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USAID Evaluation Highlights No. 53


Forestry and the Environment: Costa Rica Case Study


April 1996

(PN-ABS-531)


Summary


Rapid deforestation threatens Costa Rica's ecological balance and

continued economic growth. Very little forest remains outside a

few protected areas. What survives of these remaining forests

will be depleted by the turn of the century if current trends

continue. 


But Costa Rica is making a determined effort to change the course

of events. USAID has supported this commitment through several

project loans and grants since the late 1970s. The most recent

USAID effort--and the subject of this evaluation--is an ongoing

$7.5 million project, Forest Resources for a Stable Environment

(FORESTA, 1989-96). It supports ecologically sound, long-term

economic development of the protected and buffer zone areas in

Costa Rica's central volcanic cordillera conservation area

(ACCVC).


FORESTA finances activities of a regional environmental

nongovernmental organization, the Foundation for the Development

of the Central Volcanic Cordillera (FUNDECOR). This NGO works

with the Costa Rican Forest Service and national and

international research and educational institutions. Together

they help landowners and residents in the central cordillera (1)

manage the remaining natural forests for the sustainable

production and use of timber and other products and (2) establish

plantations of native tree species and (3) promote agroforestry

to increase the productive capacity of degraded pastures and

secondary forests.


In 1994 USAID's Center for Development Information and Evaluation

(CDIE) examined the activities of FORESTA as part of a worldwide

assessment of Agency-assisted forest conservation programs. CDIE

has also looked at forestry programs in the Gambia, Mali, Nepal,

Pakistan, and the Philippines. 


At the time of the evaluation, FORESTA was in its third year. In

that brief time it had brought 11 percent of the ACCVC's 77,000

hectares of privately owned forest (33 square miles out of 300)

under more sustainable management. It has promoted private sector

reforestation with native species on about 1,000 hectares.

FORESTA has also provided employment for a significant number of

men and women involved in tree nursery and planting activities.


Progress can be attributed to (1) creative approaches to forest

management, (2) a political and social framework conducive to

cooperative problem-solving among participating public institu-

tions and nongovernmental organizations, (3) availability of new-forest management and native-species plantation technologies, and

(4) strong USAID project management support. Modest government

subsidies for natural-forest management and reforestation have

also contributed to early successes of these programs. However,

FORESTA is also developing contractual arrangements with owners

of natural forests that do not depend on public funding over the

long run.


Background


From 1970 through 1989, deforestation at the rate of 50,000 to

60,000 hectares a year reduced Costa Rica's forest cover to

approximately 10 percent of its national area, compared with 70

percent in 1940. As in many tropical countries, the major cause

has been conversion of forest to crop production by small

cultivators and to pasture for cattle raising among larger

landowners. 


Until very recently, government policies sped deforestation by

granting land titles to settlers who agreed to make

"improvements" to the land--that is, to clear the forest for

farming or ranching. Trends in land use from 1970 through 1989

reveal the steady loss of more than 1.5 million hectares of

forestland and an almost equal expansion of pasture area (see

figure). 


The government realizes it must do better to meet threats to its

forest resources. It is now testing innovative approaches to halt

the deterioration of its natural forests. The current approach,

launched in 1989, is creation of a national system of

conservation areas (see box 1). The legislature has not yet

approved this measure, but the implementing agency, the Ministry

of Natural Resources, Energy, and Mines, has begun to group the

nation's 75 protected areas and the lands around them into 7

large conservation areas. They will be managed by independent

administrative bodies, with scope for NGOs (including local

community groups and entrepreneurs) to play important

conservation and development roles.


Under the new system, the efforts of key players are concentrated

within these high-priority conservation areas. The players are

the government's principal conservation agencies (National Park

Service, Forest Service, and National Wildlife Service), national

and international NGOs, the private sector, and the donor

community. The system aims at maintaining natural ecosystems,

preserving genetic diversity, and promoting sustainable natural

resource use. 


USAID's Assistance Approach


USAID's development strategy in Costa Rica through most of the

1970s and 1980s consisted mainly of support for export-led

growth. In 1979 the Agency revised its strategy by adding the

management of the nation's natural resource base (particularly of

its national parks and contiguous commercial forests) to achieve

sustainable economic development. The Agency recognized that

runaway deforestation was moving Costa Rica toward becoming a net

wood importer. More serious, logging was threatening the nation's

water supply, hydroelectric power, productive capacity, and

biological diversity. 


