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Abstract: The paper points out some important issues related to the Brazilian forest
primary products industry. As the most important market in Latin America, it has been
participating in quite diversified segments: solid wood products, boards, paper, cellulose
and furniture among others. The paper also indicates the importance of the Brazilian
forestry sector and its related chains in economic, social and environmental terms. The
paper points out the several challenges related to development of the Brazilian forest sector,
including: 1)the present economic, technological, social and environmental status of the
Brazilian forest sector; 2)the challenges/issues to promote the Brazilian forest sector; and
3)the strategies to better develop and promote the Brazilian forest sector.
1 – INTRODUCTION
The Brazilian forest sector, due to its importance to the country production, taxes
income, exportation and salary payments, can be one the most important ways to increase
the economy growth, once it is able to use non skill labor, which is generated by the
technological progress and use of modern agricultural techniques that forces non skill
worker to leave rural areas. Therefore, the forest industry can use the available labor once
the activity is stable in terms of the country economy.
Economic growth based on the development of the forest industry is a suitable way,
being discussed and proposed since 1950 by the Food and Agricultural Organization,
mainly for developing countries. Although it has happened in Scandinavian countries and
Canada, this strategy has not been seen in third world countries. This is due to a lack of
right forest management, production and valuation of the forest products, aiming to
aggregated value to them.
It can be seen that the reforestation sector is gaining importance due to the great
potential it has shown as a non skill employment and income generator, not only by
government policies, but also by the use of a new growth model, which intends to incentive
and improve investments by the creation of forest stands in small rural areas.
1
Researcher of the Brazilian Research Crop and Dairy Institute (EMBRAPA) and Professor of Forestry /
Federal University of Paraná, Brazil (UFPR)
2
Graduate student at the Forestry Masters Degree Program / Federal University of Paraná, Brazil (UFPR)
3
Professor of Forestry / Federal University of Paraná, Brazil (UFPR)
2 – OVERVIEW OF THE BRAZILIAN FOREST SECTOR
The activities of the forest sector, until the end of the 60's, were less expressive in
the Brazilians economy. With the implementation of public policies, during the 1960 - 1970
period, the forest sector started to contribute with an important part of the country
economy, by the production of forest products for internal and external consumption, as
well as the creation of jobs and increase of taxes income.
The creation of the Brazilian Forest Development Institute, in February 28th, 1967,
by law number 289 of September 26th, 1966, completed the reorganization process started
in 1965 with the issue of the new Brazilian Forest Policy Act.
The Brazilian Forest Development Institute was created with the objectives of
formulation, coordination and management of the necessary policies for the rational
utilization, protection and conservation of the country forests. According to PEREIRA
(2001), the institute creation represented a great improvement in the Federal forest
administration, since it has eliminated the conflicts existing in the sector.
In scenery of increasing demands for regulation, IBDF had an important rule in the
development of the Brazilian forest sector, having the responsibility of managing the
National Forest Improvement Program, established by the 5106 acts, of September 26th,
1966.
Having a great potential growth, the sector is searching a defite way of improving
sustainability aiming a continuous production, without loosing aggregate value and
productivity.
The improvement policies adopted by the country also provided a continuous supply
of raw material for the forest industry, as well as an increase of quality in wood products,
through the use of new and modern forest management and genetic practices. Therefore,
another uses for the wood products from reforested areas arose, mainly in the furniture
industry, where wood can be used in a solid form or by different types of boards.
The activities related to the forest sector are responsible by the generation of an
important portion of the Brazilian Gross National Product (GNP), as well as for the creation
of a great number of job positions. In 2002, the forest sector, in its productive chain,
industrialization and trade has contributed with approximately 4.5% of the GNP, which
represents USD 20 billions, as can be seen in Table 01 (ABIMCI, 2003)
Considering the forest sector entirely, the taxes revenue has reached USD 4.6
billions during 2002, which represents 2% of the total collected by the government (USD
254 billions), creating 6.5 millions of direct and indirect job positions, which in this turn
represents 9% of the country working population.
Another relevant trait is its contribution to the Brazilian commercial balance, where
in 2004 USD 6.6 billions were exported and USD 0.8 billions imported, resulting in a
positive surplus for the Brazilian commercial trade of USD 5.8 billions, representing 18%
of the surplus obtained, help to reduce the dependency on external money.
