Farmers are caught in Gunns trap
ALMOST two and a half years after Gunns collapsed, up to 300 Tasmanian farmers who leased land to the timber giant are still waiting to be paid.
Farmers who entered agreements to have plantation trees grown on their land have lost between $16 million and $20 million a year in unpaid rent owed by Gunns, and remain unable to claim their land back.
The agreements were known as managed investment schemes. The land is owned by the farmers, but the trees belong to investors.
Unsure who now owns the trees, many of the plantations have been left unmanaged. The quality of the timber has been steadily declining, and farmers have been losing out in more ways than one.
Campbell Town farmer David Gatenby said farmers were sick of waiting for an outcome.
‘‘I’ve heard nothing really for two or three months,’’ he said.
‘‘I’m not quite sure how the court proceedings are going. PPB Advisory ... they are the liquidators, they represent both the landowners and the investors, and it’s time they sorted it out.
‘‘We’re halfway through the third year, and it’s extremely frustrating because we were being paid rent before all this fell over, and the rent has just disappeared.’’
Farmers had believed that their contracts protected them with a clause reverting ownership of the trees to the landowners if no rent was received for 60 days, but this clause has been challenged by investors.
Mr Gatenby said farmers had been given the option to buy the trees in order to get their land back, but doing so would result in a forfeiture of rights to any future court settlement.
‘‘I don’t know what percentage have actually bought their trees. We’re sitting and waiting for a court decision,’’ he said.
‘‘We’ve got all these trees sitting on our land, and no one can tell us who actually owns them at this stage until a court decision is made.
‘‘We basically can’t touch them, we can’t prune them, we’re having people come and shoot of course, but the whole system has broken right down and no one’s got any clear direction with it all.’’
The lost rent payments have been a significant blow to farmers, some of whom had planned their retirements from the money.
Some farmers have also been forced to spend money on the plantations, some of which have not been maintained since Gunns’ collapse.
Mr Gatenby said the plantations could be a fire hazard if they were not managed.
‘‘We manage the farm around leasing these trees to Gunns, we’ve put infrastructure and we’ve put dams, and now there’s no money, so there’s a fair bit of stress, a huge amount of stress,’’ he said.
‘‘It needs managing, with fires and pests, insects and all those sorts of things, game of course needs to be managed, but if we don’t own the trees, why should we manage them?
‘‘I know some farmers that have actually sprayed for the insects, not so much in the pines but the eucalypts, and that’s a cost to them, but still they don’t know whether they own the trees or not.’’
Mr Gatenby said he was also losing money by being unable to run cattle on the plantation land, which would net roughly $10,000 a year.
Whatever happens with the plantations, farmers are hoping for an end to the uncertainty sooner rather than later.
‘‘The government has gone very quiet on this. I know it’s a private enterprise deal, but farmers are losing $20 million a year and we’re into the third year now, so it runs into big dollars, and they should be concerned about it,’’ Mr Gatenby said.
‘‘Probably the best case scenario would be that tomorrow the trees reverted to us. In an ideal world, some form of lease payment would be fantastic, but that’s not going to happen.
‘‘The longer it goes, the more money is spent in the court system. There is going to be less for farmers and investors in the long term. We want it resolved.’’
PPB Advisory did not respond to requests for comment.
Retired Northern Midlands farmer David Gatenby says landowners are sick of waiting for an outcome on land leased to collapsed timber giant Gunns. Picture: NEIL RICHARDSON