URUGUAY'S DESTRUCTIVE PLANTATION MODEL

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Autor(a): Carlos Pérez Arrarte
Fecha: 20 septiembre 2000
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Carlos Pérez Arrarte | 20 septiembre 2000 | Seedling - September 2000



September 2000

URUGUAY'S DESTRUCTIVE PLANTATION MODEL

CARLOS PÉREZ ARRARTE

Uruguay has been earmarked for dramatic expansion of its tree plantations. The government has plans to plant some 20% of the country to eucalyptus and pine plantations to generate export revenues. Such a move will have tremendous implications for the traditional gaucho lifestyle, rural livelihoods, the environment and biodiversity. Transforming prairie land into plantations may prove to be an irreversible choice, and the implications need to be thought through carefully.

 

Over the past 15 years, the policy of introducing large-scale plantations of domesticated or specially bred trees has been changing the face of forestry in the southern hemisphere. It has also allowed the relocation of the pulp and timber industries towards the periphery. In Latin America, this process was lead by Brazil and Chile, but now a number of other countries are competing to attract foreign capital into the forestry business. The expansion of tree plantations reflects the following trends:

- The native forests of the Northern Hemisphere, under grave threat from acid rain, commercial logging and urban development, are at the same time increasingly valued for the environmental services they render;

- The rainforests are disappearing at an ever-increasing pace;

- Per capita world consumption of timber and wood, paper and other pulp sub-products continues to increase rapidly.

From the centres of power – the multilateral financial institutions and via international technical cooperation – a message is going out selling the value of tree plantations to protect natural resources and the climate. They simultaneously point out what splendid opportunities plantations offer to do business in a supposedly sustainable way. However, this new plantation agriculture brings a series of impacts on land use, on the environment, and on society and the economy in general. In this article we examine the case of Uruguay, a country with a prairie landscape which has been undergoing a plantation boom for ten years.

Prairies, woodlands and cattle

Lying between its two great neighbours, Brazil and Argentina, Uruguay’s territory is part of the pampas prairie lands which are the characteristic formation of a vast region in the Southern Cone of South America. The landscape is gently rolling, the climate is humid and sub-tropical, and the best soils are both deep and fertile with a low risk of erosion. A quarter of the land is used for agriculture.

The region´s highly complex and biologically diversified climax vegetation consists of prairie grasslands in which lawn and creeping grass varieties prevail. These comprise overall approximately 2,500 different species, distributed in over 80 families, including more than 400 species from the graminaceae family. Despite the impact of grazing by cattle, sheep and horses over the past three centuries, the native grassland has shown a remarkable capacity to adapt and retain its biological and economic sustainability. In the past, the prairies formed the principal pillar of Uruguay’s economic development as well as of its social and political history. Even today, native pasture still accounts for over 80% of land use and remains as important as ever for Uruguay’s export trade (meat, wool, leather and dairy).

Extensive outdoor cattle-raising has been the principal productive system since colonial times, in a relatively harmonious relationship with the available natural resources. All-year-round grazing for cattle, sheep and horses in extensive enclosures has characterised the "estancias ganaderas" (cattle ranches) that typify the landscape, with the "gaucho" (horseman) as the emblematic social player. Uruguay quickly reached levels of self-sufficiency in agricultural foodstuffs. Early in the 20th century, it was already a net exporter of foodstuffs and vegetable and animal fibres.

The prairie landscape also includes native forests, found along the banks of rivers and streams and in the rocky hilly areas. These are composed of a wide variety of species, well-adapted to the natural conditions and the pressure of grazing animals. About 100 species of trees and 100 species of bushes make up the flora of the country’s native woods, which make up about 3.5% of the total land area. These woods have historically been used to provide firewood, fencing, and building materials as well as offering a variety of ecological services.

Slow incubation, fast growth

Eucalyptus trees of Australian origin were first introduced in 1853. Plantations expanded rapidly during the 20th century with the main aim of providing shelter to cattle, as well as firewood, building materials and other services related to cattle-ranching. These plantations took the form of small copses of about one hectare in area, or as 2 to 4 rows of trees planted as windbreaks throughout the country which became an integral component of the landscape.

