The Farm Forestry Association says the Government's plan to axe more than $8 million from a fund designed to promote new tree planting is short-sighted.
The Government is expected to announce the funding cut to the Afforestation Grants Scheme in its budget package next month.
The move would leave the scheme with only $30 million of its original $50 million of funding, because the Government also cut $12 million last year.
The scheme was launched in 2007 to encourage landowners to plant trees, so that there would be greater greenhouse gas absorption and less erosion.
Association president John Dermer says the scheme has been very successful so far, with more than 8000 hectares planted.
Forestry is a 30-year investment but the Government can't see past its three-year term, Mr Dermer says.
He also says the planned cut shows that the Government isn't serious about meeting New Zealand's obligations under the Kyoto agreement.