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In April/May 2009, two large ASX -listed companies which dominated the agri-business Managed Investment Scheme sector were placed into administration, leading to significant losses for investors in those companies and the schemes they operated. We provide a concise overview of the demise of one of these companies, Great Southern Limited, to identif...
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... ability of the RE to demand further investment beyond that agreed is determined by the scheme's constitution and the investor is not personally liable for debts accrued in the running of the project. Figure 1 illustrates the typical structure of an agribusiness MIS. Part of the attraction of agribusiness MI schemes to retail investors has been the tax treatment afforded to them, whereby initial subscriptions (and ongoing contributions where applicable), as well as costs of borrowing to finance investment were allowable - in full -as a deduction from taxable income. ...
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... MIS distribute benefits pro-rata with the level of investment. The timing of the collapse of several MIS-based companies in 2009 was associated with the Global Financial Crisis (GFC) (Brown, Trusler, and Davis 2010), although the seeds for their collapse were sown well in advance of the GFC. At a more nuanced level, some of these elements included: pre-existing adverse social responses to the MIS model due to the rapid expansion of plantations (Mercer and Underwood 2002); the unrealistic expectation of timber production (Lawrence 2008); the unbalanced treatment between plantations and other types of agriculture (O'Toole and Keneley 2010); and diverse intangible motivations regarding sense of place and rural development (Tonts, Campbell, and Black 2001;Williams et al. 2008). ...
[50 open access copies available here: https://www.tandfonline.com/eprint/YEIQCNEQXMBNAFJPS6NE/full?target=10.1080/00049182.2021.1999628] · Forestry plantations constitute fertile ground for critical analysis of land use conflict. Policy-makers are increasingly recognising the need to address controversial issues in the plantation forestry sector. However, these efforts are often grounded in short-term analyses, resulting in static or inappropriate responses to a dynamic commodity environment. This research article proposes that combining cognitive and social research approaches can elucidate place-based land-use conflicts that at their root, are about more than just the one particular commodity under examination. We explore stakeholders’ perceptions and attitudes around Tasmanian blue gum (Eucalyptus globulus) plantations in a region that has witnessed three radically different social-economic stages of blue gum plantation growth and management over the last 25 years. Our findings show that individual perceptions and attitudes over time are most closely related to the economic characteristics of blue gum plantations than to any other factor. By extension, market instability shapes popular narratives around blue gum plantations. We conclude that the analysis of conflicts associated with long-established forestry plantations should encompass an understanding of community members’ worldviews and emotions in addition to economic analyses in order to adequately explain conflicts.
... Australia wide investments in MIS industry decreased from approximately AU $1.2 billion in 2006 (The Treasury, 2008) to AU $300 million in 2009, and in 2010 fell further to below AU $100 million (NewForests, 2015b). Brown et al. (2010) and Summers et al. (2015) suggested that the loss of investor confidence in MIS forestry is a response to frequent changes in the tax incentives. For the first time in 2014, the area of Eucalyptus plantation in the study area decreased due to net clearing, the cleared land was largely returned to agriculture (Nery et al., 2019a). ...
Land use policies interact with biophysical and socioeconomic characteristics to determine land use and land cover (LULC) changes. This paper presents a method for assessing the determinants of plantation land use transitions from 1979 to 2014 from Landsat data for the Warren River Catchment (4,416 km 2) in Western Australia. This catchment is intrinsically interesting because it is a frontier between agriculture, high biodiversity native forests and commercial forest plantations. Further land use policies have had a strong bearing on LULC. Initial forest clearing in the catchment was the result of agricultural development policy. It was followed by the ban on clearing native vegetation on private land in 1978. The Management Investment Scheme introduced in the 1990s led to a rapid increase in the area of plantation forest on agricultural land. The catchment has two significant environmental problems: first dryland salinity leading to land degradation and the salini-zation of rivers and streams; and second the protection of high levels of endemic biodiversity. LULC changes from 1979 to 2014 reveal that soil depth, distance to urban centres, surrounding land use, and private land are positively correlated with transitions to plantation forest. The Management Investment Scheme brought the largest changes in LULC as land transitioned into Eucalyptus plantations in the 1990s when the tax incentives were introduced and then gradually out of plantations by clear-felling and conversion to agriculture as tax benefits for the scheme were reformulated and uncertainty about the policy increased. Other evidence on policy effects are that the Forest Management Plans have sustained the area of native forest and the ban on clearing has been effective.
... Firstly, plantations underwent a rapid increase due to agribusiness investment schemes based on tax reduction incentives. Then, the rate of planting fell sharply from around 2007 due to the changes of tax subsidies and the uncertainty around the futures tax status of forestry (Ajani, 2008;Brown et al., 2010;Ferguson, 2014;FWPA, 2011). ...
... However, empirical evidence suggested that some plantations were poorly sited in terms of climate and soil and/or poorly maintained (Brown et al., 2010). As a result the growth rates of some plantations were less than the rate indicated in the Product Disclosure Schemes for the hardwood plantation MIS, and in many cases were insufficient to justify investments (Mackarness and Malcolm, 2006). ...
... The successive revision of MIS legislation made the scheme vulnerable to policy changes, resulting in a weakness in investor confidence in forestry MIS. The risk of investing in forestry MIS had been highlighted since the late 2000s (ASIC, 2012;Brown et al., 2010), with two high-profile agribusiness companies going bankrupt, leaving some investors with heavy losses. This is particularly the case for Great Southern Group and Timbercorp Limited, the two major agribusiness companies operating in the south-west of Western Australia. ...
