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Mexican firm profits from reforestation, empowers Indigenous people

Farmers-stand-in-a-new-pine-plantation-in-Michoacan

  • The Ejido Verde company, organized in 2009, grants interest-free loans to local communities in Michoacán state, Mexico, to plant and tend pine trees for the tapping of resin, a multibillion-dollar global industry.
  • The firm’s innovative business model improves degraded agricultural landscapes by cultivating plantations, while providing traditional communities with long-term sustainable income.
  • The company says it has already sequestered more than 200,000 tons of carbon through 2021; it has hopes of cultivating 12,000 hectares (nearly 30,000 acres) of pine on 3,000 family farms by 2030.
  • But questions remain about whether the firm’s efforts do enough to repair deforested land in a part of Mexico seeing a boom in commodity agriculture; the company emphasizes that its reforestation efforts — which have increased biodiversity and watershed conservation somewhat — are not equivalent to native forest restoration.

Local stories in Michoacán tell how, when the Spanish invaded what would later be known as Mexico in the 1500s, they found Indigenous communities tapping pine trees and using the resin in sizzling-bright torches and lamps that lit the Aztec Empire capital of Tenochtitlan, today’s Mexico City. The Spanish appropriated the resin to use as a sealant on their damaged ships and, as colonization spread, sent the valued product home to Europe.

Today, pine resin remains an important economic commodity not just in Mexico’s Michoacán state, but throughout the world. It’s a key ingredient in turpentine, which is used in paint, varnishes and wax. It’s also used in all sorts of everyday products, including chewing gum, carbonated beverages, tape, firelighters, and as pine oil for lubricants and disinfectants. All told, pine resin is a global $10 billion industry that’s expected to grow significantly over the next decade.

In Michoacán, the Indigenous P’urhépecha peoples and other traditional communities have continued tapping pines for sale to transnational traders. But deforestation caused by a boom in commodity agriculture, along with illegal logging, has threatened pine resin tapping as a traditional practice.

Mexico loses hundreds of thousands of hectares of forests annually. Michoacán, a mountainous, temperate state on the country’s Pacific coast and west of Mexico City, experienced 70% deforestation in some areas.

Torch bearers holding tlepilli, bundles of resinous pine splinters set afire, the only form of illumination used in Aztec homes and at weddings and community festivals. Image from the Aztec Codex Mendoza courtesy of Mexicolore

A company dedicated to reforestation

In the first decade of the 21st century, the Pinosa Group, a pine resin company working in the region since the 1920s, grew concerned that tapping would disappear entirely unless drastic, innovative action was taken to restore the area’s pine forests.

Would it be possible, the company wondered, to plant pines on degraded agricultural land, while helping local communities thrive, and still make a profit with pine resin?

To answer that question, the Pinosa Group joined with two other local companies to found Ejido Verde in 2009. Today, the company is planting and tending pine trees in partnership with Michoacán communities in a successful, award-winning venture — a model of cost-effective tree planting it hopes to extend along Mexico’s Pacific coast and across the continent.

“We all want to make a profit,” Ejido Verde CEO Shaun Paul told Mongabay. “But we have certain social, environmental values that are just as important as the need for profit. We want to make the environment better, not worse. We want to make people better off socially, not worse. We want to be regenerative, we don’t want to be extractive.”

Ejido Verde’s success was anything but immediate. Between 2009 and 2016, the firm experimented with a variety of business models in hopes of finding a workable mix of revenue earnings and conservation. It tried giving communities money to purchase trees; it gave trees away; and it filled in deforested patches in existing forests. But many pines died.

Globally, experts say, planting initiatives often fail because trees are planted too quickly, in the wrong season, in improper soil conditions, or without proper long-term care. In Ejido Verde’s case, the problem seemed to be that most communities weren’t looking after the trees.

It takes 10 to 12 years for a pine to produce resin, and tending those trees for so long, to yield a future financial gain, proved too much to ask of local people. “Just being purely philanthropic or giving away subsidies, the way the government does, doesn’t have the desired effect,” Paul said. “You have no skin in the game. You don’t take care of the asset.”

Then the company hit on a solution that benefited everyone: Instead of gifting money or trees, Ejido Verde offered communities loans, providing ready cash flow now, to be paid back later, creating a financial incentive for residents to take care of the trees until they started producing resin. “Give them debt but not too much debt” to motivate them, Paul said.

