Growth in Chile’s plantations may have spelled growth in poverty

Chile’s industrial tree plantations are making a lot of money … but not necessarily for the people who live near them.
In Chile, research suggests timber plantations don’t lead to economic development for local communities. Photo: McKay Savage

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Timber production is a $6 billion business and the economic mainstay in south-central Chile. But the people who live around industrial plantations may include the poorest in the country, a new study has found.

The study of 180 municipalities or comunas – the first to examine the socioeconomic impact of industrial tree plantations in Chile over a decade, from 2001 to 2011 – found that the greater the expansion of tree plantations in a locality, the higher the poverty rate.

“Our data indicate that large plantations inevitably displace agricultural land,” said Manuel Guariguata, principal scientist at the Center for International Forestry Research (CIFOR), one of the study’s co-authors.

“And because they require a more technically skilled workforce, they may not generate enough economic opportunities for local workers or local development,” he added.

Industrial forestry accounts for 3 percent of Chile’s gross domestic product, and the timber it produces is the country’s second-largest export commodity, after minerals.

Plantations of fast-growing pine (mainly Pinus radiata) and eucalyptus (mostly Eucalyptus globulus) expanded from 300,000 hectares in 1974 to about 2.7 million hectares by 2013.

Spurring that growth were laws passed in the 1970s by the military government, which allowed the privatization of large expanses of public land and provided subsidies and tax breaks for plantations.


Critics say the rapid expansion has taken a high social and environmental toll.

Establishment of plantations on land that indigenous Mapuche communities claim as their ancestral territory has sparked conflicts, as it reduces access to sacred lands and eliminates the native forests where the people’s protective spirits dwelled.

Economic development does not automatically follow this type of investment, and there are signs that it could make it harder for people to pull themselves out of poverty

Krister Andersson

Critics also blame plantations for absorbing large amounts of fresh water, reducing the supplies available for local agriculture. Combined with the replacement of farms by plantations, that further shrinks the job market for unskilled agricultural workers.

“We don’t prove that forestry firms are causing these negative impacts, but our study does raise warning signs,” said co-author Krister Andersson, director of the Center for the Governance of Natural Resources at the University of Colorado at Boulder.

“What our analysis shows is that economic development does not automatically follow this type of investment, and there are signs that it could make it harder for people to pull themselves out of poverty,” he said.

Plantations are less labor-intensive than traditional small farms, and the people they hire are generally semi-skilled employees from out of town, rather than local unskilled agricultural workers, Andersson said.

The result is a vicious circle: With fewer jobs available, unskilled laborers may migrate to cities in search of employment. That means fewer taxpayers, less government revenue and fewer funds for public services such as local schools. Then, with fewer students, some rural schools close, further reducing local development opportunities.

One exception to that pattern is Los Muermos, a town of about 16,000 people in Chile’s southern Los Lagos region.

To get the greatest possible benefit from plantations, the municipal government established a Department of Forest Development and convened government officials, academics, businesspeople and civic leaders to discuss local development issues and concerns.

“This is a good example of a local population and its political representatives grappling with the challenges facing its rural residents and the economic potential of surrounding forest plantations,” the study’s authors write.

“The experience in Los Muermos, compared to experiences in neighboring comunas, suggests that the socioeconomic impact of tree plantations will depend to a large extent on the ways in which the local actors interact with, and respond to, the forestry firms,” they say.


Other countries can learn from the study and the experience of Chile, which has the largest and oldest plantation-forestry industry in Latin America, the authors say. The Chile study was made possible by the amount of information available – annual data in some cases and biennial in others – in government databases.

Governments that are pursuing poverty-reduction goals should establish safeguards for how these industries operate

Krister Andersson

One key element is that countries need to generate reliable data and user-friendly databases such as those used for this study, which are available to the public and which allow analysis of impacts over time, according to Guariguata.

“This is a timely lesson for those countries in South America that are expanding their planted forest area as sources of timber and pulp through government-led programs,” Guariguata said.

“In the future, they will want to know whether large-scale tree plantations had positive or negative impacts on livelihoods.”

The study also underscores the importance of experimenting with policies for promoting forestry plantations and being aware of potential pitfalls, Andersson said.

“Governments that are pursuing poverty-reduction goals should establish safeguards for how these industries operate,” he said.

“They need to consider how the plantations relate to their neighbors, how to involve others in decision-making, employment or training opportunities and water rights, to make sure local farmers are not negatively affected.”

For more information on this research, contact Manuel Guariguata on

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