Land aquisition for a commercial scale project?

There are many land acquisition opportunities in Australia suitable for the establishment of Leptospermum plantation projects. Not least of which is the relatively low cost of land in Australia.

  1. Redundant Tree Farms

Between 1998 and 2008-9 hundreds of thousands of hectares of farming land was either purchased or leased by a number of companies that ran Managed Investment Schemes (MIS) raising investment funds by prospectus and planting mainly Tasmanian blue gums for the harvesting of wood chips for export.

One of the larger of these MIS companies, Great Southern, alone planted 240,000 hectares mainly to blue gums during this period. (Wikipedia)

Following the spectacular collapse of the MIS companies in 2008-9, a new regime has fallen into place. The liquidator sold the assets primarily to overseas interests which are now managed and operated locally.

Rather than having the primary focus on selling investment packages there is now a far more considered and prudent approach to the plantation forestry business. To begin with, many plantations that were sold earlier to investors were never going to really produce sustainable yields either because the soils were too shallow, too dry (low rainfall) or too wet (high water table).

Harvesting commenced a few years ago and the managers can readily calculate yield (from weighbridge dockets)  x age x area and determine if a particular land unit has attained an economic return on the first rotation.

If the answer is in the negative then the property may be sold as a ‘stump block’ or the managers may decide to restore the land to pasture and sell it in that way for an increased amount.

If the land is leased the managers may choose to not exercise their right of renewal with the landowner.

If on the other hand, the answer is in the positive the managers may choose to grow a second rotation either from new seedlings or from managed coppice regrowth. Currently, the demand for wood chips is such that the managers are keen for second rotation wherever possible.

Despite all that, there are large areas of former Eucalypt plantation estate that is now redundant.

If the land is leased then the private landowner may need to meet the land restoration costs alone. The main cost of land restoration is the removal of the stumps. There are a number of stump removal options available.

This cost can be somewhere around $1,000/ha ($400/acre) with full land and pasture restoration costing from as little as $700/h to as much as $2,500/ha in total. (stump removal, cultivation, fertiliser, seeding etc). This restoration work will allow for the resumption of grazing activities with productivity outputs similar to those existing prior to the tree crop 1st rotation.

The Leptospermum plantation scenario fits neatly into the harvested blue gum plantation ‘stump block’ regime which allows for integrated honey farming and grazing.

The illustration below demonstrates the concept.

This is a blue gum plantation in Western Victoria harvested 3 years earlier with no stump removal or pasture renovation.

The original planting mounds are still quite evident. The mounds are (generally) 3 metres apart, so the idea is to rip the ground between every second row resulting in row spacing of 6m. The seedlings would be then be planted to form hedgerows with spacings of 2m within the rows. (833/ha). Hedgerows could be increased to 9 or 12 metres apart if a more open concept is desired.

The stumps would not be removed. Anecdotal evidence suggests that the stumps will rot to the point that they can be dislodged with a farm-sized tractor and offset disc plough  5 years or so.

In the meantime, the area can be grazed with sheep with a carrying capacity not dissimilar to the carrying capacity should the hedgerows not be there. Any loss of pasture would be offset by the increase in the benefits derived from improved shade and shelter.

The cost of the seedlings is likely to be less than the cost of post-harvest stump removal when undertaken soon after harvest.

The open areas between the hedgerows could in time be reseeded and renovated if required.

Wet Areas

Wet areas that are not suitable for cropping, tree crops or horticulture can be found all over the country particularly in high rainfall areas. Whilst these areas may be of limited use for mainstream primary production they may be ideal for Leptospermum plantations provided the often associated salinity levels are not excessive.

South Western Victoria. Failed blue gum plantation due to a high water table causing the upper soil profile to become waterlogged for extended periods.

South Western Victoria. Same region. Same scenario. Leptospermum scoparium naturally occurring in prolonged waterlogged soils.