The most ambitious of several recent initiatives is the $7.5

million FORESTA project. USAID and the Government of Costa Rica

designed FORESTA to support ecologically sound long-term economic

development of the protected and buffer zone areas in Costa

Rica's central volcanic cordillera conservation area. Located

within a few hours' drive of the country's major population

centers, the ACCVC contains some of the largest blocks of primary

forest remaining in Costa Rica. It also holds two of the nation's

top tourist attractions (the Pos and the Iraz Volcanoes

National Parks) and one of its richest biological reserves

(Braulio Carillo National Park).


FORESTA supports conservation of Costa Rica's forests through

actions of a newly created NGO, the Foundation for the

Development of the Central Volcanic Cordillera. The foundation

provides technical assistance and funding for managing the

ACCVC's protected areas. It also promotes sustainable production

and use of surrounding buffer zone forests. USAID and the Costa

Rican Government have agreed to use local currency proceeds from

a debt-forgiveness program to establish an endowment to fund

FUNDECOR operations after FORESTA support ends.


FORESTA is also helping redefine the role of NGOs and government

agencies in conserving forests and associated natural resources

(soil, water, biological diversity). Major project interventions

include introduction of


--   Techniques for preparing natural-forest management plans

     that simplify the process, reduce the cost, and improve the

     quality of the plans. 

--   Logging contracts with performance clauses to promote the

     adoption of practices that minimize forest damage and

     promote rapid regeneration.

--   Native-species tree plantations that ensure a supply of

     quality seed, promote associated small businesses, provide

     employment opportunities, and help landowners enhance the

     productivity of their land.

--   Cooperative relationships between various institutions to

     develop and promote improved forestry practices. Groups

     include the U.S. Forest Service, the Organization for

     Tropical Studies (composed of various U.S. and Costa Rican

     academic and research institutions), and the Center for

     Tropical Agricultural Research and Education (an arm of the

     Organization of American States).

--   An endowment fund to finance a share of FUNDECOR start-up

     and operating costs.


Evaluation Findings


Program Implementation


The early progress of the project can be attributed to the

following institutional, technological, and policy factors:


--   Recruitment of professional staff trained in promoting

     ecologically sound forest development in the buffer zone

     areas of the ACCVC and dedicated to developing FUNDECOR into

     a financially viable institution

--   Involvement of research and educational institutions to

     supplement FUNDECOR technical services

--   Introduction of global information systems technology

     (satellite-generated mapping) to cut the costs of preparing

     forest management plans and monitoring program performance

--   Cooperation between FUNDECOR and government agencies (espe-

     cially the Forest Service and the land-titling agency) to

     introduce reforms more appropriate to natural forest manage-

     ment and reforestation using native tree species


FORESTA has led to development of a strong (although not yet

financially independent) institution, FUNDECOR, capable of

applying appropriate technology to management of forest and land

resources in the ACCVC. Technical assistance to the foundation

appropriately emphasized developing administrative and financial

systems and establishing contacts with Costa Rican research

institutions. 


FUNDECOR is staffed with professionals dedicated to the idea that

conservation and development can complement each other. FORESTA

provides office and field equipment necessary to support the

foundation's operation during project implementation. The

USAID-funded vehicles of U.S. origin, however, are not suitable

for some remote working conditions. Maintenance is also a

problem, since U.S. manufacturers do not provide adequate service

and parts support in Costa Rica.


FUNDECOR uses a combination of training, supervision, and

contractual agreements to ensure that loggers and landowners

adopt sustainable forest management practices. The foundation

provides funding, training, and technical assistance for nursery

operators. It furnishes technical and administrative support to

community and farmers' organizations engaged in replanting

deforested areas. It has commissioned the preparation of forestry

guidebooks and has provided support for a variety of publications

on native tree species.


The foundation also assists landowners in the central cordillera

in managing their forests or establishing native-species planta-

tions on their degraded pastures. It uses its computers and

global information system technology to establish priorities for

its forestry work and, more important, to reduce the cost and

simplify the task of preparing forest management plans. 


FUNDECOR draws on technologies in natural-forest management and

native-species tree plantations developed by the Organization for

Tropical Studies, the Center for Tropical Agricultural Research

and Education, and other research institutions. FORESTA does not

support research. Rather, linkages with these institutions means

FUNDECOR can channel its funds more effectively into applying new

forest technologies and identifying knowledge gaps for these

organizations to address.


