Financial attractiveness of smallholder tree plantations in the Amazon: bridging external expectations and local realities.

This paper compares the financial attractiveness of forest and agroforestry plantations promoted by external organizations with tree growing practices of Amazonian smallholders. Based on 80 case studies and interviews with 112 forestry professionals from Brazil, Bolivia, Peru and Ecuador, the paper characterizes the economic, environmental and structural implications, and identifies the respective financial costs and benefits. Six case studies provided data for in-depth financial analyses. The results showed that the expectations of externally promoted smallholder tree and agroforestry plantations were not met. Despite significant inputs, smallholders generated at best annual net incomes of US$200-$1,000 per ha from NTFP plantations, and up to US$800-$1,000 from timber plantations in the year of harvest. This corresponded to around one-third of the initially expected returns. Overall, only around 1% of the smallholders participating in such initiatives managed to produce and commercialize any plantation products. Smallholders' practices of complementary tree growing in conjunction with agriculture and managing natural regeneration of timber and NTFP products were often underestimated by professionals. They required low input, didn't rely on external support, were highly flexible in risky environments, and some presented financial returns comparable to some well functioning plantations. [ABSTRACT FROM AUTHOR]