 0.1pc to national wood flows," Mr Thompson said.

"Contrary to some popular opinion surrounding plantation development, socio-economic studies show plantations are not the cause of population decline in parts of NSW.

"In fact, they have boosted job prospects in some regions."

Mr Thompson says plantations and MIS have attracted capital investment into rural and regional Australia and facilitated generational change on some farms.

A study of the Oberon plantation estate showed that softwood plantations integrated with local timber processing businesses generated jobs which allowed farm family members to remain in the region when farm enterprises produced insufficient income to support multiple generations.

"The low contribution of farm forestry to wood supply is a complex issue," Mr Thompson said.

Market access for high-quality timber, lack of scale, lack of markets for low-quality wood and small-scale harvesting costs are problems Private Forestry Development Committees (PFDCs) are working to address.

"Much farm tree planting is for environmental reasons and is often supported by government programs," he said.

"While the positive use of trees in farm enterprises to provide stock shelter and improve environmental performance, or land values are undisputed, if the primary objective is not wood production, it will be difficult to encourage investment in the wood processing.

"The regional economies of areas like Oberon and the South West slopes demonstrate that investment in wood processing provides the most regional economic benefits in the timber supply chain."

Mr Thompson says with State governments mainly focussed on replanting existing areas and native forestry policy increasingly pursuing the importance of non-wood values such as biodiversity, continued private investment in plantations through MIS is most likely to provide timber supply security for processors.

"Plantation leasing arrangements can also help underpin agricultural incomes and combat some salinity problems.

"MIS activity is causing concern in some rural areas, but may ultimately benefit farm forestry by supporting processing expansion and markets and fostering a diversity of forestry scales which combine to generate additional economic and environmental benefits," he said.

While plantation expansion can be confronting and there are concerns that need addressing, it is important that plantation policy is driven by scientific and economic facts.

Leap in investment planting

In NSW, new forestry plantings have accelerated from 3200 hectares in 2000-01 to 23,350 ha in 2006-07, with private investment accounting for about 85 per cent of new areas planted.

As in other States, the expansion has been driven mainly by large scale investment, mostly through Managed Investment Schemes, rather than the farm forestry model that was envisaged by some.

Nationally, the plantation estate has increased by an average 62,000ha a year since 1994 with most new plantings in 2006 aimed at the hardwood pulp market.

Despite the strong growth in plantings, forestry plantations still represent a minor proportion of all land uses (0.2 per cent, compared to 57.5pc for grazing).

However, they supply more than 60pc of Australia’s timber production.

Contact David Thompson, Armidale, (02) 67713833, david@care.net.au