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(generated from captions) for 10 years. MAN: I worked behind this door in last year's downturn. It closed on me

Nothing for you today. looking for work... Now I go door to door to support a family. ..but there's never enough we used to give to the Salvos. Not long ago, Look, there's Dad. Go on. Now they're giving back to us.

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Good afternoon. The Federal

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afternoon. A new tax on mining responds to the Henry Tax Review this

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reaches your place? what happens when the resources boom fired up over Coal Seam Gas. We meet some Queensland farmers when I fly from Brisbane to Roma I get constantly reminded

little white dots and see all these lovely with the lovely little white road. every 500, 600, 800 metres proud owner of 35,000 acres of that I keep thinking I'm going to be the probably within the next five years. and it's frightening. Yeah, that's daunting growth prospects We check on the future for Western Australian timber towns of managed investment schemes. caught up in the collapse Sandalwood Factory At the Mount Romance

are being consumed every hour 2 tonnes of wood chips to fuel a 6 megawatt steam boiler. is a market with hot potential. Renewable energy

look to cash in And East Timorese farmers in the world, on one of the most traded commodities coffee. Hello, I'm Anne Kruger. in a week when the Federal Government Welcome to the program emissions trading scheme consigned its problematic to the political back-burner.

won a reprieve. Of course, farmers had already Canberra's prepared to factor in Now it could be years before for households and industry. the cost of carbon are just no longer as keen Opinion polls show Australians on climate change to foot the bill for action as they were a few years ago. when we were polling, I think back in 2006, 2007,

there was a combination of factors. the Stern Review, There was the Al Gore movie, and fires and so on there was wide-ranging drought to make the connection and people, I think, had started between climate change that were happening. and some of these natural disasters I think, roll forward a few years, the Copenhagen climate change talks, you've got the problems with the science around climate change you've got some doubts raised about no longer with us and the fact that the drought's and it's started to rain again. sorts of things So I think all of those and perceptions. play into public expectation or not, Carbon pollution reduction scheme Queensland's Coal Seam Gas industry. it's full steam ahead for energy companies Some of the world's biggest developing gas fields are investing billions of dollars prime farmland, on some of the State's necessary to export it. not to mention the infrastructure But not everyone is happy. the short-term shot in the arm Some farmers fear is blinding the Queensland Government from mining royalties businesses and agricultural exports. to the long-term impact on their INDUSTRIAL ROCK MUSIC Queensland's western Darling Downs like this. is dotted with drilling camps They're drilling for Coal Seam Gas, trapped deep in the coals. a form of natural gas and they work seven days a week All the crews work 12-hour rosters runs 24/7. and the whole operation is owned by Santos. This $5 million rig in south-west Queensland. It's one of five it has working on this one project We'll be here round-about ten days we'll probably move for two days and then after that time on another location. and we'll rig up again the wells go in. After the gas has been found, as 600 metres apart They can be as close 300 and 600 metres deep. and be between is almost pure methane. Coal Seam Gas 99 percent methane. It's got about 98 percent,

So it's very, very clean.

to make that marketable So all we need to do it has water in it. is to dry it - like Santos, Arrow and Origin Australian energy majors by overseas energy giants have been joined on the gas fields and British Gas. like Shell, ConocoPhillips are the tens of thousands Their hunting grounds

in the Surat and Bowen basins. of square kilometres of coal seams It rivals the gas resource of Western Australia. on the North West Shelf prosperity that is involved here. That is the sort of resource and bandying around the fact There's been people the third biggest energy province that this will become in the world. producing gas worth $1 million a day. This is a Super Well, 11.5 terajoules a day It produces up to for a coal seam gas well. which is a lot of gas The average is about half a terajoule so we're looking at a very good well here. 1 terajoule of gas is enough to run a family home on gas-fired electricity for ten years. There are about 1,200 operational gas wells scattered across private land in southwest Queensland. It's estimated this will rise to 20,000 in the next ten years. We anticipate that as we ramp up for LNG production that we will be drilling between 300 and 500 wells a year. And that activity will go on for many years. The industry's growth so far has been astonishing. Ten years ago, there was no Coal Seam Gas. Now it supplies 30 percent of Queensland's electricity and 70 percent of its gas needs. The more wells go in, the more energy executive, Paul Zealand, likes it. I feel excited. Because what those wells represent is a real economic impact to government, to communities, to companies. It's a whole industry that didn't exist ten years ago. Go down and see the Origin crew down there, ladies and gentlemen. They've got free water and sunscreen, they've got helium balloons for the kids. That's Origin, ladies and gentlemen, big supporters of the community. The gas companies are putting a lot of effort into winning hearts and minds, sponsoring sporting clubs, festivals and art galleries and running expensive ad campaigns like this.

