World Rainforest Movement

Chile: Opposition to government subsidies for the expansion of monoculture tree plantations

In response to the global economic crisis that erupted late last year, Chilean President Michelle Bachelet has announced a series of measures to foster job creation and economic recovery. One of the most surprising measures is the decision to temporarily increase the subsidies granted to tree plantations under Decree Law 701.

Decree Law 701, also known as the Forestry Promotion Law, is the main instrument underlying a forestry model that has contributed to the unjust and voracious appropriation of land, and the expansion of monoculture tree plantations into areas formerly covered by native forest and fertile farmland. The law was passed in 1974, during the Chilean military dictatorship, which also facilitated the occupation of Mapuche indigenous territory. Land ownership became concentrated in the hands of two major economic groups: the Matte family group (CMPC) and the Angelini group (Copec–Arauco-Celco). The law provides subsidies amounting to 75% of the net costs of establishing plantations, in addition to tax exemptions and guaranteed protection against expropriation of the land.

A few months before announcing this new measure, President Bachelet had met with high-level executives from these companies to pledge the government’s contribution of three billion pesos to the Bioenercel Technological Consortium. This consortium was formed by three major forestry companies (Arauco, CMPC and Masisa), the University of Concepción, the Pontifical Catholic University of Valparaíso and Fundación Chile to conduct research on the production of so-called second-generation biofuels –specifically, the production of fuel from pine and eucalyptus biomass- which represents a further incentive for the increased expansion of monoculture tree plantations.

These latest measures come on top of the government’s ongoing support and commitment to the goal of an additional one million hectares of plantations in 10 years. In other words, the new “anti-crisis forestry measure” reaffirms the government’s support to this sector, alluding to the fact that it is a sector that is highly sensitive to the ups and downs of the global economy, since more than 90% of the wood and pulp produced is exported. These government aid measures ignore the countless demands of communities who are struggling to survive surrounded by thousands of hectares of pine and eucalyptus monoculture plantations, or who suffer from the contamination of their water as a result of the pulp industry.

Alarmed by this situation, the Foresters’ Association for Native Forests declared in a public statement that this forestry model “dominated by transnationals that have established vast areas of alien tree specie monocultures over the last three decades, accumulating wealth in very few hands and displacing rural populations,” is not sustainable. They called on the government to stop granting subsidies to large forestry companies because of the damage they cause to the environment and water resources, in addition to the social and cultural impacts on nearby communities. They urged President Bachelet to halt the growth of tree plantations, stressing that the Chilean government must not be an accomplice to this disaster. They also highlighted the urgent need to strengthen policies for medium- and small-scale agriculture, the sector most affected by the change in land use, and to develop a democratic land use management system. (The full statement is available in Spanish at

Meanwhile, 26 Mapuche indigenous, social and environmental organizations gathered in Temuco for a meeting on “Impacts of Tree Plantations on Climate Change, Desertification and Drought” and issued a declaration stating that the current Chilean forestry model is responsible for the loss of agricultural land, the decrease and disappearance of underground and surface water sources, the loss of native forest, and the destruction of the way of life and culture of local communities. Directed to the government, the declaration further states:

• We condemn the fact that these decisions – which affect many territories and communities – are adopted bilaterally between the government and large forestry companies, excluding the communities that suffer from the expansion of plantations.

• We demand an end to direct and indirect subsidies for the forestry sector using resources that belong to all of the inhabitants of Chile and are not meant to favour specific economic groups. It is time for the state to stop plundering goods and resources that are public and collective and correspond to the sovereignty of the people.

• We demand the suspension of the measure to increase the resources allocated to forestry subsidies, the definitive repeal of Decree Law 701, and the redirection of these resources to support peasant agriculture and repair the damages caused, in order to foster and promote local and diversified economies.

The full text of the declaration (in Spanish) is available at:

It is important to point out that this meeting – which was not organized by the government, but rather by the Latin American Environmental Conflicts Observatory – has been the only forum where the communities affected by monoculture tree plantations have had the opportunity to voice their position on this subject. The meeting also served as a broad-based means of coordination to continue working to demand an end to government subsidies for forestry companies and to permanently halt the establishment of large-scale pine and eucalyptus monoculture plantations.

Latin American Environmental Conflicts Observatory (OLCA),, member of the Latin American Network Against Monoculture Tree Plantations (RECOMA).