Today, the company offers residents a $4,800 interest-free loan per hectare (2.5 acres), paid back not in money, but in 10-15% of the pine resin produced over the next ten years. The rest of the resin Ejido Verde purchases at fair market price, leaving the communities with 100% of the revenue.

Ejido Verde provides its local community “investors” with genetically tested seeds to ensure high production, along with equipment, technical training and staff to help look after the pine plantations.

Tapping a pine tree doesn’t require cutting it down, only cutting into its bark, so residents can return to the same trees year after year, making it a reliable source of revenue. And importantly, the tree plantations end up being an economically self-supporting form of reforestation.

Building trust

For many traditional Michoacán communities, the offer at first seemed too good to be true. Other organizations in the past had come in promising social benefits and easy results, only to waste residents’ time or, in some cases, take their land. In early negotiations, it was common for people to ask what political party Ejido Verde wanted them to vote for, Paul said. In Cherán, a P’urhépecha Indigenous community that has been working with Ejido Verde for a decade, there are still people who wonder in whispered tones whether the company can be trusted.

“Discussions have been a bit difficult due to the historic mistrust that some projects have created,” David Romero, a Cherán lawyer and resident, told Mongabay. He added, “We have our own customs and system of government outside the logic of the nation-state, so it has been a bit difficult to build trust.”

Some communities resisted joining the corporate-community partnership. They were unwilling to buy into such a long-term investment, especially since it might only yield about half of what a family can make growing avocados, one of the state’s top economic drivers.

Michoacán is possibly the only place in the world where avocados can be grown year-round. The state has fertile volcanic soil and a perfect mix of sun and rain, creating four seasons for avocado blooms that all but guarantee farmers a consistent harvest and high income.

But some residents found a good reason to turn away from avocados and embrace the promise of pine resin: their concern over organized crime. Drug cartels, which make the state one of the most violent in Mexico, are quick to resort to kidnappings, killings and the destruction of property when lone farmers don’t pay protection fees.

Pine resin comes out as a liquid but quickly crystalizes. Photo via Ejido Verde

Taking care of the environment while growing profits

Other residents recognized that the abundance of avocado farms was exhausting soils and accelerating deforestation, putting stress on water sources and limiting access to drinking water. Avocado cultivation has also encouraged the use of toxic pesticides, resulting in the poisoning of some watersheds.

In 2019, communities had to stop using water from Lake Zirahuén because residents were getting sick. Years of chemical fertilizer use on nearby avocado farms had poisoned the lake, forcing communities to ship in water from afar.

Planting pine trees “is a way of taking care of the environment,” said Luca Alvarez, an Ejido Verde forest technician and resident of Salvador Escalante, where he and his family own a pine plantation. He added, “People start to see the effects on the changing land because of non-native species. They start to say, ‘OK, I’m going back to forestry. The forest is from here.’”

More and more communities accepted Ejido Verde’s proposal. By 2016, the company had 800 hectares (nearly 2,000 acres) under production across 10 communities. Today, it has 4,280 hectares (about 10,600 acres) growing pines across 15 communities. So far, six have entered the tapping stage, with the others still several years away.

Ejido Verde says it hopes to have 12,000 hectares (nearly 30,000 acres) in production on some 3,000 family farms by 2030 — roughly a quadrupling of growth. It also hopes to expand up and down the country’s Pacific corridor, from Guerrero state in the south, to Chihuahua in the nation’s north.

“There’s going to be a new flow of money that doesn’t exist today,” Paul said of the company’s 10-year plan in Mexico. “It’s going to be flowing in to restoring Indigenous land in ways that are culturally affirming, and propelling these communities into the middle class. You could even say eliminating poverty.”

Plantation reforestation vs. natural forest restoration

Ejido Verde’s business model, which balances profits, traditional community benefits and conservation, is garnering attention worldwide, with inquiries coming in from would-be entrepreneurs in Panama, Paraguay, Argentina, Kenya and New Zealand, among other nations.

In 2016, it won the Energy Globe Award, one of the world’s most prestigious sustainability prizes. It made Clean Tech’s “50 to Watch” list in 2020 and was named the second-most innovative company in Latin America by Fast Company.

Ejido Verde reports that its plantations have, through this year, accounted for more than 221,012 tons of sequestered carbon. By 2050, the firm hopes to store 7 million tons. It’s in the final stages of obtaining certification from the Climate Action Reserve, a body that approves and measures carbon sequestration in North America for the sale of carbon credits.

