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Market Opportunities for Farm Forestry in Australia

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Market Opportunities for Farm Forestry in Australia Market Opportunities for Farm Forestry in Australia RIRDC Publication No. 08/105 Natural Heritage Trust Helping Communities Helping Australia Market Opportunities for Farm Forestry in Australia by URS Forestry July 2008 RIRDC Publication No 08/105 RIRDC Project No URS-2A © 2008 Rural Industries Research and Development Corporation. All rights reserved. ISBN 1 74151 693 5 ISSN 1440-6845 Market Opportunities for Farm Forestry in Australia Publication No. 08/105 Project No. URS-2A The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable regions. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances. While reasonable care has been taken in preparing this publication to ensure that information is true and correct, the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication. The Commonwealth of Australia, the Rural Industries Research and Development Corporation (RIRDC), the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of the Commonwealth of Australia, RIRDC, the authors or contributors. The Commonwealth of Australia does not necessarily endorse the views in this publication. This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to the RIRDC Publications Manager on phone 02 6271 4165 Researcher Contact Details Mark Kelly URS Australia Pty Ltd Level 6, 1 Southbank Boulevard Victoria 3006 AUSTRALIA Phone: 03 8699 7500 Fax: 03 8699 7550 Email: [email protected] In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form. RIRDC Contact Details Rural Industries Research and Development Corporation Level 2, 15 National Circuit BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604 Phone: 02 6271 4100 Fax: 02 6271 4199 Email: [email protected]. Web: http://www.rirdc.gov.au Published in July 2008 by Union Offset ii Foreword Farm forestry provides a valuable economic, social and environmental contribution to rural farms in Australia, by diversify the country’s traditional farming landscape, while helping to protect the future of agriculture from environmental and economic risk. It also provides an alternative source of income for farmers. Products range from hardwood and softwood sawlogs, posts, poles and pulp, to niche markets such as sandalwood, and emerging markets such as carbon and bioenergy. This report evaluates the range of markets that offer potential for farm forestry investment and ranks the market opportunities across Australia. It is the culmination of significant market research, regional investigation and consultation across a wide range of stakeholders. Market opportunities for existing larger scale markets are ranked on a region by region basis. Opportunities in smaller scale or niche markets and emerging markets are ranked at the national level. The report also considers the varying opportunities for investment in products across regions, and identifies where farm forestry sits alongside large industrial plantations in supplying markets. The scope of market opportunities identified suggests that there is considerable potential for further development of farm forestry around Australia. This report is one three published from the project ‘Agroforestry Industry Evaluation’ commissioned by the Joint Venture Agroforestry Program (JVAP). The project updates estimates of farm forestry extent throughout Australia (report 1), identifies market opportunities with scope for future development (report 2) and overviews the results to analyse investment needs for market development in farm forestry (report 3). The project complements another project commissioned by JVAP, ‘Prioritisation of Regional Opportunities for Agroforestry Investment’, which is being undertaken concurrently by Ensis. Both projects will help to understand the products and markets likely to hold the greatest value for future investment in farm forestry. This report will provide a valuable resource to landholders, investors, extension providers, policy makers, and the forestry and forest products industry. The outcomes of the this report will be of value to policy makers at all levels concerned with farm forestry, and to the farm forestry sector itself who will be able to use the information to maximise the value of farm forestry investments. This will in turn help develop the potential of this growing industry. This project was funded by the Natural Heritage Trust and the Joint Venture Agroforestry Program (JVAP), which is supported by