Why grow trees on farms?

Growing trees on farms provides many benefits. These include helping to improve farm productivity by providing shade and shelter and other on-farm benefits, as an additional income source from growing trees to harvest commercially or storing carbon, providing catchment benefits to improve water quality and quantity, and as habitat to increase biodiversity.

Click on the sections below to find out more about the benefits of growing trees on farms.

  • On-farm benefits of trees

    Trees, when planted in the right place and in the right configuration, can increase productivity for dairy, wool, meat, cropping, and horticultural enterprises. Trees can provide multiple on-farm benefits to production, including:

    • Providing shade and shelter for livestock. Protection from hot winds and sun can help reduce heat stress and improve productivity, particularly as extreme heat events are predicted to increase in a warming climate. Strategically planted trees can also reduce wind speed and provide protection to reduce livestock losses, potentially increasing wool production and can help improve lamb survival.
    • Improving crop and pasture yields by providing protection from drying winds.
    • Helping to control dryland salinity and waterlogging to lower water tables by reducing groundwater recharge and increasing discharge through transpiration. Dryland salinity and waterlogging reduce pasture and crop production, leaving bare ground that is potentially more susceptible to wind and water erosion. 
    • Helping to conserve soil by reducing soil erosion from wind and water, increasing soil organic matter, improving soil structure, increasing water infiltration and assisting nutrient cycling. Fertile top soil is critical for crop and pasture growth. Soil erosion from wind and water can potentially cause significant economic and environmental damage through the loss of fertile top soils. Trees can reduce erosion by slowing wind speed and reducing water flows.
    • As fodder to supplement pastures for grazing stock during periods of feed shortages.
    • Providing habitat to increase on-farm biodiversity. Biodiversity refers to the variety of all living things; the different plants, animals and micro organisms, the genetic information they contain and the ecosystems they form. Land clearing for agriculture has resulted in small isolated areas of native habitat putting many species at risk.Trees on farms can help protect biodiversity by providing nesting sites, food, shelter, a haven from predators or corridors for migration, while also providing on-farm benefits, for example by providing bird habitat to contribute to pest insect management, reducing the pest control costs. 
    • To improve the scenic quality of the farm as well as contributing to improved working conditions, for example by reducing wind and providing shade.

    Further information:

  • Earning income from trees

    The demand for wood is growing both in Australia and around the world. Wood is a renewal resource with multiple uses. It is used in construction and packaging, for making paper, and is increasingly replacing plastics and petrochemicals in the emerging ‘bioeconomy’. The Australian Bureau of Agricultural and Resource Economics (ABARES) has estimated that imports of  softwood sawnwood will need to double by 2050 to meet the increasing demand for softwood in Australia.  

    Plantations established for commercial harvest can potentially provide income for landowners in Victoria. Trees can be grown for different purposes, for example as sawn timber, as woodchips to produce pulp for paper and cardboard, as firewood, to produce bioenergy, for manufactured composite boards such as veneers, plywoods, particle board, chipboard or laminated wood, or for posts and poles (e.g. fenceposts).

    Growing trees for income is a long-term investment – just how long will depend on the type of trees planted (e.g. softwood or hardwood, exotic or native species) and what the trees will be used for. Careful planning and management is needed to ensure tree survival and growth, and to maximise income.

    Factors to consider when planning on establishing trees for income include: what species to plant, design, management requirements, potential constraints and partnership options.

    +             Tree species for timber

    Plantings for commercial harvest can be based on a single species, or can be integrated with local natives to promote biodiversity and habitat values. What species is best for your site will depend on your objectives, as well as the soil (soil depth, texture, nutrients) and climate conditions (rainfall, temperature, exposure of the site), expected future demand, management requirements and length of time between planting and harvesting (rotation).

    The most common plantation tree species grown for timber production in Victoria are the softwood Radiata pine (Pinus radiata), and the hardwoods Tasmanian blue gum (Eucalyptus globulus), and Mountain Ash (Eucalyptus regnans).

    Among other species grown for timber, Spotted gum (Corymbia maculata) and Sugar gum (Eucalyptus cladocalyx) have been widely planted in the past for windbreaks and shelterbelts in western Victoria.  

    Softwood and hardwood are used for different purposes. Plantation grown softwood is mainly used for timber in the construction industry and for other building purposes. It is also used to manufacture pulp and paper-based products such as newsprint or tissue paper. Short rotation (10 -15 years) hardwood species are generally used for high quality paper and packaging but is also used in construction.

