Agricultural Exporters: An Endangered Sector?

The fresh fruit agricultural export sector in Panama can be defined as a sector in crisis in recent years.

The negative growth statistics, particularly for melon and watermelon producers, are clear. According to data from the Comptroller General of the Republic, melon exports reached $117.2 million in 2008, falling to $5.8 million by 2012. Watermelon exports totaled $96.5 million in 2008, declining to $15.8 million by 2012.

In 2008, the sector began to feel the effects of the crisis. At that time, Panama's exclusion from the list of countries in the European Union's Generalized System of Preferences (GSP-Plus) — its main market for these products — further complicated the situation.

By 2011, the lack of bank financing further weakened the sector.

There are still more causes, some unpredictable — such as climate conditions, falling prices in international markets, or freight costs — and others perhaps more programmable but absent, such as the establishment of a defined policy for the agricultural sector.

The experiences

Manuel Fernández, owner of Comercializadora Agrícola Mr. Agro, explains that starting in 2007-2008, the cucurbit sector (melons, watermelons, squash) faced a very poor season.

"Some managed to make it through the following seasons, but little by little some companies left the market, leaving the few that still try to survive today. Most are drowning in large debts accumulated with local financial institutions and clients abroad, and expectations are not the best," he says.

According to statistics from the Comptroller of the Republic, pineapple is the most stable fruit. This is because it is exported year-round, Fernández explains.

However, he notes that since last year, a downward trend in market prices has been detected, "which has set off the red light in the sector."

For his part, Omar Estrada, of Fénix Business, states that "each year we plant less. We are becoming a sort of endangered species."

Estrada finds that "there have been good intentions, but a specific policy on the matter must be established, given that agricultural exports generate many indirect and direct benefits." According to Grantrap, between 2010 and 2011 the activity generated 276,171 direct jobs.

The businessman comments that he is about to complete the planting of 123 hectares in alliance with two other companies on farms located in Gorgona and Antón.

He notes that a few years ago he filled 400 containers with fruit, and for this season he will manage to ship 200 or 240.

Fénix Business, Exportadores de Azuero, and Expo Latino were affected last year by the bankruptcy of a Dutch trading company to which they sold their 2011-2012 production, and they have not yet been able to collect the approximately $3 million invested.

Estrada produces watermelon in the dry season and rice in the rainy season, and says the situation is difficult for both sectors.

The actions

According to Alexis Bravo, president of Gantrap, the outlook is always encouraging, and although in productivity "much progress has been made in working technology, support from the authorities would be enough to take off."

This guild has 30 member companies, of which 16 remain active.

For his part, the director of agricultural exports at the Ministry of Agricultural Development (Mida), Adalberto Andrade, points out that the authorities hold meetings with sector representatives to discuss various issues, including the application of incentives.

He emphasizes that, contrary to doubts about a possible suspension of the Agricultural Export Promotion Certificate (Cefa), $1.7 million was recently approved for agricultural exporters.

He notes that although the number of planted hectares and the number of producers has decreased, "there is better quality and organization of the activity."

He refers to the protocols that have been signed with the United States for the marketing of papaya, dragon fruit, and passion fruit as new market opportunities.

For his part, Paulo Ducasa, general director of Panama's Agricultural Research Institute (Idiap), suggests the development of plasticulture or greenhouse cultivation for cucurbits. This technology, he says, is currently being developed by Idiap and will allow productivity and the number of exportable units to increase, lower production costs, and obtain a safer product.

Manuel Fernández insists that rescue and development programs are needed for the productive and exporting sectors, as well as clear and easily implementable rules embedded in a State policy, with the relevant public actors (Mida and the Ministry of Commerce and Industries) working in coordination to develop a master support plan.

He maintains that this would allow them to compete favorably abroad and consolidate a food security strategy for the country.