March 19, 2014

European taxpayers will fund new eucalyptus plantations in Portugal

The Portuguese government proposal. to submit to the European Commission for grant support from the Common Agricultural Policy (CAP) to forests in Portugal, is intended to include public funding for investment in eucalyptus plantations on the pulp and paper industry.

In 2005, Portugal had the fifth largest area of ​​eucalyptus in the world, exceeding Australia - the origin country of this species. Between 2005 and 2010 this area has increased more than 26 thousand hectares.

Over the past 30 years, the area of ​​eucalyptus in Portugal increased tenfold (10x), however, the average yield per hectare registers, nowadays, values ​​already achieved in 1928. The focus of the pulp industry and paper sector has been developed in quantity, the mass area, not in quality, productivity per hectare.

Eucalyptus areas in Portugal are private, with significant impact on of Central and Northern regions, characterized by properties of less than 5 acres and owners have little or no negotiation power.

Besides that, the pulp and paper cluster is characterized by loose-win relationships, acting in imperfect competition, with the unilateral imposition of price forestry.

Organizations of forest owners have been characterized more by a performance of broadcasting public policy and less by defending the interests of their members. The analysis of the net entrepreneurial evolution income in forestry over the last decade is self-explanatory.

On the other hand, the authorities have refrained from making a systematic monitoring of markets, allowing industry free operation.

What are the risks then?

Forest fires in Portugal have assumed contours of national catastrophe. Their progress on the ground derives from the lack of proper forest management practices. This lack stems essentially from weak or no prospects for business in the forest. When revenue is uncertain, practices are reduced to a minimum expense on forested areas, as we'll see. 

Encourage the cultivation of more land without ensuring the viability of forestry business is a gamble of very high economic risk, but also social and environmental danger.

What we know of the past?

Despite of the billions spent in the last 27 years in Portugal, under the CAP in forestry investment, the economic situation of forestry deteriorated significantly, with accessories impacts at environmental and social levels.

Two examples of 27 years of the CAP support to forests in Portugal:

- According to information from the national forest authority, the forest species that most benefited from public support, maritime pine, record this period of time a significant regression in area and volume; and,

- The second species which received more public support, the cork oak, registered practically only a maintenance of the cultivated area, but with loss of quality in the product, cork.

Where was gone the moneys collected from taxes of national and European taxpayers?

The focus of the Portuguese government, for public funding to be provided for 2014/2020, still requires the efforts of taxpayers to benefit the forest industry strategies, out of step with forests. This time, the government wants to extend this effort to benefit the financial affairs of the pulp and paper industry. The future impact of this bet can be invaluable, especially if the expected climate changes on the environmental sphere are not minimized. At the southern European level, these changes may generate more and larger forest fires, and the main cause continues to be neglected: the lack of prospects for sustained, sustainable and socially responsible business in the forests in Portugal.

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