Case study: Minas Gerais Forestry Development Project

Alcira Kreimer and Martha Preece

The Minas Gerais Forestry Development Project came about at a key point in environmental development and planning. For 20 years, the philosophy behind forest management was that forest fires are essentially healthy for overall growth and that forests should be allowed to burn naturally. The devastating effects of uncontrolled fires have forced a review of this approach and of policies that encourage or are lenient about slashing and burning forests to expand agricultural land. The Minas Gerais forestry project changed the emphasis from emergency response to long-term prevention and mitigation of uncontrolled conflagrations. This project recognized the need for important changes in government policies and priorities, especially those that minimize environmental damage from the expansion of agriculture and the promotion of economic growth. An important step in that direction is the project’s emphasis on controlling forest harvesting and forest fire, managing native forests, improving industrial production of wood, and educating the public about conservation.

The environment is deteriorating at a fast pace in Brazil. Its 850 million hectares contain about 350 million hectares of endangered tropical forest (about 30 percent of the world total). The depletion of forest resources is commonly attributed to the expansion of agriculture - particularly the conversion of natural forests to subsistence agriculture, livestock production, and commercial and industrial plantations. Brazil’s national deforestation rate is relatively low compared with other developing countries, but in the last five decades much of the forest stock has been removed for sawtimber and pulpwood. In addition, the savannah areas (cerrados) have been progressively reduced to provide land for agriculture and as a source of construction materials, fuelwood, and charcoal for the steel industry of Minas Gerais. Dennis Mahar (1989) reports that deforestation in Amazonia has accelerated since the mid-1970s. About 125,000 square kilometers had been cleared as of 1980 and almost 600,000 square kilometers by 1988.

Minas Gerais

Minas Gerais is the fourth largest state in Brazil. Its 586,624.3 square kilometers (7 percent of Brazil’s land area) are inhabited by about 14.6 million people, 26.5 percent of whom live in rural areas. A major iron and steel producing region, Minas Gerais produces 85 percent of Brazil’s charcoal-smelted pig iron and steel. It also leads in use of charcoal as a cooking fuel. Forestry, including charcoal manufacturing, is the second most important industry, generating 11 percent of the state’s gross domestic product.

Except for a few small state parks, virtually no virgin forests remain. Less than half of 1 percent of the state’s surface area is in state or federal parks and reserves. And many important ecosystems, including the cerrado, have no reserves at all. About 25.7 million hectares (43 percent of the total) are classified as “forest” lands, including 2.1 million hectares of plantations. But most of them are severely degraded because of mismanagement and uncontrolled timber removal. This has disrupted the natural and human environment, degrading soil and water, making fuelwood scarce, reducing agricultural productivity, and increasing the risk of floods. Further degradation, whether the result of natural hazards or mismanagement, threatens long-term sustainable development by increasing the region’s vulnerability to disasters. Uncontrolled fires disturb the soil, diminish its ability to store water, and threaten the forest’s ecological balance. Reduced tree cover - because of forest fires or deforestation - magnifies the risk of flooding, water runoff, the sedimentation of riverbeds, and thus disasters.

The growing industrial demand for fuelwood, the repeated uncontrolled burning of pasturelands, and rudimentary, somewhat inefficient charcoal manufacturing methods have exacerbated the rate at which native forests are cut. Domestic demand for fuelwood cannot be sustained by natural regrowth, given the present low productivity of the natural forest. Despite large-scale reforestation and increasing supervision and control of forest cutting by the State Forestry Institute (IEF), more than 80 percent of the fuelwood used for charcoal production still comes from native forests - mostly from the cerrado areas. The gathering area for fuelwood continues to expand, threatening the survival of tropical forest ecosystems countrywide.

Regional vulnerability

There are no reliable data on the number and causes of forest fires in Minas Gerais. IEF estimates that up to 30 percent of the state is burned annually, mainly to clear land for pasture or croplands. Many of these deliberately set fires extend into forest areas, risking devastation and heavy economic and environmental losses. The problem is compounded by policies designed to expand the agricultural frontiers, by poorly defined regulations, and by inconsistencies between environmental laws and broad economic policies and incentives. IEF has no appropriate preventive action programs and inadequate staffing and equipment, so forests have become increasingly susceptible to natural disasters. Today, the equilibrium of some areas - particularly the cerrado ecosystem - is rapidly changing, possibly endangered by large-scale land clearing for agricultural purposes and to provide charcoal for the iron industry. Soil erosion and progressive degradation of the remaining forests force farmers to shorten fallow periods, eroding the land’s productive capacity and precipitating further destruction of the forests. These conditions have diminished the forest’s ability to maintain soil fertility, control water runoff, and prevent flooding.

