3.1. Interactions Underlying Natural Regeneration
Historically, forest regeneration on Mestizos’ landholdings was extensive but transitory and resultant of interactions between individual landholders. Significant forest regrowth occurred over 1990–2000 coincident with forest fragmentation (Figure 4
and Figure 5
) but this gave way to secondary-forest conversion around fragments over the 2000s (Figure 5
, Figure 6
and Figure 7
). This expansion and contraction of secondary forest reflects a transitional stage of frontier development during which sharecropping and large household forest reserves—both significant predictors of household regeneration (Table 3
)—transitioned from prominence to rarity.
Secondary forests were extensive during the 1990s as landholders frequently allocated portions of their still-ample forest reserves to sharecroppers, who would in turn clear and cultivate them for typically one year and leave them to regenerate. This traditional sharecropping institution is known as a media
and entails a landowner letting a part of his land to a sharecropper in exchange for a portion of the harvest (typically ½ to ⅓) and/or the service of land clearing and/or conversion [68
] (pp. 302–303). This arrangement was often intermittently recurrent, ensuring a generally persistent cover of forest regrowth across the landscape. While interactions between landholder and sharecropper initially entailed mutual benefit and negligible transaction and organisation costs, over the long term it entailed increasing opportunity costs of foregone ranching amongst landholders as their wealth and, thus, their capacity to expand their ranches progressively grew. Accordingly, at the behest of landholders, sharecroppers progressively converted their plots to pasture over the 2000s, precluding their further cultivation and regeneration, and the practice of sharecropping became a relative rarity (Figure 4
, Figure 5
and Figure 6
Mestizo settlers’ increasing interactions with non-farm economic enterprises have not yielded further forest regeneration, contrary to expectations. Some 53% of regional Mestizo agricultural households earn the majority of their income performing non-agricultural economic activities, e.g., metal working, construction (Table S1
). While such households allocating labour and capital to off-farm activities enjoy statistically significantly greater incomes and lower rates of pasture expansion than other Mestizo landholders, they expand their pasture only slightly less rapidly in practical terms (the “significant” difference in pasture expansion is <0.25 ha/year at p
< 0.05) and do not deforest at a significantly lesser rate overall (Table 4
). This reflects settlers’ concern with overall personal welfare, which they maximise by combining off-farm income with slowed but ongoing on-farm activities. This, in turn, is possible by virtue of the minimal organisational costs of maintaining extensive pasture once established. This situation significantly influences the other, more complex inter-agent interactions promoting forest-cover gain.
Efforts by community WCs to restore forests have struggled as a lack of any precedent for communal institutions has heightened WCs’ costs of engaging with landholders (Figure 3
). In the absence of a more appropriate prior authority or communal land tenure, be it customary or decreed by the State, WCs have necessarily adapted local institutions at their disposal to pursue forest restoration. Specifically, WCs adapted the institution of derecho posesorio
—a semi-formal land tenure by which individual landholders have historically claimed forested lands by virtue of their continued occupation and “productive” exploitation, i.e.
, cultivation. For instance, WCs now claim lands “occupied” by forest regrowth, a land cover not commonly recognised as “productive” amongst settlers or attributable to a given land user, much less to a collective entity. In other instances, WCs “occupy” and claim lands with aqueducts, resulting in similar disputes over the validity and authority of claims as expansionist settlers advance competing claims. Thus significant community support for forest restoration has not yet translated into a clear communal institutional authority rivalling that of the individual settler.
Accordingly, while WCs enjoy negligible transaction costs in acquiring lands for restoration they suffer appreciable organisation costs to maintain them, ultimately limiting potential restoration (Figure 3
). The fragility of WCs’ claims obliges WCs to constantly monitor and defend them from expansionist or disgruntled landholders as well as to frequently solicit State intervention to settle individual disputes. Organisational costs are, thus, aggravated by WCs’ ill-suited institutional basis, limited communal authority, and weak integration with State institutions. Importantly, the organisation costs of restoring an individual forest patch are perceived to be far more certain, immediate, and piecemeal than the communal or individual benefit that restoration may provide, given that the ultimate of benefit of water provision depends on a critical accumulation of forest regeneration across a larger watershed. As a result, progress in forest restoration has been exceedingly slow and confined to marginal lands despite significant efforts, which have tenuously reclaimed and restored ~3000–5000 ha.