    +             Farm forestry design

    The most suitable designs for planting trees on your land will depend on the main purpose of the planting. Possible planting designs include:  

    • Block plantings
    • Multiple smaller scale block plantings
    • Belts, linear plantings of one or more parallel lines of trees
    • Wide spaced trees

    +             Management of timber for income

    Silviculture is the term used to describe how the trees in a stand, and the individual trees within that stand, are managed.  Silviculture influences the volume and quality (e.g. knots, log diameter) of the timber produced by the forest stand and by individual trees within the stand. Management activities include:

    • Thinning – trees are frequently planted at higher densities than required to protect and shelter each other, to encourage growth in height and to help control branch growth. The planting may then be ‘thinned’ to remove trees that are damaged by wind or browsing insects or animals, or trees that have poor growth or form. Thinning reduces competition between trees to maximise tree growth.
    • Pruning – depending on the intended market the trees may be pruned to remove branches which cause knots in the timber.

    +             Potential constraints on income from trees

    A range of factors influence potential income from trees, including how much the tree grows, the value of the product produced, management and establishment costs, harvest related costs, and costs of haulage to where the timber is processed.

    Potential constraints include:

    • The slope of the land. Slope affects harvest costs and influences the types of equipment that can be used to harvest the trees. Slope refers to how steep the land is where the trees are to be planted. Slope is usually expressed as a ratio representing the difference in the vertical height of the land at two points divided by the horizontal distance between the points. For example, if the height of the land increases by 5m over 1000m, then the slope = 15m divided by 1000m, or 0.015. This can be expressed as a percentage by multiplying by 100, i.e. the percentage slope in the example = 0.015 X 100, or 1.5%.
    • The area of trees planted also affects harvest costs. The larger the area to be harvested, the lower the harvesting costs are per tree. For example, the cost of floating harvest machinery to a site remains the same whether the area to be harvested is 1ha or 50ha. The area and the shape of the planting also affects costs, for example the cost of fencing smaller and narrow areas is greater per tree than fencing off a larger block for planting.
    • The haulage distance to where the trees will be processed. Haulage refers to the transporting of timber form where they are harvested to where they will be processed. The cost of haulage increases with distance to the timber processing site.

    +             Partnership options

    Landowners may choose to establish, manage, harvest and market the trees for themselves.

    Alternatively, landowners may seek business partners to establish and manage trees for harvest. Potential business partners include timber processors ….

    All partnership arrangements should be based on sound financial analysis, good technical information, and transparent agreements that clearly assign the ownership of different assets (land or trees) and indicate the rights and responsibilities, and risks and rewards, for each party

    Three types of business partnership models:

    • Land-lease, where a company or investor pays to lease land from the landowner. The company pays to establish and manage the trees. Arrangements for cost of fencing, and for providing access to the trees, are agreed between the landowner and company. The trees are owned by the company or investor who also make decisions about the management and timing of harvest. Annual lease payments may be reduced in return for permanent plantings for on-farm, aesthetic or biodiversity benefits.

    This model is more likely to suit larger, commercial-scale farmers interested in regular and secure annual income, but who do not want to commit their own time, machinery or capital to tree growing.

    • Joint venture, where the landowner contributes land, labour and equipment. The company provides tree seedlings and any specialised equipment. The sale of the timber is secured through a ‘take-or-pay’ wood purchase agreement. The trees are owned jointly by landowner, the company and, potentially an investor, and decision making is shared. The share of return to the landowner may be reduced in return for providing permanent plantings for on-farm or aesthetic benefits.

    A joint venture arrangement may suit larger commercial-scale landowners willing to commit their own resources or funds to commercial tree growing, and who are willing to bear more risk in return for a greater share of the final profit.

    • Outgrower where the landowner provides land, labour and capital to establish and manage trees. The landowner may borrow funds from a third-party investor or lender. The company provides the seedlings and management information. A future market for the timber is secured through a wood purchase agreement either as a ‘take-or-pay’ or ‘first right of refusal’. The latter gives less security to the grower but the prospect of a better price in a rising market, if there are alternative buyers. In this model the landowner owns the trees, has more control over tree location, integration with the farm operation and management decisions, such as the time of harvest. The landowner bears more risk but has the potential for greater reward, depending on the market.

    This model is may suit landowners who want a higher degree of control and take a greater interest in managing and marketing their trees.