Program Performance


Program Impact


In its first 3 years FUNDECOR has contracted with the owners of

more than 8,000 hectares of forest in the ACCVC to help them

manage, in a sustainable way, their land for timber production.

The foundation's natural-forest management plans are well

prepared and implemented, and carefully monitored. The plans are

oriented toward sustainability and involve landowners in the

management of their forests. FUNDECOR staff supervise logging

operations to ensure that companies meet the standards of road

construction, felling, and removal of logs required for minimum

impact on the forest.


Where FUNDECOR-promoted practices have been followed, damage to

forests, soil, and streams is low. More important, participants

in the foundation's forest management activities have contracted

to maintain forest cover. In most other logging operations the

timber harvest is merely the first step in converting forest to

agricultural use. The foundation also assists landowners in

obtaining clear title to their forestland without the necessity

of clearing the forest.


FUNDECOR and its co-operators have agreements with more than 80

landowners to establish more than 1,000 hectares of

native-species tree plantations. This is noteworthy, especially

given the effort that has gone into seed tree selection,

contracting for a seed supply, establishing private sector

nurseries, and identifying contractors for establishing and

maintaining plantations (see box 2). Native-tree plantations

established by FUNDECOR show initial positive signs of healthy

tree growth. It is, however, too early to know exactly what that

implies for the environment. The logic of using native-species

plantations to enhance wildlife habitat and conserve biological

diversity in buffer zones appears sound, but there is not yet

sufficient evidence to support this hypothesis. Native tree

plantations are still too young and do not cover a large enough

area to have a significant effect on wildlife habitat.


FUNDECOR has helped landowners increase their incomes from timber

harvesting and from establishing native-species tree plantations

on portions of degraded pastures. The principal direct

beneficiaries of the foundation's activities have been landowners

participating in the natural-forest management and reforestation

programs. A few of these individuals have sizable landholdings,

and some are professionals who do not live in the area. The

majority of participants in the reforestation program, however,

are smaller landowners. They take part through membership in one

of the two cooperating cantonal agricultural centers (Sarapiqu

and Siquirres). Some larger landowners in the natural-forest

management program live and work in the area. One works, for

example, as a contractor for the project, providing day laborers

to clean weeds from tree plantations. 


By acting as an intermediary buyer of seed and seedlings and as a

contractor for tree-planting and forest-management services,

FUNDECOR has generated new forestry investment and employment.The

current single seed-collection contract, four nursery contracts,

and range of tree-planting contracts represent the start of an

industry based on native tree species. The nursery operators--two

of whom are small farmers--also represent a spectrum of social

and economic backgrounds of potential investors and workers in

the business. Tree nurseries are labor-intensive operations that,

along with tree-planting contracts, provide employment and

incomes for both men and women.


Effectiveness


FORESTA reforestation and natural-forest management activities

are reaching a broad spectrum of socioeconomic groups, but larger

landowners dominate. FUNDECOR has chosen to emphasize one-on-one

activities with larger landowners in the central cordillera

conservation area to put large areas of land under improved

management quickly. The foundation has reached smaller

landholders largely through its tree seedling nursery program and

through employment opportunities under its reforestation

contracts. 


Efficiency


Increased efficiency in reforestation and natural forest

management has resulted from initiatives to reduce planting costs

and forest management plan costs and to raise timber prices for

landowners. FUNDECOR reduces the costs of establishing

plantations by combining the land of several landowners and

letting large contracts for planting and cleaning. Similarly, the

foundation recently began combining the timber holdings of

several landowners and auctioning timber harvest rights on the

combined holdings. Establishing larger harvesting contracts and

sealed-bid auctions has resulted in higher stumpage prices to

owners. The reduced cost of management plan preparation also

makes forest management more profitable.


Sustainability


The economic viability of reforestation in the ACCVC depends on

critical assumptions about the performance of native tree species

and the continuation of public incentives. The performance of

native tree species is yet to be determined. There is as yet

little evidence of the biophysical sustainability of native tree

species in plantations over the long run. Available data from

research by the Organization for Tropical Studies on native tree

species in plantations points to a promising but still

inconclusive outcome for commercial native-species plantations in

the central cordillera. The research was carried out under

limited conditions that do not reflect the site variability

encountered in fields where tree plantations are being

established. Thus FUNDECOR's promotion of native-species

plantations must at this time be considered experimental. 


