Must-Reads For Tropical Forestry Investing

Photo of women sorting native species saplings in Darien PanamaWomen sort native species saplings in Darien PanamaTwo recently published reports examine the roles of private capital in forestry, and increasing investment flows to locally controlled forestry.  

The Guide to Investing in Locally Controlled Forestry, released in December, is the product of a series of meetings called the Growing Forest Partnerships Initiative. The initiative, managed by the Yale School of Forestry’s Forests Dialogue, brought together investors, forest rights-holders, policy makers, and donors for a series of meetings to develop a set of recommendations to increase investment flows into locally controlled forestry. We contributed a case study about the challenges and benefits of building a local focus into our business model.   

In January, The European Tropical Forest Research Network (ETFRN) and Tropenbos released their News 54 publication entitled Good Business: Making Private Investments Work for Tropical Forests. The ETFRN/Tropenbos piece looks more broadly at the role private finance plays in the restoration and sustainable management of tropical forests. With an estimated investment of $15 billion per year, the private sector represents the largest investor in sustainable forestry. We contributed a case study to this report as well, a more in-depth look at how the Equitable Forestry model increase benefits to local communities and reduces investment risk.

All the case studies featured in the Guide to Investing in Locally Controlled Forestry and the ETFRN News 54 are inspiring examples of how organizations are attracting private investment to sustainable forestry models and increasing local control of tropical forests. We consider them must-reads for anyone interested in investing responsibly in forestry, and feel honored to be included.

Reforestation Strategies in Land Occupied by Foreign Grasses

A worker in Nuevo Paraiso clears brush with a machete prior to plantingIn some areas where we have reforested, the land had been previously planted with non-native grasses as fodder for cattle. We recently read a Mongabay post about restoring land previously planted with non-native grass through cultivating timber and other crops.

The paper, “Responses of transplanted native tree species to invasive alien grass removals in an abandoned cattle pasture in the Lacandon region, Mexico” by Román-Dañobeytia et al., found that successful reforestation on these lands is possible using natives species, but without continued suppression of the non-native grasses, high mortality rates may occur depending on the tree species.

Our experience confirms this finding. Whether it’s aggressive non-native grasses or just thick undergrowth, our native tropical hardwoods require frequent suppression competition to ensure low mortality rates. As the trees grow taller and start to shade out the undergrowth beneath them, suppression of competition becomes less important because the trees no longer need to compete for sunlight.

One practice used in the study to suppress the non-native grasses was burning the land before planting. Smallholders use slash and burn practices like this in the region where we work, but we decided to only clear the undergrowth and grasses with machetes before planting. When exercised in a controlled manner, the burning can return nutrients to the soil and reduce competition for the young trees, but the frequent rains in Panama erode away a lot of the nutrient-rich topsoil. Therefore, when we prepare land for planting our trees, we simply let the cleared undergrowth decompose in place and add its nutrients more gradually.

We’ve seen that certain species we planted compete better with the non-native grasses. Dalbergia retusa, in Panama called Cocobolo, has done the best with mortality and growth in our plantations with the aggressive non-native grass. It grows quickly, naturally bifurcates, and also fixes nitrogen, which gives it the ability to compete with the grasses while also recuperating the soils.

None of the native species in the study overlap with the species we plant, nor is the non-native grass the same, so a direct comparison with the study isn’t possible. However, we have found that, as in the study, suppression of non-native grasses is necessary for minimizing mortality rates. Additionally, the authors point out the need for maintaining the grasses during the dry season to reduce the drying out of the soil, something we have experienced, too.

We hope that researchers continue to pursue studies on this. Reforestation was the focus of the International Society of Tropical Foresters’ conference, held at the Yale School of Forestry and Environmental Studies where we presented earlier this spring.

If you’re interested in learning more about reforestation using native species and its challenges, you can listen to the recorded conference presentations. Additionally, you can find more academic papers on the subject, especially about Panama, on our Studies and Analysis page.

Planting in Arimae

Cocobolo saplings growing in Arimae's nurseryCocobolo saplings growing in Arimae's nursery

This morning I pulled my old hiking boots out of the closet and brushed off the residual clumps of dirt. After a few years of wearing them down to Panama, they’ve given in to the humidity and now require regular applications of Shoe Goo to keep the soles on. I should probably just get another pair, but I’m hoping they’ll make it through my next trip.

Next week we begin the planting of five hectares (12 acres) of mixed tropical hardwood trees in our partner community of Arimae. This is the first planting we’ll have done since 2008 and represents a big momentum boost for us as we continue to grow the business. 

Besides bringing our planted area up to over 60 acres, this planting contributes to one of our main goals as a company: promoting community forestry as a sustainable economic alternative. As part of a UNDP-GEF Small Grants project in 2009, we helped Arimae set up a community-owned native tree nursery to sell saplings to forestry businesses like us. For this planting they’ve agreed to sell us spanish cedar, spiny cedar, zorro and cocobolo saplings raised from seed collected from their rainforest reserve and surrounding areas. It’s a positive development for the community, and we’re hopeful that the trees will meet or exceed the quality of the ones we’re buying from more established suppliers.

While we’re only buying about ⅓ of the stock from Arimae, they have the potential to become our biggest supplier of native tree saplings.

The land is prepped, the stakes are ready, we have the fertilizer, and the saplings are on their way. Now, all we need is steady rainfall and a couple weeks' worth of hard work to get them planted. In my opinion this is the most rewarding aspect of what we do. Growing the business here in the US is exciting and rewarding, but it doesn't provide the same tangible sense of accomplishment that I get from putting trees into the ground, getting the hands dirty and building relationships with our partners.

I'll capture as many photos and videos as I can during the planting and upload them to our Facebook and Twitter accounts. Not sure how often I’ll be able to do this—internet access tends to be spotty in the campo—but keep an eye out for updates!

8 Tips for Social Business Plan Competitors


When Planting Empowerment was just a wee company, we participated in social business plan competitions at several universities including Notre Dame, University of Texas Austin, and Yale. While we never came away with a first place, they were an excellent way for us to gain valuable (and yes, critical) feedback about our business plan and become more comfortable pitching our concept. We even earned a little money which helped us get off the ground. These days, we stay involved through judging and mentoring roles, and have seen a lot of different business plans. Below we present a few suggestions on how to improve your chances at these competitions.

Have your product/service already developed. The judges see hundreds of business plans, and your amazing idea is competing with all the other amazing ideas. Having something already in production, or even a working prototype, signals that you’re serious about your business and are actually making it happen. Include photos of the product. Photoshop it being used. Include a positive testimonial from someone who has actually used your product or service (be honest, of course). Judges want to be known for choosing something that is already a reality or is well on its way, not an idea that may become reality.

Use real numbers. Assumptions won’t get you too far. Do your research and cite your sources for the assumptions you are using to develop your numbers. This is especially important for sales numbers. If you’re going to quantify your social impact, use the New Economic model system. A 568% SROI or $1-$10 cost-benefit ratio will raise eyebrows because the analysis probably isn’t accurate. Run it by one of your friends who is studying economics.

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JOBS Act and Crowdfunding

Yesterday Obama signed into law the Jumpstart Our Business Startups (JOBS) Act, which is good news for small businesses. The bill enables startups to raise equity financing for their businesses through crowdfunding platforms. This graphic courtesy of provides a good explanation of the history and potential of crowdfunding. Click the thumnail for the full sized version.

Infographic on crowdfunding