Firewood Could Be A Serious Business
The Age
Monday March 20, 2000
The expansion of plantations on farm land specifically to grow firewood is the subject of a business plan released by the Victorian National Parks Association.
The plan, entitled Firewood Business - the Business of Growing Firewood for Profit in Victoria, outlines a scenario in which 2000 hectares annually would be planted for firewood on farmland over a 16-year period.
Eventually, this would produce just under 400,000 tonnes of quality sugar gum firewood each year for various markets, and add $20 million to farmgate revenues.
The association's director, Ms Amanda Martin, said the plan would lessen the effects of on-farm land degradation and the need to take firewood from native forests, particularly the box-ironbark forests of central Victoria.
The plan envisages that plantings would be spread across many properties in woodlots taking up a relatively small area - a nominal 15-hectare lot.
The report's author, Mr Francis Grey of Economist@Large & Associates, said returns on firewood would be quite acceptable to farmers. In fact, they were superior to some activities like sheep grazing.
Despite the growing interest in farm forestry, little attention had been focused on firewood, he said.
``In fact, it is a perfect entry point to that industry and can provide much quicker - and less risky - returns than the likes of furniture timber," Mr Grey said.
The plan says demand for firewood is strong and likely to remain so. According to the report, the firewood market in Victoria is worth up to $100 million a year.
The total volume of firewood consumed in Victoria is estimated to be 750,000-1.5 million tonnes per year - up to 420,000 tonnes in Melbourne, and the rest on farms and in regional Victoria.
The business plan envisages a planting program of 2000 hectares in the first year, producing 196 tonnes per hectare of dry, unsplit product in year 16 (15 years growing, one year drying).
This equates to 2940 tonnes per 15-hectare woodlot, and a total of 392,000 tonnes for the entire 2000-hectare program. The planting program would involve up to 200 woodlots with an estimated one woodlot per farm.
The plan predicts a gross revenue of $19.6 million for the program - $9800 per hectare for the farmer.
When all anticipated costs are deducted, this equates to a profit of $659 per hectare, or $9885 for the 15-hectare woodlot, before tax. There would also be management fees of $143 per hectare for the farmer.
© 2000 The Age