Investing in Native Tree Species and Agroforestry Systems in Brazil: An Economic Valuation
Silviculture of native species and agroforestry systems have an enormous potential for tropical wood markets, in Brazil and globally. Their economic viability is shown in this report.
These results also demonstrate that the main market risk variables can be included in the valuation of forest assets, including exchange rates, inflation, production volumes, and price volatility.
- More than 70 million hectares (Mha) of degraded pastures in Brazil could benefit from forest and landscape restoration, afforestation, and reforestation.
- Brazil’s laws and policies support the restoration and reforestation of degraded lands with native tree species for economic use, which is an opportunity to establish a viable forest economy based on silviculture of native species and agroforestry systems (AFS).
- The VERENA Project conducted 12 case studies in the Amazon Forest, Atlantic Forest, and Brazilian Savanna (Cerrado) to assess the economic viability of silviculture using native species and AFS.
- The project found risk-adjusted returns on silviculture of native species and AFS comparable to those obtained from commercial plantations of exotic tree species commonly used in Brazil’s forestry sector today, while sensitivity analysis showed a lower market risk. However, capital requirements are higher, and the payback period is longer, which are important barriers to scale up silviculture of native species in Brazil.
- Increased investment in research, development, and innovation (RDI) is necessary to support the competitiveness of native species in commercial forestry and AFS and move from pilot projects to landscape scale.
- It will be critical to develop business models for native species and AFS to attract private investors and farmers.
Connected to this report:
- Research Gaps and Priorities in Silviculture of Native Species in Brazil
- The Business of Planting Trees: A Growing Investment Opportunity
- Verena Investment Tool: Valuing Reforestation With Native Tree Species and Agroforestry Systems
The Verena Project
Promoting large-scale land restoration and reforestation in Brazil with native treesPart of Forest and Landscape Restoration
TerraMatch connects local land restoration champions to capital and technical assistance through a trusted online system that vets their work, supports their growth, and monitors their progress.Part of Forest and Landscape Restoration