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Looking to the future … New business models to inspire investment in trees on farms

A new project has considered business models that could utilise areas of Australian farmland for planting trees, not only yielding financial, social and environmental benefits for the forestry industry, but also for agriculture.

An estimated 500,000 hectares of new softwood plantations are required to meet the increased demand forecast for domestic timber-housing markets by 2045. Local and export demand for hardwood timber has also been growing strongly. However, a lack of new investment in plantations could see Australia relying on an increasing amount of timber imports in the future.

Led by University of Melbourne, School of Ecosystem and Forest Sciences, Professor Rodney Keenan, the research project developed and tested a number of new business models for commercial tree plantations, which would yield mutual benefits for the timber industry, rural landowners and investors. The project was funded by the forestry industry and the Australian Government, and managed by FWPA.

The business models were designed in collaboration with industry and rural landowners after analysing landowner needs and their past experiences with tree investment in various regions. The models consider the positive impacts of trees on carbon, biodiversity and water. It is hoped outlining these benefits will inspire and enable new partnerships between forest growers and the agricultural sector.

Professor Keenen said the project found tree investment needs to be based on sound regional planning to ensure the right tree species are planted in the right places, to generate the desired benefits.

“Models need to be built on mutual understanding, trust and long-term commitment among landowners, the timber industry and other stakeholders,” said Keenan.

A Research Fellow at The University of Melbourne School of Ecosystem and Forest Sciences, Dr Nerida Anderson conduced a landowner assessment involving interviews and surveys as part of the project. Dr Anderson said the aim was to identify what landowners saw as the main benefits or barriers to growing trees on their land.

“One of the most common barriers was concern around the level of financial return, alongside the cost associated with converting agricultural land for the purposes of forestry,” Anderson said.

“There were also questions around the long growth times associated with trees, and the loss of flexibility around how land is used, compared to other types of agriculture.

“If you plant trees in the right place, both landowners and growers can enjoy a host of co-benefits.”

It was evident that mutual arrangements would be needed to address where trees would be planted, and to provide clarity around the benefits to landowners.

“These questions tended to crop up a lot,” Anderson said.

Many advantages were recognised by farmers already, including:

·       a diversified source of income

·       additional shelter for livestock

·       carbon sequestration.

“It’s important to remember not all farmers have the same goals, objectives or attitudes, so models need to reflect diverse scenarios,” Anderson said.

“At the end of the day, it all depends on how willing both sides are to meet in the middle and find a compromise that benefits all parties.”

Flexible models that meet different needs will be key to attracting the interest of a wide range of landowners, to maximise uptake.

“Flexibility in payment arrangements, landowner co-investment, tree location and design on farms, including trees in permanent plantings for shade, shelter, aesthetics or biodiversity benefits are all factors,” Professor Keenan explained.

Midway Ltd is one of the project’s major sponsors. Chief Executive Officer, Tony Price said actualising the opportunities presented by planting more trees on rural land will require the Australian timber industry to change the way it interacts with rural landowners.

“Working together, the sector can promote a consistent message that producing timber is a farm activity, complementing other forms of agriculture, and that the industry is willing to work with farmers to achieve common goals,” Price said.

Reports from the project can be found at this site.

For further information, please contact Professor Rodney Keenan, at rkeenan@unimelb.edu.au

Posted Date: April 23, 2020

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