A New Record for Forest Credit, and Life in the Tree Economy
- Chris Bright
- 2 days ago
- 6 min read
In April, the Earth Sangha's Tree Bank Forest Credit program, located in the Dominican Republic along the border with Haiti, boosted its loan value by an eye-popping 47 percent. The program lent about $50,900 to 53 families, in exchange for the conservation of about 354 acres of native and mostly riparian forest. The lending included $6,665 in "new money" — that is, donations to the credit fund from the Sangha — and it overtopped last year's total of $34,700 by $16,200. The number of participants didn't change much from recent years, nor did the amount of forest protected. This story was clearly about the lending boom. That boom is linked to inflation, which is an even greater scourge in the Caribbean than it is here in the US.
In our program area, inflation can encourage some very un-green economic behavior, especially conversion of forest to pasture, to run cattle. To protect the trees, we decided that we had little choice but to raise the value that our system attributes to enrolled forest, even though that could trigger additional inflation. But to judge from those April numbers, the system seemed to be responding as we had hoped: bigger loans seem to be keeping the chainsaws mostly at bay, at least for now. Most Forest Credit clients clearly value their trees.
Here follows more background on the program than you are ever likely to read. But get in touch with us right away if you actually did read all this, or if you consider motorcycle repair an activity suitable for the living room.
Forest Credit is part of the Tree Bank, the Sangha's tropical forest conservation effort. The Tree Bank has programs in the Dominican Republic and Panama. In both countries, it uses various approaches to promote forest conservation or restoration while boosting the incomes of local small-holder farmers.
Forest Credit is designed to address a kind of credit gap. It's very difficult to farm, even on a small scale, without access to credit. But very few banks in our project area have programs designed to meet the needs of small-holders. That's where we fit in. We offer modest annual loans, mostly on the order of $1,000, in exchange for pledges not to cut well-defined tracts of reasonably high-quality forest on small-holder lands. Loan size is based on the quality and size of these "credit reserves." A small charge of non-compounding interest is added to the repayment obligation, to help keep the program stable. Additional incentives for repayment are available in the form of community pressure. You can imagine.
The loans are made in April; they are due at the end of December. The money comes from donations over the years from our very generous donors — almost entirely individual people. The Tree Bank doesn't get much corporate or foundation support.
The system isn't perfect, but after 14 years of trial and error, it works pretty well. (Standard micro-credit probably wouldn't be a good fit for our region because the loans wouldn't be big enough or the people wouldn't be poor enough, depending on how you look at it.)
Our borrowers are all local farmers, and all are members of our local farmers' association, the Asociación de Productores de Bosques de los Cerezos (Los Cerezos Forest Producers Association. "Los Cerezos" means "the cherry trees," but there are no cherry trees in Los Cerezos.) As a capacity-building measure, we insisted that everyone enroll in the Association and pay the annual membership fee of 200 pesos (currently about $3.64). All our work in the Dominican Republic is done in partnership with this association.
Three of the borrowers actually run the credit program. I'll introduce them for the record: Cosme is my main contact and a Co-Director of the Tree Bank. Manolo is our other in-country Director. And Lucío is a former president of the association. See the photo below.
Getting the money into the hands of our borrowers is a somewhat nerve-wracking business. Fifty thousand dollars is a lot of money to be carrying around in cash and I always worry about that, but our people are pretty tough.
Here's the procedure. The credit fund is a big lump of money that accumulates in an account at the local branch of Banreservas in Loma de Cabrera, a nearby town. We make this one big annual withdrawal when it's time for the loans. This time, Cosme tells me, the bank gave our team "dark colored pouches" to make the lumps of cash less conspicuous under the heavy coats that they don for this project, in the 90-degree heat. Usually someone has a pistol as well. I feel kind of queasy about the firearm but I suppose it's understandable.
A brief aside on border security, since that is something people are often curious about: there is no police force to patrol our project area and in our area the border is not protected or even marked. (Loma does have police but if you want help a gratuity will be exacted.) The Dominican army has a special detachment, called CESFRONT, which operates check points along the roads for the purpose of arresting undocumented Haitians — that would be nearly all Haitians — and these people are then dumped back into Haiti, even though the local economy is heavily dependent on undocumented Haitian farm labor. (Many of our own Haitian workers now carry cheap Chinese cell-phones to make and take calls about which parcelas need a machete-wielding crew to chop out weeds. It's a rough life, no question, but there are some possibilities . My favorite: successive Dominican governments have made public schools a national priority and Haitian children living in the Dominican Republic are welcome to attend, for free, at both primary and secondary levels.
From the Loma Banreservas the money is brought to the Association building, a pastel blue cinder-block box made breathable with large windows. The building is a community center that we built in 2012. It's just up the road from the local elementary school — and from our tree nursery, which occupies an acre or so of terraces under shade, just behind that school.
A batch of plastic chairs and some rickety tables are brought out from the storeroom, and the building becomes a hive of activity. Everyone who comes in tries to shake hands with everyone who is already in. Chairs occasionally scrape the cement floor as people move around, and a soft intermittent murmur accompanies readings for the benefit of Illiterate borrowers, who get help counting their payment; again and again the numbers are read out.
All day, our team double-counts peso bills and obtains signatures. People stuff the cash into their pants pockets and take their leave. Each transaction is recorded on a checklist that I prepare for the occasion. A couple days usually go by before we manage to reach everyone.
Outside the building, people putter off on motorbikes, steering along the red clay gullies of our casually maintained road, off to buy seed for pigeon peas, yucca (cassava), squash, maybe some corn, and especially beans. (Seed saving is not a thing in our region.) A couple of local entrepreneurs ply the road for clients — "need fertilizer?" they ask. Yes, borrowers will definitely need it; fertilizer and seed absorb most of the loan money.
The harvests will probably be meagre, and I'll close this note with a little speculation on that topic. In my opinion, everyone would be better off if we were paying our farmers to replant much larger tracts of native forest. The farmers could just buy their beans at the shops in Loma. That's already happening to some degree because the harvests fail so frequently and climate change appears to be making things worse. Native trees are a much better bet than annual crops, since the trees are friendlier to the soils, the water, and the wildllife. And forest tree crops, particularly coffee and cacao, can make money for families willing to commit to that regimen, which would likely also include occasional small-scale timber sales and some cattle, preferably just a few cows per farm. In persuit of this vision, the Tree Bank nursery is producing thousands of coffee and cacao saplings every year, in addition to native tree species, and all of these tree are available to local farmers for free. The transition to a more tree-based economy may already be happening in the region, thanks in large measure to the Tree Bank.
And many more thanks to everyone who donated to the Tree Bank last year! Those forests are safe for another year — or as safe as we can make them. We'll do more buffer planting when we can. Cosme reports that the loan day concluded with a suffocating "vaguada," a downpour. "Ah," he said, "things are finally back to normal."
—— Chris Bright, Co-Founder
