CRITICS of managed investment schemes have savaged the forestry industry for its continued vigorous support of the sector.
In the wake of the Timbercorp and Great Southern collapses, National Association of Forest Industries chief executive Allan Hansard said the MIS debate needed to be "kept in perspective".
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He said plantation provides a diversified economic base that can reduce vulnerability to changes in other rural sectors, such as agriculture.
"Plantation employment does not fluctuate due to climatic variations to the extent that agriculture does," Mr Hansard said.
The claims have angered rural groups and Nationals Senate leader Barnaby Joyce.
Senator Joyce said MIS did not provide a cushion from changes in agriculture "so much as an anchor to take you to the bottom of the lake".
Sustainable Agricultural Communities Australia director Rob Belcher dismissed NAFI's assertions as "propaganda". He said genuine debate on MIS was "all over, rover".
"If the aeroplane is spread all over the tarmac in matchstick-sized pieces, it was hardly a fantastic flight," Mr Belcher said.
"If (plantation forestry) is sustainable, why does it need all this support? It's got a permanent disability - it's not profitable."
Mr Belcher said plantations were the "kiss of death" for rural communities, infrastructure and services.
Economist and Forest Industry analyst Judith Ajani said Australia had a "hardwood chip glut bearing down on us" as a result of MIS plantations.
"We still have that issue to work through, and it won't just be just Timbercorp and Great Southern, it will be across the whole hardwood sector," Ms Ajani said.
"We've seen it in the wine and avocado industries - (with MIS) you build up gluts."
Asked about MIS cushioning rural communities from the ups and downs of agriculture, NFF manager economics and trade Charlie McElhone said: "I think we've clearly seen that has not been the case.
"We've had concerns that MIS doesn't, in all circumstances, promote sound investment decisions."
Yendon farm management consultant Mike Stephens said MIS "continues to be bad policy".
A Senate inquiry into food production, which will look at MIS, is under way.
