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Commercial Reforestation Potential in Colombia

CHALLENGE

With over 60 million ha of natural forests, Colombia is considered heavily forested (slightly more than half the total territory), with an average annual deforestation rate of 280,000 hectares over the last decade (~0.5%). Native forests currently represent main source of wood and fiber for communities and local industries.

Colombia has an enormous potential to develop commercial reforestation programs: it benefits from excellent conditions for tree growth, is endowed with millions of hectares potentially suitable for commercial reforestation, and is geographically well positioned for exports (through both Pacific and Atlantic coasts). However, commercial forestry in Colombia is still in very early stages of development: recent estimates indicate that only around 300 thousand ha are currently under commercial plantations, which is strikingly low compared to Chile (2.3 million ha), Argentina (1.4 million ha) and Uruguay (1 million ha). This situation is mainly due to decades of security, which has discouraged development in rural areas and dampened investors’ interests.

With tremendous progress toward the consolidation of peace over the past few years, this situation is likely to change rapidly. The development of commercial forestry is highly featured on the Government’s agenda in rural areas and is identified as one of the pillars for economic growth and employment under its National Development Plan “Prosperidad para Todos 2011-2014”.

Beyond political willingness, enabling factors –both internal and external- are in place to support commercial reforestation in Colombia, including:

(i)            Large areas suitable for commercial reforestation: about 17 million hectares have been identified as potentially suitable for commercial reforestation (World Forest Investment, 2012).

(ii)           Growing demand for timber, pulp and paper. Demand for timber, pulp and paper has significantly grown over the past decade: while demand was long mainly met by natural forests, it became very clear that such a growing demand would require a diversification of supply, through developments of planted forests.

(iii)          A favorable business climate. Colombia is ranked 5th in terms of “Ease of doing business” (IFC, The World Bank, 2013).

APPROACH

The PROFOR activity aims to support the Government of Colombia’s effort to define the most appropriate model for commercial reforestation in Colombia with commercial planted forests developed in an economically profitable, socially inclusive, and environmentally friendly way.

This activity will be implemented in a two-phase approach. The first phase mainly consists of analytical work targeted on four strategic areas: (i) zoning of the most promising areas for commercial reforestation; (ii) analysis of value chain; (iii) institutional and policy framework; and (iv) transportation infrastructure. The second phase consists of in-depth studies based on outcomes of the diagnosis exercise.

RESULTS

The diagnostic analysis mostly confirmed the anticipated technical issues and the relevance of the four strategic areas. Key elements to be covered under the in-depth studies were discussed with many stakeholders as part of the diagnostic process.

The potential for commercial reforestation in Colombia is gaining momentum, particularly in the context of the peace process discussion. As a matter of fact, a strong emphasis is on rural development: the government is seeking options to generate economic opportunities in rural areas that have been most affected by the conflict. Investors are also watching very carefully the ongoing process and many have clearly indicated interest to develop plantation operations in Colombia (also highlighting that some key issues remained to be solved, which this study should help to do).

At request of the Colombian Government, the World Bank organized a South-South knowledge exchange in Chile in September 2015, so that the Colombian delegation could learn from Chile’s extensive experience in plantations. Sustainable reforestation is also receiving more and more attention across Latin America; this work was featured in an article in El PaĂ­s and in a PROFOR blog.

The final study identified a number of key findings, among them:

  • Forestry’s total contribution to the national GDP has dropped since 2005, from 1.4% to 1.1% in 2014.
  • On the other hand, consumption of wood products has increased steadily, but this has not resulted in an increase of national added value in forestry and primary processing.
  • The Colombian market has changed dramatically, with wood from commercial plantations constituting more than 75% of the total volume of industrial round wood mobilized. While large industries see the positive market environment and actively address the increasing raw material shortage by engaging in planation activities, small industries mentioned problems regarding raw material access, lack of familiarity with the plantation species, its processing and markets.
  • Colombia has a productive commercial plantation area of 310,000 hectares of commercial forest plantations, of which almost 60% are 10 years old or younger, and therefore are not yet ready for timber production.
  • An enabling legal and institutional framework is crucial for the promotion of the commercial plantation sector.

Outcomes from this activity have gained great visibility within the Colombian Government. They are also highly relevant for the World Bank portfolio. International climate-related financing through the BioCarbon Fund has been made available to Colombia, and the government has confirmed that it would like to target this support in the Orinoquia region, where commercial plantations could be a key element.

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For stories and updates on related activities, follow us on twitter and facebook, or to our mailing list for regular updates.


Last Updated : 02-26-2017

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