Two forms of small-scale forestry are developing in Australia, each with different impacts on rural communities. One is based on growing short-rotation Eucalyptus globulus (blue gum) for pulp and the other on production of higher-value products from longer-rotation native hardwoods. Several impediments exist to further development of small-scale forestry, including the lack of a small-scale forestry culture, concerns over harvest rights, lack of market development, the long wait for returns, and satisfaction with current land uses. Nevertheless, the rapid increase in farm woodlot establishment in the pastfive years has paralleled the strong increase in the private industrial plantation estate. As markets develop and hindrances are overcome, landholders not previously interested in small-scale forestry may consider it a worthwhile land use.