Fragile Lands of Latin America Strategies for ... - PART - USAID

160 Stephan Schwartzman
of more than $1 billion between 1975 and 1986, or over 90 million
dollars a year for 527 projects alone (Binswanger 1987). These projects
show a negative return on invested resources, and in many cases have
not been implemented as planned (Ibid). These government subsidized
cattle projects alone have caused up to 4 million hectares of defores-
tation (Ibid). In this light, the rubber price subsidy, as it relates to
native rubber is relatively insignificant. Elimination of government
subsidies may be a reasonable policy goal, but elimination of the rubber
price support while maintaining subsidies for the livestock sector would
heavily favor a demonstrably unproductive and resource destructive
land use (Hecht et al. in press) over one that employs more people,
conserves the natural environment and is being defended by organized
local constituencies that appreciate the economic value of the rainforest.
Another issue in considering the Brazilian rubber pricing policy and
subsidy concerns the factors that condition the world market for rubber.
Plantation rubber from southeast Asia since the 1920s has been cheaper
than native rubber produced in the Amazon. But exogenous factors
have had significant effects on production and export of rubber from
Southeast Asia as well. From 1971 to 1980, the World Bank, loaned
$676.4 million to Indonesia, Malaysia, Thailand, Cameroon and other
natural rubber producing countries for rubber development projects or
rubber components of projects (World Bank 1982). The Bank financed
an average of 50% of total project costs and total investment (by the
Bank and governments) was about $1.06 billion over nine years, or
$1 17 'million a year, directly supporting production and processing of
natural rubber for export. It is then an oversimplification to conceive
the Brazilian rubber policy problem as subsidized rubber production
versus the unrestrained free world market. The issue is, in both cases,
colored by government fiscal policy and the investment behavior of
multilateral lending institutions.
The central issue here is that native rubber production in the Amazon
has been discussed largely in the context of the Brazilian rubber
industry's demand, and the failure of rubber policy to resolve a chronic
supply deficiency. Yet, nowhere in the world is natural rubber produced
at an export-scale that is unsubsidized. Amazon native rubber, subsi-
dized or not, will not supply Brazil's needs for natural rubber. But
maintaining a guaranteed market for rubber tappers may help to di-
minish deforestation, provide employment, and maintain a productive
population on a fragile land.
Social Movements and Resource Management
Perhaps the most important point about extractive reserves as a
strategy for the sustainable use of "fragile lands" is that the proposal