Plantations as a Tool for Economic Development

The economic and social benefits of plantations have been as much a source of debate as their environmental consequences. For example, it may be claimed that plantations generate employment, but it may also be argued that this is so only in the first phases of plantation establishment. Plantations can bring economic development to a country: exports may contribute to the balance of payments, taxes may flow to the national treasury, and plantations may generate jobs and prosperity. The governments of several countries - most notably China, Japan, and South Korea - have invested in medium- and long-rotation plantations precisely because they see them as a means of creating jobs and stimulating rural development (Cossalter and Pye-Smith 2003).

For example, in Brazil, Aracruz Celulose is the world's leading producer of bleached pulp. The company is responsible for 30% of the global supply of the product, used to manufacture high-value-added goods such as tissue, and printing, writing, and specialty papers. Aracruz's forestry operations in the states of Espirito Santo, Bahia, Minas Gerais, and Rio Grande do Sul involve some 242,000 ha of eucalyptus plantations, intermingled with 121,000 ha of company-owned native forest reserves. The company exports almost all of its production, currently 2.4 million tons/year, and is one of the largest earners of foreign exchange in the Brazilian manufacturing sector, making a substantial contribution to the country's balance of trade and overall development (www.aracruz.com.br). On the other hand, this type of large-scale plantation development has attracted much criticism from an environmental point of view. Concerns about the potential deleterious effects of eucalypts on water yield downstream have been expressed by many authors, as discussed in the previous section. In addition, Aracruz's hybrid eucalypt plantations occupy land that used to harbor Atlantic rainforest, one of the most endangered forest ecosystems of the world. However, deforestation was very severe in that portion of the Atlantic forest region, and plantations were set on previously deforested, degraded pastureland. The company's environmental division also emphasizes its use of native forest as buffers interspersed in its plantations as a way of mitigating the negative environmental consequences of growing large monoculture plantations of exotic trees.

From a regional development point of view, plantations may also result in economic losses. Some industrial plantations are established with financial support from the state, and therefore public taxes are used to finance private economic ventures. Economic benefits of plantations must be felt publicly so that these investments of public monies are justified. The advantages of such economic development must also outweigh any potentially negative environmental effects for plantations to be considered a successful development venue. In Box 6.7, we present a case study where plantation forestry brought economic development to a region, reconciling conservation objectives with economic development.

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