Changes in Brazil’s forestry policy

The government’s objective of promoting economic development by expanding the agricultural frontier over the past two decades has put increasing pressure on Brazil’s forest lands. In the 1980s, there was growing recognition that efficient, sustainable economic development depends on sound use of natural resources. The government has tried to establish a policy and institutional framework to encourage the protection of natural forests. The government has modified important policies and laws that conflicted with the goals of environmental protection and sound management. One policy now prohibits new fiscal incentives for establishing extensive beef cattle schemes in forest areas of the Amazon. Another eliminates legislation that requires clearing land as proof of its occupancy and a precondition for securing the title to the land. This program also included measures in support of sustainable extractive uses of the forest. Forest development and conservation programs remain weak, however, because of strong resistance to land reform and population control, and the lack of consensus among professional, social, and political institutions. Moreover, forestry policies are difficult to implement in Brazil. This has been especially true of laws requiring reforestation in charcoal-producing areas.

The Minas Gerais Project

Environmental issues have become increasingly important in the Bank’s program in Brazil. In the last decade, the Bank has supported environmental, forestry, and Amerindian protection programs under many of its projects in Brazil. It has participated in more than 50 agricultural projects in the country, totaling about US$3.5 million.

In April 1982 the Bank appraised a project to finance 40,000 hectares of industrial-scale reforestation in the state of Minas Gerais. Negotiations broke down because the federal government was preparing a national reforestation program that would include most of the components contemplated for the project. Unfortunately, the national program failed to materialize for lack of government financing. Meanwhile the depletion of forest resources in Minas Gerais accelerated. In late 1985, the state government asked the Bank to support a forestry project that would help preserve and conserve the state’s native forests. The Bank’s involvement in the project is based on its strategy of promoting sustainable economic growth through comprehensive action programs for environmental management and protection of natural resource bases.

The Minas Gerais forestry project focuses on expanding reforestation and increasing the productivity of native forests through better management, protecting forests through conservation and prevention programs, and strengthening the management capabilities of the State Forestry Institute. The credit for reforestation will help finance the expansion and rehabilitation of the state’s industrial forest area. At the same time, through the small-scale reforestation program the Bank will continue supporting forestry activities that encourage better land management, the conservation of native species, and extension support for small farmer silviculture. Labor-intensive planting, plantation maintenance, and harvesting activities are expected to generate jobs and income in the rural areas. Meanwhile all of the Bank’s rural development projects have targeted the forest sector with land management, soil conservation, small-scale reforestation, and fire prevention and mitigation activities.

Through December 1985, more than 47,000 hectares of small woodlots were established on the land of more than 26,000 participating farmers. An additional 34,000 hectares are expected to be established on more than 14,300 properties. An increasing number of native species are seriously threatened by uncontrolled deforestation, so the project is establishing and managing 7,300 hectares of native species plantations. To encourage community participation, the project expects to subsidize small farmer forestry activities. Seedlings and extension will be provided free to farmers who supply the labor to plant the trees on their land.

The project’s forestry conservation component is a key feature of its hazard prevention and mitigation strategy. The fire prevention and control program combines legal controls with environmental education to stop invasive burning. Surveillance and policing will focus on virgin rainforest and other protected areas. The Bank is also financing the staffing and equipping of a State Operational Center (COE) for forest fire prevention and control. Federal and state agencies will coordinate the formation of ad hoc fire-fighting brigades and will provide the information needed to predict or combat fires. The private forest and forest industries sector will also be called upon to form fire-fighting units. Procedures will be updated, particularly the system of permits for controlled burning by landowners. Six fire towers will be built in parks and reserves as part of the comprehensive fire response effort. Public education and awareness campaigns will be aimed at preventing hazards through better land-use management, planting, controlled burning, and fire control techniques. A variety of activities will promote measures to prevent and mitigate environmental degradation and losses from natural hazards. A state forest inventory and vegetation maps will be prepared to monitor, protect, and control forest harvesting and to examine changes in vegetation annually and semiannually. This will allow the Control Department (DC) to identify areas where unauthorized cutting is taking place.

To prevent further degradation of the cerrado vegetation that covers 55 percent of the state - providing more than 80 percent of the charcoal for the steel industry - the project may try to increase productivity of cerrados’ energy production. Because of heavy cutting followed by repeated burning, much of this vegetation has been devastated. The project may establish eight experimental plots to determine what different management techniques yield in fuelwood and charcoal production.

To reduce the pace of environmental degradation and ultimately protect and improve the quality of life, the project proposes to consolidate state parks and reserves, create public recreation areas, and support ecological research. The project will finance infrastructure, equipment, and staff for existing (legally designated) reserve areas and develop the most comprehensive ecological research program ever carried out in the state.