The bespoke element of Glastir, Wales’s new sustainable land management scheme, offers grants to landowners to create new woodlands on their land.
The grants provide support for the costs of creating new woodlands as well as income foregone payments for taking land out of agriculture.
Rural affairs minister Elin Jones said: "Woodlands play an important role in helping us to meet many of society’s challenges and priorities, including climate change, biodiversity and water management. Wales is one of the least wooded countries in Europe, with woodland covering only 14 per cent of the land area. Every landowner here can play a part in increasing this by looking for opportunities to create new woodlands that integrate with and complement their farm businesses.
"The Glastir woodland creation grants will assist the Assembly Government in fulfilling its promises to the people of Wales while also bringing a range of real benefits to the landowners managing their land and providing a financial return."
The launch event was held at Clynblewog Farm, near Trelech, Carmarthenshire. The minister met the owners of the farm before addressing guests.
Elin Jones added: "The adaptability of woodlands and the many uses they can be put to over their lifetime is a potentially valuable addition to any farm. Strategic planting of woodlands has many benefits. They can be used to create shelterbelts for crops, stock or buildings, they can prevent run-off and reduce soil erosion or provide timber or fuel wood. Woodlands can also offer the opportunity to generate income from shoots as well as the benefits provided to wildlife and biodiversity."
The Minister also met the owner of Clynblewog Farm, Mark Sillars, who accompanied her on a tour around his farm to view a selection of his woodlands which are at different stages of growth.
Sillars has recently planted two areas of mixed woodlands to build on the planting undertaken by the farm’s former owner. These new woods are mainly broadleaf - ash, birch and rowan with larch, pine and spruce.
Mark Sillars said: ""I have used planting to provide shelter for my fields and to provide firewood. The woodlands also add interest to the farm and I enjoy watching the trees change across the year. I have found that forestry and farming can effectively work alongside each other to support my business and also enhance the environment."
The new woodland creation grants have been developed by Forestry Commission Wales which will deliver them on behalf of the Welsh Assembly Government until 1 January 2013 when responsibility for delivery will transfer to the Welsh Assembly Government.
Meanwhile, the Welsh Assembly has said any sell-off of the Forestry Commission will not affect Welsh forests because Wales is devolved.