Farm foresters are disappointed that the Government is cutting back funding for its Afforestation Grants Scheme and winding it up a year early.
The scheme was created to encourage the planting of smaller-scale forests to help reduce greenhouse gas emissions by storing carbon.
Funding is available to regional councils as well as individual foresters.
However, Government budget documents show that funding for the scheme will be cut by $2 million a year from next year, and it will end in 2012-13, a year earlier than planned.
Farm Forestry Association president John Dermer says he's disappointed as the scheme encouraged the planting of 8000 hectares of forest in two effective years of planting.
Forestry Minister David Carter says he's confident that now the Emissions Trading scheme is up and running, it will provide the incentive to increase forestry planting.
John Dermer of he Farm Forestry Association agrees that more foresters will see the opportunity that the ETS offers as they get more familiar with it.
Senior land sustainability officer of the Southland Regional Council, Gary Morgan, says the $2m cut is a blow because the scheme has been a huge success.