It has warned that current populations of grey squirrel "are reaching proportions which threaten the survival of some of our most loved species of trees".
It says the contraceptive, still under development, offers "a very real opportunity to reverse the tide of damage", but that government and forestry sector must commit to fund the five-year research programme required.
The cost of tree damage by grey squirrels has been put at £14 million a year. Currently, woodland owners can only trap and shoot the pest, methods which are not always wholly effective.
RFS Chief Executive Simon Lloyd said: "Without more effective controls, grey squirrels will continue to strip bark of many broadleaves when they are young, exposing them to stress and disease which causes irretrievable damage and can kill them."
He added: "If more recently planted trees no longer reach their full potential it will have a measurable impact, both of the UK's ability to grow hardwood timber, but also on the landscape for generations to come."
He welcomed the announcement that research into a grey squirrel oral contraceptive by the government’s Animal and Plant Health Agency (APHA) in York has received an initial £39,000 investment from Defra.
The RFS maintains that a long-lasting species-specific oral contraceptive would be far easier to administer than single-dose injectable immuno-contraceptives. However, a longer term commitment to a five-year test programme is required to look at dosage, at longevity of the dose and at how to administer the oral contraceptive to be species specific via bait-lacing in feeders or hoppers which only the grey squirrel will be clever enough to access.
"It is pointless to plant oak and other broadleaved species where they are vulnerable to grey squirrel damage without a rigorous and sustained control programme," Lloyd added.
"We believe that oral contraceptives will be most effective when combined with trapping and shooting. Funding research into fertility control must become a top priority for government and the forestry sector."
There are an estimated 3.5million grey squirrels in the UK. Scientists estimate around £1m will be needed to carry out a five-year oral contraceptive test programme and believe the oral contraceptive would cause populations to fall by around 90% over a few years.
£100,000 has already been raised by members of the Squirrel Accord, of which the RFS is a leading member, towards further research.
But recent indications suggest any such campaign will face widespread public opposition.
More than 80,000 people have signed a petition urging The Wildlife Trusts to seek alternative ways to protect native red squirrels after it called for a seeking a "volunteer army" of 5,000 people, some of whom would be trained to kill trapped grey squirrels with a blow to the head.
The Heritage Lottery Fund awarded the Wildlife Trusts a grant of £1.4 million in 2016 for its umbrella Red Squirrels United project, and has now awarded £2.4 million to Scottish Wildlife Trusts' Saving Scotland’s Red Squirrels project.