VOICE OVER: For our families and local communities - new jobs, brighter prospects. For the farmers we work with - rewarding partnerships. But despite their best efforts, they've been unable to quell the disquiet and anxiety about their presence. One of the main reasons is because this boom is occurring on prime agricultural land. I didn't have any understanding of what my rights were or what the company's ability to access my land was. I really was coming in totally from the dark. I was in a knowledge vacuum on the subject. Wayne Newton is a grain grower from Dalby, three hours west of Brisbane. He says the impact on his highly-productive,

intensive cropping operation, with its laser leveled paddocks and control traffic tracks, will be significant. What happens when they want to build a gravel road across your floodplain? It will be over my dead body. There is no way that I want gravel roads built across my farming land. But when it comes down to it, can't they do what they want?

Legally, right at the moment, they can and they can take us to the Land Court and gain access to this property and put their infrastructure in and I can't stop them. Farmers like Wayne Newton might own their land but they don't own what's under it - the Government does. The Government grants rights to the resource to the gas companies, and they pay royalties on the gas they extract. To get to the gas, though, they need to build wells

and roads and other infrastructure. The potential for conflict arises because farmers and gas companies are trying to do business on the same dirt. When a gas company knocked on Dr Jim Baker's door, he was told his 18,000 hectare cattle property was earmarked for 32 wells, a 25-acre holding pond, a compression plant, and a 300-man camp. I put my head in my hands and I cried. Um, 35 years of Lighthouse, 35 years that I've, ah, devoted every extra penny that I earn,

and it was all coming tumbling down around my ears. Did you ever consider selling up and leaving? That's not an option because we've had that option removed. No one will buy a gas farm. Our land, which was very valuable grazing country, has depreciated in value very significantly. The Valuer-General's Department now have admitted that they are decreasing the value of all properties that have just one hole on them - not 32, just one - by 12 percent. From this point, there's one, two, another one back there, three. Peter Thompson farms up the road from Dr Baker. There's gas under his wheat and his cattle too. And this one here, so seven, yes. Seven that we can see from here. He knows what he's in for, as Echo Hills borders a well-developed gas field. To the middle distance we're looking at somewhere over 100 wells, as you can see right here in front of us. That's what we're going to have overlaid on home and I like I say, I've driven past here numerous times, seen it happening, but as you start to try and picture it on your own land, yeah, it's going to be a big change for us. Peter Thompson says when a well, interconnecting roads and pipelines are taken into account, he will lose about ten hectares per well site. There are no rules about how much per well the gas companies have to pay farmers in compensation. Peter Thompson knows he can't fight the gas, but he is determined to negotiate a fair go. It's all about working together and accepting that we're not going to give it to them for nothing. They need us so that they can carry on their business and we'd like to see it that we do it in partnership with them. That conciliatory attitude is not in evidence down the road at Australian Country Choice, which operates one of the State's biggest feedlots. First experience was having a phone call from my staff telling me they drilled a well, they've cut the fence, they'd made their own roads into the property - it's not where they said they were going. How did you react?

Oh, pretty angrily first up. I guess my first reaction is get mad, ring the lawyers, find out what we can do. And what we can do was issue a Notice of Trespass which we did immediately. You can either call it measles or you could call it pox. ACC has an abattoir in Brisbane, but 22,000-hectare Brindley Park is the hub of the business. Each of these red dots, wherever they are, is going to have a pipeline for water, and a pipeline for gas, and a connecting road to service the pipelines and/or the motors on each. So it becomes a massive infrastructure network of pipes and roads. So where the cattle go, where the farming goes, I've got no bloody idea. ACC runs 20,000 head, turns off 2,000 cattle a week for Coles supermarkets and employs 1,000 people.

