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Reforestation

Our Reforestation Experience

We at Land Assurance are dedicated to reforestation.  We make it a practice to grow multi-specie hardwood plantations for a variety of people and organizations. Brice and Tim first invested in pasture land and started planting trees in Costa Rica in 1992. They lived and worked in the US back then, so at first they had to manage the plantation from afar. When they moved to Costa Rica full-time in 1998, Land Assurance took over that task.

Since then, Land Assurance has gained a good deal of hands-on experience in Costa Rica real estate, reforestation, and managing plantations for its principals and their clients. We are thankful that we can count on a top-notch local team of reforestation experts, from the hole diggers in the field to the design professionals on AutoCad.

Our Goals with Reforestation

Land Assurance’s primary goal: to plant as many trees as possible on non-productive cattle and crop land, while earning exceptional returns for our investors, and for our workers in Costa Rica who put in the back breaking labor to make it all happen.

Our approach to reforestation together with your real estate investment puts your money to work under a dynamic paradigm. The positive impact is significant, in many ways:

  • by indefinitely “capturing and sequestering” tons of carbon dioxide emissions, your trees in Costa Rica will combat global warming and ozone depletion;
  • by converting real estate that has been abused for years as cow pasture into a poly-culture tree plantation, you’ll help mitigate the growing pressure to log the remaining tropical rainforests;
  • by sponsoring a multi-species, ecologically managed plantation, you’ll help preserve and regenerate local biodiversity in Costa Rica;
  • by collaborating with us in setting an example, in which business works with instead of against the environment–freeing the latter from dependence upon mere charity—you’ll help inspire others to explore similarly ground-breaking alternatives in Costa Rica and elsewhere; and
  • by investing now, you and your family will receive robust financial returns starting in 16 years, and continuing potentially for as long the farm is responsibly managed.

Reforestation Mission Statement

  • To earn a healthy return for your investments and for our plantation workers and their families
  • To capture and sequester carbon dioxide, with the aim of combating global warming and other serious imbalances caused by excessive greenhouse gas emissions
  • To lead by example in the creation of sustainable eco-developments projects, in which cattle pasture is allowed to regenerate into forest, due to restrictions dicating that at least 90 percent of the land on each parcel sold be allowed to remain forever green, with building allowed only on a maximum of ten percent;
  • To help pioneer and teach sustainable reforestation practices
  • To promote and support the achievement of equal rights for the women of Costa Rica, particularly those in isolated rural areas
  • To utilize multiple plant and tree species under an organic framework to renovate the soil of Costa Rica and recreate biodiversity
  • To fund the regeneration and preservation of existing primary and secondary rainforest adjacent to plantations
  • To provide local markets in Costa Rica as well as international markets with plantation lumber as a means of reducing the logging pressures on remaining tropical rainforests.

We know of many beautiful properties, some with trees already planted, others ideally suited for that purpose. If you would let us know your approximate budget, and exactly what kind of features you are looking for, we’ll do our best to find you a perfect property in Costa Rica.

In addition, we’ll represent your interests in Costa Rica, from the selection of initial properties for you to consider, through the inspection process, to the negotiations and finally the closing. We have done similar transactions for years, and thus, over time, have assembled an ace team of professionals (lawyers, topographers, forestry experts, etc.) to get the job done for you.

Examples of the kinds of “due diligence” tasks we can have done for you:

  • soil sampled and tested;
  • topographer’s property plat map done and issued;
  • title researched;
  • drainage study performed;
  • reforestation plan elaborated

In all cases we issue you a comprehensive report. We can also provide you with an expertly-conceived maintenance plan. Please contact us for more details at info@LandAssurance.com

  Getting Started with Reforestation

In the mid to late 1990s Brice and Tim studied the prospect of reforestation in Costa Rica.  We went to multiple teak operations, including in Trinidad, read all the literature, and hired the best experts we could find to try to sort out the fact from the fiction.  And this is what we found, distilled to a few truths:

1) If the ROI’s sound too good to be true, they are.   No (legal) business on the planet is predictably that good.

