Kangaroo Island community leaders back bid to convert forestry to farmland amid KI Phoenix proposal

Converting Kangaroo Island’s timber plantations to farmland would be an economic boost, leaders say, despite a forestry company’s rejection of a $20m bid to buy up its land.

Kangaroo Island Plantation Timbers managing director Keith Lamb. Picture: Sarah Reed

Converting Kangaroo Island’s burnt timber plantations to farming land would boost the island’s economy, provide extra jobs and reduce the fire risk, some community leaders say.

It comes as Kangaroo Island Plantation Timbers (KIPT), which controls most of the region’s plantations, has rejected a $20m offer from a company to buy 15,600ha of its land.

But KI Phoenix, part-owned by agricultural investor AAG Investment Management, still hopes to negotiate a deal with KIPT.

Mayor Michael Pengilly said if a land transfer came to fruition it would boost the island’s economy after decades of slow action to harvest and export the timber.

“It’s a wonderful opportunity to move forward from this hiatus we’ve been in for seven decades on the island,” he said.

He said the introduction of plantations was an “economic disaster”, because it reduced the number of farming enterprises from the island’s western end, resulting in population declines.

“If this was to happen it would be a win-win for the island,” said Mr Pengilly, who after the 2019/20 bushfires, was critical about the fire risk associated with the island’s blue gum and pine plantations.

Kangaroo Island Mayor Michael Pengilly at Emu Bay. Picture: Brad Fleet

“Bringing it back to pasture … aids and abets firefighting.”

About 95 per cent of the company’s trees were burned during the December 2019 and January 2020 fires.

KIPT is trying to salvage as much of its timber as possible by harvesting it before it deteriorates, submerging some of it in water and sending logs to mainland customers on barges and the SeaLink ferry.

It’s maintained that a planned seaport at Smith Bay – under State Government assessment – is still vital to transport much larger volumes.

Kangaroo Island Plantation Timbers managing director Keith Lamb today told shareholders KI Phoenix’s offer was “substantially less” than the land’s value.

He said the company was “well on its way in achieving its goal to monetise its forest assets and preserve land value” and KI Phoenix was “welcome to return” with another proposition.

“Our foremost motivation is to preserve and enhance shareholder wealth,” he said.

The company said forestry complemented agriculture in providing economic diversification.

In the fires’ aftermath, KIPT said forestry could act as a fire break as long as plantations included juvenile trees, which held a lot of moisture.

Agriculture KI chairman Rick Morris supported any move to convert plantations to farmland.

“There’s very limited job opportunities when they’re not harvesting (timber),” he said.

“Anything is better than what we’ve got at the moment.

“At this stage the best model is dryland farming – livestock or cropping.

“The margins are good, it provides employment and we have families contributing to the community.”

AAG Investment Management’s Marcus Elgin was disappointed Kangaroo Island Plantation Timbers had rejected the company’s offer.

“We’re hopeful that Kangaroo Island Plantation Timbers will further consider its position over the Easter break and enter into formal discussions with us about the acquisition of their landholdings,” he said.

“We’re also confident that the sale of the land and remediation for agricultural use is in the best interests of the people of Kangaroo Island and will have their majority support.”

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