THE BRAZILIAN FOREST SECTOR: CHALLENGES AND STRATEGIES FOR ITS DEVELOPMENT

HOEFLICH, V. A.1, (hoeflich@cnpf.embrapa.br) ALVES, M. V. G.2

(marcos@floresta.ufpr.br); KOEHLER, H. S. (koehler@ufpr.br)3 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. Key works: Brazilian Forest Sector, Brazil Primary Products

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.

The results of the improvement program, during 22 years of duration, provided a great change in the Brazilian forest scenery. At the end of 1988 - when its activities were finished - the country had a reconstructed forest area, mainly in the southern and southeast Brazilian regions, showing:

• An area of 6 millions hectares of planted forests;

• An implemented a reforestation area of 300,000 hectares annually, having created about 500,000 jobs of non skill labor, between 1970 and 1985;

• That in less than a decade the country reached a worldwide projection due to the planted forest expansion area resulted of the new improvement policies;

• That the reforestation implemented due to the improvement policies has allowed the reborn of the forest industry, even though the quality of the products did not met quality standard requirements;

• The improvement program had created a new wide reforestation scale basic structure in the country.

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.

2.1 – GENERAL ISSUES

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.

TABLE 01 – Macro economical indicators of the Brazilian forest sector.

Indicator Forest Sector %

GNP (2002) USD 20 billions 4.5% of GNP

Taxes Income (2002) USD 4.6 billons 2.0% of national income

Job Positions (direct and indirect) (2002) 6.5 millions 9% of working population

Exportation (2004) USD 6.6 billions 7% of total exportation

Importation (2004) USD 0.8 billions 1.3 % of total importations

Surplus Commercial (2004) USD 5.8 billions 18% of total commercial trade surplus

Source: ABIMCI (2003) & SECEX (2005)

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

Pulp and Paper Planted large

Steel industry (charcoal) Planted medium / large

Solid Wood Planted and natural medium / small

Furniture Planted and natural most small / medium

Wood boards Planted and natural medium / large

No wood forest products Planted and natural small Source: Authors (2005)

2.2 – INTERNATIONAL TRADE

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.

0

500

1000

1500

2000

2500

3000

1996 1997 1998 1999 2000 2001 2002 2003 2004

(mill

ions

USD

) .

Exportation Importation Trade Balance

Source: SECEX (2005)

FIGURE 01 – Brazilian international trade historic of forest wood products.

The main destinies of Brazilian forest products have been changed during the past years, as can be seen in Figure 02. In 1996, Japan was the principal importer of Brazilian wood products (in volume). In 2000 United States turned the most important buyer, keeping this position since then. In the last four years the USA participation in Brazilian wood products exportation changed from 21% in 2001 to 37% in 2004, representing an increase of 15% during the analyzed period.

0%

20%

40%

60%

80%

100%

1996 2000 2004

USA Japan UK Portugal Other

Source: SECEX (2005)

FIGURE 02 – Main destinations of Brazilian wood products exportations over 1996 and 2004 period.

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.

Research done by BRASIL et al (2003) concluded that the growth in Brazilian plywood board exportation will have to be based on the real competition capability of Brazilian wood industry and efforts should be done to increase the advantages of scale production, price and promotion of the Brazilian products at the international market.

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.

0

500

1000

1500

2000

2500

3000

1996 1997 1998 1999 2000 2001 2002 2003 2004

(mill

ions

USD

) .

Exportation Importation Trade Balance

Source: SECEX (2005)

FIGURE 03 – Pulp and paper international Brazilian trade historic.

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.

0%

20%

40%

60%

80%

100%

1996 2000 2004

EUA China Holland Belgica Italia Others

Source: SECEX (2005)

FIGURE 04 – Main buyers of Brazilian pulp and paper products.

3 – BRAZILIAN FOREST POTENTIAL Brazilian forests represent a major position worldwide. Brazil is the 5th largest

country in the world and its economy is the 13th. In 2000, there were 543.9 millions hectares of forest in 845.6 millions hectares of land, corresponding to 64,3% of the country territory (FAO, 2001). The Brazilian forests represent 59.8% of the tropical forests in South America and 26.6% of tropical forests in the world (FAO, 1999).

As far as tropical forests are concerned, Brazil has three times more area than the second country, the Democratic Republic of Congo, most of them inside the so-called Legal Amazon. These forests are located in the northern part of the country, and the majority of its areas are still unexplored. There are estimates that the Brazilian biodiversity, if explored rationally, would generate two trillions of American dollars per year, around four times the 2003 country Gross National Product.

The areas used in forest and agricultural activities are far from reaching its maximum productive potential. Even under these conditions, the economics data show that Brazilian forest products business already represents 4.5% of the nation Gross National Product, 23% of agricultural business and 7% of the total Brazilian exportations, generating 1.2 millions of direct job positions and 5.3 millions of indirect ones, job positions in fields as natural rubber extraction, wood, pulp and paper and furniture. The number of job positions would be much greater if it has included positions in no wood forest products and environmental activities (VIANA et al, 2002).