three R&D Corporations - Rural Industries Research and Development Corporation (RIRDC), Land & Water Australia (L&WA), and Forest and Wood Products Research and Development Corporation (FWPRDC). The R&D Corporations are funded principally by the Australian Government. This report is an addition to RIRDC’s diverse range of over 1800 research publications. It forms part of our Agroforestry and Farm Forestry R&D program, which aims to integrate sustainable and productive agroforestry within Australian farming systems. The JVAP, under this program, is managed by RIRDC. Most of our publications are available for viewing, downloading or purchasing online through our website: • downloads at www.rirdc.gov.au/fullreports/index.html • purchases at www.rirdc.gov.au/eshop Peter O’Brien Managing Director Rural Industries Research and Development Corporation iii Acknowledgments The Florasearch project collaborated with URS Forestry in this project. In particular the assistance of Trevor Hobbs is acknowledged. FloraSearch is co-funded by the Joint Venture Agroforestry Program and the Cooperative Research Centre for Plant-Based Management of Dryland Salinity. This analysis and ranking of market opportunities during this project benefited from consultation and the constructive feedback of a range of stakeholders. This included representatives from regional farm forestry networks, the forestry industry and from various government organisations. In particular URS Forestry would like to thank the generous contributions of David Skelton, Graham McKenzie, Sean Ryan, Jim Burgess, Rowan Allen, Craig Morris, John McGregor-Skinner, David Thompson, Allan Wilson, Bernard Young, Phil Clements, Charles Hajek, Ian McArthur, Louise Maud, David Fisken, Andrew Lang, Rob Willersdorf, Kevin Piercy, John Kellas, Peta Crewe, Peter Bulman, Malcolm Boxall, Julia Levinson, Leonie Offer, Ted English, Phil Bellamy, Monica Durcan, Peter Beatty, Paul Brennan, John Bartle, Adrian Chegwiggen, Nenad Ninkov, Leo Kerr and Peter Taylor. Members of the JVAP committee and project steering committee provided comment on the draft report, and Rosemary Lott (RIRDC) provided review and editorial comment on this report. iv Abbreviations ABARE Australian Bureau of Agricultural and pa Per annum Resource Economics ABS Australian Bureau of Statistics PFDC Private Forestry Development Committees ALFA Australian Lot Feeders Association PNF Private Native Forests APLPI Australian Pine Log Price Index RFA Regional Forest Agreement APVMA Australian Pesticides and Veterinary SOx Sulphur Oxides (generic) Medicines Authority BCTMP bleached chemi-thermo mechanical pulp VPC Victorian Plantations Corporation CCA copper chrome arsenic VRET Victorian Renewable Energy Target CIF cost in freight CMA Catchment Management Authority CO2 carbon dioxide CRC Cooperative Research Centre Units of Measurement DAFF Australian Government Department of bdt bone dry tonnes – dry weight Agriculture, Fisheries and Forestry of wood (excluding moisture content) ESL engineered strand lumber m3, km3 cubic metres, thousand cubic metres ETS Emissions Trading Scheme ha hectares FAO Food and Agriculture Organisation of the kg kilograms United Nations FEA Forest Enterprises Australia t, kt, Mt tonnes, kilo tonnes, mega tonnes FOB free on board Mtoe mega tonnes of oil equivalent FPC Forest Products Commission, Western ML megalitres Australia FPQ Forestry Plantations Queensland Mj megajoules FWPRDC Forest and Wood Products Research and MWh megawatt hours Development Corporation (now Forest and Wood Products Australia – FWPA) GGAS Greenhouse Gas Abatement Scheme GTFP Green Triangle Forest Products HDB hardboard Geographical HVP Hancock Victoria Plantations AU Australian IWP integrated wood processing ACT Australian Capital Territory JHI James Hardie Industries Ltd EU European Union JVAP Joint Venture Agroforestry Program NSW New South Wales LSL laminated strand lumber NT Northern Territory LVL laminated veneer lumber NZ New Zealand MDF medium density fibreboard PNG Papua New Guinea MIS managed investment scheme QLD Queensland MRET Mandatory Renewable Energy Target SA South Australia NAFI National Association of Forest Industries TAS Tasmania NOx nitrogen oxides (generic) US United States of America NPI National Plantation Inventory VIC Victoria NRET NSW Renewable Energy Target WA Western Australia OSB oriented strand board v Contents Foreword..............................................................................................................................................
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