THE SURROUNDING FORESTRY ENVIRONMENT

Uruguay is located in the Southeastern region of South America (Figure 1). The country is between 30 and 35 degrees latitude south, 53 and 58 degrees of longitude west, and covers an area of 176,213 km². It borders Brazil in the North and Northwest, and the Rio de la Plata (Silver River) in the South and Southwest. The Uruguay River separates Argentina from Uruguay in the west.

The capital of the country is Montevideo, and the official language is Spanish. The population of Uruguay is 3 151 662, and the annual population increase rate is very low. In the period between 1990 and 1995, the population increase was 0.6 percent (Encarta, 1999). A large proportion of the population lives in the capital (42 percent), and the population is mainly urban (92 percent). The age profile of the population is characterized by older ages as 40 percent of the population is between 30 and 64 years of age, and 13 percent of the population is older than 65 years of age.

The climate is temperate, sub-tropical and semi-wet, with clear divisions between the four seasons. The annual mean temperature varies from 16 ^o to 19 ^o C, while the minimum temperature in July is 11 ^o C and maximum temperature is registered in January at 22 ^o C. The average number of days with frost per year varies from 15 to 30 (MAGP/DF-OEA/DDRMA, 1994; FMAM/PNUD/MVOTMA, 1999). The average precipitation is 1190 mm/year. December is the driest month, and March is the wettest.

Figure 1: Map of South America showing the location of Uruguay.

The gross national product (GNP) for Uruguay is US$16.15 billion, and the GNP per capita is US$3 046. Most of this GNP comes from services (47 percent), while commerce, communications, and transport contribute 18 percent, and industrial energy and construction 27 percent. While agriculture accounts for only 9 percent of this total, agricultural products - from cattle, wool, leathers, dairy products, crops, fruits and wines, forestry products and fishery - represent US$2 730 million, or 65 percent of total exports (INE, 2000b). Thus, Uruguay is a country dedicated to cattle, milk and crop production. The following table shows how forest products contributed to Uruguay's total exports in 1997.

Table 1: 1997 Agricultural Exports for Uruguay

The country's principal resources are agricultural, since minerals are scarce. The soils of Uruguay are generally fertile, except for the sandy, marshy soils along the eastern coast. It is estimated that there are 3 500 000 ha with soils suited for forest production. Of these, 2 300 000 ha (66 percent) have been identified by the Ministry of Agriculture of Uruguay as "priority soils for forestation" (MAGP/DF-OEA/DDRMA, 1994). These are soils that have little potential for the production of wool, cow and sheep meat, but are suitable for the development of forests. The productivity of soil is determined by its capacity to produce a certain yield per hectare per year.

Hydroelectric power is of major importance in Uruguay. The principal hydroelectric power plant is Salto Grande on the Uruguay River; two other plants are in operation on the Río Negro, and another, on the Brazilian border, was constructed during the 1980s.

Forests covers over 7 percent of Uruguay, of which 4 percent is native forest and the remaining 3 percent, planted forest. The present native forest vegetation of Uruguay can be categorized as: riverside or fluvial forests and gallery forests, which are fringes of arboreal vegetation that accompany water courses; forested gulches, also associated with water courses but with the characteristic of being restricted to depressions that exist around basaltic hills; high hill forest, appearing in hilly areas and characterized by xerophyte species; park forest, which forms the transition vegetation between a hosted prairie (with a density of 1 tree/ha or less) and dense forest; and palm tree forest (IMM - Museum and Botanical Garden, 1987, cited in FMAM/PNUD/MVOTMA, 1999).

Planted areas consist of protective and industrial forests. Protective forests are used to give animals shade and protection against winds. Most industrial forests are registered and have management plans approved by the Forestry Directorate of the Ministry of Agriculture. Industrial forests have experienced significant growth as a result of the incentives provided by the Forestry Law of 1987. In the years between 1990 and 1997, industrial forests have increased by 615 percent. The two main species planted in industrial forests are Eucaliptus and Pinus. Land use in Uruguay is described in Table 2.