3.1 – NATURAL FORESTS

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.

74%

13%

13%

0 20 40 60 80

Forest

Savanna andOpen Areas

Exploited

Source: INPE (2002)

FIGURE 05 – Composition of Brazilian Legal Amazon forest (1998).

Following the late called Soviet Union, Brazil has the largest forest in the planet, twice the Canadian area, the second largest, retaining more biomass than any other country in the world (FAO, 2001).

Brazil is divided in five large geographical regions. The North region, the largest, corresponds to the traditional Tropical Amazon forest. However, the Legal Amazon forest, delimited for political and planning purposes, has 500 millions of hectares, representing 60% of the country territory.

Table 03 shows the remaining vegetal cover in the five Brazilian regions, grouped by Dense Forest, Open Forest and others types. Dense Forests cover 352 millions of hectares, with 288 millions of hectares that could be considered potentially productive. Open Forests cover and area of 205 millions hectares, with 172 millions of hectares showing productive potential (FUNATURA, 1995).

TABLE 03 – Brazilian Natural Forest areas by region.

Country Region Forest (millions of ha)

Productive Potential Areas

(millions of ha)

% Of productive

areas North

Dense Forest Open Forest and/or Others

358 284 74

310 246 64

86.6 86.6 86.5

Northeast Dense Forest Open Forest and/or Others

73 11 62

62 6

52

84.9 54.5 83.9

Middle West Dense Forest Open Forest and/or Others

95 48 47

72 34 38

75.8 70.8 80.8

Southeast Dense Forest Open Forest and/or Others

22 4

18

14 1

13

63.6 25.0 72.2

South Dense Forest Open Forest and/or Others

9 4 5

2 1 1

22.2 25.0 20.0

Total Dense Forest Open Forest and/or Others

557 352 205

460 288 172

82.6 81.8 83.9

Source: FUNATURA (1995)

3.2 – PLANTED FORESTS

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.

0

5

10

15

20

25

30

35

Canad

a

Sweden

USA

Austra

lia

South

Africa

Mex

icoChil

e

New Zea

land

Brazil

(m³/h

a/ye

ar)

Source: Forest Research Institute (2003)

FIGURE 06 – Average growth rate in several countries.

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.

0

200

400

600

800

1000

1200

1400

1600

Minas Gerais São Paulo Paraná Bahia SantaCatarina

Rio Grandedo Sul

Others

(100

0 ha

)

Pinus Eucaliptos

Source: SBS (2003)

FIGURE 07 – Area Distribution of Eucalyptus and Pine species in Brazil (2001).

3.3 – PROTECTION FOREST

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.

There are 229 conservation areas under government supervision, adding up to 45 millions of hectares, representing 5.25% of the country territory. Out of them, 101 are considered Permanent Protection areas (indirect uses) with 18.3 millions of hectares, being 47 National Parks, 29 Ecological Stations, 24 Biological Stations and two Ecological Sites. The remaining 128 areas are designated as of Sustainable Use (direct uses), covering 26.5 millions of hectares, with 60 National Forest areas, 23 Exploitation areas, 28 Environmental Protection areas and 17 of high Ecological Importance (IBAMA 2002 & WWF 1999).

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

As already mentioned, Brazil has 54.3 millions of hectares of forests, which represents 64.3% of the country area (FAO, 2001). This vegetal coverage represents 14% of the world’s coverage, making the country the second largest. However, if the biomass stock is considered, the country is the largest in the world, as it can be seen in Table 04.

TABLE 04 – Area of vegetal coverage of the world, considering the major countries.

Country Total Area (1,000 ha)

Vegetal Coverage (1,000 ha)

% Of Country

Soviet Union 1,688,851 851,392 50,4

Brazil 845,651 543,905 64,3

Canada 922,097 244,571 26,5

USA 915,895 225,993 24,7

China 932,743 163,480 17,5

Australia 768,230 154,539 20,1

Republic of Congo 226,705 135,207 59,6

World 13,063,900 3,869,455 29,6 Source: FAO (2001)

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.

TABLE 05 – Area of planted forests in the major countries of the world.

Country Country Area (1,000 ha)

Planted Forests (1,000 ha)

% Of Country

China 932,743 45,083 4.8

India 297,319 32,578 11.0

Soviet Union 1,688,851 17,340 1.0

USA 915,895 16,238 1.8

Japan 37,652 10,682 28.4

Indonesia 181,157 9,871 5.4

Brazil 845,651 4,982 0.5 Thailand 51,098 4,920 9.6

Ukraine 57,935 4,425 7.6

World 13,063,900 186,733 1.4 Source: FAO (2001)

The world international trade holds USD 6.0 trillions and forest products are among the ten principal commodities traded. International transactions of forest products represent a total annual value of USD 132 billions.