Brindley Park operation has an in-and-out trades and local trades value of over $200 million a year in goods and services, grain and livestock. This was now under threat, and it appeared that we had no way of stopping it and it appeared governments went very deaf to our pleadings, as to the value of agriculture, not only to our business but to this State. David Foote and his neighbours, Peter Thompson and Dr Jim Baker are members of the Northern Landowners Group. Formed two years ago, it meets regularly at Brindley Park. Certainly there's a little bit of resistance going on, in that people are not going to allow themselves to be hoodwinked and say, "Oh yes, I will accept $2,000 a hole," and the next door neighbour gets offered $5,000 a hole but can't tell anybody. This is the nonsense that has gone on, and they've played this game very well and they've got away with it for a long time but I've got news for them - the good times are over. The email I sent around with the compensation amounts and the compensation agreements - It might feel like David and Goliath to the farmers but the gas companies say the days when a few cowboy outfits didn't respect landholders' rights are gone. And I think we're not perfect either. All the time we're trying to check in that we are doing the right thing, because at the end the day

the whole industry gets tarred by the worst brush. There is a code of conduct that's just been introduced by the Government and we've been a party to contributing to how that was put together. And I believe there certainly needs to be some consistency in the way we approach landholders and the way we deal with them. Queensland rural lobby group, AgForce pushed for the code of conduct because of the way farmers were being treated. We've all heard the horror stories. We've all heard the processes where gates have been left open and stock that's been brought into a certain area has been allowed to go into another. We've seen dams being sullied from on-ground water that's been put across from some of their drill sites, or from even some of the pipelines that have been put in place. So the general position of access is one of great difficulty. The district scuttlebutt is that the companies are offering $1,500 per well, per year.

This group says it should be $10,000 per year. They've got a business, we've got a business. It's unfair if their business impacts ours. And so they have to pay correctly just the same as any other commercial arrangement. You know this whole control-traffic farming system with the zero till and everything, it's really been a lifetime of learning and - AgForce wants landowners to be paid more, too, and for everyone to be paid the same. There needs to be that parity, there needs to be that equity and until we actually get that it will continue to be a position of divide and conquer because that's is what they're trying to achieve. Local mayor, Robert Loughnan, welcomes the gas companies and the prosperity they're bringing to the region. But he says they have to play fair. I won't name which companies are paying more or less than others,

but certainly at the lower end, the lawyers, not so long ago, were extracting more out of every transaction or every document than the landholders were, and you haven't got the balance right when that's happening. He says people are wary of buying a property with gas wells on it. I've had a property on the market for some time and one of the first questions that's always asked is, "Do you have gas production or exploration on your property?" It's being asked in a negative sense at the moment. If that compensation was a little bit higher I'm absolutely certain it wouldn't be an issue. Do you think if the companies just paid a little bit more, that resistance would just go? I can't answer that, but farmers are very good negotiators and farmers, like all of us, you know, want to have the maximum compensation we can get. We're just trying to be fair and reasonable and consistent across all our landowners. From what you understand, does everybody get the same? We're trying to be consistent, so the framework that we use is consistent across all our landowners. We do have a common framework that we use. You know, we will be investing many hundreds of millions of dollars which are going to take many, many years to pay back. So for us this is actually a very difficult investment decision, so we shouldn't think this is just a gold rush. It by no means is a gold rush. These will be very difficult projects. The Coal Seam Gas sector has experienced its most exponential and dramatic growth. At a recent Rural Press Club lunch in Brisbane, one industry insider said the companies could pay more. Yeah, no, definitely - I just think the argument, "We can't pay you ten grand for a well," is rubbish. They're making big bickies. They're making six bucks a gigajoule out of Gladstone. Tory Shenstone used to do landholder negotiations for a gas company. If they did want you there they wanted you to respect their property. Half the time it wasn't about the money, it's like, "Sweetheart, I don't want your ten grand, I just want you to do the right thing." At that same lunch, rural financial adviser, Rod Saal, said the stress was building. We're in a situation which is really creating immense anguish and I regularly make the comment that it's not a long time before someone pulls a trigger out there in my opinion. A major bugbear farmers have with the gas companies is confidentiality agreements. Origin defends them. Because it's a commercial relationship between ourselves and a farmer, that landowners' interest as much as we want to protect our own interests, because during that relationship we'll learn a lot about what the farmer's business is as well, and I'm sure that farmer wouldn't want us to talk to his neighbour or anybody else about that business, either. So I think that confidentiality is a very important relationship

and really cements the relationship between ourselves and the individual landowners. Santos also has confidentiality agreements. Its aim is to be fair and respectful. It's a long-term relationship so it's really important that it is a strong and a trusting relationship because if it's not, it's going to be difficult for either of to us do business. Between 60 and 70, I think, is the number now. But not all farmers are upset with the gas companies. Take Ree and Leon Price. They have nearly 70 wells on their property, Mount Hope at Wallumbilla, east of Roma. Ree Price says the cattle aren't fussed by the wells and graze happily nearby. The Prices enjoy a good relationship with Santos and are happy with their annual well payments

which they expect will last 30 years. It's not dependent on cattle prices, it's not dependent on - will we get the rain from above? So yeah, it is a welcome addition to our budget. As well as the cash payments another benefit has been the roads, grids and water points built by Santos. She says the company has been flexible and listened to their concerns, particularly about strangers driving around their property.

