Do I own individual trees through my investment?
To reduce investment risk, investors do not own individual trees. Rather, they own a pro rata portion of an entire tree plantation. We include tree counts only as a nominal characteristic of your investment. Forestry businesses who plant single species monocultures use tree counting to better effect because their individual trees differ little from one to another. Planting Empowerment plants at least six commercially valuable tree species in our plantations which differ in growth characteristics, harvest times, and market value.Back to top
How does your investment earn me a return?
As the trees planted in our plantations grow and reach commercial size, we harvest, mill, and sell the wood. The majority of this revenue goes to the investor. Investor distributions coincide with the periodic harvests of trees from our plantations, which will begin around year eight. Subsequent distributions will occur in years 12 and 20 depending on the assessment of our forester. The final harvest in year 25 produces the majority of the investor’s refund. The tropical hardwoods we cultivate are among the most valuable in the world and include mahogany, rosewood, spanish cedar, and teak. Diversifying the mix of tree species in a plantation reduces overall risk by lowering the investor’s exposure to a single species market. As with any investment, there is no assurance that any distribution will be made.Back to top
When do I start to receive distributions from my investment?
Trees are assets that literally grow and appreciate - as saplings, they have little commercial value. In order for the trees to develop correctly and produce valuable timber value in the future, we must ensure that they receive the proper care during their first 3-5 years of growth. Planting Empowerment projects first commercial thinnings, or harvests, to occur in year eight. Subsequent harvests are expected to produce larger distributions as the trees grow in value. Forestry businesses who claim to produce fast returns for their investors are either using inflated growth projections, or producing fast-growth, single species monocultures that are detrimental to the environment. Aside from the projected financial returns, your investment begins to produce returns at the grassroots level almost immediately. When you invest, you help to supplement the incomes of our local partners, create jobs in sustainable forestry, and your trees begin to replenish degraded land.Back to top
What social and environmental benefits will my investment produce?
Most forestry businesses in Latin America buy up large tracts of land to establish monoculture tree plantations. This practice displaces local inhabitants, usually pushing them further into the rainforest to begin homesteading a new plot of land. It also divorces them from future returns from the timber plantations. Planting Empowerment practices a different model. We do not buy land, but instead lease undervalued parcels of privately owned land for commercial forestry. Our lease payments provide much-needed income to poor landowners, and keeps them tied to their land. Additionally, we share a significant portion of our profits from the timber produced with them, providing an additional incentive to become better stewards of their natural resources.
Planting Empowerment seeks to improve the economic opportunities of our community forestry partners through the land lease model. But we also strive to involve local Panamanians in all aspects of the business, with the goal of working them into managerial roles as their skills develop. To this end, we financed a baseline study of the communities in which our plantations are located. Future studies will help determine our economic and social impact on these communities.
Environmentally, Planting Empowerment distinguishes itself from other forestry businesses by planting 70% native tree species. These are trees that locals are familiar with, and that require fewer chemical inputs to achieve strong growth. Native species naturally attract more flora and fauna to the area, and one can easily see nature's diversity when passing through the plantations. We also allow the understory (natural vegetation) to flourish among the trees. This prevents harmful insects and blight from spreading easily by providing a natural barrier between rows of trees.Back to top
If my trees die, what happens?
Investors do not own individual trees, but rather a pro rata share of a timber plantation. This spreads your investment across a much larger number of trees. During the first three years of a tree's life, they are most susceptible to premature mortality. Special care is taken to ensure that they establish a sound root system and straight growth. Should a higher than usual die off occur in the first three years, Planting Empowerment will replant the lost trees. After that, the smaller and less commercially promising trees are periodically culled (thinned). Like most viable forestry businesses, we assume that less than half the trees we plant initially will be harvested commercially. Planting Empowerment maintains at least 5% of its total area under cultivation as an insurance pool, should anything happen to investors' trees.Back to top
Are you bringing back the rainforest?
About 30 years ago, the Darien province was mostly old-growth rainforest. When the area was opened for homesteading, this complex ecosystem, which had been developing for thousands of years, was drastically altered. Deforestation, agriculture, and cattle ranching have caused irreparable damage to the Darien. Even the secondary forests that are starting to grow will not match the biological richness of the rainforest that once thrived. Planting Empowerment is not in the reforestation business. The trees that we plant will be harvested over their 25 year growth cycle. Our timber plantations do benefit the environment in a number of ways, however. Most of our tree species are indigenous to the area, and help to replenish soil fertility, prevent erosion, and regenerate habitat for local flora and fauna. During their lifetime, each hectare (2.5 acres) of trees sequesters approximately 150 tons of carbon! Our business model was designed to slow deforestation by decreasing our partners' economic dependence on it. For this reason we lease land instead of buy it, involve our partners in all aspects of the operations, and share our profits with them.Back to top
Why don't you buy the land where the trees are planted?
We believe that buying land outright from poor Panamanians perpetuates the cycle of slash-and-burn development. When a farmer is displaced with a lump sum of cash, there is a strong temptation to reinvest that money into homesteading another parcel of old growth rainforest. Our model strives to keep locals on their land, and connected to the future income stream of our timber plantations on their land. Before entering into partnerships with locals, we analyze their opportunity cost of cultivating subsistence crops or breeding cattle, then pay a small premium above this. In this way, our partners benefit more by staying on their land versus cultivating old-growth rainforest.Back to top
Do you lease all the land of your partners?
No. We only lease parcels of their land that are already deforested and currently offer them little economic benefit. These lands were previously worked for growing crops or breeding cattle. Our goal is not to make our partners completely dependent upon our lease payments, but to demonstrate a more sustainable way to profit from their natural resources. By only leasing a small part of their property, our business provides a way for them to compare the benefits of their traditional income-producing activities with a new model. After living and working in Panama as Peace Corps volunteers, we’re are aware that new ideas must be established first at the grassroots level. We believe that as our partners see the continuing economic benefit of our partnerships, they will embrace more sustainable livelihoods.Back to top
How secure are the lease contracts with your local partners?
When a local partner enters into a leasing contract with Planting Empowerment, he signs a legally binding agreement. This grants Planting Empowerment exclusive land-use rights to the parcel for 25 years. This document is inscribed into the public registry. The contracts 1) Lay out the lease payments to be made to the partner of the 25 year period, 2) Guarantee us the first right of refusal should the partner decide to sell his property, 3) Restrict Planting Empowerment to carrying out only forestry projects on the land 4) Prevent local partners from felling new forests to lease more land to Planting EmpowermentBack to top