The international trade of forest products has been shown a very positive behavior during the last decade. Between 1993 and 2003, the growth rate of international trade of forest products has reached 2.6% per year, as a result of international demand. The flow of the international trade of forest products is basically concentrated in the developed countries (80%), being East Europe and North America (USA and Canada) the largest ones. More recently, it can be observed a slow penetration of the developing countries in the international market, mainly China, Indonesia and Brazil.

In the last years, Brazil is gaining some space in the international market of forest products. In 1993, the country participation was 2.1% of the total traded, while in 2003, the country has contributed with 3.7% of world exportations, as shown in Figure 08.

0

1

2

3

4

5

6

1963 1973 1983 1993 2003

% o

f wor

ld e

xpor

tatio

ns

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.

4 – CHALLENGES AND STRATEGIES TO THE DEVELOPMENT OF BRAZILIAN FOREST SECTOR

The forest products sector, as any other national economy segment, needs to its development, clear and adequate policies assuring resources and technology as a way to achieve its goals, according to local characteristics. The politics turned to the development of the country forest sector must be objective and wide. Objective because is treating of an issue of high complexity, and wide because deals with sustainable production of goods and services, taking into account environmental aspects.

The development is not reached by only using the natural resources available, but treating issues concerning the management of its sources. The goods provided by the natural resources allow its exploitation and the services, otherwise, lead to the necessity of its conservation. Therefore, the development of an adequate national forest policy cannot leave to consider:

��Ecosystem conservation;

��Utilization of the natural resources as a development factor.

As shown in the previous sections of the present paper, forest products sector generates 6.5 millions of direct and indirect job positions, has a strong participation on the National Gross Product and at the country's international trade. These benefits may be increased significantly and the challenges are being transposed. Among the challenges to be meet, are:

- New Institutional Structure; - Raw material availability; - Sector policies; - Simplification and stability of legislation; - Technological development and labor training;

- Financial resources; - Consolidation of the forest development spots in the country; - Decrease of bureaucracy costs.

• New Institutional Structure

The issue of conservation of natural resources is complex and is pressuring highly all forest production activities. The major challenges and pressure are over public and private institutions, such as:

− The private sector needs for a stronger identity to support the national forest development;

− A strategic strength program of institutional capability needs to be formulated and executed, embracing public and private levels;

− Public institutions need to be capacitated and organized, having monitoring and controlling instruments to fulfill their role in implementing and managing sector development policies, with special emphasis on the forest production sector;

− Creation of one agency focused on production and commercialization of forest products, mainly for planted forests;

− Change of the public institutional model, which presently privileges command and control actions;

− Decentralization of the public administration, with the creation of new commands and controls procedures;

− Skill improvement on processes management and development of new regulations.

• Raw material availability

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.

• Technological development and labor training

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.

• Consolidation of the forest development spots in the country

The consolidation of forest developments spots throughout the country is an important challenge to be overcome, seeking to increase the competition of the Brazilian forest sector. This is highly dependent on the available region infrastructure, like roads, ports and electrical energy. The development of forest production spots contributes to the attachment of the small and medium size producer to the economical and productive chain.

• Decrease of bureaucracy costs

Probably due to a subconscious association with natural forest exploitation, and aiming to preserve and protect the environment, several administrative requirements were established, making reforestation in the country quite bureaucratic, aggregating administrative costs, which reduces the yield of forest activity in Brazil. Among them, it can be stated:

− Annual reports by producing farms;

− Annual register and renewal of forest industries;

− Cutting plans and permissions;

− Inclusion and exclusion taxes in different activities, such as log trade, charcoal production, commercialization;

− License to cut private wood;

− Obligation of several papers to transport logs and wood products;

− Environmental taxes.

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ASSOCIAÇÃO BRASILEIRA DA INDÚSTRIA DE MADEIRA PROCESSADA MECANICAMENTE (ABIMCI). Estudo Setorial 2003 – Produtos de Madeira Sólida; Curitiba-PR, 72pp. 2003.

BRASIL, A. A.; ANGELO, H.; SANTOS, A. J.; BERGER, R. Demanda de Exportações de Painéis de Madeira do Brasil. Revista Floresta, Vol. 33(2), Curitiba-PR, 135-146pp. 2003.

FOOD AND AGRICULTURE ORGANIZATION (FAO). Status and Progress in the implementation of National Forest Programmes: Outcome of the FAO World-Wide Survey. Rome: Food and Agriculture Organization of the United Nations. Rome, Italy. 1999.

FOOD AND AGRICULTURE ORGANIZATION (FAO). State of the world’s forests. FAO, Rome, Italy. 181pp, 2001.

FOOD AND AGRICULTURE ORGANIZATION (FAO). Online Forestry Database. FAO, Rome, Italy. Disponível em <http://www.fao.org>. 2001.

FOOD AND AGRICULTURE ORGANIZATION (FAO). Online Forestry Database. FAO, Rome, Italy. Disponível em <http://www.fao.org>. 2004.

FUNATURA / IBAMA / ITTO. Diagnóstico do Setor Florestal Brasileiro. Brasília, 1995.

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