Everything about the forest should be viewed as potential cash flow. My friends the flowing of cash is more important in business than the bottom line. As long as you have a product and a market you have cash each time that you sell into the market. Most of the imports into the Philippines are a result of the local manufacturers not being able to obtain the same raw materials with consistent quality from local producers. The reason for this is merely attitude.
A change in attitude from windfall thinking to cash flow thinking is not so difficult. However, to illustrate this point: How many Filipino friends do you have who own a piece of property that pays them 12 months rent in advance? That is a windfall, they get that lump of money all in one shot and then what do they do with the money? They travel and play for a month until it runs out. The renter then calls and says that the water pump has broken. Oops no money for that so the house deteriorates and deteriorates. That is the cycle of windfall thinking, whether it is in real estate, farming or forestry.
In agroforestry you build a diversified forest that has something of value produced every day of the year and it is sustainable from one year to the next without having to harvest all and replant.
You start with a piece of barren and non-productive land that you have had for the past 20+ years. Just a hectare. It is not an earner, has not been nor do you expect it to be in the future. Let’s plant it in Mahogany, the beginning stage of an agroforest. In seven years you have a mini-forest that has rehabilitated the soil and held the property together. Over the next seven years we slowly convert at the rate that slides downward as the trees get older, maintaining sustainability.
Remember, rehabilitating the soil on unproductive and barren land was the initial goal. That is now achieved and it is time to use that soil, productively and sustainably so that we produce an indefinite cash flow.
Each Mahogany that we thin, no matter how small, has
value. We must add value to what
we cut before selling it. Even
prior to the first thinning we have been trimming the trees for the first seven
years. During that time we have
learned how to make products for the market that have never been sold
into it before.
Recently we trimmed merely 246 trees on 450 meters square. The small branches and usable twigs totaled close to 6 board feet. Sure you won’t build a house, but how many small parts for the multi-billion dollar hobbyist industry will you make. Such products are rare nowadays. At US$ a board foot equivalent what other products can you think of that you could start your cash flow? Oh, BTW, those twigs and branches that you trimmed are growing back while you work and there are another 9,550 square meters or 9,754 trees that need trimming, not to mention the ones that we are going to actually harvest to make room for planting producers.
Along the way we also plant fast growing "producers" that create a cash flow within the first three years.
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