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César Augusto Valencise Bonine

Executive R&D Manager at Suzano

OpCP69

Seedlings: let the modernization begin from the beginning!

An issue as important as the evolution, or revolution, that the Brazilian forest system has suffered in the last two decades could be the subject of some editions of Revista Opiniões. In fact, if the attentive reader looks for previous editions, he will see this leap, whether in the content and breadth of the themes, in the size of the advertisers, in the range of guest writers and in the story that has already been told.

In other words, the system has been modernized, and the strength of the forestry sector is felt by the weight that this sector has in the economy, in the generation and sharing of income, in the preservation of biodiversity and in the range of biopossibilities that trees can provide, as we usually do. talk to Suzano. But since nothing alive can be static, we have some challenges, and the “system” needs to constantly modernize.

In this sense, I intend to talk a little about what I call "beginning of the chain", more specifically in the system of production and commercialization of forest seedlings, which, in my opinion, needs a careful look, either by the seedling producers themselves, from the consumer market (from large and medium forestry companies to individual customers), also passing through the necessary system of regulation and inspection.

The production and sale of seedlings are regulated by the Seeds and Seedlings Law, Law number 10,711, published in August 2003 (it is important to mention that the first Federal Law on the subject was number 4,727, of July 1965), and its conception took place at a time when the planted forest sector was already very relevant, but not as well articulated as it is today. In addition, an important feature of this Law is that it was born much more focused on the issue of market regulation of agricultural seeds and less on seedlings.

Part of this initial focus on the agricultural sector, in addition to the enormous piracy of seeds that already existed at the time, could be justified by the apparent ease of control, since the number of players is much smaller when compared to the seedling market, which has a geographical dispersion and a much larger number of plant species than the seed market.

Thus, considering the relevance of agribusiness to the Brazilian economy and some vulnerabilities, such as the aforementioned seed piracy, it was urgent to regulate this market, including production control mechanisms and a system to punish illegality. This legitimate movement was already seen with "good eyes", for the necessary modernization, to give the guarantees that the system needs.

However, when we look at the largest market for forest seedlings, pine and eucalyptus, we notice a first, great and fundamental difference in relation to agricultural crop systems: in the case of forest species, we have an almost totally verticalized process, in which companies they are developers and holders of genetic materials, they have their own structures for the production of seedlings, almost exclusively this seedling production is aimed at their own consumption and, finally, the wood produced aims to serve and supply their own factories. This model is completely different from most agribusiness seeds and seedlings, where there are clearly different actors, including very unbalanced economic and political power.

A little after the elaboration of the Seeds and Seedlings Law, another important discussion on the subject developed, culminating with the enactment of the Cultivar Protection Law (Law number 9,456 of 1997). The objective, at the time, was to guarantee the rights for those who invested in innovation and in the development of new plant cultivars, guaranteeing the rights of the holders of genetic materials. With due regard for the differences, we can say that the protection of cultivars is equivalent to patents, but aimed at plants.

The issue of cultivar protection brings a second difference between forest and agricultural species: while the agricultural seed market seeks a return through royalties, the forest seedling market seeks, through the protection of cultivars, to guarantee competitive advantages for those who have invested 15 or 20 years and a few million dollars in the development of superior cultivars. Considering only the components of verticalization of the business and the cost and time to protect cultivars, it can be assumed that there are few holders of pine and eucalyptus cultivars today.

However, as we have already learned from several writers who have appeared in Revista Opiniões, the Brazilian forestry sector continues to grow. It is true that it was sidelined a few years ago, but investments in new forestry ventures and new capacity increases in pulp, energy and wood products plants have started to grow again. Suzano alone, in 2022, has a planting program of 800,000 seedlings per day. That's right! It is the biggest planting program that a company has done to date, worldwide.

And where does so much change come from?

Obviously, companies have modernized and increased their seedling production capacities, but more and more partner nurseries are included in the seedling supply chain. In addition to being strategic and commercially viable, it is also a way of sharing the generated value. And this point, including partner nurseries, lacks a careful look at the modernization issue.

A few years ago, the only concerns on the forest seedling market were availability and sometimes quality. The situation has changed radically and drastically. A first major concern concerns the origin of the genetic material and whether or not it is protected. Some cases of infringement of the intellectual property of eucalyptus cultivars have come to light in recent years, and the system has reacted with robust seedling production contracts, which seek to ensure that clones developed by a particular company are not shared with third parties.

But that just isn't enough! Some companies that outsource part of the seedling production have created procedures based on quality control by DNA analysis , ensuring that they receive seedlings from the right clones. This generates an additional cost for companies, but there is a guarantee not to “buy a pig in a poke”. This point is very serious, to prevent a company, due to ignorance, from buying seedlings of clones protected from third parties.

Another critical point concerns the health of the seedlings. Quality, which was previously restricted to the seedling's visual standards (height, homogeneity and apparent health), now requires much higher production standards, ensuring that seedlings are free from fungi, insects, bacteria and viruses, which have advanced a lot in the different forest borders of the country. There are cases of third-party nurseries that serve as a reference and model, even for many companies in the sector, but this is not the rule.

The self -regulation of the seedling production system, which needs initial government support, also needs to be modernized. Perhaps there is still very little left for the main forestry input, the seedlings, to be treated with the importance and rigor it deserves, but an articulation can already be seen, bringing light to the subject. Let's wait, for the modernization to start from the beginning!