Tasmania's country sawmillers can now apply for government compensation to upgrade their equipment to handle plantation logs.
The $4 million compensation package was promised in the Community Forest Agreement (CFA), along with funding for softwood and hardwood operations.
Stephen Cornish, from the Country Sawmillers' Association, says many owners have indicated they will phase out of the industry, but there may not be enough funds to satisfy everyone who wants to continue.
"We've known for a long time that the resource is changing and is going to change and we know there are some mills that are operating now, simply won't be competitive in five, 10, 15 years' time," he said.
"So it's a matter of evolution I guess that these mills will disappear from the scene.
"The sawmillers I've been speaking to are looking to upgrade or changing their gear.
"You're talking about capital expenditure of equipment that is quite expensive, so the $4 million I suspect won't go very far and will go fairly quickly.""