Economic Trends in the timber industry of the Brazilian Amazon: evidence fron Paragominas

Título	Economic Trends in the timber industry of the Brazilian Amazon: evidence fron Paragominas
Autores	Steven W. Stone
Ano de publicação	1996
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STONE, S. 1996. Economic Trends in the timber industry of the Brazilian Amazon: evidence fron Paragominas. CREED Working Paper Series, 6, 28. Amsterdam: PREM-Poverty Reduction and Environmental Management.

Introduction

The timber industry of Amazônia is changing rapidly. From a slowly evolving base of extraction in the estuary areas of the Amazon, the industry has expanded along an extensive road network straddling upland areas of terra firme forest (Rankin, 1985). At the same time that transportation costs over land have decreased, higher domestic and international wood prices have extended the range of profitable timber extraction (Stone, 1996). The result has been a dramatic increase in the area of economically accessible timber over the last thirty years, and an explosion of logging activity. Where are these trends leading, and what are the implications for Amazônia? The changes underway in the timber industry of Amazônia will profoundly alter the economy and ecology of the entire Basin. But, as of yet, the economic trends within the industry are little understood, much less what their social and environmental effects might be. This research examines changes in the economic profile of timber extraction and processing in an old frontier area, the county of Paragominas (9°W, 3°S) in the Eastern Amazonian state of Pará (see Figure 1). As one of the earliest centres of upland logging, its experience after twenty years of logging, may offer insights to the likely evolution of the industry as it spreads to other regions of the Brazilian Amazon. Why are economic trends in the timber industry of the Amazon important? First, over 80% of the Amazon is covered by forest (Skole and Tucker, 1993), containing billions of cubic meters of tropical hardwoods. As prices rise and the costs of extraction decrease, the area of economically accessible forest will grow, and with it, an industry to extract and process the timber. Trends in the timber industry will not only determine how forest rents are distributed among income groups, but also the environmental impact of future logging. For example, a trend towards more capitalintensive extraction and processing may signal a redistribution of rents away from owners of labour to owners of capital. Second, the timber industry has a large impact on land use and figures prominently in the environmental debate over the Amazon. Indirectly, roads opened by loggers may facilitate the colonisation of land. Directly, logging damages forested land after extraction by compacting soil, opening canopy, and increasing the risk of fire (Verissimo et al., 1992). Although there are opportunities for secondary regrowth, few cases of forest management can be found. To make an informed prediction about the role of an expanding timber industry on the economy and environment of the Brazilian Amazon, we need to know how it will evolve. This paper attempts to make a contribution to our understanding of these trends by studying changes in the timber industry of Paragominas between 1990 and 1995. Although this is a brief interval, the frontier is dynamic. Secular trends in raw material prices and property rights are already apparent. The paper is structured around five parts. In the second section , a general theory of industry response to changing frontier conditions is presented. The third section introduces the methodology used to collect and analyse data for the study, and the next presents the results of the analysis. The final section discusses the results and their implications for forest management and policy in the Brazilian Amazon.