Illegal Logging and the Productivity Trap of Timber Production in Mexico

Abstract

This paper uses two approaches to estimate illegal volumes and provides arguments to show that timber production in Mexico is largely defined by the presence of significant volumes of illegal logging, which supply the market with a volume equivalent to that of the legal harvest. Estimated illegal volumes are closely linked to the growth rate of the construction and manufacturing sectors, which suggests these sectors trigger demand for illegal volumes, while a lower supply of illegal volumes is kept for making rustic furniture and wooden handicrafts. Illegal logging reinforces the productivity trap through several mechanisms throughout the value chain, from timber production to sawn wood retailing. These mechanisms, in conjunction with certain features of the domestic sawn wood market, contribute to keeping the forest sector in a productivity trap. Illegal logging is a complex socio-environmental problem, which requires the participation of society as a whole to reverse the effects of this activity in every component of the forest value chain.