That was something we talked about with the companies and they are investigating at the moment actually putting in security cameras. More wells are due to go in at Mount Hope. Do you feel that it's devalued the place? No, I don't see it that way.

Yes, there are disruptions at times, at peak times when there's the drilling going on or a lot of activity like that, but on a farming calendar there are busier times of the year, too, so they're aware of that and work along with us. Her advice is that landholders shouldn't panic. Let's face it, it's in the companies' best interests to make the process as easy as possible for the land owners as well so they'd be only too happy to show you somewhere where it's actually working just to take that fear away of the unknown. The biggest of these unknowns is water. Farmers are terrified about the potential environmental impacts associated with bringing such massive amounts of salty water to the surface. They want to know what's going to happen to their underground water supplies, and where the millions of tonnes of salt are going to go. This is going to be a mega project. This is so big we have to get it right because if we don't get it right we're going to pay forever afterwards. Water - that's just one of the issues we'll take take a look at on Landline next week in Coal Seam Gas Part 2. We'll also look at how local government is coping with such unprecedented growth and sudden prosperity and what that means for the future of agriculture.

We're gonna be here in 200 years producing food, producing jobs, producing lifestyles and the gas will be gone.

So we gotta think about that - we gotta think long term

and agriculture's all about long term. Coal seam gas. If you think it's big now, you ain't seen nothing yet. That's next week on Landline. To our news summary now - and the National Farmers' Federation says a delay to the Federal Government's emissions trading scheme should allow for more research on how it would work and how it would help affect farming. There will be no emissions trading scheme in Australia until 2013 at the earliest,

saving the Government about $2.5 billion in compensation to householders and industry. On climate change, we confront the great moral, economic and environmental challenge of our generation. The Prime Minister says he now believes that it's better to wait and see how serious the rest of the world is on climate change before he commits Australia to an ETS. Our commitment to acting on climate change through a carbon pollution reduction scheme remains unchanged. The Opposition, once accused by Kevin Rudd of cowardice on climate change, says it's now the Prime Minister who lacks the courage of his convictions. He's running away from it because he seems scared. Now, what happened to the policy that he said was so important, so necessary, and so self-evidently right? Unlike Mr Abbott, we recognise the science, we accept the science. we remain committed to action on climate change, and unlike Mr Abbott, we're not pretending that you can reach the targets that he also has signed up to unless we pass legislation which puts a price on carbon pollution. The National Irrigators Council has challenged a new study which claims the Federal Government's water buy-back scheme is having only a minimal impact on rural communities. The Bureau of Agriculture and Resource Economics examined the effect of the $1.5 billion first stage of the buy-back scheme. ABARE found irrigation production in the Murray-Darling basin would only be cut by 2.4 percent. Federal Water Minister, Penny Wong, said lost production from water purchases was small compared to the impact of drought. But the Irrigators Council said it was too early to calculate the broader economic impact on the communities and businesses that rely on irrigated agriculture. Western Australia's oldest livestock sale yard has closed after a hundred years of buying and selling sheep and cattle. I think it's a little bit sad, although it is really good to see so many old faces around and I think there's a lot of nostalgia around today. The Midland yards will be replaced by a multi-million-dollar, state-of-the-art facility 40 kilometres away, at Muchea. It is my great pleasure to announce that the winner of the IFAJ Starr Prize for Rural Broadcasting is Kerry Staight from ABC Landline. And finally, congratulations to Landline's Adelaide-based reporter, Kerry Staight, for taking out a prestigious, international agricultural journalism award, with her story on succession planning. KERRY STAIGHT: To help walk them through what can be a financial, legal and emotional minefield, the Ways have turned to Rob Brown. Succession planning is about how families move assets from one generation to another or even actually between generations. It's about how they do it in a way where they get on

and don't kill each other and how they actually build trust. It's commonly thought of about how you hand on a farm but that's just the transaction that's the instant, whereas the succession plan is what you did 5,10,20,30, years before to make that really easy. The story was judged the best TV report and the best overall broadcast entry in the awards organised by the International Federation of Agricultural Journalists. Canberra-based reporter Serena Locke, who was featured on the program a couple of weeks back, won the radio category for a fascinating documentary on her mother's work as a vet working on containing exotic diseases in West Timor. Commodity booms can come back to bite, especially when that boom is based on a single market. In recent years the live export trade out of the north