In the late 1960s, a series of incentives to develop tree plantations boosted growth, resulting in average annual increases of 2-3,000 hectares of new plantations. The enactment of the new forestry law in 1987 led to a further increase in new areas, which are now being added to at the rate of 50,000 hectares of plantations each year (see graph). These plantations are predominantly limited to a very narrow range of species: two varieties of eucalyptus – globulus and grandis – and two varieties of pines – elliottii and taeda. Within the framework of these forestry laws, and with management strategies designed to produce wood for industry, about 450,000 hectares of trees have been planted during the past few years. Adding in the 140,000 hectares of previously existing plantations and 650,000 hectares of native woodlands, the result is some 7% of the land covered with native or exotic trees.

 

The government has big plans for its forestry sector. During a trip to Chile in March 2000, aiming to attract Chilean forestry investors, the President of Uruguay outlined a potential area for forestry plantations of 3 million hectares, or 20% of the national territory. Estimates of the timber to be harvested over the next 20 years suggest that 90% will be eucalyptus and the remaining 10% of pine. Pine is destined for the saw mills, while 70% of the eucalyptus will go for pulp with the remaining 30% for saw mills. Originally, Uruguay’s forestry policy was designed to produce eucalyptus trees to produce woodpulp. Over the past two years, however, awareness has grown as to the difficulties which this strategic option may bring, and North American investors have been opting for pine plantations instead.

There is a wide range of social agents involved in the forestry sector, from giant transnational companies with many thousands of hectares, to small independent planters with 20 to 50 hectares. Owing to the scale of their investments, their levels of productivity, their technologies, their vertical integration overseas and their social and political influence, transnational corporations have a strong influence on the sector. The arrival of these companies marked a turning point in Uruguay’s history, because up till then big corporations had played a very limited role in agricultural production. A second significant group amongst the investors in plantations are the Chilean investors, who turned to Uruguay in search for more permissive investment opportunities, in response to an increasingly hostile environment to plantations in Chile

Local capital also plays a role. Two national pension schemes made considerable investments in tree plantations before the enactment of the present legislation. More recently, forestry investment funds establish plantations and divide them into many individual lots which are then put onto the market. Forestry service companies provide tree nurseries, tree planting and pruning services, export opportunities and technical services

Laying the plans

The forestry sector is a prime example of the development model established by the three governments which have been in power since democracy was re-established in 1985. Production is export-driven and follows the directives of, and benefits from, the credit facilities of multilateral financial institutions.

The various fiscal incentives are channeled to those plantations established on "forestry priority land" (see box). Up to 1997, subsidies and tax exemptions amounted to about U$S350 per hectare (without counting other benefits which were only applied to certain firms as part of the overseas debt cancellation mechanism for direct investments). Multilateral financial institutions were essential for the expansion of the Uruguayan forestry sector. Additionally, the Japanese International Cooperation Agency (JICA), played a major role in the preparation of a national plantation plan in 1986 aimed at the establishment of 420,000 hectares of eucalyptus and pines over a period of 30 years.

BENEFITS ENJOYED BY THE FORESTRY SECTOR IN URUGUAY

* Tax exemptions for plantations and forestry companies for a period of 12 years after the plantation has been established, including protection from any new taxes which may be created and which may tax plantations generically. This means that forestry firms are exonerated from all of the principal taxes paid by ordinary agricultural establishments.

* Companies involved in forestry or the industrialisation of wood and timber are exempted from all import duties payable on machinery and other inputs for a period of 15 years from the date of the enactment of the 1987 forestry law.

* Direct subsidies are granted to plantations established in the forestry priority areas, provided each new project is approved by the Forestry Department. This subsidy covers approximately 50% of the cost of establishing the plantation. At the present time, this is valued at approximately U$S160 per hectare.

* Companies are allowed to register as "Sociedad Anónima" (public limited company, or Incorporated), something that is not allowed otherwise in the agricultural sector.

* Forestry firms benefit from long-term (12 to 15 years) credit facilities with the National State Bank, Banco de la República, with a period of grace for repayment of interest and capital until the trees get harvested.

* A one third reduction in port fees for the movement of timber.

In 1997 a new project was approved: "The Transport of Forestry Products," totalling U$S152 million, with 50% funding from the World Bank and 50% from the Uruguayan government. In the same year, the Interamerican Development Bank (IDB) also approved a U$S176 million transport programme which would largely benefit the forestry sector.

