Jari project

The Jari project was an attempt to create a tropical tree farm in Brazil for producing pulp for paper.

The Jari project was a brainchild of US entrepreneur and billionaire Daniel K. Ludwig. In the 1950s he noticed that demand for paper was rising. Since the forests of the temperate zone were already in use, the supply of the wood pulp for paper was fixed. Ludwig foresaw a future increase in the price of paper due to the increase of mass media. Since most of the natural forest timber was not suitable for paper production, Ludwig planned a site where the natural forest would be replaced by a tree farm. It would have to be started decades ahead to supply the future paper production.

Ludwig selected the fast-growing tropical tree Gmelina arborea for his tree farm. At first he tried to site his tree farm in Costa Rica but the Brazilian military government encouraged him to settle on the lower reaches of the Rio Jari, a tributary of the Amazon River. In 1967 Ludwig bought 1.6 million acres (6,475 km²) for $3 million.

Ludwig controlled the project mainly from the USA. He built a settlement, Monte Dourado, with houses, schools, hospitals, nurseries, bridges and community buildings. He also built roads and railways. The building also destroyed most of the topsoil in which the trees were supposed to be planted. The soil turned out to be partially unsuitable for Gmelina. Other settlements, the "free cities" of Beiradão and Beiradinho, were built to house workers. In its heyday, the Jari Project had 35 000 workers.

Ludwig's next idea was to expand into rice growing, which did not turn out well either. Rice growing required large amount of pesticides to keep insects at bay and the soil did not have enough sulfur for rice. Ludwig corrected the situation with the application of ammonium sulfate. He expanded to cattle farming and also discovered a very large source of kaolin.

Ludwig had also commissioned two large ship-shaped platforms - a pulp mill and a factory - that were built in Japan and floated to the Jari Project. The pulp mill was finished in 1978 and launched on February 1. It traveled through the Indian Ocean and through the Cape of Good Hope, arriving at the Brazilian city of Munguba on April 28. The factory arrived four days later.

When workmen begun to cut trees, the growth of Gmelina was found to be smaller than expected, so the pulp had to be supplemented by using the local wood, which had been deemed useless before.

Problems also begun to increase due to so-called Amazon Factor - the combined effects of soil, insects, humidity and tropical disease. Workers contracted malaria. Insects devoured the harvest and supplies.

Then Brazilian government officials began to criticize Ludwig's methods and the extent of his land ownership. They also questioned the project's exemption from taxes, not to mention his methods - he had fired twenty-nine directors during the thirteen years of the project and preferred to decide everything essential by himself.

Ludwig gave up in May 1981. Next year he turned the Jari project over to a consortium of Brazilian businessmen. He did not receive any money but the several hundreds of millions of dollars of debt were transferred to new owners. Ludwig was to receive a gradually diminishing cut of the possible profits until the year 2026. The new owners demanded - as Ludwig had - investment in the local infrastructure.

The remains of the project remain on Brazilian hands in the form of the Jarcel Cellulose company. Ownership is in the hand of Brazilian banks and holding companies.