Cooperative Reforestation

How To Reduce Startup Costs & Reach Economic Sustainability
Costa Rican Countryside
The verdant countryside of Costa Rica

Editor’s Note: Throughout the tropics, forests have been devastated by demands from growing human populations for fuel and building materials. Equally significant has been the removal of trees by industrial logging operations. In Central America, these forces have caused the amount of forest to be reduced to less than one-third its former extent. How these trees were removed in most cases has led to soil erosion, catastrophic mudslides, destruction of habitat, desertification and climate change.

During the last twenty years however, as the worldwide destruction of forests has raged worse than ever, restoration of forests has quietly begun. Throughout deforested regions, conversion of land from mono-crops to mixed use, sustainable agro-forestry is yielding a new and improved environment. Not virgin forest, but combined land use, where some land is returned to jungle, some is retained for grazing and agriculture, and some becomes new, sustainably harvested forest.


In this personal account by Fred Morgan, President of Finca Leola, a former dairy farm in Costa Rica is turned into a combination of restored jungle and sustainable agro-forestry plantation. But Morgan’s explanation of how his dream was realized through a combination of working with local communities and innovative financing via investments from people outside Costa Rica is especially interesting. Models such as Finca Leola have the potential to bring both prosperity and environmental recovery to much of this world where the original forests are lost.

It was never my intention to be an environmentalist.

Not that I felt that there was anything wrong with being one; I just wasn’t expecting it. Sure, I had contributed some to the Nature Conservancy because I was hiking regularly on their lands, but with raising kids and trying to pay bills, it seemed that my efforts would have to be limited to just giving some money here and there to environmental causes.

I’ve always been interested in nature. Few things are more enjoyable to me than long distance hiking, especially in new and novel areas. At one time in my life, I wanted to be a marine biologist or a forest ranger, and I think that was because I wanted to be outside rather than have a desk job. Besides, I was born on a 300-acre farm and never really got very far away from that experience. A woodcarver since age eight, I have also been interested in wood for a long time. When I was a teenager, I had a part-time job in a lumberyard and found all the different properties of wood fascinating.

Fred Morgan with Ojoche Tree
Fred Morgan in front of a massive Ojoche tree

Caring about the environment, occasionally contributing to environmental causes, this description could probably apply to thousands of people, if not millions. How in the world did we get involved in reforestation? And how did we manage to pay for it?

The Dream:

For years – in fact most of our married life – my wife, Amy, and I had a plan of living in a Latin American country someday to start a business that would help the people there as Amy perfected her Spanish, a language she loves. Once we decided that Costa Rica was it, I started to research into what it takes to live there. I knew that Costa Rica grants residency to people if they have a retirement pension (or Social Security), but that does not apply to Amy and me, since we are nowhere near that age (though it keeps creeping closer when we are not looking!).

Costa Rica Flag

We learned that one of the ways to obtain residency is to be involved in reforestation. Costa Rica has suffered very rapid deforestation over the last 50 years; in fact more than 70% of the country is currently deforested. This is causing serious problems with mudslides, floods, and believe it or not, lack of water during the dry season. Because of that, the Costa Rican government is trying to encourage reforestation with tax benefits, information, and residency.

Map of Costa Rica
Costa Rica encourages reforestation with
tax benefits, information & residency

Of all the different ways of qualifying for residency in Costa Rica, reforestation appealed to me most, and as I researched it, it appealed even more. Since I work in a technological field, I prefer to invest in something besides technology. If I were to lose my job because of a downturn in technology, I don’t want to lose my retirement fund as well. So, growing trees seemed like a good approach to retirement planning for me. I also liked the idea that it would help the environment. We decided on a combination of replacing pastureland with a tree plantation along with protecting and expanding existing rainforest.

If we had not met Hector Ramirez and his wife, Christina, I rather doubt that we would have gone through with it as a do-it-yourself project. The difficulty is that reforestation is not just sticking trees into the ground. For the first 3 years, there is a lot of work. Also, doing business in another country is challenging. As the saying goes, you aren’t in Kansas anymore. Hector was born and raised in Costa Rica in the very area where we wanted to establish our plantation. We had been trying to work through agents to find land in that area, and they could find nothing for months. Hector found us more than we could even see in a matter of a few weeks.

Amy Morgan on Horse
Amy Morgan inspects property on horseback

Finding the Land:

Hector, Amy, and I flew down to Costa Rica together to look at fincas. What a week! We stayed with friends of Hector and ate at their soda (roadside cafe) every day. During the day, we would visit farms (fincas), and every evening Hector would go out and line up the farms to go see the next day. We rode horses around most of the fincas, which was quite an experience, since neither Amy nor I would be considered horse people by any stretch of the imagination. We eventually picked a very nice finca that was a working dairy farm and well-maintained.