The Brazilian activities may be classified in several areas, such as: i) pulp paper; ii)
steel industry; iii) solid wood; iv) furniture; v) wood boards; and vi) forest no wood
products. Each sector has specific traits concerning the type of raw material utilized,
company size and geographical distribution, as can be observed in Table 02.
TABLE 02 – Principal traits of Brazilian private forest sector.
Sectors Forest Type Company Size
Historically the trade of forest products always had a strong participation in the
international Brazilian commerce. In the last decades, the participation of forest products in
the total Brazilian exportations varied from 6% to 7% of the total exported by the country.
In the same period of time, importation of forest products felled from 2.2% to 1.3% of the
total importations.
Wood products are the most representative of the international trade, where they
account for 3.2% of Brazilian total exportation and approximately 45.5% of Brazilian forest
products exportation, in 2004.
Figure 01 shows the historic of wood forest products exported. During the analyzed
period of time, can be observed and average increase of 11.8% per year, in currency. In
2004 the exportations had increased 45.3% in currency compared to 2003. However, if the
volume is analyzed, the increase was 18% higher than 2003, at the same period of time.
3000
2500
2000
(millions USD) .
1500
1000
500
0
1996 1997 1998 1999 2000 2001 2002 2003 2004
100%
80%
60%
40%
20%
0%
1996 2000 2004
USA Japan UK Portugal Other
Sawn wood and plywood boards are the main wood products exported. Together
they represent about 55.6% of the total Brazilian wood exportation. Plywood boards
exportation has been increased since 1998 and in 2003 they reached 2.2 millions of cubic
meters, with approximately 66% of pine plywood and 35% of tropical plywood boards,
representing USD 780 millions. Compiled information by the authors indicated that the
exported volume in 2004 has reached 2.9 millions of cubic meters, placing Brazil as the
third largest world exporter.
The pulp and paper sector is strongly represented in the Brazilian international trade
operations. In 1966 the sector exported around USD 1.9 billions and in 2004 exported USD
2.9 billions, showing an growth rate of 4.6% per year, as it can be seen in Figure 03. Lately
(2004) the sector represents 44% of the Brazilian forest products exportations.
The importations of the pulp and paper sector were, in 1996, approximately USD 1
billion and in 2004 were USD 759 millions, showing a annual decrease rate of 4.6%. These
importations represents 90% of the Brazilian importation of forest products.
3000
2500
2000
(millions USD) .
1500
1000
500
0
1996 1997 1998 1999 2000 2001 2002 2003 2004
The nations importing Brazilian pulp and paper products have been changing during
the last years, as can be observed in Figure 04. The USA is the main imported during the
analyzed period, however, the exportations of Brazilian pulp and paper are gaining new
markets, like Holland, which in 1996 imported 0.1% of the total exported by Brazil and has
imported 11.5% of the total Brazilian exportations of pulp and paper in 2004.
100%
80%
60%
40%
20%
0%
1996 2000 2004
The Amazon forest is the largest tropical forest in the world, with its unique
biodiversity and volume of water. The so-called Brazilian Legal Amazon forest includes in
its area other forest types like savanna. The Legal Amazon forest occupies 5 millions of
square meters, composed of 74% of forest, 13% of savanna and 13% of exploited areas
(INPE, 2002), as shown in Figure 05.
Exploited 13%
Savanna and
13%
Open Areas
Forest 74%
0 20 40 60 80
By the time the above mentioned forest improvement program ended, in 1987, the
total area of planted forests were 5 millions hectares of Eucalyptus and Pine species. From
1987 to 2004, the forest industries increased in more than 200% their production but the
reforested areas remained the same, according to the sector data. The main explanation for
this is that the industry had invested heavily in research and development thought
association with Universities and Research Institutes, reaching a significant improvement in
forest productivity.
The reforested areas were submitted to new plantations and 50% of them were
replanted two or three times, each time incorporating new technology available, leading to
improvements in the forest productivity. Besides the technological improvements, is worth
mentioning that environmental and social gains are also detectable. These references
indicate the great planting potential of the Brazilian industry, granting their better
competition pattern (SBS, 2003).
It can be observed in Figure 06 a comparison nation of average annual growth rate
between Brazilian planted forests and other countries. The average growth rate in Brazilian
planted forest is 35 m³/ha/year, with a rate of 70m³/ha/year under excellent site conditions.
The average growth rate is, therefore, higher than any other country.
