THE final nail is in the managed investment scheme coffin as almost 6000has of trees are ripped out to create farmland.

Some of the directors of the company now returning blue gum land to agriculture - with the intention of selling it at a profit - had previously spruiked MIS benefits to investors and the rural community.

Nationals Senate leader Barnaby Joyce has labelled the exercise "the agricultural form of digging holes to fill it back up again".

"I've always believed that unless we're about to evolve into a higher form of termite, these forests are not much use to us," Senator Joyce said. Australian Agribusiness Group company Demeter Farming Australia bought 6000ha of western Victorian land from the fire-sale of failed MIS giant Environinvest last year in a sale subject to confidentiality clauses.

Demeter aims to harvest only a fifth of the estate and the rest of the trees will be mulched.

It is the first large-scale reversion of blue gums to farmland in Victoria and Demeter plans to sell some properties at Skipton, Beaufort and Stawell as broadacre farms while holding on to other properties.

AAG's directors include vocal MIS supporter Tim Lee.

In May 2009, an AAG press release was issued which stated "AAG knows agriculture and MIS".

In the release, AAG said: "The (failed Great Southern and Timbercorp MIS) projects themselves are not necessarily finished ... the trees are worth more today than last week, and they will be worth more in six months too."


In 2007, Mr Lee said MIS projects were "not tax rorts".

"They will clearly produce massive future tax revenues for government, while they generate very significant regional development activity.

"In a year when much of the traditional agriculture under-performed and leveraged billion dollar subsidies, the MIS sector instead raised over a billion dollars and will generate over $6 billion in farm gate income," Mr Lee had said.

But, this week, Mr Lee said there was no point chipping the blue gums "due to the low productivity of the site and the cost of harvesting".

Mr Lee said the amount of timber that was viable to harvest was "a lot lower than we'd anticipated".

He said he still did "independent research in MIS" but AAG had not worked for Environinvest.

"At no time have we ever promoted an MIS or sold an MIS. The work we have done has been at an arm's length basis looking at the underlying schemes," Mr Lee told The Weekly Times.

Senator Joyce said he was glad the land was being returned to agriculture.

"We paid for the tax break, subsidised people to stuff up farmland, now we're subsidising them to clean it up again," Senator Joyce said. "(MIS) was a dirty little experiment."

Sustainable Agricultural Communities Australia director and MIS opponent Rob Belcher said Mr Lee's actions in choosing not to harvest the trees directly contradicted his earlier words.

"This great resource (blue gums) was just the visual bait to take money from dumb investors," Mr Belcher said.

He said the Australian taxpayer "wasted $10 billion on MIS", which "destroyed high-rainfall country", and demanded an explanation from those who had recommended MIS projects to investors.

Victorian Farmers Federation president Andrew Broad said the MIS policy must be "immediately ripped up and thrown out".

"The policy has not benefited Australia. It has distorted markets and lost the savings of investors and accumulated land and water assets that have largely been bought by offshore entities," Mr Broad said.

"If a fool and his money is easily parted, then anyone who invests in MIS is a fool."

Gippsland real estate agents have also confirmed 500ha formerly owned by a Great Southern subsidiary has been sold as farming and lifestyle blocks, though some will stay in forestry.