The Uruguayan Forestry Miracle

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South America is extremely diverse in terms of ecosystems: rainforest, desert, mountain forest, dry forest, native pastures, wetlands, peatlands, grasslands, and mangroves create a melting pot of landscapes. Despite this diversity, the Amazon rainforest, which spreads across almost a third of the continent and occupies nine countries, tends to steal all the headlines.

Last year, deforestation in Brazil increased by around 30%, the largest in a decade, while Argentina has lost 2.8 million hectares of native forests in the last 12 years. This would seem to be a general practice across the continent, yet Uruguay has become the exception to the rule.

How forestry became a game changer

Regarding landscape, Uruguay belongs to the Temperate Grassland biome, which makes up 95% of the country’s 176,215 km² territories. They can be described as plain prairies lacking in both trees and altitude, with an annual rainfall of 1,000-1,500 mm.

“For many generations, these lands were used as pastures for bovine and ovine cattle, and the forestry industry was quite residual back in the 1980s. The government and all political parties made a strong commitment to diversifying land use by creating a framework to promote forestry, industrial development and the protection of endemic forests,” says Diego Mora, president of the association of forest owners in Uruguay, the SPF (Sociedad de Productores Forestales).

The Forestry Law (Ley Forestal 15939) was approved in 1987. Thirty years later, the sector represents 3.5% of the country’s GDP (a total of USD 56 billion in 2019) and generates USD 2,000 million in exports, according to the SPF. Before the law, man-made forestry plantations were made up of around 50,000 hectares – today, they total one million hectares, representing about 6% of the country’s land.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

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