has been built almost exclusively with Indonesia. Close to 600 thousand head went there last year. It's a trade worth several hundred million dollars and it not only props up northern Australia, it puts a spine into cattle prices across the country. Earlier this year, Indonesia stopped issuing import permits and Australian exporters are getting very nervous. There's a lot of mustering in the north at present and you'd have to think another month or so without permits, and exporters could be well and truly up that proverbial creek. At the sale yards, numbers were down because of the short week. This impacted on throughput and oddly enough, given the year so far, there's some concern in Queensland about quality after what's being described as a very dry April. To cattle items from overseas of interest - cattle prices in America are skyrocketing on the back of cheap grain. And there's real concern just about everywhere about outbreaks of foot and mouth disease in South Korea, Japan and China this past week. It's worth remembering that foot and mouth outbreak in Britain in 2001 cost the UK $16 billion. And pigs continue to slide - demand is weak and those prices have slipped close to 15 cents in a fortnight. Dairy prices remain on an upward curve. It used to be milk was sold cents per litre. Nowadays it's per kilogram of milk solids. Current Victorian price is $4.40. Chicago markets are all a chatter - Is China about to become a major buyer of American corn? Some are tipping a million tonnes a year. If this happens there'll be price ramifications across all grains. The sceptics say, "No way," but it's worth noting that a decade back, China did not buy one soybean from America. Now China is their biggest soybean customer. To New York now, where cotton was mixed with lengthy contracts, mostly weaker than the July futures. Meanwhile, sugar slipped below 14 cents at one stage before recovering on the back of spec-talk about a Chinese buy.

Finally to wool, where the market slumped more than one percent across the microns and various auctions as buyers from China were again dominant,

although not as much as earlier in the year. And that's the Landline check on prices. The collapse of Australia's two biggest managed investment schemes last year has had a devastating impact on the Great Southern region of Western Australia and its 60,000 hectares of Blue Gum plantations. More than 250 local jobs were lost and dozens of small businesses were affected. But as Sean Murphy reports, things are looking up with the plantation's new owners committed to a business plan based on timber production and value adding rather than tax benefits. ACOUSTIC GUITAR At Unicup near Cranbrook in the Great Southern region of WA, Butch Packard is clearing his farm for the second time in 30 years.

Only this time instead of virgin bush he's removing 337 hectares of second rotation Blue Gums. In some respects I hated putting it to Blue Gums. It was purely a financial decision. I really hated pulling out all the fences and the work that I'd done to get the farm to where it was but it was difficult to make it pay, so yeah, it was purely a financial decision. Lured by a generous 24-year lease the Packard family signed over 415 hectares in 1997 to Timbercorp, the second largest company promoting onfarm forestry funded by tax minimising managed investment schemes. We knew that the yields that they estimated that these farms would do

were highly unlikely. But, of course, I guess none of this country had been planted to Blue Gums before so it was fairly early days I guess. So, I mean I knew nothing about Blue Gum plantations so they could've been right but we had a nagging suspicion that they were wrong about the yields. Timbercorp's heroic yield projections were ultimately wrong and when the company went bankrupt last year, Butch Packard was told

his lease would not be taken up by the new owners, Australian Bluegum Plantations or ABP. Yeah, we've had a number of people come and look what we're doing. Yes, I'd say there's quite a few farmers that are quite nervous that they're gonna, they're gonna be doing the same job. In fact, a lot of 'em are almost certain that they're going to be but, you know, the timber companies haven't given them any forewarning or anything.

How long do you reckon, Butch, until you will have it back into full production? Oh, I reckon three five years before it's back to four to five price heap equivalent.

Cranbrook Shire President, Doug Forrest, says it's still unclear how many more farmers will have to return their wood lots to farmland. He says neither ABP nor Gunns Limited which has taken over assets from the failed Great Southern managed investment schemes have made their intentions clear. At the moment there's so many people that are in limbo and particularly farmers who have planted all of part of their farm to trees, their children have gone off to work in some cases within the plantation timber industry, whether it be in Albany as part of the processing or out in the bush driving harvesters and they're in a state of flux at the moment. They've got mortgages to pay and they're not sure what the future holds for them and how certain and how bright it's gonna be. The companies aren't saying much yet but Timber 2020,

