Guatemala palm plantation offers environmental, social, economic benefits

By Erin Voegele | June 17, 2008
Web exclusive posted June 23, 2008 at 2:27 p.m. CST

Palmas del Ixcan, a subsidiary of Texas-based Green Earth Fuels LLC, is developing a model project in Guatemala to create environmentally responsible, economically sustainable and socially just palm oil production.

Officials say the project will provide a much needed influx of income into the region while stemming the negative clear-cutting subsistence farming practices that have already claimed significant portions of primary growth forest.

On May 21, U.S. Ambassador to Guatemala James Derham and Gregory Bafalis, president and chief executive officer of Green Earth Fuels, sowed the plantation's first palm. "Palm is the most efficient oil-producing crop in the world," said Bafalis. "The economic viability of palm is playing a critical role in placing agriculture in the forefront as one of the largest wealth-generating sectors in Central America."

"The environmentally responsible and sustainable practices being implemented at the Palmas palm plantations are quite remarkable," Ambassador Derham said. "It is impressive that an American company has taken such a strong leadership role in the environmental and economic stability of Guatemala, setting a very high standard for other palm oil producers in the region to follow."

In an effort to eliminate future destruction of primary forests in the area, Palmas del Ixcan has allocated approximately $3 million to establish a private preserve of primary forestland on its plantations. According to Green Earth Fuels' Executive Vice President Jeff Trucksess, while the total acreage of preserve is not currently available, the company is using satellite images to identify primary forested lands within the plantation. "If its primary rainforest ľ it stays, and we want documentation to stand by that," Trucksess said.

In addition to providing environmentally sustainable farming practices, the Palmas del Ixcan project is designed to provide sweeping economic benefits to the local economy and social development contributions to the region, bringing in an estimated $11 million during the first year of production.

The project will provide an estimated 4,000 jobs to the area, the establishment of a savings and loan program for its employees, resettlement packages to squatters, land and materials to build schools, markets and waste water management facilities, services for public roads and fuel for villager's machinery.

"Government sees it as a great economic development arm, a way to bring income generation into the region and address issues with squatters," Trucksess said. "There's been encroachment into national parks and we can help address those things by providing jobs, putting buffer zones around national parks and primary forest, and halting slash and burn subsistence agriculture."

A 9,884 acre (4,000 hectare) Independent Producers Project will provide additional economic and entrepreneurial opportunities in the region. According to Trucksess there has been a lot of focus on doing what is right for the community and finding ways that the business and local residents can work together. The grower's co-op project is an opportunity for members of the local community to become entrepreneurs. Palmas del Ixcan will help individuals become independent producers that can work their own land and sell their products to the company's crushing facility to earn extra income. "It's a way to improve the economics of the local people, and give them the opportunity to work for themselves instead of just working for somebody else," said Trucksess.

"This Palmas project is just another example of the further advancement of our fully integrated business model," Bafalis said. "We are committed to ensuring global stability by incorporating economically viable, environmentally appropriate, and socially beneficial operations and management procedures into all aspects of our company's holdings."

Palmas del Ixcan will continue to develop additional palm plantations and extraction plants in several Guatemala locations over the next five to ten years. Construction on the first extraction plant is slated for August 2009, with oil production to begin in 2010.
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