Two new studies show that excessive taxation and a tangle of rules and regulations are crippling forest enterprises Mexico, harming their ability to compete on the domestic market and depriving the sector from a role in reducing a US$6-billion trade deficit in forest products, cellulose and paper. Source: Newswise
The economic burden falls particularly hard on community forest enterprises, which pay disproportionately high taxes and suffer excessive regulation, jeopardizing the livelihoods of the 12 million people who depend on forests for their livelihoods in Mexico, according to two new studies published by the Mexican Civil Council for Sustainable Forestry (CCMSS).
“Mexico needs to eliminate the red tape and high taxes on production and sale of its forest products,” said Iván Zúñiga, forest policy coordinator CCMSS.
“If Mexico’s political leaders want to protect our forests and increase domestic production of wood, and to reduce the nation’s trade deficit, they must take this problem seriously.”
The release of the CCMSS studies comes on the eve of the GLOBE World Summit of Legislators (6-8 June), which will bring more than 500 legislators from 100 countries to Mexico City, with the goal of coming up with a common strategy for combating climate change.
Mr Zuñiga said the new studies suggest that the success of community forestry – one of Mexico’s most important contributions to the global forest sector and to combating climate change – is now at great risk.
In one study, CCMSS asked SKATT, an international tax advisory firm, to analyze taxes paid by forestry companies in seven forest nations, including Mexico, Chile, Brazil and the United States.
The authors conclude that timber producers in Mexico pay at least 30 percent more in taxes than their competitors in the other nations, suggesting a major cause of the drop in Mexico’s ability to compete on the domestic market for forest products.
“We are seeing local sawmills and other related enterprises closing,” Mr Zuñiga said.
“Some of them are in vulnerable areas where people are protecting both forests, as well as rivers and watersheds that supply major cities with water for millions of people.
“Without the ability to earn a sustainable living, local communities will lose their ability to play the role of guardian of these vital resources.”
Other studies by the CCMSS in the past suggest that the lack of response to the situation disclosed in the new studies could lead to an increase in illegal logging.
Mexico ‘s forest sector currently generates 0.35 percent of GDP, which represents a drop of 50% in the last 20 years, according to Mr Zuñiga.
Despite having created a business model that allows communities to harvest timber and other forest products sustainably, Mexico currently uses only 30% of the 21.6 million hectares of forests with potential for harvest, causing Mexico to cede to imports a huge market for forest products in Mexico.
“This means we are not taking full advantage of our potential domestic market for forest products, which is estimated at US$1.3 billion a year,” Mr Zuñiga said.
The methods used by forest communities for the use and conservation of forests in Mexico are renowned for their ability to curb deforestation and combat rural poverty.
In 2010, nation’s community forest enterprises were designated as a global model for forest conservation because of their ability to provide poor rural people to educate their children and meet the needs of their families, while preserving the forests that are vital to curb climate change.
But Mexico’s position as a world leader in community forest management is now at risk, according to the CCMSS.
“Our studies suggest that Mexico has now a huge flaw in its forest regulatory framework,” Mr Zuniga said.
“Government agencies focus on control and compliance, rather than coming up with simple and efficient procedures that recognize the reality of the communities that are trying to manage the country’s forests.”
