THE HISTORY

THE SERIOUS IMPLICATIONS OF CONTINUED DEFORESTATION

In Costa Rica we have denuded the forests to provide pastureland for cattle ranching. Pristine forests fell to make way for a world-wide demand for beef.  Since the end of World War II, approximately 80% of the forests of Costa Rica have disappeared.  Many people think that bananas, coffee, or even sugar cane, are the prime exports of Costa Rica.   Sadly, the fact has become apparent that top soil, the very life source to Costa Rica's agriculture, has becoming its prime export.  Down from the denuded hills into the streams and out to the oceans, top soil has disappearing from the land mass, year after year. 

On-going forest loss and degradation have had, and will continue to have, serious implications at local, regional, and global levels.  Exploitation and clearance of natural forests have resulted in incalculable losses in biological diversity and ecological services, including nutrient recycling, watershed management, and climate regulation.

Deforestation alters the atmosphere by increasing the amount of carbon dioxide and other trace gases.  The plants and soil of tropical forests hold 460-575 billion metric tons of carbon worldwide with each acre of tropical forest storing about 180 metric tons of carbon.  When a forest is cut and burned to establish cropland and pastures, the carbon that was stored in the tree trunks (wood is about 50% carbon) joins with oxygen and is released into the atmosphere as carbon dioxide.

Tropical deforestation also affects the local climate of an area by reducing the evaporative cooling that takes place from both soil and plant life.  As trees and plants are cleared away, the moist canopy of the tropical rain forest quickly diminishes.  Recent research suggests that about half of the precipitation that falls in a tropical rain forest is a result of its moist, green canopy.  Evaporation and the taking in of carbon dioxide and releasing of oxygen by the trees and plants returns large quantities of water to the local atmosphere, promoting the formation of clouds and precipitation.  Less evaporation means that more of the sun's energy is able to warm the surface and, consequently, the air above, leading to a rise in temperatures.

In a tropical rain forest, nearly all of the life-sustaining nutrients are found in the plants and trees, not in the ground as in a northern or temperate forest.  When the plants and trees are cut down to sow the land, farmers usually burn the tree trunks to release the nutrients necessary for a fertile soil.  When the rains come, they wash away most of the nutrients, leaving the soil much less fertile.  In as little as three years, the ground is no longer capable of supporting crops.  After the land is abandoned, the forest may take up to 50 years to grow back.

THE FUTURE

The deforestation of tropical rain forests is a threat to life world- wide.  Deforestation may have profound effects on global climate and cause the extinction of thousands of species annually.  Stopping deforestation in the tropics has become an international movement and has promoted the search for ways to reverse its effects.  Costa Rica has been a pioneer in this effort.

 

REFORESTATION EFFORTS SUPPORTED BY THE GOVERNMENT OF COSTA RICA

The Costa Rican government, in a typically pragmatic approach to the problem, has offered excellent incentives for those interested parties who wish to assist in the reversal of the denuding of the country.   For those individuals and their families who wish to invest in reforestation, the government offers tax-free returns of dividends in addition to granting the investor the right to live here in Costa Rica.  The status offered is called "Resident Investor Status," and the applicant, spouse, and children under the age of 18 receive their "cédulas" which are their personal identification booklets.

HUMAN RESOURCES

In Costa Rica, agricultural labor is readily available and the workers respond quickly to training.    Costa Ricans are very hard workers, and thus we find excellent value in our labor force.  There are few labor unions in Costa Rica, and labor shortages and disruptions are few.

TIMBER HARVESTING

It is anticipated that the first commercial harvesting will begin when the trees reach the age of 20 to 25 years.  This is the industry’s recognized “cycle of growth.”  Thinning must take place at established intervals.  No commercial value can be expected from the first thinning.  It is anticipated that there will be a considerable value to the second thinning. The ultimate value remains in the final harvest.

Note:  The objective of any plantation is to have the maximum volume of wood available for harvest at the end of the growing cycle.  By means of thinning, the remaining trees provide a real increase in volume of wood to be harvested.  The objective is the volume of cubic meters, not the number of trees.

THE RISK FACTORS

  1. LABOR RISK:  All fruit trees such as orange, pineapple, banana, macadamia, cashew nut, cardamom, pepper, etc., have fixed harvest times and therefore time-specific high labor demands.  This can be very risky for the owners of these kinds of plantations.  Precious wood by itself has a daily increment in value just by growing, and as it does not have a specific harvest time, labor risks do not exist.
  2. FIRE RISKS:  After the first year, teak plantations have no fire risk because by then the trees are fire resistant.  Furthermore, the tree tops pack tightly and the shade from these trees creates a ground cover that prevents the growth of grass and any other plants that could be a source of fire.
  3. FLOOD RISKS: The natural geography of our plantation provides a natural drainage system.  There are two areas where man-made drainage has been added in order to ensure proper growing conditions.
  4. INSECTS:   In Costa Rica there has never been an insect attack causing damage to wood plantations.
  5. HURRICANES:   A hurricane has never hit the on the West Coast or the central area of Costa Rica.

PRICE HISTORY

All wood inventories are being rapidly depleted, and none more so than the world's supply of teak.  Supply and demand can only drive the price higher.   Because of the ever decreasing world wide supply, teak has enjoyed double-digit price increases ever year for the past number of years.