Eleven years since the enactment of the Forestry Programme, and after numerous alarm calls from independent researchers and university or non-governmental organisations have been made, neither the Bank nor the Government has commissioned a significant study on the overall impacts of afforestation on the country’s natural resources. Neither have they examined the possible combined impacts which may arise when these plantations impact on other activities: for example, projects for the supply of hydroelectric energy, provision of drinking water to urban centres, the development of irrigation for rice-growing and so on.

The first eucalyptus plantations established under the prevailing law of 1987 are now reaching maturity, and are almost ready for harvest. Given that the area under plantation has increased from the initial 3,000 new hectares per annum to the present 50,000 hectares per annum, the volumes of timber harvested will increase rapidly over the next few years. From 638,000 cubic metres harvested in 1997, it is projected to reach 1.6 million cu. metres in 2000 and 8.7 million in 2004.

In Uruguay there are no plans to set up the infrastructure for the industrial production of paper pulp. In the medium term, therefore, the vast majority of the plantation production will be exported in the form of logs and, to some extent, wood chips, to supply the pulp industries with their raw materials. The most likely destination is the North Atlantic, basically the Iberian Peninsula, and, to a lesser extent, the Scandinavian countries. Regional integration as well as regional forestry development – in the State of Rio Grande do Sul in Brazil, and in the provinces of Entre Rios, Corrientes and Misiones in Argentina – may dramatically alter the present scenarios. These areas, and Chile and Paraguay too, are competing strongly to attract foreign corporate investors.

Recently, some modern industrial plants, saw mills and drying facilities have been established to process wood-products with a higher added value, such as high quality "clear" timber, blocks, blanks, and laminates which are beginning to open markets overseas and are already contributing significantly to export earnings. These products are obtained from pine and eucalyptus grandis plantations specially managed for industrial timber purposes.

Transport needs will put great pressure on the country’s physical infrastructure. A number of strategic routes will require repairs, rebuilding and re-structuring. Some of these activities have already begun, but the country has not yet fully realised how short a time remains before the product comes on the market, nor the enormity of the logistical problems which handling it will entail in the near future.

Goodbye to the rural landscape

In the regions where the "forestry priority" land is concentrated, plantations have become the main type of land use. This is having a significant impact on traditional social structures. In cattle-raising areas, the price of land has risen, the ownership of productive resources has become more concentrated, there has been an initial increase in the demand for labour (particularly, for female workers in tree nurseries) and for the provision of services (transport, housing, etc.), land taxes are no longer received by the local municipal governments, and some traditional forms of production have been displaced. Roads have been impacted by the increase in transport, and this in turn is affecting the local people or local governments responsible for their maintenance.

As regards local power structures, the agrarian community is faced with the arrival of new players with a huge economic capacity, who are courted by the local authorities. Their presence is establishing a social rift of such magnitude that integration into local society is proving extremely difficult. In some small localities, these new companies are totally monopolising the local labour market and local services, and their middle-management are transforming public administration and political power structures to serve their own needs.

Only those plantations intended for the production of quality timber – currently less than a quarter of the forested area – have continuous significant labour requirements (for pruning and thinning) in the long term. Otherwise, the forestry sector uses a high proportion of seasonal labour with poor working conditions, scant observance of social security laws, and high accident risk. These working conditions arise because the companies usually contract out to sub-contractors who provide "forestry services" using informal labour.

Sucking up the lifeblood

Tree plantations result in the replacement of the original climax biotic system (the pampas) with uniform tree cover, composed of one identically-aged species in initial densities of 1,000 and 1,200 trees per hectare, with none of the accompanying undergrowth that would have existed in the countries where the exotic species originated. Over their 20-30 year growth cycles, commercial tree plantations eliminate all the original vegetation and its associated fauna, posing the question of how reversible this form of land-use may be in the future. There is a dramatic contrast between a single-species system of vegetation composed of identically-aged trees, and a multi-species prairie system.

In terms of biodiversity, this process is equivalent to the deforestation of the Amazonian rainforest where new frontiers are being opened up for tropical cattle-ranching. Except that in Uruguay, the process is happening the other way round: the destruction of a natural ecosystem (the prairie grasslands, with their multiple associated environmental services) that is highly suitable for cattle raising, to produce tree monocultures. Furthermore, for three centuries, this prairie grassland has been the basis of a sustainable productive system on which the entire structure of Uruguayan society and its economy has rested.

