Federated Farmers Southland meat and wool chairman Dean Rabbidge, of Wyndham, said he was frustrated Government legislation allowed for overseas companies to buy farms.
"It's an alarming trend."
Similar developments had "devastated" small communities in Southland in the early 1990s, as families moved away and schools closed.
"Rural towns have become almost ghost towns."
The development of forestry blocks was resulting in "little towns getting wiped off the map".
Many of his friends dreamed of owning a sheep and beef farm but were competing against big overseas companies buying farms for forestry, both carbon and commercial.
He understood why developing forests was an "attractive option" for an overseas investor but he believed forestry would negatively impact the environment at harvest time including damaging soil structures and sediment loss.
"We are setting ourselves up for a disaster in 30 years time."
He respected the decision of the vendors.
"It may have been a difficult decision to make."
The Gill family were approached for comment but had not responded before deadline last week.
Tuatapere Community Board chairwoman Margaret Thomas said she was a friend of the Gill family and was unaware they were selling the farm.
She declined to comment on the sale due to concerns it would start "people passing opinions" on the matter.
"I'm not in the mood for that."
