Forest Based Industries and Poverty Alleviation
Mario H.
Leonel
Executive Director
Bracelpa – Brazilian Pulp and Paper Association
Prepared by Rubens Mazon, Ph.D.
This paper presents a brief overview of some of the efforts made by the Brazilian pulp and paper industry and the Brazilian Association for Pulp and Paper – BRACELPA in contributing to poverty alleviation. Forestry activities are of high importance in Brazil and thus, the pulp and paper industry understands its important and responsible role in the national efforts to alleviate poverty. The paper is organized as follows:
• presents an overview of the industry in Brazil, and its understanding of the United Nations initiatives towards poverty alleviation;
• presents and analyzes how many Brazilian companies are applying the sustainability framework to poverty alleviation to their operations, in particular Fomento;
• describes examples of poverty alleviation projects whose implementing procedures were not successful.
• makes a general conclusion and recommendation for action
According to World Bank, over 90% of the 1.2 billion people living in extreme poverty depend on forests for some part of their livelihoods; of those people, at least 200 million are considered indigenous. To reduce poverty, the UN has worked with over 160 world leaders to agree on a framework of goals referred to as the UN Millennium Development Goals. Their main purpose is to reduce by half the portion of people living in extreme poverty by 2015.
In Brazil, poverty is greater in rural areas compared to urban centers, and the most vulnerable populations such as indigenous people, women and marginal communities are strongly dependant on natural resources. The Brazilian pulp and paper industry has made a strong commitment to poverty alleviation directly related to production and environmental goals. The Brazilian industry also recognizes the need of developing long range sustainable programs to assist in implementing the Millennium Goals.
Forestry and the pulp and paper industry
In 2002 the Brazilian pulp and paper industry contributed US$ 608 million in taxes, offered 100 thousand direct as well as indirect and induced jobs around Brazil, and paid industrial salaries and related taxes duties in the amount of US$ 513 million. At the same time, the industry is also concerned with the preservation and re-establishment of native forests, although the fibre comes exclusively from planted eucalyptus and pinus species, which are renewable resources (Zogbi, O.E. in “Bracelpa, Social Report”, 2002).
Some important characteristics of the Brazilian forest based ndustry
The paper market in Brazil offers great opportunity for production, and the current consumption level shows space for long term growth (see Figure 1). There is an apparent paradox if we compare the paper consumption in countries like Finland and Brazil who are both paper producers.
Figure 1- Evolution of Paper Consumption in Brazil and the 2002 Per Capita Consumption
(Source: PPI, RISI, CNPL, BRACELPA)
The financial stability of a given industry is a necessary precondition to enable it to engage in sustainable poverty alleviation programs. Indicators of stability are market share and international trade of the Brazilian pulp and paper industry:
• Market Share of 4.5 % in International Pulp Trade
• Market Share of 28,8 % in Harwood International Pulp Trade
Figures 2 and 3 shows the position of the Brazilian production of hardwood pulp relative to some other pulp producer countries:
Figure 2 - Hardwood Pulp Production from Eucalyptus
(Source: PPI, RISI, CNPL, BRACELPA)
Figure 3 - Hardwood Pulp Production from All Species
(Source: PPI, RISI, CNPL, BRACELPA)
The pulp and paper production process is an energy and natural resources intensive activity that has historically been associated with environmental impacts. However, over the last three decades, the Brazilian pulp and paper industry has presented considerable improvement in its environmental performance, and most importantly, has a better understanding of the links between natural habitats transformation and social issues. Recognizing this link has generated both discussion and the development of programs to address poverty alleviation through forest based activities.
There is a general consensus among specialists that the Brazilian pulp and paper industry has an important role to play in poverty alleviation. The intensive use of rural labor and land of low quality offers great opportunities for impoverished communities and one important program to address poverty is the Fomento.
Fomento (Brazilian Sustainable Poverty Alleviation Example) can be defined as the activities or practices realized by the Brazilian pulp and paper industry promoting rural extension, and technical and financial assistance for small farmers. It not only addresses rural poverty issues but it also provides benefits to the industry by addressing the forecasted wood shortage issue which will become critical from 2005 onward (see Figure 4).
