Community sawmills can save forests: Forest regrowth and avoided deforestation due to vertical integration of wood production in Mexican community forests

Integrated conservation and development efforts in low- and middle-income countries have emphasized the devolution of forest management to local communities. This approach is posited to benefit both communities and conservation, but those benefits may depend on community capacity to capture value added, e.g., by processing forest products. In Mexico, most forests are under community management, but only some communities have vertically integrated their wood products supply chain through the establishment of community sawmills. The different timing of sawmill construction allows us to test the hypothesis that vertical integration of the wood products supply chain under community management is protective of forests. We use detailed, spatially explicit panel data from southern Mexico that allow us to examine impacts on land use change (deforestation and forest regrowth) separately from temporary changes in tree cover within forest areas. We find that vertical integration, as indicated by the presence of community sawmills and corroborated by a government classification of ejidos, reduced deforestation while increasing forest regrowth. Our findings, thus, have a somewhat counter-intuitive policy implication: programs that increase financial resources for communities to invest in forestry operations could improve forest protection and restoration, with regional and global benefits for climate, biodiversity, and other ecosystem services.