FOR Hamilton nursery owner Keith Cumming, the boom and bust nature of forestry managed investment schemes in western Victoria has led to fortune and now loss.

The demise of Great Southern and Timbercorp cost Mr Cumming more than $140,000 when he was forced to switch off the water to a million bluegum seedlings when the companies went into receivership.

But Mr Cumming has been in the industry for 14 years and has survived difficult patches before.

His Arborline nursery would have grown 5.5 million bluegum seedlings for various companies this year.

But the million seedlings on order from two companies are now dying and cannot be sold to other buyers because each order was grown to specification, Mr Cumming said.

Not only has this lost his business significant income, as only part of the seedling order was paid upfront with the remainder to be paid on delivery, but it has meant Arborline has been forced to cut back on casual staff.

"It came as a big surprise to us, we were fully geared up to supply them but fortunately we are well diversified into farm forestry and other areas," Mr Cumming said.

He said it was positive news US company Global Forest Partners was taking over the Timbercorp plantations, although he has reservations about the MIS policy and how it helped produce the current situation.

"I guess there was always a risk that the MIS companies could fail, but I was surprised that Timbercorp and Great Southern did," he said.

"Smaller MIS companies had gone by the wayside but I thought that surely they were big enough and ugly enough not to.

"For some, what has happened has been an absolute disaster, for those who have lost jobs or contractors who have gone broke.

"But from a broader perspective the plantations are still here and need to be tendered and harvested, as I hope this (Global Forest Partners) is a good forestry company that has taken them on."