Farmers pose with their pine samplings in Cheranástico, Michoacán. Photo via Ejido Verde

However, Paul qualifies the firm’s conservation successes: It is not, he said, in the business of forest restoration; it is focused on tree plantations. That means degraded agricultural landscapes planted with pine across Michoacán may only partially recover the biodiversity lost from decades of land use change.

“There’s this dominate thinking that the desired outcome is to restore a degraded or damaged place to its original habitat,” Paul said. “Rewilding, bringing it back to the way it was. We’re obviously not doing that. We’re not restoring native forests. If someone wants to do that, it would be awesome.”

This vital difference between reforestation and natural forest restoration has plagued countless companies and government programs carrying out planting initiatives globally. Plantations are, by design, less ecologically diverse than natural forests because they are typically monocultures, meaning they support just one crop.

Around the planet, from China to South Africa, the tree plantation system has failed to restore local ecosystems and habitats, with many thousands of hectares of trees, usually planted in rows, being empty of native plant life and eerily silent of chirping birds and insects.

Nevertheless, there is empirical evidence that some biodiversity is being restored in Michoacán. Animals, including deer, coyotes, eagles and rabbits, are returning to Ejido Verde’s plantations. In addition, Paul said, many farmers have noted significant growth in the size of creeks and rivers that were on the verge of running dry before Ejido Verde started planting.

“Where Ejido Verde is establishing plantations, it’s already deforested,” said Abel Tello, president of the Rural Association of Collective Responsible Interests, which works with dozens of Michoacán communities. “There aren’t trees there. There isn’t anything. Ejido Verde doesn’t cut down trees. It’s [pines are planted on] agricultural land, so its plantations can only help the biodiversity because there wasn’t anything there before.”

Today, the company is looking into diversifying its crop, adding companion plantings of mushrooms, coffee, agave and other agricultural commodities to its projects, with the intent of shifting from commercial forestry plantations to what Paul calls “food forests.” But this move toward agroforestry is aimed more at providing community food security than improving degraded landscapes and biodiversity — though that may be a subsidiary effect.

Other conservation groups throughout Latin America have looked to Indigenous communities’ ancestral knowledge of local ecosystems to determine ways of bolstering biodiversity. The United Nations views Indigenous peoples as key to global conservation, because they currently act as stewards of roughly 25% of the world’s total land and 80% of its biodiversity. However, a major shift in Michoacán away from traditional culture to modern lifestyles during the 20th century has often forced Ejido Verde to take a different approach.

Ejido Verde land owners with their pine samplings. Photo via Ejido Verde

The state over the years has seen a drastic decline in the number of P’urhépecha speakers in younger generations. Without the language, and as agriculture has transitioned the state away from forestry, the company has found it increasingly difficult to rely on traditional forest knowledge regarding pine resin tapping.

Often, Ejido Verde’s forest technicians need to teach residents how to tap the trees, or must call on the few locals who still have traditional knowledge to inform the process. The company has learned and adopted some ancestral techniques for arranging tree plantations to divert rainfall and limit runoff. It has also relied on community knowledge for organizing local brigades to fight forest fires.

The company says it hopes the economic mobility created by pine resin profits will attract younger generations willing to learn traditional customs, which could in turn lead to better mechanisms for restoring biodiversity.

Michoacán, due to its violence and lack of economic opportunity, has historically been a top source of migration to urban centers like Morelia and Mexico City, or to cities in the United States. But Ejido Verde’s pine plantation projects appear to be changing that.

“The younger generations are starting to participate,” said Ernestina Escobar, a resident of Santa Ana Gerahuaro. “It’s so cool because we were cutting down trees, and now, with these plantations, there is work. People don’t have to migrate anymore.”

Citations:

Coleman, E. A., Schultz, B., Ramprasad, V., Fischer, H. W., Rana, P., Filippi, A. M., … Fleischman, F. (2021). Limited effects of tree planting on forest canopy cover and rural livelihoods in Northern India. Nature Sustainability4(11), 997-1004. doi:10.1038/s41893-021-00761-z

Fleischman, F., Basant, S., Chhatre, A., Coleman, E. A., Fischer, H. W., Gupta, D., … Veldman, J. W. (2020). Pitfalls of tree planting show why we need people-centered natural climate solutions. BioScience70(11), 947-950. doi:10.1093/biosci/biaa094

Banner image: Farmers in the Cheranástico community stand with their sapplings in Paracho, Michoacán. Photo via Ejido Verde

This article has been updated to more accurately reflect deforestation rates in Michoacán.

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