  • Carbon benefits

    Carbon dioxide is a greenhouse gas. Greenhouse gasses absorb heat energy reflected from the Earth's surface and radiate that heat back to the atmosphere. While greenhouse gases play an important role in insulating the Earth, excessive greenhouse gas emissions resulting from human activity and the burning of fossil fuels is contributing to global warming and human-induced climate change.

    Trees can play an important role in helping to mitigate human-induced climate change. Trees absorb carbon dioxide from the atmosphere and store or sequester the carbon in their leaves, bark, branches, trunk and roots. In the process of photosynthesis, light energy from the sun is used by green plants to convert carbon dioxide and water to glucose, oxygen and water. In the process of respiration glucose produced during photosynthesis combines with oxygen to produce energy for cell growth.

    How much carbon is stored as a tree grows depends on the tree species, local climate, soil factors and the way the trees are managed. As a general rule of thumb, about half of the dry weight of the biomass of a tree is carbon, with one tonne of carbon being approximately equivalent to 3.67 tonnes of carbon dioxide.

    Equations can be used to calculate the amount of carbon dioxide a tree absorbs from the atmosphere. For example, if the fresh weight of a tree is known the carbon dioxide sequestered by that tree can be calculated using the formula:

    Carbon dioxide (kg) sequestered per tree  = Tree mass (kg of fresh biomass) x 65% (dry mass) x 50% (carbon %) x 3.67 x 120%

    Using this formula, if a 12 year old spotted gum tree has a fresh weight of 600kg, the amount of carbon dioxide sequestered can be calculated as:

    600 x 0.65 x 0.50 x 3.67 x 1.2 = 859 kg of carbon dioxide sequestered, or 72 kg of carbon dioxide per year of growth. 

    If there were 100 of the 12 year old spotted gums on a farm, then approximately 85,900 kg or 85.9 tonnes of carbon dioxide would be absorbed and stored by those trees over the 12 year period.

    The Department of Environment and Energy calculates that a fuel-efficient car using around 5L of fuel per 100km emits around 1.5 tonnes of greenhouse gases a year. As carbon dioxide is the main greenhouse gas produced by motor vehicles, the stand of 12 spotted gums absorbs the carbon dioxide emitted by around 50 fuel efficient cars per year. 

    When commercial trees are harvested some of the carbon is converted into long-term storage in wood products. Carbon stored in trees can potentially offset emissions that might be occurring in other parts of the farm operation. 

    For more information about trees and carbon:

  • Earning income from carbon

    Trees remove or capture and store carbon from the atmosphere. Carbon that is sequestered or stored in trees has value as carbon offsets. Carbon emitters such as industry or airlines can purchase carbon credits to 'offset' unavoidable carbon emissions to achieve net zero emissions or become carbon neutral. 

    The  Australian Government Emissions Reduction Fund (ERF) is a voluntary scheme providing incentives to organisations and individuals to adopt new practices and technologies to reduce their carbon emissions. The ERF is a market-based mechanism where emitters required to reduce emissions can purchase and surrender carbon credits. There are a number of opportunities for the land sector to participate in the ERF by either storing carbon or avoiding emissions from agricultural activities.The types of projects that can be undertaken are called methods.The methods explain how to carry out a project and measure the resulting reductions in emissions.

    Some new tree plantings may be eligible for carbon sequestration payments under the Plantation forestry method or the Measurement based methods for new farm forestry plantations method. Both of these methods relate to vegetation ​projects that generate emission abatement by removing carbon dioxide from the atmosphere and storing it as carbon in the trees as they grow. Eligible vegetation activities include reforestation, re-vegetation, or protecting protecting native forest or vegetation that is at imminent risk of clearing.

    There are strict guidelines for participating in carbon abatement projects within the Emission Reduction Fund. See the Clean Energy Regulator Emission Reduction Fund Opportunities for the land sector site for more information about eligibility requirements for participating in vegetation projects under the ERF.

    For more information:

  • Improving biodiversity

    Biodiversity refers to the variety of all living things, including all the different species of plants, animals, fungi, bacteria and viruses that inhabit our planet. Biodiversity also refers to the diversity of genetic material all living things, and the diversity of ecosystems, habitats and communities in which they live.

    Biodiversity is fundamental  for maintaining ecosystem services such as clean air, water, and food. These ecosystem services are essential for the survival and well-being of humans and all living creatures. Loss of biodiversity not only reduces the ability of ecosystems to maintain these essential services, but also affects the ability of ecosystems to adapt to global change.