2) The best filter to sort out the hucksters is their own assumptions.  For example, that a teak tree planted today would be worth $7,000 in 20 years . . .  There-is-no-way.

3) The most common trick is to insert a small number in the field for inflation, and run it for 20 years.  The tactic  does wonders for the bottom line, while ignoring the question of what future inflated dollars would be worth.

4) One feature every one of these promoters had in common was lack of experience on the far end of things.  Meaning the final harvest and actual sales of wood.  None of them had ever done it before, all of them were wannabes.

5) On the other hand, we did visit excellent plantations where management most definitely seemed to have its act together.  But they were outnumbered by the others 10 to 1.

In conclusion, while many of the teak promoters were not scammers, because they did deliver the trees and the management, they were true believer types.   Either way, though, the end result was often the same to the  investor:  money down the drain.

 A True Reforestation Story

We looked at all of this as we went ahead and bought a farm and started to plant it out, several hectares per year.  And we decided that for the next 20 years, we would focus on proving (or disproving) the validity of the concept,  from planting through to the most critical part of the entire operation: the very end, when we actually sold the lumber. Before we could feel comfortable making financial projections for events not due for decades, we first needed to give it a go ourselves.

So we planted trees for ourselves and for fellow land-owning clients, relying on the advice of accomplished local experts.  We shared with our clients everything we knew, we helped them with management, and offered the same for eventual sales in 20-25 years’ time.  But we were not the “promoters,” nor the “guarantors.”

Anyway — how to sell the trees for top dollar:  we always knew that was the big challenge. Why?  Because a lot of farmers and local folks knew how to plant and manage trees; but selling them for good money  was something nobody had any experience doing, since all the plantations were too young.  Moreover, back then there was no Internet!  (Remember what it was like to write letters by post? And wait weeks for replies?)

Sure enough, it turned out that how to effectively market and sell them internationally, IS  a different ball game, requiring sophisticated Internet marketing, much research, a lot of planning, etc.    Case in point: a lot of the teak here is now being bought by “Hindus” from India who buy it “on the stump” at low prices, according to local talk.  But the farmers sell cheap cause they don’t know what else to do with their teak trees, or they lack the capital to harvest and process them.

Anyway, the bottom line for us is that we are finally there (or is it “here”?), almost 20 years later, with our trees between 14 and 18 years old.  We just performed a major culling, with two teams of oxen.

Current Financial Projections

We now believe based on recent evidence that a sustainable plantation with a ~16 year turn around time is feasible, way down from the 25 years that we had been assuming prior to actually doing it (there’s nothing like on-hands experience to settle an issue).  Here is a rundown of very rough general costs that we would project:

$6,500:  buy suitable (but cheap) farming land incl closing costs, per ha.
$3,500:  plant 1 ha. w/ 1,100 trees
$8,000:  manage trees 15 years
$6,000: costs to do 3 thinnings, at years 4, 8, and 12

Total: $24,000 for one ha. of 1,100 trees, with the cycle ending 16 years later with 300 trees.  There is no charge shown for the final harvest at year 16 because the proceeds at that time would cover this cost, which we estimate would be about $2,000/ha.   At that time the tree owner would have to decide whether to have the trees milled into some sort of product, or sold as logs.   The above cost estimates are on the generous side, to avoid any potential shortfalls.

As for the returns, each hectare’s lumber would be worth between $150,000-250,000, depending on how it is sold.  This figure is based on having 300 trees left at year 16.  On our farm, these 16 year-olds were quoted as being worth $500 apiece by an agro-forestry expert three months ago.  In addition, we are selling the teak to local builders for $3/bd. ft.

Note that the next round of reforestation, to be planted as soon as you did the final harvest, would be much cheaper to plant:  you would save on the land buying costs, as well as the planting costs; since the land would require neither purchase nor prep, the second round could be planted for closer to $1800/ha. total, down from $9,000.  Alternatively, the land could instead be used for development, but that would require buying “dual purpose” terrain which would almost certainly cost more than the 60 cents US/m2 of land quoted above ($6,000/ha.) for basic farmland.