As in much of Central America, Honduras's once abundant forest resources have been badly squandered. In 1964 forests covered 6.8 million hectares, but by 1988 forested areas had declined to 5 million hectares. Honduras continued to lose about 3.6 percent of its remaining forests annually during the 1980s and early 1990s. The loss is attributable to several factors. Squatters have consistently used land suitable only for forests to grow scantyield food crops; large tracts have been cleared for cattle ranches; and the country has gravely mismanaged its timber resources, focusing far more effort on logging than on forestry management.
The government began an intensive forestry development program in 1974, supposedly intended to increase management of the sector and to prevent exploitation by foreign-owned firms. The Honduran Corporation for Forestry Development (Corporación Hondureña de Desarrollo Forestal--Cohdefor) was created in 1974, but it quickly developed into a corrupt monopoly for overseeing forest exports. Timber was mostly produced by private sawmills under contracts selectively granted by Cohdefor officials. In fact, ongoing wasteful practices and an unsustainable debt, which was contracted to build infrastructure, appear to have undercut most conservation efforts. The military-dominated governments contracted huge debt with the multilateral development agencies, then extracted timber to pay for it. Cohdefor generally granted licenses to private lumber companies with few demands for preservation, and it had little inclination or incentive to enforce the demands it did make.
With encouragement from the United States Agency for International Development (AID), the Honduran government began to decentralize Cohdefor beginning in 1985. Under the decentralization plan, regulatory responsibilities were transferred from the central government to mayors and other municipal officials on the assumption that local officials would provide better oversight. Despite decentralization and the sale of government assets, Cohdefor's remaining debt was US$240 million in 1991. The government also assumed continued financial responsibility for the construction of a new airstrip in the area of timber extraction, upgrading facilities at Puerto Castilla and Puerto Lempira, and providing electricity at reduced prices to lumber concerns as part of the privatization package.
Major legislation was passed in 1992 to promote Honduran reforestation by making large tracts of state-owned land more accessible to private investors. The legislation also supplied subsidies for development of the sector. The same law provided for replanting mountainous regions of the country with pine to be used for fuel.
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