Minister of Agriculture Prepares Forestry Promotion Bill and Industry Calls for Focus on SMEs

The forestry industry has been arguing for several years that for this sector to continue developing in Chile, it is necessary to generate incentives that encourage activity and promote plantations, especially with stimuli for SMEs.

The decline in forest mass, insecurity, fires, and "permisología" (excessive bureaucracy) have led to a decrease in operations and caused large companies, such as Arauco of the Angelini group and CMPC of the Matte family, to turn their expansions toward Brazil.

But this demand from the forestry sector is being considered by the Minister of Agriculture, Jaime Campos. "I have discussed this with President Kast; one of my ambitions or purposes in the Ministry of Agriculture is to have a forestry promotion law again that accounts for this reality," he stated yesterday on T13 Radio, alluding to the decline in plantations and the fact that the previous instrument that boosted the sector, Decree Law 701 of 1974, ceased to operate in 2012.

Campos stated that "in our country, there are more than 1.5 million hectares of eroded land with forestry potential, susceptible to being planted, and they are not being planted."

The minister indicated that the planned promotion law must be adjusted "to the reality of today's Chile, not that of the 1960s or 70s." He argued that "forestry activity has been demonized in recent times. The beneficial impact that forestry activity generates on the environment is remarkable. It is the most important means to contain erosion in Chile." Likewise, he pointed out the economic effect of this area in the country.

To drive this project forward, Campos indicated that he formed a commission headed by Fernando Raga, a professional who knows the industry closely. He was president of the Chilean Wood Corporation (Corma) and executive director of the Forestry Institute (Infor), a public entity of which he is now president of its board of directors.

Raga was also director of CMPC Maderas, Forestal Mininco, and Bosques del Plata in Argentina.

Campos specified that for budgetary reasons, they will not present this project in 2026, but he stated that it will be finalized in 2027.

Optimism with Urgency

Rodrigo O'Ryan, president of Corma, stated that "we value that the need for a forestry promotion policy for Chile is being reinstated, because recovering forestation is a long-cherished goal for the sector and a strategic necessity for the country. The foundation of all forestry activity is precisely the forests planted today, thinking about the coming decades. Without new forests, there is no future supply of timber, nor continuity for thousands of jobs, SMEs, and regional economies that depend on this activity."

O'Ryan added that "the data clearly show the magnitude of the challenge. During the decades when incentive instruments existed, Chile planted more than 130,000 hectares annually. However, that figure fell drastically, and today new forestation barely reaches 1,831 hectares. This decline has especially affected small and medium-sized landowners."

According to the latest available data from Infor, as of 2023, forest plantations covered 2,224,163 hectares nationwide, a decrease of 2.3% annually and a reduction of almost 8% compared to 2016, before the megafires in the south-central region.

Hernán Muñoz, president of PymeMad —a guild that groups SMEs in the forestry sector— valued the statements by Jaime Campos. At the same time, he recalled that "wood SMEs are in a long silent crisis: 169 sawmills closed in five years, according to Infor, and this cannot hold out any longer."

Regarding the timeline contemplated by the Government (2027) to promote the project, Muñoz assured that "the crisis does not wait." He added that "while the project is being drafted for 2027, we will continue to see closures. If nothing is done, our projection is that in the next five years we will have 100 more sawmills closed. We need to reactivate the construction sector urgently and with special measures to mitigate rising costs and increase our productivity. Chile needs to build many quality homes, and the best material will always be wood."

Priorities

The president of Pymemad stated that the focus of the project "must be on incentives for forestation by small and medium-sized landowners and productive chain integration, so that wood becomes a supply for local SMEs and a driver for generating greater added value, such as industrialized wood construction."

Muñoz indicated that each SME sawmill supports about 150 direct and indirect jobs. "Reactivating the forestry base means thousands of recovered rural jobs," he highlighted.

For the head of Corma, "the main focus of a new forestry promotion bill should be on small and medium-sized forest landowners. The data show that the decline in forestation especially affected this segment."

O'Ryan explained that "while in 2006, small landowners forested more than 40,000 hectares annually, by 2016 that figure fell to just over 1,000 hectares. Currently, they are practically not foresting or reforesting."

He added that other focuses should aim, among others, at recovering areas affected by fires —with the forestation of at least 20,000 hectares annually until 2035—, preventing these disasters, and promoting "associativity among landowners, allowing leveraging of initiatives linked to carbon mitigation and access to carbon credit markets."

Source:El Mercurio