Trees require less fertile soils than prairies, especially conifers and those associated with mycorrhizae. Over time, the soil becomes less fertile than that in prairie systems. Changes can be expected with regard to the type and distribution of organic matter in the soil profile, in the carbon-nitrogen relationship, besides the acidification of the soils and the production of complexifying substances (i.e. aluminium and iron composites).

Parallel to this, trees need more water than prairie grasses. When exotic trees are introduced, less water will be left for other uses and the water table will be depleted. Important changes can be expected in the various components of the water cycle. It is estimated that a eucalyptus plantation will have a 30-50% greater evapo-transpiration level than a native grassland. The forestry plantations will also significantly affect the amount of surface run-off, reducing it by about 2,500 cubic metres per hectare/per annum. Equally, the degree of interception of rainfall caused by the foliage of a prairie under grazing and a plantation of ten-year old pine trees is dramatically different. What impacts will these changes have on the productivity of the basin of the River Santa Lucía, which is responsible for supplying the drinking water of Montevideo’s entire metropolitan area where 60% of the country’s population lives? Or on the operations of the hydroelectric plant on the River Negro – along which large-scale afforestation is taking place – where three dams supply the bulk of Uruguay’s energy supply? Similarly, conflicts with rice-growers dependent on irrigation can be expected, since they rely mainly on surface run-off water.

In 1997, under pressure from environmental organisations, the Forestry Department commissioned its first study of the environmental impacts of tree plantations. As a result of its recommendations, monitoring of sample micro-river basins has begun in order to gather local information to respond to some of the above questions. Other more complex impacts are not yet on the agendas of academic research programmes. For example, changes in air circulation over this type of landscape, on micro-climates, on the cycles of carbon and other nutrients, on soil morphology, or somewhat surprisingly, on the relation between ranching and forestry. Some forestry companies have also begun their own research: certain lines of genetically-modified (GM), herbicide-resistant eucalyptus are being reproduced in the country, with the expectation that these will eventually lead to a reduction in cultivation costs (see article in this issue on GM trees).

Local people have reported many environmental impacts. There have been many complaints about the damage caused by birds such as parakeets and doves which nest in the trees. Ranchers complain of the damage caused to lambs and calves by wild boars, foxes and other animals which find shelter in the plantations. Local communities worry about the proliferation of poisonous snakes in some areas, and have serious concerns about forest fires. There is considerable scepticism about the ability to fight fires on the scale of today’s plantations.

Visual pollution is probably an underated concern. The native rural inhabitant, with his or her roots in the gaucho culture of the pampas, has always appreciated being able to move freely across the territory, roaming on horseback with the sight of the distant horizon far ahead. Another impact has to do with the various effects afforestation will have on agro-tourism, an activity which is undergoing a considerable expansion at the present time, and one which is thought to have a good potential for the future development of rural Uruguay.

The impact tree plantations are having on the landscape and people of Uruguay is also being suffered in many countries around the world. In the box at the end of this article we are including some options being explored by organizations from the South and North, in order to better counter the negative impact of afforestation and develop viable alternatives.

Conclusions

The multilateral banks favour the plantation forestry model for Uruguay because of the particular conditions offered by its humid, sub-tropical climate. The dominant prairie ecosystem is extremely biologically diverse but is not adequately valued in the global system. After being identified by the World Bank in particular as being a suitable candidate, this forestry model has been applied with hardly any modifications in a country with scarce traditions of forestry, not ideally the best ecosystems for the plantation model and limited infrastructure for product exploitation and handling. Over the past two years, and with the maturity and harvest of the first plantations looming large, successive loans are being made available to develop the infrastructure which will be required to develop the national transport and port terminal systems, without any questions being asked about the suitability of the current model. Meanwhile, the plantations continue to spread.

Internationally, as a marketing strategy to promote agricultural and meat products as well as tourist services, academics, and rural and political leaders are presenting Uruguay as a "natural country," because of its privileged range of natural resources and their relatively limited degree of transformation compared with other societies with a similar level of development. The artificial tree plantations will play a negative role in the construction of this image. However, Uruguay’s afforestation programme looks appealling within the framework of the North’s interest in creating "carbon sinks.", but the country will experience a heavy toll in environmental and social terms.

