Plantations are not forests. An anti-ecological model of forestry business looms over Paraguay

The expansion of European investments on eucalyptus plantations destroys biodiversity and the livelihood of Paraguayan peasants.

As the CBD discusses crucial issues for biodiversity such as land use in Target 1, and the impact of invasive species on ecosystems in Target 6, unfortunately the issue of industrial monocultures, such as tree plantations, is not included in the negotiations.

As in other South American countries, the area dedicated to tree plantations has grown considerably in Paraguay in recent decades, severely impacting biodiversity, the water cycle, and the soil, as well as the health and well-being of communities. In a country with one of the highest percentages of peasant population of Latin America, and home to many native and traditional agricultural species at risk of extinction, monocultures are the most dangerous threat to the preservation of traditional and agroecological agriculture.

Since 2018, Paraguayan President Mario Abdo has promoted investments through the creation of a line of credit for the forestry sector, granted through the National Development Bank with the enactment of Law 6616/20, opening the international market for the export of wood from plantations of exotic species, and the approval of a pulp mill for the company PARACEL.

Currently, the main industrial demand for biomass in Paraguay is to produce charcoal, used in the drying of grains. Paraguay is the fourth largest exporter of soybeans in the world, and drying soybeans before storage requires more than 500,000 tons of wood to be burned each year. A similar amount is required to dry wheat, corn, and other grains. 

Another connection between agribusiness and eucalyptus is the fact that in the eastern part of the country these plantations are replacing cattle pastures and industrial soybean monocultures, or are being incorporated into silvopastoral systems. In any case, disguised in a language of sustainability, the reality is that the land is tied in the long term to another non-sustainable and ecologically harmful use, with profitability as the only goal.

The Green Climate Fund (GCF), the financing mechanism of the United Nations Framework Convention on Climate Change, has approved approximately USD 102,000,000 for four projects in Paraguay to date. This includes the signing in 2020 of a controversial USD 25,000,000 equity deal with the German-based private equity fund Arbaro Fund to support its plans to develop new tree plantations in seven countries in Latin America. and sub-Saharan Africa, totaling 75,000 hectares. The Arbaro Fund was created by two German companies, the private consulting company UNIQUE Forestry and Land Use Gmbh, and the investment management company Finance in Motion.

Regional and world organizations strongly questioned the financing proposal by the Arbaro Fund to the GCF, citing the historical experiences of failure and destruction of ecosystems and communities in different countries. In this sense, the socio-environmental impacts of eucalyptus monocultures in Paraguay were investigated by Heñói in May 2021, paying attention to the dissociation between the discourse of the companies financed by the Arbaro Fund and the reality for the surrounding communities in terms of the supposed environmental and social benefits.

Contrary to what the companies declare, the insecurity and precariousness of work on the plantations, the breakdown of the local peasant economy, and the enormous area of land taken over by the plantations, damage the means of production and the livelihood of families, thus weakening food sovereignty and the right of the communities to a dignified life.

By Heñói – Paraguay Member of the Global Forest Coalition.

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