the industry's chief lobby group in the west, says rationalisation in more marginal rainfall areas is inevitable. Yes and that's already happening. Those trees that were planted in the early days in the more marginal areas are not getting the yield

and so they're not going back into plantations, correct. We're plaining out with our industry now, we probably won't get many more plantations in because where the plantations should be growing - in the high rainfall the price of land is quite high. At Albany there are signs of a recovery as other companies continue to export shipments such as this 4.5 million tonne consignment to Japan. With Timbercorp not coming in we've lost their production, of course. So we're probably at 50% of our production we would've had in 2008, but the forecast for 2010 looks quite positive particularly towards the end. When Timbercorp and Great Southern went bankrupt their contracts were extinguished. But even in a downturn, the Great Southern Development Commission is optimistic about the industry. The plantation timber industry is viable in its own right. It doesn't necessarily need that MIS overlay. I think that was very beneficial when getting the industry up and going but we now know that we've got a solid economic base there.

Our best reading of the situation is that that downturn has been associated with the so-called Global Financial Crisis and that as things improve internationally, that those markets or the demand will pick back up. So I think we're still confident going forward. Albany's robust economy has weathered the storm from the Blue Gum industry's problems which the region's Small Business Centre estimates has cost about 80 jobs. A number of small businesses closed their doors completely. Others have been struggling trying to make amends for that huge shortfall in their revenue.

What about in terms of money that's owed to small businesses? Ok, That's really hard to put a figure on because a lot of it has just gone. If you have ever looked at the bowl of spaghetti that happens when an insolvency occurs and how people get paid they could be waiting years. So the question we asked them was -

"What impact did they feel would be on their annual turnover?" About 30% said between 80% and 100%, so that's quite large. 40% said - between 40% and 60% they felt their income would be impacted. When the industry does pick up again, finding skilled labour may be a problem. Many contractors have folded or let staff go to survive the last 12 months. Going from 26 sort of staff at our peak back to basically over a Christmas we went back down to four and that's four operating staff and an office manager as well. And it was probably that was the hardest period for me I reckon.

The trees were still there to cut but having to let people go, the ones that were with the family and kids. I even had to let my best friend go. He was one of our first guys we put on. I had to let him go as well. So, that was the hardest thing for me. Warren Marshall runs a specialised coppicing business,

pruning and trimming Blue Gums in their second rotation. He has found work from his machines from as far away as Victoria. Finding drivers to operate them as the industry picks up in the west will be another challenge. There's no training course for these guys. We have to train them ourselves. You're looking at anywhere from 6 weeks to 12 weeks to get a good guy up and fully operational and then we had to let him go. To get another guy back like the ones we have at the moment,

that's another cost for us that at the moment we can't afford.

Some companies such as the harvest contractor, Edenborn, have survived the recent crisis by asking their staff to take leave

or other work until things pick up. So we asked them if they had trades, if they had other seasonal work they could do, if they went out and got jobs in the interim that we would continue to give them their benefits and pay them for public holidays etc. So they didn't lose any entitlements. So they went and worked elsewhere. And when we needed them we asked them to come back so that we kept that trained base of people that we required. Although the company is harvesting just over a third of what it was two years ago, it is making money and is confident that the industry will thrive again. Yes, we see it as a good industry, we see it as a solid industry,

with the global economic downturn, that's what's happened in this industry and we're just waiting for the supply to start to build back up and we will be able to do the same ourselves. Even those hardest hit by the crisis such as nurseryman, Bill Hollingworth are talking the industry up. He lost nearly 2 million seedlings last year worth half a million dollars. What's left of them are now rotting in a pit. And if they were in the ground planted in June they'd be up above my head now. So quite apart from the financial loss, the emotional toll must've been quite something? Oh, of course, yeah, yeah. These are just like having one of your best crops in the ground and then you need to drive over it or spray it and kill it and get rid of it. So the emotion is the same, exactly the same. Bill Hollingworth has been growing trees since he was 13 years old and he wants to continue doing so for as long as he can. We can survive, yes.

It's going to be certainly a very tough battle

particularly because we're in the expansion phase as well, but you know, looking to the long term, it's very positive, it's going to turn around. The question is how long and whether we can pull everything together to make it happen. Before those questions are answered, others must also be resolved such as the ownership of the Albany Chip Terminal. It was built in 2005 as a joint venture between Timbercorp and Integrated Tree Cropping, now part of the Elders Group. Australian Blue Gum Plantations says even if it fails to win its legal bid for the mill, it's confident it can make its new assets pay in the Great Southern.