3.2. Interactions Underlying Active Reforestation
Substantial reforestation in the Bayano-Darién Region has occurred at the nexus of corporate plantation interests and private landholders and, to a lesser degree, at the nexus of indigenous communities and landholders. This reflects the State’s encouragement of forest-cover gain via economic incentive as well as its hesitation to devolve greater authority to Mestizo communities long involved in forest conversion. Under pressure to counter deforestation, the Panamanian government enacted the Reforestation Incentives Law 24 of 1992 to stimulate reforestation [69
] while subsequently encouraging the integration of reforestation and forest carbon markets (amendments and regulations of Law 24 include: Executive Decree 89 of 8 June 1993; Article 80-C of the Executive Decree 170 of 27 October 1993; Law 1 of 1994; Law 24 of 1995; Law 1 of 1998; Resolution Number AG-0151-2000; and the Fiscal Reform of January 2005, also known as Law 6 of 2 February 2005 (esp.
Articles 75 and 76)). State efforts to engage private, agro-pastoral landholders directly have rarely resulted in reforestation [35
], and indeed such landholders receiving State support to reforest have simultaneously converted natural forests to pasture, again to maximise overall welfare [71
] (p. 108). Rather, the reforestation that ensued reflects complementary, mutually-beneficial interactions between such private landholders and plantation interests or indigenous communities minimising the organisational costs of forest-cover gain (Figure 3
A complementary division of resources and labour between communal and individual agents in the Emberá indigenous community of Ipetí Emberá (Figure 1
) has facilitated the relative success of 550 ha of reforestation by reducing costs and enhancing benefits (Figure 3
). The organisational and opportunity costs of reforestation for the community and individual landholders are reduced by the availability of communal labour and securely titled communal land, including additional land for landholders hosting reforestation on communal lands, all of which is coordinated gratis by an existing quasi-traditional communal governance institution [35
]. Accordingly, landholders availing of communal land and labour distribute the risks of reforestation across the wider community, in contrast to WC-landholder and State–landholder interactions for which risk and reward are relatively asymmetrically distributed. The community governance institution also increased reforestation revenues beyond expected timber revenues by arranging for forest carbon payments, a feat beyond the ability of WCs due to their relatively insecure land tenure and lesser communal authority. These carbon payments are shared with participating Emberá landholders similarly otherwise unable to individually negotiate the complex permits and forest inventories required by non-local institutions.
The forest-cover gain in Ipetí Emberá is more extensive than in most larger Mestizo communities and even many corporate plantation interests of considerably greater resources. Yet despite the organisational strength of Ipetí Emberá, reforestation there has stalled due to the difficulties of sustained collective action. Landholders and labourers have not attained the target ~200 man-days of labour per hectare per year necessary to ensure high rates of sapling survival and growth [72
] largely because communal revenues are deferred some years after plantation establishment. Landholders and labourers have, therefore, gradually flouted communal directives concerning plantation maintenance and instead favoured agricultural land uses under their individual control. Under-investment in collective reforestation by individuals has in turn diminished the potential utility of further personal investment, given that reforestation revenues are shared communally and become increasingly less certain with divestment. Thus a downward spiral of declining year-on-year labour investment in reforestation is reported and the communal endeavour is increasingly discounted by its participating members.
The Panamanian government enacted Law 24 of 1992 to stimulate reforestation via economic incentive [69
]. Amongst other incentives, Law 24 provided for (a) subsidised credit for the establishment of planted forests; (b) tax exoneration for direct and indirect investment in reforestation, including a 100-per-cent income tax deduction; (c) tax exoneration to processors of plantation timber; and (d) tax exoneration for properties, materials, administration, goods and services, labour, and other costs related to reforestation. Such incentives were highly attractive. Of the $313,729,620 invested in Panamanian reforestation between 1993 and 2004 by public and private entities, tax exemptions alone accounted for between $90 million (28%) and $100 million (32%) [72
] (p. 40), increasing profits accordingly. The area reforested surged as a result. Prior to Law 24, Panama had 11,000 ha in forest plantations, most of which were State-owned, regionally-confined, established during the 1970s for conservation purposes, and 11 per cent of which were in teak [72
]. Between 1992 and 2007, Law 24 spurred at least 40,000–46,000 ha of reforestation [73
], rising to 75,000 ha by 2009 [75
]. Private commercial interests reforested the vast majority of this area, with 77-80 per cent of the national area in teak [72
]. In 2008 alone, commercial entities accounted for 84% of the national area reforested, with the balance attributable to communities, NGOs, and various ecological projects [76
] (Table 4
). Reforestation concentrated particularly in the Bayano-Darién Region [67
]. By 2012 reforestation reclaimed 29,381 ha in the region according to the ANAM forest map, with the vast majority in teak.
