Frequently Asked Questions
About Certified Commercial Reforestation
India and China are the largest consumers of teak, yet they pay the least for it globally. In Panama, the cost of exportation has skyrocketed over the last 5 years (wages, fumigation, maritime and land transport), and additionally, the quantity of teak produced in Latin America has increased, so India cannot absorb all the world's production. Vietnam pays well, but it's a small market that buys timber in logs, while we produce high-precision sawn timber. We need to explore other markets.
No, only 3% of the territory in Panama is suitable for teak. Most of this land is located in Chepo and Darién, with some suitable areas in Bugaba and Veraguas. Many plantations were established during the 1990s on land that is not suitable for teak, and after 2010, when direct incentives for reforestation were eliminated, they were abandoned, and those are the unattractive plantations.
Yes, teak is not native to Panama; all teak is cultivated through commercial reforestation. We are going to remove all the teak from Darien and replant it. Most of our rotation cycles are 30 years. In Darien, there are over 37,770 hectares of certified teak planted on land that used to be pastures, and harvesting and replanting began years ago. In recent years, many plantations have reached maturity, which has increased the number of containers exported annually to 9,000.
We are the #3 export product, and teak mostly comes in logs in 40-foot containers from Darien. Local consumption of teak is limited, and that is a pending task for our mainly artisanal industrial sector to begin replacing forest wood with planted wood.
We don't know for certain, but undoubtedly, the most utilized wood is teak, which is 100% planted, sustainable, and sourced from plantations. The only reliable numbers we have are the ones for teak containers exported since 2018 when mandatory fumigation was established. OIRSA provides us with these figures, so since we have fumigation data, we can determine the number of containers we export. Tariff splitting is not used, so when they talk about wood exports, 98% of it is teak. Therefore, our figures are often confused with the 2% of native forest.
We lack an office dedicated to promoting the forestry sector comprehensively. We are under Miambiente, which is a conservation-focused entity. Consequently, their efforts are regulatory, not promotional. This makes our work much slower, as it depends on convincing each office in all the Ministries that have an influence on our work, rather than focusing on developing a National Commercial Forestry Development Plan.
We donated a traceability system for plantations to them, free of charge, with all the access codes, and they rejected it at the request of Anarap, which has had funds to do it since 2019 and has not delivered any.
The average Panamanian and the media are not aware of the volume of investments made in the plantations, which amount to more than 500 million USD, primarily from foreign pension funds.
We are not in direct competition. Our focus should be on placing our teak in better markets because our production is limited, with high production costs, and mostly certified with FSC.
We need to increase our production to premium-quality teak. We have recently created our country brand, Panama Teak, for the marketing of certified teak, and we are new to the European market. However, the demand for FEQ-quality teak is five times the global supply, so our focus should not be on competing in volume but rather on elevating the quality of our plantations and seeking niche markets.
We will always have thousands of empty containers at the canal, which makes our shipping costs lower. Additionally, the ports are only 100 kilometers away, and we have 12 hours of daily sunlight.
We work on former pastures, not on native forests protected by law. If we buy properties with forested areas, we maintain them as conservation measures, as required by Panamanian law and international certifications. Monocultures will never replace the biodiversity of native forests, but we serve as buffer zones. We directly impact rural economies and serve as refuges for animals from neighboring areas during the dry season since we are the only ones conserving water in the streams during that time.
The FAO declared Panama as a country with a forestry vocation back in the 1970s, but the lack of state policies has caused the sector to develop slowly. We lack a forestry culture, and that needs to change, but it takes time. The difference is that in other countries, the development of the forestry sector is optional, while for Panama, it is not. The Panama Canal is already facing the impacts of droughts, and our water treatment plants have restricted water production in both summer due to water scarcity and winter due to the high sediment levels flowing from deforested riverhead areas. The government has not yet begun quantifying the costs of climate change consequences, but once those numbers are available, I believe we will start reforesting more aggressively.
La cantidad de animales y plantas en una plantación bien gestionada puede ser muy grande. En un estudio sobre la vida silvestre realizado en 2014, se identificaron 231 especies diferentes de aves dentro de las plantaciones de Ecotopia Teak. Es importante recordar que antes de plantar teca, la tierra se utilizaba como pastizales y tierras agrícolas, donde la vida silvestre es generalmente limitada. Este es un excelente ejemplo de cómo la vida silvestre puede regresar rápidamente en plantaciones de teca bien gestionadas
The potential for the development of the Panamanian forestry sector is similar to that of the Panama Canal.
We have different studies from international organizations that support this assertion.
It all depends on soil analysis, which is essential before deciding what to plant. Only 3% of the soil is suitable for teak, and the FAO has designated large areas for pine.
Having a government-led project is crucial to attract large-scale investors. The state should conduct national land planning, identify lands suitable for project development, and designate them as forestry areas to attract investment from large-scale reforesters with comprehensive project proposals that determine the final product from the outset. This is not a new concept; in Colombia, the Investment Promotion Building for the forestry sector handles projects ranging from 1 million to 100 million USD throughout the country. Without such initiatives, large-scale investments are less likely to materialize.
- Attracting the right forestry partners could bring a significant portion of the low-educated population in rural areas into the formal economy, reducing their dependence on subsidies. Seeking partners with FSC certifications immediately compels them to meet international standards that are much higher than national ones.
- By increasing the number of certified partners, you gain access to better international financing options and development programs.
- This new socioeconomic model would help curb deforestation while increasing forest plantations. Most deforestation occurs not for timber extraction but through deliberately set fires during the dry season. Afterward, the land can be titled since it's not native forest, making it suitable for agriculture or subsistence farming.
- Proposing legal instruments to encourage the use of abandoned lands through various models and profitable usage options is a valuable approach. There are 2 million hectares of abandoned land that can be reclaimed for various species. Business models can be developed, including land leasing, a 50/50 harvest share, or land management agreements.
- Creating legislation to promote reforestation projects under international certification schemes on indigenous lands is a positive step. This can generate decent employment opportunities while adhering to Panama's labor laws, promoting the inclusion of indigenous groups in the country's economy.
Panama needs to invest in technology, genetic improvement of various species, and education to meet the demand for green jobs. Agriculture uplifts rather than denigrates, and our educational sector should aim to change the perception that the only way for the children of farmers to find well-paying jobs is by moving to the city.
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