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Luis Calvo Ramires Jr.

Executive Director of Ramires Reflortec and Vice President of Reflore


Could it be that the maximum potential productivity has not already been reached?

We all know that planted forests or forest plantations have played a fundamental role in Brazil's economy and environment. Over the last few decades, there has been a significant increase in the production of planted forests in the country, mainly driven by the pulp and paper sector. However, despite the advances, there are important challenges that need to be faced to ensure the sustainability and efficiency of this activity.

In addition to the challenges in aspects that directly affect production, such as the increase in input costs, the shortage of labor and the logistical infrastructure, we have to focus on two very important issues that directly affect the return on the forestry business: Forest productivity, a much debated and studied topic, and another little questioned, but a very important input for the forest, which is the Earth, an input that is increasingly scarce and expensive as forestry projects grow.

The productivity of planted forests in Brazil was a key factor in boosting the forest sector compared to the rest of the world. The average productivity of eucalyptus plantations has reached around 35 cubic meters per hectare per year and can reach up to 40 cubic meters per hectare per year. These numbers reflect advances in terms of genetic improvements, investments in research and development.

The continuous search for greater productivity is essential to meet the growing demand for forest products, to ensure the competitiveness of the sector and to promote the long-term sustainability of planted forests in Brazil. However, the important question to ask is: has the maximum potential productivity not already been reached?

My answer to this question tends very much towards yes, and today the likely gains may still be on a small scale gains from improvements in forestry and development of new clonal materials.

The new materials must not only focus on increasing productivity, but on variability so that there is no stagnation or even a decrease in average productivity.

With productivity gains limited to growth reaching its near-maximum potential, the cost related to land becomes a key element in the economic viability of new projects and forest plantations, and this is something that is rarely discussed, because in any case , these prices are regulated by the market rule of supply and demand.

In much of its expansion, forestry projects have established themselves in new agricultural frontiers with abundant land availability. However, this has become increasingly difficult and today the borders are no longer so unexplored, causing an increasingly fierce competition for land, thus raising its prices for acquisition or lease.

To cite as an example, today we have Mato Grosso do Sul, which is the main frontier for the development of forestry projects. In the early 2000s, when industries began to be established in the state, a hectare of land for forestry could be acquired on average for 500 dollars and leases were rarer since the acquisition cost was still low. Today, with expansion investments taking place mainly on the east coast of the state, prices can reach 5,000 to 6,000 dollars per hectare, making the viability of forestry projects with land acquisition at these prices very difficult and almost impossible.

Leasing has been the most adopted strategy as an alternative to acquisition for forestry projects in the region. The capital cost for investment in land and in forestry projects, which are of long maturation, is extremely sensitive, making the projects unfeasible. Price pressure, even for leases, has been and must be a major challenge for large projects.

Since land is one of the main inputs for forestry projects or the basis of the forestry industry, its high costs can significantly hinder new developments; allied to productivity, which should grow little or even remain at current levels for a long time, I see a very challenging scenario for the development of forestry enterprises and plantations from now on.

Despite not having been mentioned at the beginning of the article as a challenge, Environmental Legislation issues still in some parts of the country are a major obstacle to the growth of the sector. Once again, citing the State of Mato Grosso do Sul as an example, and in this case, as an example to be followed, the environmental issue has been very well handled and has not been a challenge; on the contrary, it has been a differential factor for growth.

Semac Resolution 17 of September 20, 2007 was a watershed in the growth of forest plantations when it decided that the planting and management of native or exotic forest species, with the purpose of producing and cutting or extracting various forest products, in areas of alternative land use with agricultural activity, or in areas that are underutilized or degraded, as long as they are located outside the Pantanal, Permanent Preservation Areas and Legal Reserve, are exempt from environmental licensing.

The reduction of bureaucracy in planting forests, bringing other agricultural crops on a par, led to a great growth in the area of planted forests and the availability of wood in the State, which today has been the great attraction for the development of the Forest Based Industry in Mato Grosso do Sul .

Even with this reduction of bureaucracy in licensing that, at first, could seem to pose a risk to environmental issues, the data recently collected and presented by the Mato Grosso do Sul Agriculture Federation, the Siga project (highlighted table) show the opposite, there was a gain in the past 13 years.

The data show a decline in the traditional areas of livestock in the order of 4.2 million hectares, and a growth and diversification of other crops, in this case the forests planted in the period from 2010 to 2023 grew by almost 1 million hectares. The positive fact that draws attention is that the remaining native forests in this same period also grew by almost 250,000 hectares, clearly demonstrating greater responsibility and concern of the new projects with the agenda of sustainability and compliance with environmental legislation.

It is very important to highlight, in this same work by the Federation of Agriculture of Mato Grosso do Sul, which position the crops produced by the State of Mato Grosso do Sul occupy today, being an important player in Brazilian and world agribusiness.

The facts and data show a growth of the agricultural sectors in the State, especially in the forests planted in an orderly way and fulfilling the requirements for a sustainable growth, mainly in the Environmental and Social theme, since it will be one of the great employers of the State.

Probably, the competition for land and the conquest of the necessary spaces for the development of new projects has in fact opened discussions and eyes to regions where there is still room for growth and more competitive land cost. However, new locations require new research on clonal materials for the productivity challenge to be overcome.

The recent history of Mato Grosso do Sul shows that if there is political will to face the challenges, such as the change of legislation more adequate to the activity, allied to the natural characteristics of the soil and abundant land with potential for forestry production, in recent years it has become the Mato Grosso do Sul in the “time ball” of plantations and forestry industry. However, growth brings new challenges such as the shortage of labor and competition for land, not to mention logistics in all senses of mobility, from urban infrastructure to road and rail transport of inputs.

The challenges for the sector to continue growing are big and of different natures, we will see a lot of changes and we will have to be more efficient in the use of the land, always seeking maximum productivity, we will see regions that can be explored where the plans did not foresee the growth of forests, in especially in Mato Grosso do Sul.

Finally, nothing beats good planning and the engagement of all actors in a plan and a project, which is why we continue to grow in Mato Grosso do Sul, still being for years one of the main centers of development of the forest-based industry in Brazil and in the world.