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Growing Exports Brazil English cover 9/8/03 8:51 PM Page 3 Growing exports The Brazilian tropical timber industry and international markets Duncan Macqueen (Ed.) Maryanne Grieg-Gran Eirivelthon Lima James MacGregor Frank Merry Neil Scotland Roberto Smeraldi Carlos Young July, 2003 Copies of this report are available in Portuguese from: Earthprint Limited, Orders Department, P.O. Box 119, Stevenage, Hertfordshire, SG1 4TP e-mail: [email protected] http://www.earthprint.com For enquiries - Tel: +44 1438 748111 Fax: +44 1438 748844 e-mail: [email protected] Correspondence should be addressed to: Duncan Macqueen, Forestry and Land Use Programme, International Institute for Environment and Development, 4 Hanover Street, Edinburgh EH2 2EN Tel: +44 131 226 6860 Fax: +44 131 624 7050 e-mail: [email protected] Website: http://www.iied.org Citation: Macqueen, D.J., Grieg-Gran, M., Lima, E., MacGregor, J., Merry, F., Prochnik, V., Scotland, N., Smeraldi, R. and Young, C.E.F. (2003) Growing Exports: The Brazilian tropical timber industry and international markets. IIED Small and Medium Enterprise series No.1. International Institute for Environment and Development, London, UK. Design: Eileen Higgins Cover photos: Duncan Macqueen Illustration on cover and chapter pages: Print: by Russel Press, Nottingham, UK. Printed on Sovereign Silk 115gsm, 100% chlorine free ISBN 1 84369 437 9 "English is a simple but hard language. It consists entirely of foreign words pronounced wrongly" - Kurt Tucholsky i Author Contact Details: Maryanne Grieg-Gran International Institute for Environment and Development (IIED) 3 Endsleigh Street London WC1H 0DD Tel: ++ 44 207 872 7325 Email: [email protected] Eirivelthon Lima Instituto de Pesquisa Ambiental da Amazônia (IPAM) Av. Nazare 669 CEP 66035-170 Belem Pará Brazil Tel: ++ 55 91 2414647 / 2415495 / 2416700 Email: [email protected] James MacGregor International Institute for Environment and Development (IIED) 3 Endsleigh Street London WC1H 0DD Tel: ++ 44 207 872 7327 Email: [email protected] Duncan Macqueen (Editor / Lead author) International Institute for Environment and Development (IIED) 4 Hanover Street Edinburgh EH2 2EN Tel: ++ 44 141 226 6860 Email: [email protected] Frank Merry Instituto de Pesquisa Ambiental da Amazônia (IPAM) Av. Nazare 669 CEP 66035-170 Belem Pará Brazil Tel: ++ 55 91 2414647 / 2415495 / 2416700 ii Email: [email protected] Victor Prochnik Instituto de Economia Universidade Federal do Rio de Janeiro Av. Pasteur 250 Rio de Janeiro CEP 22290-240 Brazil Tel: ++ 55 21 38735248 Email: [email protected] Roberto Smeraldi Amigos da Terra - Amazônia Brasileira Rua Bento de Andrade 85 São Paulo CEP 04503-010 Email: [email protected] Neil Scotland Rue Cardinal Lavigerie 23 (3rd floor) Etterbeek 1040 Brussels Belgium Email: [email protected] Carlos Eduardo Frickmann Young Instituto de Economia Universidade Federal do Rio de Janeiro Av. Pasteur 250 Rio de Janeiro CEP 22290-240 Brazil Tel: ++55 21 38735248 Email: [email protected] iii CONTENTS EXECUTIVE SUMMARY........................................................................................ vi 1 An introduction to the Brazilian forest context..................................................... 16 Duncan Macqueen.................................................................................................... 16 1.1. The background to this study............................................................................. 16 1.2 Why this study is relevant ................................................................................... 17 1.3 Why Brazilian forest resources are important nationally and internationally............ 18 1.4 Government vision for Brazilian forest resources and forest industries................... 21 1.5 Brazilian concerns over forest resources and industry.......................................... 25 1.6 Conclusions ....................................................................................................... 29 2. What is the current context of Brazilian timber production and trade? James MacGregor and Maryanne Grieg-Gran ................................................................... 30 2.1 Introduction:....................................................................................................... 30 2.2 General global context........................................................................................ 30 2.3 Brazilian production............................................................................................ 34 2.4 Brazilian exports................................................................................................. 37 2.5 Consumption:..................................................................................................... 47 2.6 Imports.............................................................................................................. 49 2.7 Conclusions ....................................................................................................... 50 3. Expedient plunder? - the new legal context for Amazônian logging ................... 51 Roberto Smeraldi ...................................................................................................... 51 3.1 Historic development of timber exports in Amazônia - 1950-2003 ...................... 51 3.2 A new context and the increasing cost of illegality................................................ 54 3.4 The agrarian settlements revolutionize timber supply ............................................ 57 3.5 The extinction of forest management activities...................................................... 59 3.6 The new context of expedient plunder................................................................. 60 3.7 The residual niches of current illegality................................................................. 61 3.8 Independent certification and the campaign against it ........................................... 63 3.9 Classification of legal and desirable activities ....................................................... 64 3.10 Conclusions ..................................................................................................... 65 4. Foreign direct investment and the industrial structure of the Brazilian forest sector......................................................................................................................... 67 Carlos Young and Victor Prochnik......................................................................... 67 4.1 Background ....................................................................................................... 67 4.2 An introduction to Foreign Direct Investment (FDI) in the Brazilian economy....... 67 4.3 The quality of Brazil as a destination for FDI....................................................... 71 4.4 The debate over the likely impact of FDI on the Brazilian environment ................. 72 4.5 The links between the current forestry framework, FDI and sustainable forestry in Brazil....................................................................................................................... 73 4.6 Changing patterns of industrial structure linked to FDI......................................... 76 4.7. Barriers to FDI in Brazil .................................................................................... 82 4.8. Conclusions ...................................................................................................... 82 5. Views of Brazilian producers - increasing and sustaining exports...................... 84 Eirivelthon Lima and Frank Merry......................................................................... 84 5.1 Introduction....................................................................................................... 84 iv 5.2 How the perspectives of Brazilian producers were surveyed................................ 85 5.3 Introduction to the timber export situation........................................................... 86 5.4 Barriers to exports by forestry operations ........................................................... 89 5.5 Barriers to export in processing operations.......................................................... 93 5.6 Barriers to export faced in marketing operations.................................................. 98 5.7 Barriers to export faced in the financing of timber industries............................... 101 5.8 Conclusions ..................................................................................................... 105 6. What are consumer perceptions of the main barriers involved in sourcing timber products from Brazil?.............................................................................................. 109 James MacGregor and Duncan Macqueen............................................................ 109 6.1 Introduction to the consumers of Brazilian wood products................................. 109 6.2 Methodology ................................................................................................... 109 6.3 General perceptions ......................................................................................... 111 6.4 Issues of demand and consumer social and environmental concerns ................... 111 6.5 Informational issues.......................................................................................... 114 6.6 Product cost, specifications, and delivery.........................................................
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