A few years ago, teak was considered the panacea for solutions to Panama’s socioeconomic problems. But, today, the harsh reality of teak farming is widely known. Recognized in many countries as a weed, Panama is one of the few nations in the world that grants tax incentives for the planting of Tectona Grandis, teak.
It is well understood that teak harms the environment. Teak leaf drop is one of the main causes of severe erosion and fires throughout the country. The high oil content of the tree and leaves is like tinder or fuel for the fire during the dry season. When the leaves fall to the ground, they do not disintegrate quickly and serve no useful function in the forest, either as natural fertilizer or animal feed.
Today there are huge teak forests throughout Panama. Instead of contributing to the nation’s economy, they are actually depleting the national treasury through tax breaks provided to the wealthy. In general, there are more offers to sell teak than to buy.
Many of these teak stands are over twenty years old. Why don’t they sell? There are two main reasons: one, the price of teak in Panama is not in sync with the realities of the price of teak in the world market and two, today’s buyers are more informed and require documentation that most Panamanians cannot provide because they have not made the necessary financial investment for this type of company, but their interests have been to hide money from taxes. “Chain of Custody” documents are one of the key requirements for selling timber in today’s world market. This documentation proves that the producer is not damaging the environment or the forest to extract the wood.
Today there is a new alternative for agribusiness and multidimensional agriculture. This new paradigm of agroforestry allows for a mix of the traditional with the non-traditional generating more income for the farm and at the same time restoring the ecology of the nation. A June 2005 USAID/AED study “A FINANCIAL ANALYSIS OF SUSTAINABLE LIVESTOCK RAISING SYSTEMS IN THE PANAMA CANAL BASIN” demonstrates the economic viability of tree-based livestock farming. Although the study mentions some tree species, it does not mention species with high agricultural value. Selecting the correct species will not only serve as a source of income, but also function as an integral and important part of daily farm life.
Paulownia could be that species. Paulownia is recognized as the fastest growing tree in the world, the aluminum of hardwood trees. Cultivated for hundreds of years on the Pacific coast, paulownia is worth more than teak on the world market and offers the opportunity to have three harvests in the time it takes for teak to have one.
Paulownia leaves are used in many parts of the world as animal feed due to their high nutritional value.
With today’s skyrocketing land prices, farms are smaller and farmers must maximize the economic utility of each hectare. Unlike teak, after two years the farmer can graze the cattle among the paulownia trees without damaging them.
Paulownia increases the fertility of the soil. The leaves quickly disintegrate feeding the natural grasses that control the erosion of the topsoil. Paulownia also works as a natural firebreak. The ignition temperature of Paulownia is approximately 425 degrees Celsius. Teak has a flash point of just over 100 degrees Celsius above that of boiling water.