ABP is a subsidiary of the American timber giant, Global Forest Partners.

A spokesman says the company is making good progress in finding new markets. Less is known about the fate of Great Southern's former assets,

now in the hands of Gunns Limited. The company is being coy about its plans but has said it won't take on any Blue Gums planted after 2006. For farmers such as Liz Frusher, that has meant she now owns 50 hectares of Blue Gums grown by Great Southern on her farm at Chorkerup near Albany. Well, in the short term we have a major cash flow crisis. So that's left us in quite a quandary. Long term, we're not absolutely sure what we can do, but at least now we have the option of leasing the trees to somebody else, if somebody comes up with a good proposition. Or selling the trees to somebody before harvest. With her husband Jim, Liz Frusher runs a successful stock horse stud and a herd of 200 cattle. She says she would be reluctant to now also become a tree farmer. I think that if I had gone into farming the trees, I might not have gone for a monoculture of Blue Gums I might've thought of other sorts of trees that would be, I think, more valid. I'm not sure that growing paper, which is going to get shredded

when the things that are written on it are no use is a terribly good way of using land that could be producing something more valuable as in furniture-grade timber or high protein food for the world. Not just monoculture but lack of market diversity

is an issue for the industry. The woodchips behind me are worth just over $200 a tonne dry weight and they're destined for the pulp mills of Japan. but there has been a softening of demand for paper products since the Global Financial Crisis, and it highlights the problem the industry has here in relying on just one market. The search is on now to come up with new markets and some value added products.

At the Mount Romance Sandalwood Factory, 2 tonnes of woodchips are being consumed every hour to fuel a 6 megawatt steam boiler.

Renewable energy is a market with hot potential. Woodchips and forestry residue are now being converted into bioenergy pellets on the outskirts of Albany. The Victorian-based Plantation Energy Australia has invested $25 million in Australia's first biomass pellet plant. It has already sent two shipments to Europe where the pellets' renewable energy status is in high demand for the carbon offset market. And I'm just showing you now the energy of the future.

They are accredited renewable energy. They don't give off pollution so they don't give off smoke, and they combust very slowly.

We mustn't rely just on one market. We must spread the risk.

So this is what we are doing right now. Starting to develop those added industries which is looking at bioenergy, biodiesel, fuels, oils, right the way through to structural timbers for sawlogs, for building materials. Because we're going to need that once we start getting into the carbon industry in a big way. The WA Government owned Forest Products Commission has been a major player in diversifying farm industry to higher value species for sawlogs. But now it wants to sell out of its share farm arrangements with farmers such as David Preston, who planted a about 250 hectares of trees on his Cranbrook farm. I'm not concerned so much for my own personal situation. We've got a lot out of what's been done. But on my real concern is for the taxpayer that have funded a project like this. And really it's to point where most of the work - certainly in this area we're standing in, has been done. So I just think it's ludicrous that you would walk away from it at this stage. I'm advised that will need $40 million per year for 20 years to get to that level. We haven't got that sort of money to put into it. Once there's a price on carbon I'm sure there will be some other drivers that may well support it. We've made the decision now

to divest ourselves of that particular component. We'd like to think that all those people that put their trust in the government of the day when they signed up to plant these forest product trees and it was a high value sawlog orientated planting -

we'd like to think their faith in dealing with the government The fact they're of a different political persuasion to the ones that were in power when it was planted shouldn't matter. The State Government wants the Forest Products Commission to focus on managing its native harvest. But even without government as a commercial player the Minister for Forestry

says there is a bright future in the Great Southern and he believes there should still be room for managed investment schemes. I would be disappointed to see the MIS schemes lost in its entirety. Sure, I think there needs to be some tweaking around the edges

of some of the rules so that we can possibly avoid what happened over the last 18 months or so but I think it has been a vehicle to get this investment in place and started. Clearly the industry in here has been a strong one. I've got confidence it will be a strong one again. At Unicup the more immediate concern for the Packard family is finding the funds to get their dirt back to productive farmland. The financial burden is the biggest thing and I guess financial burden can put an emotional strain but at this stage we're coping reasonably financially so hopefully we'll get it fairly quickly back to reasonable production as far as grazing goes. And I don't expect to be able to crop for probably anything up to 10 years to give the stumps time to rot out. Now to the final in Tim Lee's series of reports from East Timor. As we've seen, a range of Australian aid projects are helping rebuild the tiny nation's subsistence agricultural base all but destroyed by Indonesian troops and anti-independence militias a decade ago. When it comes to export earning cash crops one of Timor's brightest prospects is organic coffee. It's so stifling, it's almost unbearable. The air is thick with smoke from the roaring furnace. But the smell is aromatic and enticing. And the product is sought after around the world. This is one of the few coffee roasting houses in East Timor. It dates back four decades

