Forestry could be five times more profitable than upland sheep farming, Confer, the Scottish organisation promoting forestry and wood, says.

Confer says that Scottish hill farmers have been urged to consider diversifying their farming operations by planting woodland after new figures showed a significant increase in the relative benefits of forestry to farming in the Southern Uplands of Scotland.

Quoting figures from an updated version of a report commissioned by Confer by SAC Consulting which examined 20,000ha in an area of Dumfries & Galloway, it indicated that once established, productive conifer forestry is delivering an annual surplus of more than £4m based on figures from 2011 and 2012.

Confor says that by comparison, the new figures indicate that if hill farming continued on the same area of land, a loss of £930,000 would be expected before subsidy, more than double the deficit of £438,000 recorded in the earlier report.

The report also showed that annual output per hectare is £549.61 before subsidy for forestry (up from £495.15 in the initial study) compared to £117.33 for upland sheep farming (£196.19 with subsidy), down from £154.27.

Chief Executive of Confor, Stuart Goodall, said that this updated research by SAC Consulting reinforces and enhances the initial findings that productive softwood forestry is a very significant economic activity in rural Scotland.

“It’s a real economic opportunity for Scotland’s sheep farmers. It provides an opportunity for farmers to successfully diversify their businesses, deliver more for the environment, create shelter belts for livestock and reduce their reliance on public subsidy in the longer term,” he said.

Goodall said that the report was not a call to return to the blanket afforestation practices of 30 or 40 years ago.

“What it does demonstrate is that forestry is an even better economic opportunity in Scotland than we previously believed – and we would, therefore, encourage more hill farmers to consider the economic opportunity of diversifying their operations by planting trees on part of their land.

“The report also provides compelling social and economic evidence to support the ambitions of the Scottish Government and the forestry sector to create a further 50,000ha of productive woodland in the decade to 2022.”

The report was published after a survey showed that the vast majority of people in Scotland support further substantial tree-planting.

The Forestry Commission Scotland study last week revealed that 83% of those surveyed want to see a lot more trees planted.

The statistics in the new report reflects a strong timber market, Confor says, with prices for standing timber up by more than 20%  between 2012 and 2014.

At the same time, it says that sheep prices fell at a time of rising costs, while agricultural subsidy payments are expected to fall to 2019.