29 Nov1999

Overstory #48 - Farm Forestry

Written by Craig Elevitch and Kim Wilkinson.

World demand for timber is steadily increasing, while availability of hardwoods from natural forests is decreasing. Some of the future timber supply will come from large plantations. However, timber and wood products can also be a sustainable, high-value yield from farms and agroforests.

Farm Forestry

Farm forestry is the management of trees for timber yields by farmers. Farm forestry can take many forms. Some farm forestry projects resemble small-scale forest plantations. Others are diverse agroforests, involving timber trees mixed with animals, crops, or other trees with nontimber products. Projects can range in size from very small (one acre) to very large (hundreds of acres). Farm forestry has the potential to produce quality timber products, increase farm incomes, support community development, and provide employment and environmental benefits.

Often the term "forestry" has been associated with large-scale single-species plantations managed exclusively for commercial return of a timber product. Indeed, much of the scientific and economic study of forestry has been devoted to the needs of this industrial form of forestry. The farm forester shares the goal of commercial timber returns. However, the small-scale farm forester may have a very different set of resources, needs, and objectives compared to the industrial forest investor.

Timber Trees on Farms

Some farm foresters may choose to devote all or part project to a solid stand of timber trees. These plantings usually consist of trees planted close together, uniformly spaced, and managed as small-scale timber plantations. Sometimes called woodlots or tree farms, these plantings can also be a productive use of poor, difficult, or hard-to-access farmland, such as steep slopes, river banks, or waterlogged areas.

There are many ways to integrate timber trees with other farm practices such as with pasture, windbreaks, and crops. These may improve returns and enhance environmental benefits. Integrating trees into farm systems may also have potential drawbacks. Careful planning is necessary to select appropriate species, and to prevent problems from competition and shading. Good planning helps to ensure that the interactions between the trees and other farm elements are beneficial, and result in a net gain for the farmer.

Some examples of ways to integrate timber trees with other farm elements include:

Silvopastoral systems (trees and livestock)
Windbreaks (also known as shelterbelts)
Sequential cropping systems (short-term crops planted with and eventually replaced by long-term timber trees)
Wide row intercropping (Wide spacing between rows of timber trees, with crops cultivated between the rows)
Dispersed trees (timber trees with shade-tolerant crops in a permanent arrangement)

In agroforestry systems, the return from timber will usually be lower than if the timber trees were cultivated in solid stands. However, integrating timber trees with farm systems can enable farmers to diversify their yields, reap earlier returns, and make more efficient use of land. The total return per acre over time from combined timber and nontimber products may exceed the financial yields of single-species forestry.

Some Benefits and Drawbacks of Farm Forestry

Farm forestry differs from large-scale commercial forestry in a number of important ways. Some of these differences can work in the farm forester's favor; others may be a disadvantage. In most cases, it is unrealistic to assume that the small-scale grower can hope to compete in the same markets, and with the same product line, as large-scale industrial plantations. The farmer must instead understand the advantages and disadvantages of their situation in order to optimize the potential for an economically viable forestry planting on their property.

The smaller scale of farm forestry projects and the higher level of personal involvement puts farm foresters in a position to benefit from many economic or environmental products of the forest that are not available to the industrial grower. For example, small scale operations may enable the farm forester to exploit market niches of specialty timbers for which there is a small but high-value market. Site-specific planning and species selection can allow the farm forester to make optimal use of the resources, microclimates, and conditions available on the site. Farmers may also make better economic and/or personal use of the secondary benefits of trees on their property, such as recreation, wildlife habitat/hunting, livestock shelter, aesthetic values, windbreak, watershed enhancement, etc. Integrating trees with other crops can result in diversified returns and increased net benefits.

Farm forestry also has some drawbacks compared with large-scale industrial forestry. The long-term investment required for forestry may be difficult for farmers to make. Misunderstanding or ignorance of farm forestry in government, planning agencies, funding sources, and the community at large may also be a barrier. Constraints to harvesting and marketing relatively small quantities of wood products may also be an issue. Harvesting, processing, and marketing are other areas where little is known of the critical factors influencing the economics of forestry for small land holders.

Financial Returns of Farm Forestry

Timber trees represent a long-term investment of land, labor, and resources for farmers. For this reason, it is important that the farmer/landowner carefully consider the economic prospects. Good planning, including careful financial analysis, is essential.

However, farm forestry involves financial questions that economists, researchers, government officials, and scientists cannot presently answer with any degree of certainty. Predicting growth rates, timber volumes, prices, and markets in twenty or more years is difficult. The diverse conditions and practices of farm forestry can add to the uncertainty. For example, in mixed agroforests, interactions between timber species and other elements may be unknown and untested. On degraded lands where environmental conditions have become inhospitable to many species, the growth and yields even from well-known plantation forestry species are uncertain.

An understanding of some basic financial analysis tools can help a farm forester estimate the potential of investing in a forestry project. Financial analysis provides a means to compare different forestry scenarios. This can be used to weigh the costs and returns of investing in farm forestry against the farmer's other options for economic use of the property. Analysis tools also aid in project design, in selecting project size, budget, implementation factors and management strategies.

Financial analysis includes estimating the costs and returns of a farm forestry project. Typical costs include planning, site preparation, fertilizers, seedlings, planting and maintenance costs, thinning, pruning, and harvesting. Estimating returns can be a very uncertain process, but there are ways to conservatively determine the potential for returns, including "best-case" and "worst-case" scenarios. These scenarios can be varied to examine the possibilities of changing market conditions, risks of natural disasters, or other factors.

Farm forestry is an expanding field that is gaining appreciation from both farmers and researchers for its potential. More information is becoming available to aid the farm forester in planning a successful project. Some current resources are listed below.

References

Holmgren, D. 1994. Trees on the Treeless Plains: Revegetation Manual for the Volcanic Landscapes of Central Victoria, Holmgren Design Services, Victoria, Australia.

Reid, R., and G. Wilson. 1985. Agroforestry in Australia and New Zealand, Goddard & Dobson, Victoria, Australia.

Stephen, P., and R. Reid. 1999. Australia Master TreeGrower Farm Forestry Economics Exercise, School of Forestry, The University of Melbourne

Sullivan, G. M., S.M. Huke and J.M. Fox (Eds). 1992. Financial and Economic Analysis of Agroforestry Systems. Proceedings of a workshop held in Honolulu, HI, USA, July 1991. For copies visit .