Smallwoods' retirement plan facing the chop

Haidee VandenbergheCountryman

When David and Penny Smallwood planted the first blue gums on their Merivale farm, they were brimming with optimism for an industry that they thought would see them through to their retirement.

Sixteen years later, with the deadline for the commencement of harvest well and truly passed, the couple are facing the prospect of pulling out thousands of trees.

"We wanted to buy an investment in land, generate an income out of it and retire at the same time," David said.

"We were looking 30 years down the track. We weren't looking at tomorrow and making a quick quid."

David and Penny have an involvement in about 1300 hectares of blue gums, some leased, some sharecropped and some fully owned.

But none of the trees look like being harvested. It's heartbreaking for David, who after a lifetime of farming, thought moving into blue gums would include him in a stable industry that created jobs for the Esperance area.

A combination of declining woodchip prices, a lack of interest in building woodchip infrastructure at Esperance Port and the global financial crisis mean there is little hope of harvest.

Without harvest, a 16-year investment in their wholly owned tree farm will not yield a dollar of income.

At their home farm, lease money from Elders for blue gums expires at the end of the year. The trees - which should have already been harvested - will then be owned by David and Penny.

But with no port to export the chips and limited market interest, the couple will have to decide how long they wait financially before clearing the mature trees.

"If I can afford to I would look at hanging on (to the trees) but some of the poorer areas I might put a chain in," David said.

"They'll dry for 12 months, then we'll burn them and just reseed it.

"It's going to be a very expensive exercise. If the trees are harvested, one's probably looking at between $300 and $500 per hectare to re-establish it to pasture.

"If they're not harvested, probably $1200/ha. If you want to put it back to crop, probably $1500/ha."

Their work will not stop with clearing the trees - fences need to be rebuilt, water points reconnected and the entire 1300ha restocked.

It's an enormous undertaking for someone who thought he would already be retired.

"I still believe the woodchip industry was a good idea but this whole scenario has left a sour taste in our mouths," David said.

"It's exasperating. Elders has spent $300 million in this town in establishing the plantations and buying land.

"It's employed people. There are about $670 million worth of woodchips, perhaps even closer to a billion dollars worth, that might never be harvested.

"Those trees will be burnt and the land will go back to cows. That's not what I wanted.

"I wanted another industry in Esperance to generate jobs and keep young people in town."

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