WHEN Kellie and Andy Canning bought their 40ha red gum plantation about a year ago, they saw it serving two purposes.

Firstly, as a place where they could bring up their children and secondly as an investment.

"I did some reading about the trees, finding out about carbon credits and when the trees would be ready to be harvested," said. Kellie, 33.

"We started to see it as a good superannuation investment."

The Cannings bought their plantation from Andy's uncle, Ian Cootes, who planted the red gums eight years ago on a farm at Byawatha, north of Wangaratta in Victoria.

Forestry consultant Ray Borschmann manages the project, which began with 40,000 river red gums and included trials of red-gum hybrids planted in a cropping paddock.

Since then, the trees have been pruned and thinnings were taken at about four years of age for posts, which were treated and used in a vineyard, leaving about 24,000 trees.

Ray said the plantation, which includes provenances such at Douglas, Hindmarsh, Albacutya and Barmah, was one of the biggest red-gum plantations in Victoria.

Eight years on and despite the drought, the trees are doing well, with minimal damage caused by insects, he said.

"They might not be growing as fast as we would like because of the low rainfall but there are not many deaths," Ray said.

He has been impressed with the performance of the hybrids, planted as part of an Australia-wide eucalypt trial aimed at finding the best clones for a range of conditions, such as low rainfall, drought, salt-tolerance and suitability for effluent-fed plantations.

The hybrid trial on 2ha included a river red gum-blue gum cross and a river red gum-flooded gum cross.

"Many of the hydrids have out-performed the parent species," Ray said.

Ray said the parent red gums were also doing well but it would be at least 25 years before they were likely to produce timber of sawlog quality.

Until then, the Cannings are hopeful of an on-farm income from carbon credits.

They have taken over Ian Cootes' agreement with a carbon broker, who measures how much carbon the trees are locking up based on the age, size and number of trees.

"The idea is that the broker then on-sells those carbon credits to industry," Kellie said.