Forestry in Argentina
Its variety of climates, land quality, and reliable precipitation allow for the cultivation of different tree species at high growth rates.
However, this vast amount is not easy to put into production due to its land tenure situation (the proliferation of owners holding areas of 5 to 10 hectares), legislation which protects native forests, and lack of infrastructure.
However, as a producer of primary goods with low value added, the country experienced an overall trade deficit that ran from US$500 million to US$1 billion from 1992 to 2002.
[1] In terms of the major destinations of Argentina's exports of wood and furniture products, the United States, Brazil, Spain, and Chile continue to be the most important markets.
Currently there is a dispute between Uruguay and Argentina over two cellulose plants that are being built on the Uruguayan side of the Río de la Plata, which forms the border between the two countries.
[1] Argentina is the fourth largest producer of paper, paperboard and corrugated fiberboard in Latin America.
It is estimated that this year, between 40,000 and 50,000 hectares (100,000 to 124,000 acres) will be cultivated mainly in the Mesopotamia region (the provinces of Misiones, Corrientes, and Entre Ríos).
This law, besides providing economic incentives for small and medium producers, has also created important fiscal benefits to attract both domestic and foreign investments.
The relative short average periods for harvest and Brazil's current young cultivation should help Argentina become more competitive in the wood market.
[1] This law oversees activities such as implementation of projects, restoration, maintenance, protection, and sustainable management of native forests.
[1] This law was implemented in January 1999 and is intended to increase land development by the Argentine forestry industry to 3 million hectares of cultivated forest in 10 years.
This law also provides tax benefits and economic support for Argentine and foreign investors.
[1] Among the most important regions in Argentina for the industry are the provinces of Misiones, Corrientes, Entre Ríos, and Buenos Aires.
These four provinces form the country's eastern border with Uruguay and Brazil, and comprise 80% of the total cultivated area.
The reasons behind this growth include:[1] During the 1990s, Argentina was a net importer of forestry products with high value-added (i.e. paper, cardboard, furniture, etc.)
[1] There are both negative and positive factors that currently affect the forestry industry in Argentina that need to be considered by investors.
[1] Argentina still has low land prices relative to other countries involved in forestry (e.g., Chile and Brazil).
[1] Another issue is the lack of interest of the SAGPyA (Secretaria de Agricultura, Ganaderia, Pesca y Alimentacion) to promote the forestry industry.
In 2006, the Argentine Forestry Association-Mesopotamia (Afome) complained to the Ministry of Economy about how SAGPyA has managed the Law 25,008.
Afome blames SAGPyA for not reaching cultivation goals established in 1999 due to delayed promotional payments.