Similarly, the earliest plantings by the Organization for

Tropical Research are not yet old enough to determine rotation

lengths or provide the information necessary to calculate rates

of return on investments in forest plantations. The risk to the

landowner is reduced, however, by modest government subsidies and

earlier research on native tree species performance.


Another long-run uncertainty is how long the Costa Rican

Government will be willing and financially able to subsidize

reforestation costs. The subsidy now provided is important to

helping many landowners finance investments in clearing,

planting, and managing the land on which new trees are planted.

Demand for reforestation subsidies on a nationwide basis already

exceeds funds available. 


Without outside financing the government probably cannot expand

the subsidy program to support reforestation rates needed to have

any real effect. Lowering per hectare subsidy rates might help

adjust supply and demand and result in landowners' assuming a

fairer share of the risk involved.


Replicability


Reforestation with native tree species has begun to spread beyond

FUNDECOR operations in the ACCVC. Availability of reforestation

subsidies has increased interest in establishing plantations

throughout the nation. Despite limited nursery capacity and the

limited evidence, so far, of success, native-species plantations

are appearing in other areas. Nurseries in the ACCVC are selling

native and exotic species to landowners in the Ro San Carlos

area of northern Costa Rica and in the area around the Caribbean

port of Limn. Organizations from conservation areas, including

the northern, Caribbean, and southern areas, have formed an

association of groups interested in native-species plantation

technology.


The information base of 8 to 10 years on native tree species

performance is unique to the central cordillera conservation area

and not available for supporting replication of FUNDECOR

reforestation in other areas. The Organization for Tropical

Research and others have recently begun research on native

species in the Caribbean and southern zones of Costa Rica. It

will probably take at least another decade before enough data are

available to support native-species programs in either of these

zones. Despite the lack of research, some risk-takers are already

involved in tree-planting programs that include native species in

each of these zones. As discussed above, FUNDECOR's

native-species tree plantation program is not risk-free, but

attempting to implement a similar program without at least a

similar research base will greatly increase the risk.


It will probably be much longer before a native-species program

similar to FUNDECOR's can be replicated in many other Latin

American countries. Few, if any, such countries have access to

research institutions with the facilities, personnel, and

financial support available to the Organization for Tropical

Research and the Center for Tropical Agricultural Research and

Education and their Costa Rican collaborators. A plantation

program similar to FUNDECOR's could be carried out elsewhere only

if research results were available and local institutions could

provide research support. Absent information and research

institutions, any attempt to replicate FUNDECOR's program would

be very risky. 


Lessons Learned


Given the long-term nature of forest conservation and the

relative recentness of environmental interventions in Costa Rica,

much about the FORESTA project remains speculative. Still, two

early, concrete lessons do emerge: 


Contracting for services can be an effective means of transfer-

ring knowledge, raising awareness, and changing behavior of

natural resource users. FORESTA has contracted for natural

resource management as a means of encouraging private tree

planters and loggers to follow more responsible forest management

practices. Contracts contain conditions and compliance

requirements regarding tree extraction in a way that does the

least damage to the forest. However, administering contracts and

supervising their compliance is staff-intensive.


Long-term project assistance is required when attempting to

establish new NGOs with broad responsibilities for cooperating

with other NGOs, community groups, government agencies, and

research and educational institutions to manage forest resources.

USAID support to FUNDECOR through FORESTA will last less than 5

years. This is only enough time to set up and test a new system

of NGO government partnership in forest management. It is

insufficient time for achieving self-reliance given that the NGO

must first develop and carry out a program that addresses complex

forest conservation needs. Organizations such as FUNDECOR require

several years to develop new approaches to short- and long-term

conservation activities and to achieve self-reliance. In forestry

projects based on introduction of new technologies, USAID project

design also should analyze the need for continuing research

support and, if appropriate, provide for such support.


This Evaluation Highlights, by Phillip E. Church of USAID's

Center for Development Information and Evaluation, summarizes the

findings of CDIE Working Paper No. 205, Forestry and the

Environment: Costa Rica Case Study, by Phillip Church, Robert

Mowbray, Nora Berwick, and Roberto Martin, June 1994. Reports may

be ordered from DISC, 1611 N. Kent Street, Suite 200, Arlington,

VA 22209-2111; telephone (703) 351-4006; fax (703) 351-4039;

Internet docorder@disc.mhs.compuserve.com. Editorial and

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