... The statistically significant and positive association between net forest area and farm output prices in New South Wales, Victoria and South Australia, along with the observation that most area gained was from plantation forest expansion (Fig. 5), suggests that the result may be a response to federal incentives to establish forest plantations-mostly in the form of tax breaks after 1997 (Fin et al., 2010). These incentives were offered during a period when Australian agricultural productivity and the index of farm output prices were increasing (Hatfield-Dodds et al., 2015) and resulted in the planting of around 0.7 Mha of mostly short rotation hardwood between 1997 and 2007 (Burns et al., 2009), and around 0.2 Mha between 2005 and 2011 (Montreal Process Implementation Group for Australia and National Forest Inventory Steering Committee, 2013). ...
The shift from net forest loss to gain-forest transition-has been associated variously with economic development , market-driven reforestation, forest policy, and globalization. Evidence shows that governments can expedite forest transition, although economic and institutional failures can distort policy incentives. This study addresses the paucity of spatially explicit empirical research on the robustness of the forest transition hypothesis in a developed country context and identifies factors that may hasten, delay, or even reverse forest transition. We applied spatial-econometric analysis to high-resolution forest cover, climatic, socioeconomic, physiographic, and State-jurisdiction data for the Australian intensive agricultural zone from 1988 to 2014. While environmental and physiographic factors explained the spatial distribution of forests, net forest cover change was significantly associated with trends in farm-output prices inducing deforestation in Queensland, the State with less effective land clearance regulations. Changes in land clearing regulations in Queensland were significantly associated with the national forest cover trends that resulted in forest transition in Australia around 2008. Yet when land clearing regulations and their enforcement were subsequently relaxed in 2012, significant forest cover loss was once again observed in that State, particularly in remnant forests. We conclude that if forest regulatory protection is not effective, net forest loss could resume or increase, even in developed countries, in response to growing incentives for forest conversion to agriculture.
... While their collapses were noteworthy and affected many investors, they constituted a relatively small proportion of the financial sector. (Brown, Davis and Trusler, 2010). ...
... 10 D'Alosio (2009) provides more detail on the extent of corporate failures and outlines responses by the securities market regulator (ASIC) to the market failings uncovered by the GFC. Great Southern and Timbercorp had over $3 billion in funds under management(Brown, Davis and Trusler, 2010).Oct2008Mortgage/Property Trust redemption freezesJan 2009 Storm Financial (financial adviser/fund manager) placed in administration Mar 2009 Babcock & Brown (investment bank) placed in administration Apr 2009 Timbercorp (Agribusiness MIS manager) placed in administration May2009 Great Southern Plantations (agribusiness MIS manager) placed in administration Dec 2009 Trio/Astarra (fund manager) placed in administration ...
This paper argues that there were two key factors behind the resilience of Latin American financial systems during the crisis. The first was the initial conditions that a number of countries in the region faced during the pre-crisis years. Sound macroeconomic policies and highly improved financial regulations were in place at the time the crisis erupted. This meant that banks and other financial institutions stood on a good footing when the external shock hit. The second factor (highly related to the first one) was the appropriate response of policymakers in several countries in the region to deal with the impact of the shock. In particular, and departing from previous crisis episodes, a set of Latin American countries were in a strong position to implement counter-cyclical monetary (and some even fiscal) policies that minimized the contraction of credit growth to the private sector and contributed to a rapid economic recovery. A third factor, not discussed in this paper, but well documented elsewhere (see Izquierdo and Talvi, 2008) is that the region also benefited from some doses of good luck. The external environment remained friendly to Latin America on two counts. First, following the initial impact effect from the collapse of Lehman, the response from the US Federal Reserve Board was to lower the Fed funds rate sharply and keep it low, which eased the external financing conditions to the region. Second, supported by the high growth of Asia (especially China), the prices of commodities exported by the region recovered in 2009 and, though they have been quite volatile, have remained
quite high since then. Thus, in the assessment of Latin America’s performance during and after the crisis it is only fair to conclude that the role of improved macro/financial regulatory conditions was facilitated by a combination of low interest rates in industrial countries and favorable terms of trade.
Plantations are expanding in many parts of the world, often accompanied by public debate. If policy makers and plantation managers seek to better align land use policy with social values and to reduce social conflict, they require a clear understanding of public expectations of land use, and the kinds of plantations that are socially acceptable. This paper presents results of a large postal survey (n = 2167) conducted in two regions of southern Australia. Residents of Tasmania and southwest Western Australia reported their acceptance of a range of plantations characterised with regard to factors such as type of product, location and size of plantation and ownership. Participants also indicated their beliefs about the impacts of commercial eucalypt plantations. The results showed that participants generally prioritised public good outcomes over individual gains from rural land use, and tended to view plantations as providing more benefits for owners than positive outcomes for the environment or the broader community. Plantations were more acceptable when grown for timber rather than pulp, when planted in areas with good water availability and poorer soils, when planted on part of a property rather than a whole property, and when owned by an individual landholder rather than a plantation company. Results are interpreted to highlight the implications for plantation policy and management in the Australian context, and to illustrate how social research can inform these practices.