Hector & Christina Ramirez
Partners in Reforestation

After spending a week in Costa Rica, it became clear that we needed Hector long-term, so we made him an offer he couldn’t refuse – or we hoped that he wouldn’t. He accepted our offer to be a partner in the business. We all figure that Hector is the one really important person. The rest of us are support staff for him. The other very important person is Antonio, our forestry engineer, who has 20-plus years in Costa Rica growing trees. Hector and Antonio make all of the important decisions – all I get to decide is how many trees we are going to plant each year and what species. We started out with four: teak, mahogany (caoba), Spanish cedar, and sura.

Spanish Cedar Tree
A 20 year old Spanish Cedar Tree

Of course, these species were chosen with Antonio’s agreement. This is working very well; in fact, the plantation is growing excellently, probably because they are doing it and not me. Of course, Hector loves it when I show up. He figures using me for a mule saves wear and tear on the animals.

Well, buying the land and a truck pretty much wiped out our reserves. We did not have enough to pay Hector what he was worth, although that’s not a lot of money in Costa Rica. So Hector explained to us that since we owned land, we could make money. We had bought 67 hectares (about 164 acres), and since we were only planning on planting 5 hectares the first year, most of it was going to be fallow, which means it would soon be jungle if we didn’t prevent it. I like letting the land go back to jungle, but I cannot afford to let all of it do that, unfortunately. Our land, like me, has to earn a living.

The Agro-Forestry Formula:

Hector suggested that we continue to graze cattle in the places where we were not planting yet. This would provide income for Hector and his family and reduce the amount we needed to pay him. After Hector brought this up, I did what I always do, delved into researching it, both on the Internet and with Antonio, our forestry engineer. Agroforestry, the management of land by growing trees in combination with pasture and food crops, would work very well for us.

The problem in growing just trees is that it requires tying up a considerable amount of capital. The reason farmers do not normally plant trees is that it is impossible for them to not have their land constantly produce revenue. Agroforestry is an attempt to compromise between the need to produce a cash crop each year and the need to grow trees for the future.

In addition to grazing cattle, when we plant trees, we plant a crop of tiquisque between them. This provides several benefits. One, the tiquisque protects the soil so that bare ground doesn’t wash away in the rains. Two, the trees are weeded and fertilized for free, since Hector works with another person to plant the tubers, and the other person maintains and weeds them. After the tiquisque was harvested, the trees are big enough not to need weeding any more. Three, the harvest provides additional money for Hector and his family. I figure with all the money Hector is making doing agroforestry, he will soon be lending me money!

Tiquisque Plant in Costa Rica
The Tiquisque plant protects soil from erosion,
crowds out weeds, and provides an edible tuber

Another interesting development has occurred. Because we are a bit obsessed about this adventure of ours, it kept coming up in our conversations. (I swear everyone who knows us knows about our tree plantation – they are very tolerant.) Well, some of our friends asked to be part of it. We got very excited about being able to save a whole lot more rainforest than we could on our own. We had purchased four times as much land as we needed for our own retirement. I did a lot of study and research and found out that a common practice is to sell trees instead of shares. Instead of owning part of a plantation, you own only the trees. The advantage for the tree owners, of course, is that they invest in trees without having to go through the pain of owning land in a foreign country and becoming knowledgeable in growing trees. They can also piggyback on our experiences: We try growing each species for ourselves before we sell it to anyone else.

Financing Agro-Forestry:

We had several friends who didn’t realize they had money on hand to invest it trees—in their IRAs! We had made contact with a company that specializes in administering self-directed IRAs and other self-directed retirement accounts. They helped us streamline the process for people to own trees in their IRAs, so even more people got involved in our reforestation effort.

In July 2003, we decided to switch from only offering to grow trees for family and friends to offering our services to the general public. We hesitated (for about a second) because of all the work involved, but our desire to preserve more of the environment in the area as well as provide more jobs for the locals won out. This has been much more successful than we imagined. We sold out of the available trees from the July 2003 planting in about 5 months, and we weren’t even trying. Because of that, we are planning to plant triple in 2004 what we did last year, and already things are looking like we may have to bump that up considerably and maybe even buy more land for next year’s planting. We are happy about this, not because we will get rich off it (we will not) but because it helps preserve so much of Costa Rica. Generally speaking, 40 to 60 percent of the land we own is allowed to remain virgin rainforest or revert to jungle. So, the more trees we plant, the more biological corridors we are creating. This allows the wild animals to pass through from one feeding area to another and to proliferate.