Figure 4 – Total Planted Wood Demand and Supply for All Brazilian Industry
(Source: PPI, RISI, CNPL, BRACELPA)
The “Fomento” program offers, economic, social and environmental advantages. In summary they are as follows:
1. Economic advantages to industry:
• Reduce wood shortage
• Guarantee fibre supply
• Provide logistical advantage, since “Fomento” is done with neighbour farmers
2. Economic advantages to farmer and local communities.
• Guarantee of new source of income generation to small farmers
• Buyer’s agreement at market prices
• Make financial resources available
• Provide technical assistance
• Supply of plants and seeds
• Provide stimulus for regional development of forestry related activities
• New sources of financing under analysis by governmental agencies.
• Provide education and training for sustainable forestry practices
• Create procedures for forest certification to be extended to the “fomented” properties
• Industry provides technical assistance to enable small farmers for the certification process
• Guarantee more stable prices with buyers contract
• Small farmer must have protection from the asymmetric relationship with industry due to their size and limited economic power.
• Use degraded areas no longer available for traditional agricultural practices
• Respect legal reserves and other protected areas according to the Brazilian environmental laws
• Recuperate biodiversity by mixing homogeneous and native forests.
As we can see in Table 1, at least six Brazilian states have “Fomento” projects in place and they cover approximately 114 000 ha benefiting over 6 000 property owners.
Table 1 – Current “Fomento” Activities in Brazil
Recipient State |
Planted Area |
Benefited Properties |
Bahia - Espírito Santo |
114,300 |
6,115 |
Other poverty alleviation initiatives
There are several other initiatives in brazil which attempt to address poverty. they include a wide range of measures such as:
• train and build capacity of forest dwellers and rural communities through scholarships and specialized courses in land use related activities.
• develop agro-forestry projects with indigenous communities.
• develop health programs for children and aids patients
• create employment through the development of programs such as used paper collection and recycling where many workers’ cooperatives play important roles.
• improve health and safety conditions for small scale business partners which were not addressed under brazilian labor laws.
There are also several poverty alleviation initiatives being discussed. They are:
• maintain the policies aiming to support a certified production chain which, protecting local habitats which directly benefit poor people in the community. in brazil many pulp and paper companies are adopting some certification scheme, either the cerfor or fsc label. it may be possible for the industry to it could be very interesting if brazilian forest based industry extend their certification standards to their wood suppliers (out growers inserted or not in the fomento system) with the objective to qualify them with the same socio environmental criteria.
• extend to small producers and local communities the potential revenues originated from any environmental services markets schemes such as carbon sequestration or watershed markets.
• tailor more programs to income generation and basic education and training.
To address poverty alleviation issues is not always easy and in Brazil some companies have faced tremendous challenges. Below are examples from two such companies.
After a long dispute with indigenous communities in the Espírito Santo State, Aracruz reached an agreement to repay for the use of reservation land.
What Aracruz has learnt is that it is imperative to be engage with local community from the outset. The current programs in place are mainly directed to income generation and partnerships for eucalyptus plantation by indigenous people in reserved areas.
A plant was constructed by the Suzano Group in the state of Bahia and this was initially met with severe distrust by the local communities. Although the region was extremely poor, there was widespread fear that the project would bring serious environmental impacts, endangering their livelihood. Bahia Sul decided, in order to better understand the communities perspective, to commission a research work to the University of Bahia. With the obtained results, it became evident that any programme should first be evaluated jointly with the local communities.
Conclusions and recommendations
This paper highlights just a few examples of what the Brazilian pulp and paper industry is doing but there are many other company lead initiatives. Experiences have shown that for sustaining or improving the livelihoods of poor people it is important to involve the communities and other key stakeholders from the beginning and that any initiative should contain the cornerstones of sustainability –economic, social and environment. Having the industry engaged will ensure that the economic dimension to sustainability will be sufficiently addressed.
Currently there are poorly defined dimensions to industry’s attempt to distinguish between philanthropic activities, social work and sustainable programs. Although they are all seemingly positive and necessary, there is a huge difference between them.
It is recommended that FAO of the UN develop the means to analyze, organize and communicate the efforts of the forest products industry and associations who (including paper, solid wood, panel and pulp, furniture) have been contributing to poverty alleviation. It would also be helpful to develop specific principles that are consistent with the various UN poverty alleviation initiatives and the performance measures to indicate meeting the targets of the principles.