This surge of reforestation in the Bayano–Darién Region is largely attributable to corporate timber interests and, to a lesser extent, domestic commercial investors (reforestadoras
) (Figure 4
, Figure 5
, Figure 6
and Figure 7
). The activities of both these agents centre on interactions with private landholders but follow from the State incentives inherent to The Reforestation Incentives Law. Of the 5733 ha reforested in The Greater Bayano Region between 1992 and 2007 according to the Forest Registry, 28 timber corporations reforested 73% and commercial interests (i.e.,
corporations and reforestadoras
) reforested 91% (Table 5
). Significant differences in the mean forest plantation area are also apparent amongst corporate interests, reforestadoras
, and individuals, with corporations establishing plantations fifteen times greater than individuals and six times greater than reforestadoras
on average (Table 5
and Table 6
Interactions between plantation interests and private landholders reflect well-known dynamics of frontier deforestation as well as new, less-familiar patterns of forest-cover gain. Plantation interests have bought out ranchers and consolidated their lands in the same manner in which ranchers succeeded smallholders previously [67
]. Yet at least two points distinguish the Bayano–Darién from similar “neoliberal frontiers” where well-financed cattle and export-agriculture interests displace landholders further into the frontier (e.g., [36
]). First, commercial timber interests in the region subsume principally the larger ranchers with extensively cleared lands, not the smaller, poorer agriculturalists. Indeed, owing to appreciation in the value of land, which most locals attribute to the plantation boom, those ranchers who might have participated in reforestation instead find it more profitable—or at least more appealing—to sell out to plantation interests. Second, as reforestation interests in the Bayano-Darién Region succeed the larger ranches they displace relatively fewer landholders deeper in the frontier, although even rare occurrences of “displacement deforestation” of ranchers flush with cash may still offset many of the environmental gains of plantation forestry. (To illustrate: suppose ten Bayano ranchers owning 50 ha of pasture each at 45 tonnes of carbon (tC) per ha [79
] sell their pasture to plantation interests for reforestation at 125 tC/ha [80
], such that 40,000 tC over 500 ha is sequestered over 20 years. Then suppose that one of the ten ranchers use their proceeds of their land sale to recommence deforestation of mature forest of 335 tC/ha [79
] elsewhere. Upon clearing 50 ha of mature forest anew, the rancher would have offset 16,750 tC or 42% of the 40,000 tC sequestered). Observations in the Darién frontier further east confirm that displacement deforestation has indeed occurred, though its actual extent remains uncertain.
The direct interaction between plantation interests and private landholders contrasts the complete lack of interaction between plantation interests and communities. This reflects the autonomy of neoliberal forces penetrating frontiers [8
] but also the relative impotence of community institutions to influence regional land use. Plantations in the Bayano-Darién Region have concentrated in a patchwork over the most accessible pastures bordering the highway while the surrounding, partially forested marginal lands remain occupied and progressively deforesting or under tenuous communal claim (Figure 7
). These plantations thus constitute a reforesting core within an expanse of expanding pasture, itself fringed by narrowing bands of regeneration beyond which communities have cordoned off fragmented areas of forest regrowth.
The traditional “policy levers” by which the State promotes forest management—namely taxes, subsidies, and permits—have inherent appeal to large-scale commercial interests and help promote them over individual or communal agents. Commercial interests were relatively responsive to the reforestation incentives in part because of their relatively unique concern over asset depreciation, relative rates of return, and taxable income. More importantly, commercial interests were responsive because the incentives lowered their long-term organisation costs of reforestation. Indeed the incentives gave rise to an entirely new industry of subsidised subcontractors that maintained plantations as investments on behalf of non-forestry commercial interests but also international corporate forestry interests, typically with the use of non-local labour. Such was the response to Law 24 that it was criticised and ultimately reformed for having attracted investment by industrial elites, investment firms, and corporations seeking to protect wealth from taxes but having little interest in reforestation per se. In contrast, subsidised transaction costs for land acquisitions and titling appear less relevant to the surge in commercial reforestation. While these subsidies certainly assisted commercial interests in acquiring large, typically informally-occupied or untitled tracts of land from marginal ranchers, the corresponding rapid appreciation of land values in the Bayano-Darién Region greatly offset these subsidies with little apparent effect (Figure 4
, Figure 5
, Figure 6
and Figure 7
The specialisation of corporate interests and reforestadoras in exploiting State reforestation incentives has rendered these agents and their interactions with private landholders highly sensitive to changes in State support (Figure 3
). The sudden decline in the annual area reforested after 2002 in The Greater Bayano Region and nationally coincided with the onset of a progressive 20 per cent per annum curtailment in the income tax exemption for plantations established thereafter [see also ref. 82 for similar observations in Ecuador] (Figure 8
). Nonetheless, apparently as a result of the fact that the costs of plantation maintenance remained subsidised after 2002 while income did not, plantations became particularly extensive in the Bayano–Darién Region by 2012 (Figure 7
). Plantations first apparent in 2012 were far larger and more contiguous than those of 2000, ostensibly to achieve economies of scale (Figure 4
, Figure 5
, Figure 6
and Figure 7
). Plantations interests in turn reportedly became increasingly selective in their interactions with landholders after 2002 in order to achieve such economies.