Fresh approach to encourage investment in new forest plantations
A research project funded through the FWPA voluntary matched funding program, investigated a unique approach to addressing the need for investment in new forest plantations, in order to meet the growing demand for timber.
An action plan has been developed to encourage various stakeholders, including private landowners, farmers, government and capital investors, to work together towards boosting timber production, as well as contributing to additional environmental and social outcomes.
The Next Generation Forest Plantation Investment Project, led by Professor Rod Keenan of the University of Melbourne, recognises the existence of clear economic, social and political limits to the purchase of large areas of agricultural land for forest plantations.
Despite this, there is significant capital available for potential investment in Australian plantation assets. Considerable areas of farmland also exist in Australia where different types of planted forest would provide agricultural production and environmental benefits. Furthermore, policy drivers to invest in trees exist, including mitigating climate change and supporting forest landscape restoration.
However, investment in new plantations in Australia remains at a standstill.
“In short, industry needs more wood, the environment needs more trees, investors need sustainable and reliable sources of return on capital, and farmers are increasingly seeking income options that are integrated with their agricultural operations. This presents an opportunity for investment in more trees in rural landscapes,” Professor Keenan said.
In order to capitalise on these opportunities, researchers identified the need for the forest sector to form a coalition of stakeholders, committed to working together on the design of a ‘best fit’ solutions that would ensure optimal benefits for all when establishing new plantations.
The project was governed by an industry steering committee. Focussing on two key regions, Colac Otway and Gippsland, a land feasibility assessment determined the available land base for integrated tree plantations. Project researchers surveyed landowners in these regions to understand their attitudes, motivations, and interest in commercial tree growing.
Design workshops brought together forestry industry, landowners, government and capital investors, to design new models of investment in planted forests. This approach presented a unique opportunity to learn from past experiences, and considered the requirements of all parties.
“The ideal approach would deliver on-farm and wider economic, environmental and social benefits, while also supporting profitable, resilient, publicly-supported, high-value regional industries,” Professor Keenan explained.
The work has resulted in a suite of recommendations for increasing investment in Australian plantations, with an industry action plan outlining the measures required from forestry, government, the finance sector and landowners. Stakeholders also identified a range of tools and activities that would support the successful development of industry-landowner relationships.
The findings of this work, including the action plan and recommended tools and activities, have now been published in a series of reports. This detail will provide industry and policy makers with the information needed to adopt more sustainable and effective approaches to working with landholders and establishing new planted forests on private lands.
While it is hoped this research can be used to enable more successful and long-lasting industry-landowner partnerships, realising these opportunities will require further education, industry leadership and ongoing investment.
FWPA and the research team would like to acknowledge the Australian Government for their support, and funding partners AKD Softwoods, HVP Plantations, Australian Paper, Midway and OneFortyOne Plantations.
You can read the report in full here