Planting Empowerment: Cultivating Panama’s future through entrepreneurship and sustainable forestry

Written by on January 15, 2013 in Central America, Entrepreneurship, Green - 1 Comment

Planting Empowerment: Cultivating Panama’s future through entrepreneurship and sustainable forestry

Chris Meyer comes from a long line—four generations to be exact—of forestry workers. However, with a finance degree and a passion for entrepreneurship, he never expected to end up following in his family’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 – an activity that destroys tropical forests.  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 Empowerment’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 – 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 wasn’t the only one contemplating this issue.  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 – but with complete ownership.

“The 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,” says Meyer. “In 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.”

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.

“Early 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,” Meyer notes.

Operationally Meyer also states that Planting Empowerment has faced what he calls ‘Biblical challenges’. Yet, the company worked through those challenges, and has emerged stronger and poised for scaling up. “Although there have been fires, floods and pests – the mix of tropical hardwoods that we planted are now growing straight and tall,” Meyer happily states.

Planting Empowerment’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 company’s smallholder land lease partners are earning roughly 45% more for land leased to Planting Empowerment than the business-as-usual scenario. “We see strong demand for more sustainable income-generating opportunities by people living on the deforestation frontier,” says Meyer. “But those options are almost non-existent.”

Yellow wood is one of the native tree species in Panama.

Yellow wood is one of the native tree species in Panama.

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 – 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 excited to have won the Startup category,” says Meyer. “We look forward to developing more sustainable forestry projects with small landholders and Indigenous communities in Panama and throughout Latin America as a result of the WWF Switzerland Tropical Forest Challenge.”

While Meyer didn’t necessarily intend to end up in the forestry industry from the outset, today he is very much continuing his family’s legacy with passion working alongside his partners.  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.

“Being able to continue to work in the field—finally ending up in the forestry sector—and growing Planting Empowerment with my co-founders has been an amazing adventure,” concludes Meyer. “We 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.”

To learn more about Planting Empowerment or the WWF Switzerland Tropical Forest Challenge click here.

Allison Langille

Ennovent accelerates innovations for sustainability in low-income markets. We work with a global community to discover, start up, finance and scale the best innovations. We envision a sustainable future for low-income people in developing countries.

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  • http://amble.com/ambler/ Amble Resorts

    Even the language used in naming and describing efforts like this one is indicative of the long view a sustainable startup business must take to achieve its goals. “Cultivating”, “empowering” and “planting” all speak to a long, careful process which will produce a great harvest for years to come, though the labor may be backbreaking at times, and stormy weather may threaten your “crop.”

    Congratulations to Planting Empowerment on winning the challenge; we’re sincerely inspired in our own parallel mission to bring sustainable development and environmentally-friendly opportunities to Panama and its people.