    The extensive clearing and modification of agricultural landscapes has resulted in highly fragmented landscapes and is considered to be one of the key drivers of species loss around the world.  Patches of natural habitat or remnant vegetation in agricultural landscapes are important for maintaining biodiversity. However these patches are frequently too small or isolated to support the diversity of species that would once have been found there. Trees planted on farms, while not a substitute for remnant vegetation, can play a role in restoring natural values and enhancing species diversity in agricultural landscapes. 

    How can trees on farms enhance biodiversity?

    Trees on farms can enhance biodiversity in different ways, including  improving connectivity between patches of remnant vegetation and by increasing the area of available habitat. For example, trees planted around existing patches of remnant vegetation can provide a buffer to protect against external impacts such as wind, sun, help protect native reptiles, birds and animals from pests such as foxes, help reduce weed infestations, and help reduce the impacts of agricultural land uses. Trees on farms can be planted to improve connectivity and act as  wild life corridors in fragmented landscapes by linking existing patches of remnant vegetation. Trees on farms can also expand the area of available habitat for insects, reptiles, birds, animals and other species. When planted in the right place trees on farms can help improve areas of degraded natural remnant vegetation. Planting trees on farms can enhance biodiversity more indirectly, for example by helping to stabilise soil and reduce wind and soil erosion, while riparian plantings can enhance aquatic diversity by stabilising stream and river banks.

    What sort of plantings are best to increase biodiversity?

    Large, wide tree plantings help maximise biodiversity by minimising  edge effects  and exposure to external impacts. Plantings should be structurally complex, providing a range of niches and habitats to support different species. Structurally complex plantings include a range of understorey shrubs, taller middle-storey shrubs or small trees, as well as an upper canopy of taller trees. To increase complexity, include species with different growth habits that provide diverse sources of food, including pollen and nectar, and different types of shelter and refuge. Retain existing physical structures within the planting, such as old trees with hollows, logs and stumps.

    Additional resources

    • Conservation Management Notes: Corridors and Connectivity
    • Biorich plantations mimic nature to integrate conservation and production. Established in 2010 as a demonstration site by Ballarat Region Treegrowers, the 15ha Lal Lal biorich plantation site has a biodiverse core replicating the original natural forest with species diversity of over 40 plants and five structural layers as once found in swamp woodland at Lal Lal, south-west of Ballarat. A biorich plantation bridges the gap between environmental plantings for habitat and farm forestry for landholder use and profit.

  • Catchment benefits

    A water catchment is an area where rainwater collects in the natural landscape and flows into creeks, rivers, dams, lakes or oceans. Water collected in catchments can also flow through cracks and spaces in the soil and rocks to flow into, or to recharge, groundwater systems.

    The condition of land within water catchments can affect the health of streams, rivers and other waterways. Ultimately the conditions within water catchments can affect the quality of drinking water and the health of communities.

    In general, trees use more water than grass.  Large scale planting of trees on land that has previously been cleared for pasture or for growing crops can reduce the flow of water into dams, creeks and other waterways. However, reduced water yields must be weighed against the other catchment benefits of establishing trees on cleared land. For example, trees planted in riparian areas adjacent to streams, rivers and other waterways can filter and reduce the movement of nutrients a such as phosphorous and nitrogen from agricultural land into waterways. Phosphorous and nitrogen are both major contributors to eutrophication or increased nutrient loads in waterways, dams and wetlands. High nutrient levels are one factor contributing to toxic algal blooms, leading to fish deaths, stock poisoning and can be pose a serious human health risk.  

    Trees planted in riparian zones can also contribute to healthy waterways by helping to stabilise riverbeds and banks to reduce erosion and sediment movement into waterways.  

    Useful resources and contacts:

    The Regional Riparian Action Plan outlines the riparian management outcomes and aspirational targets to be achieved across regional Victoria over the five-year period 2015-16 to 2019-20.

    Victoria is divided into ten catchment and land protection regions.  The Catchment Management Authority (CMA) within each region is responsible for the integrated planning and coordination of land, water and biodiversity management in each catchment and land protection regions. The ten catchment management authorities are:

    An assessment of the impact of riparian revegetation on stream erosion during floods in Victoria – a report the findings from a study investigating the role of native vegetation established through revegetation programs on the extent of flood related channel change.

See also:

StandingTall: Tasmania’s forestry future, an ABC Landline (2017) production looking at the benefits of integrating forestry trees on agricultural land.

Low impact sustainable agriculture: Regenerating the family farm

Going Bush 2015: Private Forestry Services Queensland