Planting Empowerment: Cultivating Panamaâ€™s future through entrepreneurship andÂ sustainableÂ forestry
Chris Meyer comes from a long lineâ€”four generations to be exactâ€”of forestry workers. However, with a finance degree and a passion for entrepreneurship, he never expected to end up following in his familyâ€™s footsteps.
Today Meyer very much is continuing the family forestry legacy. He is one of the four Co-Founders of Planting Empowerment, a small forestry company working in Panama providing alternative income streams for indigenous and smallholder farmers who traditionally live off slash and burn agriculture â€“ an activity that destroys tropical forests.Â Recognizing the link between rural poverty and deforestation, Meyer and his partners designed a business model to help rural communities profit more sustainably from their natural resource endowments.
Unlike most entrepreneurs who are driven by sheer passion from the outset, the road to Planting Empowermentâ€™s inception was more of an evolution.
The Co-Founders, including Meyer, each served in the US Peace Corps for a number of years, working with local communities in Panama on projects ranging from water delivery systems to cooperative development. During their time in Panama the teak plantation business was exploding â€“ companies were buying land and planting large amounts of teak for large-scale production.
Meyer was fascinated by the economics of the teak boom. Companies were buying up deforested land, planting thousands of non-native teak trees, and selling it to European investors for USD 30,000/hectare (without land ownership). Based on his finance training, Meyer estimated that at least half of the sale price was arbitrage. Furthermore, the plantation companies only encouraged migratory deforestation by encouraging smallholders to sell out and move further into the rainforest.
With minimal options at their disposal, rural communities practiced unsustainable slash and burn agriculture to put food on their tables as a result, which threatened biodiversity and long-term income generation prospects. After living and working in these communities for two years, Meyer and his partners recognized the Panamanians’ desire for more sustainable land management, but also their need for the capital and technical skill to do so.
It turns out that Meyer wasnâ€™t the only one contemplating this issue.Â His Peace Corps colleagues were also considering how to adapt the principles behind the commercially viable teak plantation model to yield additionally social and environmental benefits to the local communities.
Recognizing a solid business opportunity tied to making a difference in the communities to which they had become close, Planting Empowerment was born.
Instead of purchasing land like the majority of forestry companies, Planting Empowerment leases land from indigenous communities and small landholders to encourage land tenure. The leases are structured to assist with income generation and provide an incentive to actively participate.
Additionally, community members and small landholders have the opportunity to acquire hands-on forestry management skills and traditional classroom knowledge, financed by Planting Empowerment. After the first plantation cycle ends, their goal is that land lease partners will have the capital (from profit sharing) and technical capacity to manage their own agroforestry plots â€“ but with complete ownership.
â€œThe lease model covers the short term opportunity cost of the landowners, but also ensures them a portion of future profits from whatever might be planted on their land,â€ says Meyer. â€œIn the long- term we aim to work ourselves out of jobs by training local counterparts in forestry management so that after the first harvest cycle, the local partners can manage their own profitable forestry projects and receive 100% of the profits.â€
But even with a strong team that had a solid business background, Planting Empowerment has faced its share of challenges as a young startup company.
â€œEarly on we learned that raising the capital to finance our operations was going to be challenging. We lacked a history of managing forest plantations, were using a land-lease model, and were working with untitled indigenous lands,â€ Meyer notes.
Operationally Meyer also states that Planting Empowerment has faced what he calls â€˜Biblical challengesâ€™. Yet, the company worked through those challenges, and has emerged stronger and poised for scaling up. â€œAlthough there have been fires, floods and pests â€“ the mix of tropical hardwoods that we planted are now growing straight and tall,â€ Meyer happily states.
Planting Empowermentâ€™s results have been impressive. Since the first sapling was planted in 2007, the company has planted 27,500 trees (25 hectares) of at least eight different species that have sequestered approximately 540 tons of CO2 to date.
In line with the vision of the co-founders, the startup has also produced significant social returns.
Planting Empowerment now employs two Panamanians fulltime at an above-average wage and benefits. In addition, factoring in profit sharing, the companyâ€™s smallholder land lease partners are earning roughly 45% more for land leased to Planting Empowerment than the business-as-usual scenario. â€œWe see strong demand for more sustainable income-generating opportunities by people living on the deforestation frontier,â€ says Meyer. â€œBut those options are almost non-existent.â€
In 2012, the Planting Empowerment team applied for the WWF Switzerland Tropical Forest Challenge, an initiative managed by Ennovent, because they wanted to scale the business and have a greater impact. This global initiative ran from May â€“ September 2012 to source the best for-profit solutions from around the world addressing the conservation of tropical forest biodiversity.
The Tropical Forest Challenge applications gathered more than 2,300 public votes and were further vetted by a panel of forest biodiversity, development and business experts. A separate panel of distinguished jury members evaluated the top ranking applications to select the winner and finalists in the Startup and Company category.
Of this, Planting Empowerment was selected as the winner in the Startup category for their inspiring work promoting tropical forest conservation in Panama.
“Planting Empowerment is excitedÂ to have won the Startup category,â€ says Meyer. â€œWe look forward to developing more sustainable forestry projects with small landholders andÂ Indigenous communities in Panama and throughoutÂ Latin America as a result of the WWF Switzerland Tropical Forest Challenge.”
While Meyer didnâ€™t necessarily intend to end up in the forestry industry from the outset, today he is very much continuing his familyâ€™s legacy with passion working alongside his partners.Â As a relatively small forestry operation, Planting Empowerment has a long way to go to attain its vision of creating thousands of hectares of sustainable forestry projects throughout Latin America. However what is clear is that the company is on the right track.
â€œBeing able to continue to work in the fieldâ€”finally ending up in the forestry sectorâ€”and growing Planting Empowerment with my co-founders has been an amazing adventure,â€ concludes Meyer. â€œWe look forward to scaling Planting Empowerment and offering our agroforestry option to more and more small landholders and indigenous communities in Panama and throughout Latin America.â€
To learn more about Planting Empowerment or the WWF Switzerland Tropical Forest Challenge click here.