Carlos Pérez Arrarte is Director of Social Sciences in the Faculty of Agronomy at the Uruguayan National University and researcher at the Centre for Interdisciplinary Development Studies, Uruguay (CIEDUR). He can be contacted at: cperez@chasque.apc.org

Research for this article was undertaken with the support of GRAIN and World Rainforest Movement: WRM, International Secretariat, Maldonado 1858, 11200 Montevideo, Uruguay. Tel (59-82) 403 2989. Fax (59-82) 408 0762. Email: wrm@wrm.org.uy / Internet: http://www.wrm.org A complete version of the original 25 page Spanish report is available at: http://www.biodiversidadla.org/

 

LOOKING TO THE FUTURE

1) Alternatives and control at the community level:

Only through close contact with popular movements can people interested in 'alternatives' really find them. Local communities disposed of their resources by industrial plantations must have a central role in the search for alternatives.

2) Small-scale and local paper production:

China still supplies its immense paper needs largely through small local mills which use surplus local agricultural wastes such as straw. These mills support community economies and require no advanced infrastructure to support them. Paper manufacturing expert AW Western has argued that in India and other Southern countries, "detailed comparisons between the large mill and the equivalent capacity in small mills overwhelmingly favour the smaller unit in economic terms." According to researcher Maureen Smith, there are no serious obstacles even to current US paper and paperboard consumption being met by a more decentralised network of small- to medium-sized mills using approximately half waste paper and half non-wood crops.

3) Urgent working propositions:

* Large monoculture industrial tree plantations are socially and environmentally unsustainable.

* Local people must have the right to veto land uses and manufacturing processes they do not accept.

* Ways must be found of promoting existing ways of decentralising pulp and paper manufacture, making it more receptive to local needs and plans, reducing its scale and dependency on vast amounts of a single, standardised commodity such as wood, and lowering demand, particularly in the North.

* Large industrial tree plantations cannot be fruitfully discussed in isolation from the global economic and social realities of which they form a part. The issues they raise are political, not merely technical.

4) International solidarity and alliances:

Southern groups may share information and strategic thinking with other Southern groups within a region or across the globe. Southern groups may also offer insights to Northern movements, as has happened in the Nordic countries, whose growing forest networks have benefited considerably from the lessons learned from the South. Northern groups can also play an important supporting role in Southern groupsí attempts to curb the damage done by plantations. They can, for example, monitor the plantation-promoting activities of the bilateral ëaidí agencies, consultancies, commercial development investment agencies and transnational corporations based in their countries.

Taken from: Ricardo Carrere and Larry Lohmann, Pulping the South: Industrial tree plantations and the world paper economy. Zed Books Ltd, London, 1996.

 

Main Sources:

* A Duran (1991). Los suelos del Uruguay. Editorial Hemisferio Sur, Montevideo.

* El Observador Económico daily newspaper 2/1/1998, Montevideo.

* R Carrere (1993). "El bosque natural uruguayo: un recurso aprovechable." In: Desarrollo forestal y medio ambiente Editorial Hemisferio Sur, Montevideo.

* R Vazquez Platero (1996). Evaluación de impacto de la inversión forestal en Uruguay.

* C Von der Forst (2000). "Quién es quién en el sector forestal: dos colosos bajo la sombra de los árboles." The Mercurio newspaper 16/07/2000, Santiago, Chile.

* C Pérez Arrarte and J Etchevers Vianna (1997). Aportes para un balance macroeconómico del sector forestal CIEDUR, Serie Seminarios y Talleres No. 103, Montevideo.

* R Carrere and L Lohmann (1996) Pulping the South, Zed Books, London, in association with the World Rainforest Movement.

* L De León (1991). Comentario de síntesis. In: CIEDUR, 1991. Desarrollo forestal y medio ambiente en Uruguay 16: Relatoría del Seminario "Desarrollo forestal: ambiente, economía y sociedad." CIEDUR, Serie Seminarios y Talleres No. 42. Montevideo.

* M Gutierrez (ed.) et al, op.cit. Facultad de Agonomía, Cátedra de Hidrología. Lima, W.P. Consultancy into Environmental Impacts of afforestation programmes.

* Information provided by members of the group Guayubirá, in the departament of Paysandú

* M Pereira (2000) Investigación de campo: sequía y forestación. Grupo Guayubira, documento interno.

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