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Good practice Imported

Uruguay's Ley Forestal (Law 15.939) — Four Decades of Tax and Subsidy Incentives for Industrial Afforestation, and Its Contested Water and Biodiversity Costs

Uruguay · Montevideo · See the Uruguay profile · See the Montevideo profile

Evidence: Observational / pre–post Top 96% 20/100 · Ask Evidence Copilot about this practice

Uruguay's 1987 Forestry Law used tax breaks and subsidies to grow industrial pine/eucalyptus plantations to roughly 1.3M hectares and a major pulp-export industry, but independent research links the same plantations to reduced stream flow and native-grassland biodiversity loss.

~1.3 million hectares
Plantation area
Uruguay's Ley Forestal (Law 15.939) — Four Decades of Tax and Subsidy Incentives for Industrial Afforestation, and Its Contested Water and Biodiversity Costs

Details

Maturity
Established
Promoter
Dirección General Forestal, Ministerio de Ganadería, Agricultura y Pesca (MGAP)
Period
1987-present
Keywords
forestry policy, tax incentives, industrial plantations, pulp export

Context

Uruguay's 1987 Forestry Law (No. 15.939) gave tax exemptions, subsidies and credit to convert low-fertility grazing land into pine/eucalyptus pulpwood plantations.

Results

Plantation area grew to about 1.3 million hectares, a major wood-pulp export industry; independent research (World Rainforest Movement and academic sources) documents reduced stream flow, soil degradation, lower net carbon sequestration than native grassland, and declining native grassland bird/fish populations.

Implementation
Indicative cost
High (€500k–€5M)
Time to results
Long (> 3 years)
Staffing & skills
Dirección General Forestal, MGAP

Conditions for success

  • environmental-externality monitoring commensurate with the scale of fiscal incentives granted

Common failure modes

  • independent research finds reduced stream flow, soil degradation and native-species decline in plantation catchments

Commonly funded by

National / regional programmes

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Data sources

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