35
30
25
(m³/ha/year)
20
15
10
5
0
d
lia
ca
en
SA
da
ile
o
il
an
ic
az
fri
ed
na
tra
Ch
ex
U
al
Br
A
Sw
Ca
us
Ze
M
h
A
ut
ew
So
Wood from planted forests, mainly from Eucalyptus and Pine species, constitutes
the most important source of raw material to several Brazilian forest industries. The use of
this type of wood is already a reality and is very promising in the future. The knowledge
accumulated in the past years, regarding forest management, genetic improvement and
mechanical and industrial technologies are considerable, allowing the wood products
originated from these kind of forest to be used in a variety of forms, in a high competitive
way and also aggregating social and environmental values to them. Social and
environmental care is traits being requested by the countries, which import solid wood or
its products.
According to data from the Brazilian Silviculture Society (SBS - Sociedade
Brasileira de Silvicultura) Brazil has nowadays 4,3 millions of hectares of planted forests of
Eucalyptus and Pine species. The Eucalyptus planted forests represents 61.4% of the
Brazilian reforestation area, where 57% of them planted in the State of Minas Gerais,
southeast part of the country. The planted area of Pine species are 38.6 % of the total,
mainly in the State of Paraná, which is located at the South region of the country, as it can
be seen in Figure 07.
1600
1400
1200
1000
(1000 ha)
800
600
400
200
0
Minas Gerais São Paulo Paraná Bahia Santa Rio Grande Others
Catarina do Sul
Pinus Eucaliptos
Brazil has a large net of tropical forests protection areas. This net embraces
permanent protection areas, sustainable management areas for direct use, exploitation areas
and integral protection areas for indirect use.
State protection areas add up to 26.9 millions of hectares, representing 3.18% of the
country total area. Adding the federal and state conservation areas, Brazil has 80 millions of
hectares of protected forests, representing 8.43 % of its territory.
Even not being part of the National System of Conservation Units (SINUC), Brazil
has 105 millions of hectares of legal Indian Protection areas, where more than 300 different
Indians tribes live, divided in 586 areas and representing 12.4% of the country territory,
most of them (98%) located at the Legal Amazon region (ISA 2003).
3.4 – BRAZIL FOREST SECTOR IN THE WORLD
Concerning planted forests, Brazil has 4,9 millions of hectares, representing 0.5% of
the country territory. The area of planted forests put the country as the eighth largest of the
world, representing 2.7% of the area of planted forests in the planet, as can be seen in Table
05.
6
% of world exportations
5
4
3
2
1
0
1963 1973 1983 1993 2003
Austria China Indonesia Brazil
Source: FAO (2004)
FIGURE 08 – Participation of some countries in world exportation of forest products.
Between 1993 and 2003 the growth rate of Brazilian exportations was 6% per year.
The total exportation of forest products by the country reached USD 6.6 billions, which
represents 7% of the total exported by the country.
Concerning forest products using raw material originated from planted forests,
Brazil appears as the largest exporter of Pine plywood and Eucalyptus sort fiber pulp. In
case of products based on tropical wood, the country is the third world exporter of plywood
and sawn wood, being however the largest exported of raw tropical wood, with 90% of its
production coming from the Amazon forest.
Log cuttings from Amazon forest has grown significantly in the last two decades.
The production of logs had an increase from 4.5 millions m3, in 1976, to 28 millions of m3
in 1977, mainly from the northern states of Pará, Mato Grosso and Rondonia. The majority
of these cuttings (80%) happen inside the belt surrounding the southeast area of Amazon,
from Rondonia to the north of Mato Grosso and south and east of Pará.
Brazil is also the greatest consumer of tropical wood. The majority of wood logs
produced at the Amazon region (86%) is for the internal market in the southeast region,
used mainly as a charcoal source, having an estimate total revenue of USD 2.5 millions per
year (SMERALDI & VERÍSSIMO, 1999).
According to NOCE (2003), Brazil is showing a very competitive pattern,
increasing exportations, and this fact is based on factors like low costs, product quality, and
cambium rates.
The Brazilian forest products sector has all the basic conditions to occupy a
privileged position at the international market. To accomplish that is important that the
country uses its comparative advantages for improve it’s competitive. The efforts done by
the private Brazilian wood industry must be followed by government actions towards a
common sector strategy.
In reality, the Brazilian forest product sector has shown great capability of penetrate
the international market and has full conditions to increase its participation on it. However,
the boundaries of its participation will be established by the country government policies,
which in its turn may help or restrict the development of the sector.