when the country was under Portuguese rule. The Portuguese established coffee plantations several hundred years ago. Coffee is often called the Golden Prince of East Timor agriculture. It accounts for about 80% of the country's exports. TRANSLATION: In Timor Leste we have a history of a natural hybrid. A long time ago the Portuguese were doing research here and they identified a natural hybrid that had the high quality of arabica flavour and taste and were resistant to pests and diseases. The Portuguese have carried this 'Hybrid of Timor' to Africa, to Spain, to other countries, and many of the coffee that you drink originates from a natural hybrid here in East Timor. Arabica organic coffee of Timor is one of the best in the world. We have no difficulties placing them in the market. Starbucks buy 40% of the Timor coffee. Like others, the American coffee chain Starbucks is attracted to the smooth flavour and low acidity of East Timor's coffee.

Its other great virtue is its organic status. Increasingly consumers want coffee produced with no pesticides or fertilisers. This coffee has neither because for many years the country's groves of coffee trees got very little attention. TRANSLATION: Coffee is an important crop,

it's our major export of all crops that we do. The Ministry of Agriculture has a number of programs, including the replanting of old trees. Many of the trees are quite old and need replacing. They haven't had much renovation in the past 30 years. We are now doing it.

I'm doing it some myself with funding coming from of all places from a friend of mine, Royal Prince Albert of Monaco. By Presidential decree the coffee industry is on the rise. Amongst the tangled understorey in higher regions of East Timor

the coffee trees would be even harder to spot if not for their red berries known as cherries. The Albizia trees which provide vital shade are being replaced. Plantations are being pruned and better harvesting and processing methods are being used. This coffee processing plant in the Melbourne suburb of Brunswick

is one of the largest in the Southern Hemisphere. Worldwide, coffee consumption is on the rise and East Timor is well placed to gain an increasing share of this lucrative market. I think so, because it is quality coffee. You know we're focusing more on origins so, you know, Timor is a very well-known coffee throughout the world. It has quite a light acidity, and very smooth coffee, very non-offensive. So there is a demand. Recent civil unrest in East Timor greatly harmed the country's coffee exports. In one of our major blends we had a Timor bean in the blend.

In 2006 we couldn't get the beans out of the country. And that really did affect...

..we had to replace the bean with another bean. So yeah, that would've had a huge effect on their market and their growers.

It's easy to see coffee production as a panacea to East Timor's rural poverty. Already, 30,000 families are benefitting from farmer cooperatives. But in truth, it will take a decade to renew the industry. The more immediate need is for food crops. Crops not reliant on the vagaries of export markets and crops which can ease the burden of hunger and poverty. Politically, East Timor's government foresees stronger ties and trading links with Australia. A relationship which can also flourish over a nice cup of Timorese coffee. TRANSLATION: We know now most of our coffee is sent to America, sent to other countries. We'd like Australians to enjoy our nice coffee. Also like Australians to be able to enjoy our horticulture produce and so we'd like to work together in the future, how the markets in Australia can be opened to the hard work

and sweat and tears of Timorese farmers. Anzac Day is often a planting signal and that's what's been happening in a lot of areas.

Central Queensland is all but finished, it's been all go on the Downs for a couple of weeks and the next month or so will see the action shift south and west. Thankfully the weather has been mostly good for tractor work and the outlook appears promising. To last week now and a fairly standard autumn pattern.

And that's Landline's check on rainfall. That's almost it for another week. When we return, Sean Murphy climbs aboard a cray boat to assess the high cost of sustaining a viable fishery. This industry was once known for its pots of gold.

But now, it's floundering.

Rising costs, an inflated Australian currency and now a predicted crash in fish stocks have led to the most extraordinary management measures since the industry began 60 years ago.

Well, I mean a lot of guys planned, just like last year, planned at the beginning of the season for knowing what the ruling were and once again, just like last year the rules were changed mid season and this year they were changed quite a few times, I think three or four times. We've got a closure coming up soon as well so you can't operate a business when you don't know from week to week if you can operate it on not and under what rules you can operate it. The latest twist in the tale of West Australia's rock lobster industry.

One of our stories next week.

Remember, can you catch us any time on the Internet. There's the address. And we're also on ABC iView.

Have a good week.

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