Table 2: Land use in Uruguay

Forestry Extension

Forestry extension activities are the responsibility of the Directorate of Forestry of the Ministry of Agriculture (MGAP) of Uruguay. Agronomists (who have expertise in forestry) are assigned to different regions of the country, as well as in the headquarters in Montevideo, to give advice to foresters. The FA also carries out extension activities, including conferences and technical assistance to foresters. Additionally, some private enterprises conduct extension activities including field days, publications, and provide advice about the environment.

The National Forestry Law of 1987

The approval of the Forestry Law in 1987 has been a significant boost to the forestry sector in Uruguay. The law declares of "general interest the defence, the improvement, the amplification, the creation of the forest resources, and in general, the forest economy". This national effort was also supported by a loan from the World Bank. The main institution responsible for coordinating efforts to promote forestry in the country is the Forest Directorate of the Ministry of Agriculture.

As a way to stimulate the development of forestry plantations, some incentives were created, including:

• Tax exemptions for protective and industrial forests on lands identified as having priority soils for forestry. The law also exempts from taxation, imported machinery, goods and materials for the purposes of developing commercial forests.
• Partial reimbursement of plantation costs. The legislation allows forest holders paying "Agricultural Rents", or the "Rents of Industry and Trade", to receive a subsidy of 20 percent of their production cost, per forested hectare. Other foresters are eligible to receive an amount equivalent to 50 percent of their production costs, per hectare. The Forest Directorate calculates and administers these annual subsidies, which also apply to fences, soil preparation, pest control (mainly ants), the cost of seedlings and other expenses.
• Lines of credit have also become available to farmers which have low interest rates and periods of relief in accord with the cycles and activities of forest nurseries, plantations, the production of forests as well as for forest management and the installation and modernization of wood industries.

The legislation also prohibits the cutting of native forests unless authorization from the Forestry Division is granted. A written request is first required describing the reasons for a cut, the area to be affected and the volume of wood to be harvested.

Until the approval of the Forestry Law, the forestry sector had little impact on the agricultural development of the country. Table 3 shows the evolution of main forestry species in the country over the past ten years. The fast growing Eucaliptus is the main planted genus, occupying 83 percent of the total planted area.

Table 3: Evolution of planted area of fast-growing species during the period of 1989-1998, in Uruguay

Several observations were made about the forestry sector in Uruguay based on a socio-economic study (INTERCONSUL, 1994) which noted that:

• forestry enterprises in Uruguay were both dynamic and innovative, favoured by climate and economic incentives;
• the "work value" of forestry is much higher than for traditional cattle production systems;
• the profitability of forest production was higher than for cattle production;
• there has been a crossover of labour from cattle production to forest production;
• there is greater economic activity in forestry, leading to increases in the levels of employment, income generation and exports;
• the forestry sector employed 13 000 people, 7 000 of whom were full-time;
• migration to large cities had diminished.

The impact of forestry on the country's economy was also calculated by Vázquez-Platero (1996), who estimated that the internal rate of return from State investment in forestry was 30 percent.

While exports from forestry products have increased significantly over the past decade, most of the forests planted after the Forestry Law are not yet in production. Nevertheless, in the period between 1990 and 1997, forestry products increased from US$13 million to US$76 million, or an increase of 475 percent (Table 4). The chief forestry products are wood for pulp, sawn wood, paper and cardboard. During the first half of the 1990s, Eucalyptus was the primary source of sawed wood, but during the second half of the decade, the processing of conifers increased significantly. In 1997, for example, 61 percent of the total sawed wood came from coniferous species.

Table 4: Evolution of main export of forestry products in Uruguay (from 1990 to 1997, in US$ 1000)

¹ Which include wheat, barley, corn, sorghum and sunflower.

² Planted in the period between 1975 and 1997, which correspond to the area registered as industrial plantation forest trees, by the National Forestry Department, Ministry of Agriculture of Uruguay.

³ Other planted forests not registered as industrial plantation forest trees.