Teak plantations in Costa Rica - Precious Woods' experience

K.-H. Schmincke
 Karl-Hermann Schmincke was Director of the FAO Forest Products Division from 1993 to 1998.
The story of a commercial plantation enterprise aiming to meet the rising demand for teak while contributing to sustainable forest development.

World Record on Teak Yield:
TRUTH or TRICKERY
Julio Cesar Centeno, PhD March 12, 1996.
In a report recently released in The Netherlands, a world record on the production of commercial teak timber is reported, at the plantations established by the company Flor y Fauna in Costa Rica. The oldest of these plantations is only seven years of age. The Centro Cientfico Tropical of Costa Rica [CCT], based on information supplied by Flor y Fauna, has concluded: "the average growth-results of the plantations are higher than ever recorded in scientific literature in or outside Costa Rica.

The Management of Teak Plantations:
Julio César Centeno, PhD
Teak [Tectona grandis L] is a tree originally from an area encompassing parts of India, Thailand, Myanmar and Laos. It seems to have been introduced to Java, Indonesia, in the 14th century. Some scientists consider the island of Java as part of the natural range for the species. It has performed well in plantations, not only in its Southeast Asian range of origin, but also in other parts of Asia, as well as in Africa and Latin America.

 Teak (Tectona Grandis) in Central America:
Based on the work in 1998 of R.V. De Camino M.M. Alfaro L.F.M Sage Consultants / Edited by M. Varmola
May 2002
Forest Resources Development Service Forest Resources Division Forestry Department Working Paper FP/19 FAO, Rome Italy.

4.2.1 Costa Rica
The first Forestry Law (No. 4465) of Costa Rica was promulgated on November, 1969. The present Forestry Law is No. 7575, approved in 1996. Together with its Rules and Regulations[2], constitutes the Costa Rican forest legal framework.

Costa Rica has a 29-year experience of regulating plantation and conservation activities. However, it is only in the last 10 - 12 years when private sector plantation activities attained relevance. Also, the private sector increased its participation in the decision-making process of sector.

New legislation defines the State intervention in forest plantations. Article 28 indicates that "forest plantations, included the agroforestry systems and individually planted trees and their products, will not require harvesting, transportation, industrialization or export permit...". Article 56 states that "logs and rough sawnwood from forests or plantation, will not be transported, if it does not have the respective documentation". A transportation certificate is required as a form of control in highways.

The law establishes a new incentive system for forest plantations known as Payment for Environmental Services (PES), a payment or compensation for carbon sequestering, soil, water and bio-diversity protection and scenic beauty provided to society. Some of these services benefit not only the Costa Rican population, but also the global community, as is the case of carbon sequestering.

PES is a program under the responsibility of the National Fund for Forest Financing (FONAFIFO)[3], organization created to finance forest activities by granting credits or PES. Article 69 indicates that, from the total amount collected yearly by the selective consumption tax on fuels and other hydrocarbons, a third will be allocated to the PES Program (approx. US$31 million/year).

Government dispositions detailed PES conditions. The yearly amount to be paid is updated annually, for forest plantations US$600/ha for the first five years. The landowner endorses to the government the annual amount of carbon sequestered by the plantation, signing a contract for a maximum of 15-years.
Article 29 of the Forestry Law lists the incentives that the landowner can have access to:

• Exemption on real estate tax on planted areas.
• Exemption on payment of uncultivated lands tax.
• Exemption on payment of taxes of assets during the establishing, growth and thinning period, that will be considered pre-operative.
• Special protection against squatters.

Different articles permits that:

• If the landowner finance the plantation with its own resources, "the profits obtained by the marketing of products from their plantations will be tax exempted".
• An investment of US$100,000 in forest plantations will allow the investor access to the category of "Resident Investor" (Art. 70).
• Forest plantations that were established without Forest Bonus (FB) can apply for PES, and will receive an amount of US$46/ha/year during 5 years.

FONAFIFO has incorporated new elements to facilitated landowner access to these credits. Payment schedule and interest rates area designed for long-term investments. They cover not only the establishment of the plantation, but also its management. Because FONAFIFO has limited financial resources, at present the maximum area to be financed is 100 ha/year/loan. Also is possible to use the plantation (trees) as collateral to guarantees the credits. The country’s commercial banking system has no similar credit plan.

Landowners and industrial managers interested in the forestry sector development have organized the Costa Rican Forestry Chamber (CCF), a union created in 1993 that represents the interests of the Costa Rican private forestry sector.

Teak a global overview:
By D. Pandey and C. Brown Devendra Pandey is Director, Forest Survey of India. Chris Brown is Forestry Officer (Forest Plantations), Forest Resources Development Service, FAO. An overview of global teak resources and issues affecting their future outlook. Teak (Tectona grandis) is one of the world's premier hardwood timbers, rightly famous for its mellow colour, fine grain and durability. It occurs naturally only in India, Myanmar, the Lao People's Democratic Republic and Thailand, and it is naturalized in Java, Indonesia, where it was probably introduced some 400 to 600 years ago. In addition, it has been established throughout tropical Asia, as well a in tropical Africa (including Côte d'Ivoire, Nigeria, Sierra Leone, the United Republic of Tanzania and Togo) and Latin America and the Caribbean (Costa Rica, Colombia, Ecuador, El Salvador, Panama, Trinidad and Tobago an Venezuela). Teak has also been introduced in some islands in the Pacific region (Papua New Guinea, Fiji and the Solomon Islands) and in northern Australia at trial levels Although relatively unimportant in terms of the volume of world timber production, because of its strength and aesthetic qualities teak is the tropical hardwood most in demand for a specific market of "luxury" applications including furniture, shipbuilding and decorative building components. It is thus of major importance in the forestry economies of its main producing countries.

How To Restore & Maintain An Ecosystem While Earning A Permanent Profit
By Ed Ring August 31, 2005
In recent years demand for tropical hardwoods has increased exponentially.