The new planting bonus and the law the Government is studying for the forestry sector

The Government, together with various actors in the forestry industry, is working on the guidelines of a new law to promote the sector's growth, and which would eventually include a subsidy for plantations. This was revealed by Pulso, citing several sources from this economic branch and also from the Executive itself.

During recent years, companies and trade associations have warned about a slowdown in forestry activity. In this context - to which high unemployment is added - is where the initiative is framed which, nevertheless, targets medium and small producers, leaving out large companies such as Arauco and CMPC, both now focusing a large part of their efforts on their megaprojects in Brazil.

Government prepares new law to promote forestry

According to the information reported by the specialized outlet, the Executive's projection is to forest between 20,000 and 25,000 hectares per year, generating 55,000 additional jobs.

Regarding the subsidy for planting, Corma's general manager, Antonio Minte, told Pulso that it would be 90% for small producers and 75% for medium ones, along with an extra 5% if there is associativity among the parties.

Another 'bonus' that would be considered in the initiative, where the Government already delivered the first ideas to the Forestry Policy Council (CPF) in August, is one where, for each ton of carbon captured, a determined amount is paid.

However, the release of these subsidies would be conditional on producers demonstrating that one year after the plantation is made, at least 75% of the trees are still alive, according to what the president of the College of Forestry Engineers, Simón Berti, told the aforementioned outlet.

From the Ministry of Agriculture, in turn, they stated to Pulso that they are proposing "a comprehensive agenda to recover investment, strengthen SMEs, protect and recover our forests and move towards sustainable forestry development."

Other points indicated by the portfolio are the recovery of native forest, increasing carbon capture and generating economic activity "in our territories." "The goal is not to return to the past, but to build a new forestry policy for the future," they emphasized.

In 1974, Decree Law 701 was created, which established bonuses for companies for forestry plantation.

Later modified in 1998 and expired in 2012, it helped boost this type of industry in the south-central part of the country, with an impact both on employment and also on the export portfolio, where cellulose alone represented 2.88% of Chile's shipments abroad, according to Central Bank data.

According to what Berti told Pulso, the bonus cost the State close to US$500 million, while today, "only one of the large companies pays that figure in taxes every year. It has always been a phenomenal business for the State, because what has been spent on the bonus has been returned many times over."

However, the aforementioned decree and the industry also face criticism regarding the environmental changes that monocultures can bring about in the areas where they are located and the decrease of native forest.

Source:BiobioChile