Blue gum fears grow on prime farmland

For some, those two words mean a vital part of the carbon solution and economic prosperity for some rural communities.

For others, they mean destroying prime farmland, pitting neighbour against neighbour, social and economic hardship for small towns and a failure to heed the lessons of a not-so-distant past.

In plain English, those words mean blue gums.

And in Southwest Victoria, communities are bracing themselves for a new wave of blue-gum plantings, propelled by a $200 million spending spree on local farmland by German investment company MEAG.

In the past year the company, represented by Colac plantation company Midway, has been approaching farmers to sell farms for blue gum plantations.

MEAG has so far bought 14 farms across 1700 hectares around Simpson, with the final land size to be purchased unknown.

"The scale of purchase will be determined by market prices and availability of supply," said MEAG spokeswoman Liz McKinnon.

However, at the current average purchase price of $22,250 a hectare ($8500 an acre), as reported by locals, $200 million could represent a total of 9400 hectares across 77 farms (based on the 122ha average sized farm purchased so far).

The purchases have centred around Simpson, a predominantly dairy town 130km southwest of Geelong.

Farmers around Simpson have told Stock & Land of their surprise upon discovering neighbours had sold their farms to the plantation giant without the traditional heads up to make an offer on that most valuable piece of land, the adjoining property.

Cooriemungle dairy farmer Daniel Campbell was last year approached by a Midway representative with an offer to buy his farm, with"quite a few" farms around him taking up the company's offer.

Mr Campbell said the representative who visited his farm told him "the whole district will be back in trees by 2030".

"Even if that is half right, it is not very good," Mr Campbell said.

That is the fear many have, pointing to population decline and the plantations' impact on local communities and services.

Many reference the surge of blue gum plantations in far Southwest Victoria in the late 1990s and early 2000s, where an estimated 40,000 hectares of farm land was planted to plantations driven by managed investment schemes that allowed for substantial tax write-offs for investors.

A University of Melbourne study of that region in 2002 found "residents of smaller townships and rural areas were more likely to believe plantation forestry had an overall negative impact on their area. Their concerns were related most strongly to beliefs about impacts on local employment and population retention."

That is the concern many around Simpson now hold.

"When the trees come in, you lose the people that would have originally been with the farm, and all the services that go with that then have less work," Mr Campbell said.

"The trees are not going to ring up about the vet, they are not going to ring up and order some grain, they are not going to ring up a hay contractor. The list goes on and on."

It is a view echoed by Simpson dairy farmer Peter De Jong.

"We're not a massive community, so it doesn't take a lot to shrink your community," Mr De Jong said.

"You hear of other places where the trees have ripped the communities. It is quite disappointing."

Mr De Jong's neighbour recently sold to a plantation company, which he was unaware of at the time.

"We didn't get a go at it," he said.

"We would have been interested in one title and the neighbour over the other side would have been interested as well."

His property was now virtually surrounded by plantations or soon-to-be plantations.

"We're closed in now. We can't expand at all."

Asked about the potential impact of the plantations on jobs and the community, Liz McKinnon pointed to 140 Midway staff currency working in the region.

"This will increase as new plantations are established with roles required to plant seedlings, deliver silviculture activities to maintain the health of the trees, right through to operator positions to deliver harvest and haulage activities," she said.

"These staff members and their families work and live in the local community."

However, Corangamite Shire Councillor Jamie Vogels disputed that figure, saying no one in the local area was employed by the plantation companies.

Mr Vogels, a dairy farmer who said he was not speaking on behalf of the council, said the plantation companies "will muddy the waters wherever they can to talk about jobs and prosperity and other things".

"They do not employ anyone in the local area," Mr Vogels said. "They try to expand it out and talk about regionally, but that is not locally.

Mr Vogels also discounted any economic benefits the plantations would bring.

He estimated a dairy farm in the area would provide $6500 a hectare annually in turnover, with most of that going back into the local community.

"I can't get an official figure of what the wood pulp industry does. I know they get about $1000 a hectare a year in carbon credits.

"But I can tell you how much would come to the local community and that is zero dollars."

Mr Vogels said his experience of having plantations adjoining his Scotts Creek farm was that they brought only "weeds and kangaroos who breed up phenomenally in the bush, who have nothing to eat so they all eat on our place."

And the experiences of the late 1990s in far southwest Victoria, he said, showed they produced "ghost towns".

"When you drive through towns with trees there is not much, just rundown houses and businesses."

MEAG, which is part of German insurance company Munich Re, has $A2.8 billion in forestry assets worldwide.

In 2022 it paid $154 million for a 17,000-hectare plantation in southwest Victoria. As part of that purchase it committed to spend another $200 million to buy land to establish extra plantations over five years.

So far it has purchased 14 properties around Simpson which, according to Liz McKinnon, have predominantly been beef or sheep operations

Ms McKinnon said the area was being targeted due to its proximity to the port of Geelong, with most of the timber destined for export as pulp.

"The southern zone of the Corangamite Shire has been identified due to its gentle terrain, well developed road infrastructure, high rainfall, deep loamy-clay soils, availability of cleared land, and strong history of agricultural improvements, such as fertiliser and weed control as well as established local contractor base," Ms McKinnon said.

MEAG has gained Foreign Investment Review Board approval for the purchases, but has not sought funding from the Federal Government's Support Plantation Establishment program, which provides up to $2000 a hectare for the purchase of land for plantations.

Ms McKinnon said carbon credits were not the primary aim of the $200 million investment, but rather the wood fibre," with demand on this fibre set to quadruple by 2050".

Asked if MEAG or any affiliated bodies planned to build a pulp processing plant in Southwest Victoria, Ms McKinnon said it was "exploring new value-add opportunities, with trials investigating how to create new hardwood structural timber products for a domestic market".

"There may be future opportunity to commercialise the outcomes of this project, with manufacturing capability close to resource."