WHEN Daniel Ludwig gave up his Amazonian dreams in 1982, he seemed little more than another rich, wild-eyed visionary who crossed chain saws with the Brazilian jungle and lost.
In 1967, the American shipping magnate bought 3 million acres of virgin Amazonian forest - a piece of real estate bigger than Connecticut and Rhode Island - and announced plans to build the Jari Project, the world's biggest private environmentally sustainable tree farm.
Just 14 years later, he sold out, leaving behind a community of 50,000 people, 5,600 miles of roads, a port serving oceangoing ships, a 40-mile railroad, and most of his estimated $1 billion investment.
His fast-growing "miracle trees," imported from Asia and the Caribbean, didn't take to the mineral-deficient Amazon soil. His giant pulp mill - built entirely in Japan and towed 15,500 miles by barge to Brazil - had to buy outside wood to keep operating. In addition, Jari became a focus for Brazilians upset with foreign development of the country's resources and for environmentalists worldwide concerned about the rapid destruction of the Amazon.
But 11 years after the Jari Project was labeled "Ludwig's Folly," many are declaring it a success. Its new Brazilian owners have discovered how to make a strain of fast-growing Eucalyptus tree prosper, and their mill ships wood pulp to paper manufacturers around the world.
Once considered a debt-ridden ecological disaster, Jari is now being held up as a model of sustainable development. For Jari's supporters, it also offers a solution to the Amazon's most pressing dilemma: the conflict between the economic needs of Brazil's largely poor population and the danger those needs pose to the environmental integrity of the rain forest.
"The only reason for antagonism is ignorance," says Eduardo Netto Alves Barreto, president of the Companiha Florestal Monte Dourado, the private Brazilian company that took over the Jari Project in 1982. "Ludwig was right, and we will develop his sustainable-development model here in the Amazon."
Despite his optimism, Mr. Alves Barreto faces an uphill battle trying to convince environmentalists that the Jari Project offers a suitable model for Amazon development.
While the 6,400-square-mile Jari Project is huge, it has not wreaked the kind of destruction many feared. Its size also allows it to deliver certain social benefits missing in other parts of the Amazon.
Jari's managers have no intention of clearing their entire property for tree farming. While the government has given them the right to cut down and replant one- half of Jari's 3 million acres, plans call for intensive tree farming on only 276,000 acres, approximately 9 percent of Jari's total area.
For Jari's scientists, the natural forest is important to the health of the new tree crops. Eucalyptus, the only species now being planted, is arranged in thick stands surrounded by intact virgin forest. The scheme helps prevent erosion, keeps the disruption of local animal species to a minimum, and allows for enough biodiversity to keep pests under control. From the tops of Jari's rolling hills, the project appears to be one vast carpet of green.
Worried that their efforts might hurt the region's biodiversity, the company has also established eight biological reserves where plant and animal species will be cataloged, studied, and protected. The reserves, which do not include huge tracts of untouched forest, cover 50,000 acres.
The scientists have also overcome most of the problems that stymied Ludwig. The rough, mechanized forest-clearing methods that destroyed the soil and made it hard for the imported species to grow have been replaced with less-intrusive measures. Soil mapping has found the minerals needed to improve growth. Trees now reach harvestable size in six years. After harvesting, the areas are planted again. More than 1.5 million tons of wood is harvested each year.
Chemical fertilization is limited to the addition of phosphorous. The pulp-mill waste is treated by scrubbers and a huge series of lagoons, and additional investment is being made to reduce the amount of chemicals used in the pulping process.
Jari now ships 333,200 tons of wood pulp a year out of its mill. According to Brazilian forest-industry statistics, nearly all wood pulp produced in Brazil is grown on sustainable or nearly sustainable tree farms, a situation that takes a good deal of pressure off the virgin forest.
"We have implanted conservation values here before there has been a chance for the environment to be destroyed," says Sergio Coutinho, the Jari Project's chief biologist. "The important thing about this kind of project is that it allows us to maximize efficiency and concentrate development on the smallest area possible."
The size of the project has also allowed for the creation of schools, housing, and hospitals that are the envy of the rest of the Amazon region. Most communities in the Amazon are isolated, and if they can even get such services, the lack of infrastructure makes their delivery expensive.
In Monte Dourado, most of the company's 5,500 direct workers live in sturdy American-style concrete homes and have access to subsidized goods in well-stocked stores. Despite promises from the government to provide schools, the company pays for education. Clean water and sewage systems are also installed, luxuries that many in Brazil's more developed South still don't have.
"We invest a lot in the region and its services," Alves Barreto says. "The people here, most of whom are from poor regions, did not have the same quality of life where they came from. Perhaps the biggest environmental problem in the region is poverty."
According to Alves Barreto, the Amazon is going to be developed whether environmentalists want it developed or not. The pressures on the country's poor population are too great to stop the continued search for wealth in such a large, rich, and largely unexploited region.
Hearing of Jari's apparent turnaround, Stephen Schwartzman, chief scientist of the Washington-based Environmental Defense Fund, says that Jari, under certain circumstances, may be part of a mix of systems that might help both develop and protect the Amazon (See related story, left).
"From what I can tell, they have done some very interesting forest research," he says. "If what they are doing really amounts to a sustained-yield forest-management system [a system that only cuts as much as can be regrown] and it can be competitive with the depredatory exploitation going on in the uncontrolled areas around it, then it's probably good."
Mr. Schwartzman, who has been involved in the creation of communal "extractive reserves," (a system where mostly poor forest people jointly manage an area of virgin forest, harvesting what grows naturally) is particularly interested in what can be learned from Jari to help replant and maintain areas that are already destroyed or degraded. Still, he is concerned that tree farming may not be the most efficient way to create wealth in the Amazon.
"I'm not particularly happy about Jari's cutting of virgin forest for tree farms," he says. "There is plenty of open and degraded land for that. There has also been a tradition of not really valuing the forest correctly. According to some studies, leaving the forest alone and harvesting what grows naturally can actually bring a greater return than cutting down trees or setting up farms."
Jari's apparent success will have to continue for many more years before it is proved. Still, at the least, the new Brazilian owners of Jari have shown that Ludwig, who died last year, was probably not as foolish as many people thought.