Costa Rican Jungle
Allowing corridors of land to revert to jungle helps
wildlife safely pass between feeding areas

We structured the tree purchases so that we would have enough money to take care of the trees, but our profit comes when the trees are harvested. We will receive 6% of the proceeds from the sale of the wood. We did this so that tree owners would know that we are highly motivated to take care of the trees for the full 25 years until the last ones are harvested. Also, they can come visit any time they want and check out their investment as well. We love to show people around the place.

The average tree owner is a person who is concerned about the environment, often has traveled outside of the United States (and sometimes has immigrated to the USA from a Latin American country), and is either saving for their children’s education or for their retirement. A sizeable percentage also are people like us who want their residency in Costa Rica and feel that this is a great way to get it, help the environment, and invest for their future all at the same time.

Timber Harvesting Log Truck
Conventional methods of timber harvesting
can needlessly damage the surrounding land

Since Hector and Antonio have the current plantation so well in hand, what are Amy and I doing? Currently we are exploring a value-added direction. Instead of just growing trees, we want to make sure that the trees we grow are efficiently used. Usually during the harvest of a tree, a large percentage of the wood is thrown away, because the big sawmills only want a certain kind of wood. Have you ever wondered why it is so hard to find wood with an interesting grain pattern? It is because the sawmills don’t like to handle it, since it is hard to saw. To make matters worse, the normal method of harvesting trees tears up the land, because the logs are dragged to a tractor-trailer and then the tractor-trailer is dragged out of the forest. This leaves big scars on the land that cause erosion if not fixed. We are already researching how to harvest trees with the least amount of damage to the land.

Promoting Sustainable Forestry:

It is interesting that, although cutting down rainforest is a bad thing, cutting down plantation trees for furniture is a very good thing, because it ties up the carbon for years and years. This is very important in reducing the amount of carbon dioxide in the atmosphere. It is also a very good thing because it returns a profit to those who have invested in reforestation, encouraging others to do it as well.

Furniture
Finca Leola is building a network of furniture
makers who use sustainably harvested wood

Recently we went on a furniture research trip to see the design and quality of the furniture being made in Costa Rica. Some was rustic or not well-made, but some was excellent, beautifully designed and made as well as any furniture we had ever seen and very reasonably priced. For example, a large, oblong dining room table and six chairs was priced at about $1,000.00 US. This was about 25% to 30% of what I would expect it to go for in the USA. The problem is, of course, that you have no idea where the wood comes from and may be contributing to the destruction of the rainforest by buying it. We are currently making plans to develop a network of furniture builders who will create furniture from our wood that we will help them sell, so that people can help by buying tropical hardwood furniture instead of hurting.

Finca Leola Logo

Finca Leola has evolved into much more than just a couple of families trying to help do something for the environment with their limited time and resources. Our Web site, www.fincaleola.com, has become a source of information on reforestation, and our lives are being enriched by all of the tree owners and others who contact us and stay connected with us throughout the year. We also spend considerable time giving free advice to people who own land in Costa Rica and want to grow their own trees, as well as to some other owners of reforestation projects. It has so far been the most fulfilling and enriching experience of our lives.

What I think is developing is Cooperative Reforestation. Instead of the idea of just planting trees and eventually harvesting them (our first plan) we have morphed into a collaboration of individuals and companies, all with a common thread of reforestation and improving the environment, but at the same time, having the plantations pay for themselves. We have created a website that dispenses information on reforestation and related topics, since our primary purpose is to encourage reforestation.

Hacienda Baru Logo

One of the most famous reforestation projects in Costa Rica is Hacienda Baru. Jack Ewing started 30 years ago to reclaim a portion of Dominical, Costa Rica. Not only has he successfully grown lumber for his own use, but he has created an ecotourism paradise. In this case, tourism is supporting the reforestation project, showing that often, the trees are worth considerably more alive than dead.

CloudBridge Logo

Another family has started CloudBridge, a private nature reserve. They have volunteers who come help replant the deforested areas and sell merchandise, and they accept donations to help fund the project.

We at Finca Leola encourage anyone who is interested in reforestation to drop us a line. We feel that much of the deforestation that has occurred is not because of greed but lack of knowledge. If we can, through our Web site and through offering to plant trees for others, help in reforesting a part of Costa Rica, we feel all of the hard work and money will have been well-spent.

Fred Morgan

President

Finca Leola S.A.

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