Brazil has 4.8 millions of hectares of planted forests, using 5% of the national
territory and 2.3% of the agricultural land area, and are providing growth conditions for
several industrial branches, which are supplying internal and external markets.
Statistics show, however, that keeping the growth levels of the last twenty years,
and assuming the same consumption of forest products quantities, it will be necessary
enlarge the reforested areas in about 6 millions of hectares until 2012. This is a hard task,
demanding great efforts and attention of government authorities and the interested parts of
society aiming to overcome the existing limitations. However, another aspects must be
taken into consideration, such as:
− Development of ways to improve the creation of planted forests at small and
medium size properties;
− Coordination and support to the developed forest stands at small and medium
size properties;
− Explaining and teaching the population the social, economic and environmental
benefits from planted forests.
• Sector policies
There is a necessity of taking some acts towards the implementation of a
Reforestation Program at federal and state levels. Some actions are urgent and, if not
established, may compromise deeply the industry expansion in the future. The priority
actions are:
− Ecological and economical mapping, considering the forest sector needs, mainly
the increase of the planted area;
− Effective access to financial sources compatible with the forest activities, with
special emphasis on reforesting new areas at small and medium size properties;
− Reduction of importation costs for forest activities, with taxes and customs fees
reduction for forest equipment;
− Creation of incentive programs aiming the increase of technology, training and
media exposure for forest resources;
− Simplification and stabilization of the forest legislation, with a full revision of
the Brazilian Forest Code;
− Forest and environmental equalization of legislation;
− Stability guaranty of legislation for a medium and large period of time;
− Establishment of a national forest program, contemplating the creation of a solid
and organized base for forest activities;
− Revision of the land use and ownership code, seeking for a less concentrated
model.
The Brazilian forest activity, based on research and experimental work, reached an
excellent technological point. However, the new acquainted technical and scientific
knowledge must not be set aside, once they may represent a great improvement either in
quantity as in quality of the forest sector. Among the new traits that can be incorporated,
the following are worth of mentioning:
− Knowledge in genetic improvement;
− Scientific definition of the relations among the productive process and
environmental demands;
− Development of products with high aggregated value;
− Multiple use and application for forest products;
− Increase research with different and alternative forest species;
− Training of technicians and government agents;
− Improve the public and private managing capabilities;
− Integration of universities with the new markets needs and demands;
− Training of small and medium size forest producers.
• Financial Resources
Reforestation lost, ant the end of the 80's, the flow of economical resources that had
allowed the implementation of the Brazilian forest industry site, based on which the wood
processing, plywood, wood board, vegetal charcoal, extraction and industrialization of
vegetal resins and pulp and paper industries established their growth in the last 30 years.
The come back of reforestation requires a new placement and dimension strategy as
a productive activity, through the adoption of some mechanisms of correction and
compensation of the disadvantages it has, as compared to another activities.
The structural aspects of forest reforestation demand a set of institutional actions,
aiming the reduction or suppression of the actual pressure on the sector. allowing the
activity to gain yield. Some strategies for the sector, regarding these aspects is:
− Taxes compensation for legal reserved areas, permanent protection areas, and
ecological areas;
− Protection mechanisms against variations on interest taxes, specially in a long
term period;
− Creation of a forest reforestation found;
− Inflation reposition on forest actives;
− Time adequacy and probation period for official financial loans for forest
activities;
− Special lines of financing for small and medium forest owners and/or
cooperatives.
With these actions, the gaps between different competing countries would be
minimized, especially with the ones offering some type of subsidies.
5 – REFERENCES
ASSOCIAÇÃO BRASILEIRA DA INDÚSTRIA DE MADEIRA PROCESSADA
MECANICAMENTE (ABIMCI). Estudo Setorial 2003 – Produtos de Madeira Sólida;
Curitiba-PR, 72pp. 2003.
VIANA, V. M., MAY, P., LAGO, L., DUBOIS, O., GRIEG-GRAN, M. Instrumentos
para o manejo sustentável do setor florestal privado no Brasil. Uma análise das
necessidades, desafios e oportunidades para o manejo de florestas naturais e
plantações florestais de pequena escala. Série Instruments for sustainable private sector
forestry, International Institute for Environment and Development, Londres. 182pp. 2002.
WORLD WILDLIFE FUND (WWF). WWF-Forests for Life: Forest Protected Area
Triples in Brazil’s Amazon.. 1999.