 |
| Jean Boichou, SSC -SWT Curacautin, Chile |
More specifically in the mountain area where SSC Wood-Technologies (SWT) operates, cattle grazing today is the forest’s main competing land use. Local people include Indigenous People (the Mapuche people) and “Colonos” (“settlers”). These Colonos are descendants of people who came in the XIXth and XXth century when government land was available for people to claim. Many Indigenous people have also adopted the Colonos' agricultural methods. The local agricultural economic pracitce in the XIXth century was largely to burn forests in order to clear land for farming, in the XXth century and especially after the 1950s' the availability of trucks and roads allowed owners to cut and sell the wood before land conversion (thus improving the deal). The better lands have already been converted to agricultural crops so today's conversion pressure is more towards cattle prodcution. It is to be noted that even though some may criticize this agricultural pressure on forests, agriculture is what has been feeding the region and these farmers are hard-working people who have lived through much hardship.
An official ban on land conversion is enforced, but a subtle practice does beat it: cattle are allowed to freely roam and to graze forest regeneration which effectively kills the forest ecosystems in several decades. Permission for “rehabilitation of degraded land” to farming use is then easy to obtain formally[2] as it does not account officially for forest loss. Despite the obvious cultural love for agriculture and against all the clichés that may arise from their fragile economy, local farmers are extremely efficient users of economic principles. Their land use decisions involve a very delicate balance between expected incomes and risks inherent to local markets. Due to technological gaps, their access to international markets is close to nil. And as a result, one could say that the insufficient and risky income offered by the local wood markets is the main reason why farmers have traditionally favored the better known option of cattle grazing.
Soil productivity involves that it takes almost one hectare of pasture to sustain one large stock unit (LSU: cow-calf pair) the quality of the mountain grasses means that beef cattle are preferred to dairy production). In a forest however, it takes at the very least five hectares to sustain the same production. So considering the Net Present Value only (NPV), cattle grazing in forest is at best twenty percent as profitable as cattle grazing in pasture. This is reflected by the market value of forestland versus pasture which is roughly five to ten times less. Basically the ideal situation for an owner is to sell off the wood obtained by clearing in order to subsequently receive higher incomes from pasture grazing, and many farmers are prepared to resort to tricks in order to achieve this. Local wood markets are so gloomy and imperfect that their price levels do not allow the harvests from sustainable forest management to compete with cattle grazing income. These poor timber market conditions of course constitute a vicious cycle inherited from the land conversion tradition. Wood was a sub-product of farming, and therefore wood prices were kept steadily low: people were cutting down their forests for cattle anyways, so why offer a good price for wood which would have been burnt otherwise?
When SWT arrived in the area, it quickly bumped into these issues. Born from the premise that fair business practices and FSC Certification[3] was the way to implement better forest practices and to achieve higher wood prices for it, SWT discovered a rundown economy which was struggling with the old model. All available old-growth forest had been depleted and local sawmills had mostly shut down because they were so inefficient at utilizing wood coming from secondary forests. These struggling sawmills had been implementing unfair practices which ranged from underestimating the volumes of wood extracted to be paid for to an owner, to downright non-payment. As a result forest management was even more difficult to implement for a willing owner because both market depth and market breadth were extremely poor: when an owner could find a decent buyer for its saw-logs it could not do so for its firewood, or vice-versa.
SWT does not own any land and buys logs from small farmers and arranges for their FSC Certification, but SWT's leverage to demand sustainable forest practices from its suppliers was at the beginning completely insignificant. SWT not-only had to offer better prices and payment conditions, but it also had to reconstruct the whole value-adding chain. This included taking in hand the forest operations (including replanting), and helping its suppliers to find a market for sub-products such as firewood. This we believe is in line with what the FSC-Fairtrade pilot project for wood seeks and this is how SWT became one of four case studies worldwide. It is expected that such certification will help SWT reach responsible and more rewarding markets for its sawnwood, thus put it in a position to redistribute such benefits to forest owners through various means.
As of now and even before reaching FSC-Fairtrade markets, SWT's business system allows a local standing forest NPV to roughly triple its value because of the higher prices and elimination of unfair practices (which basically included sophisticated means to steal wood). This has been sufficient to raise much interest amongst local farmers, and in addition one could say that working with SWT is also much less risky than working with another buyer: the offered market is much more steady and finally allows for planning of future forest income (and therefore, for investments in proper silviculture). Even though the present value of sustainably managing one's forest for sales to SWT is still 40 to 60% inferior to that of cattle grazing (or less in already degraded forests which hold very few potential saw-logs), the above-mentioned improvement is significant enough to make illegal conversion much less attractive. As a matter of fact, several of SWT's supplying forest were originally planned for conversion had SWT not made an offer to the owner, and these forests are now managed under FSC's environmental and social rules of sustainability.
Finally, SWT is working on various issues which are aimed at finding and improving markets for lower quality logs, in particular via a bioenergy project. We believe it is possible to make sustainable forest management of local native forests competitive with cattle grazing in the short term and to outperform cattle grazing in the long term. Experience shows this would be more effective at conserving forest than a strict ban on land conversion. SWT's experience has also been fed to the working group in charge of forest policy elaboration at country level, thus improving several draft documents whose effects could have caused an unwanted increase of threats to certain endangered species (wrongful or excessive coercion causes a decrease in forest land value, and therefore motivates forest owners to further illegal conversion to other land use). In conclusion, it is our belief that green markets for sawnwood through SSC Wood-Technologies have had a very positive influence on local biodiversity, and that this influence would be increased and replicated by spreading this business model.
Jean Bouichou
Managing Director
SSC Wood-Technologies S.A.
[1] CONAF-CONAMA-BIRF “Catastro y Evaluación de los Recursos Vegetacionales Nativos de Chile”, 1994 – 1997., updated 2008 for region IX.
[2] As quoted by CONAF (the national Forest Authority), approximately 5000ha per year are subject to such rehabilitation in Chile.
[3] Forest Stewardship Council, one of the leading two environmental and social certification systems available for wood products. See www.fsc.org
