Description

The State model for import substitution industry favored the growth of the industrial sector as the driving force behind economic development. The role assigned to the agricultural sector and, thus to the timber and forestry sectors was as a provider of raw materials and abundant and cheap labor. The protectionist policies underlying this model provided for the appearance of monopolies in the timber industry.

The factors cited gave rise to distortions in the timber market and eliminated the economic incentives that a free market normally generates. This process led to a decline of investments in timber activities and the elimination of an economic option for peasant communities in possession of vast extensions of forests, which could have obtained income through the local management of their forestry resource.

These market failings continue today and are reflected in the low price of timber, both standing and cut; in Borbon, the former goes for six dollars per tree, while the latter brings twelve dollars per cubic meter. These prices do not cover operating costs, and may even represent losses on the part of communities and owners of the forest. In addition, problems exist in the areas of regulation, information, intermediation, and forest extraction techniques, as well as in the availability of credits.

These are some of the major elements involved in the sale of timber in the buffer zone of the Cotacachi-Cayachi Ecological Reserve (RECC) which have led to both environmental and socio economic problems, phenomena which occur simultaneously and which perpetuate a vicious circle of poverty and environmental degradation.