Agriculture in Panama is an important sector of the Panamanian economy."Agriculture", Encyclopædia Britannica Major agricultural products include bananas, cocoa beans, coffee, coconuts, timber, beef, chicken, shrimp, corn, potatoes, rice, soybeans, and sugar cane.
In 2009 agriculture and fisheries made up 7.4% of Panama's GDP. Panama is a net food importer and the U.S. is its main supplier. Agriculture employs many Panamanians (in relation to agriculture's percentage of Panamanian GDP) because many farmers are engaged in subsistence farming.
Agricultural products
Major agricultural products in Panama include bananas and other fruit, corn, sugar, rice, coffee, shrimp, timber, vegetables, and livestock. As of 1996, the important agricultural product exports included bananas ($96.4 million), shrimp ($29.2 million), sugar ($14.1 million), coffee ($11.3 million), and beef ($2.9 million).
In 2018, Panama produced 2.9 million tons of sugar cane, 400 thousand tons of banana, 314 thousand tons of rice, 112 thousand tons of maize, 109 thousand tons of pineapple, 46 thousand tons of palm oil, 40 thousand tons of oranges, in addition to smaller productions of other agricultural products such as watermelon, cassava, coconut, onion, potato, tomato, yam etc.Panama production in 2018, by FAO
Rice In 2000–2001 (April to March), there were 1,600 domestic rice producers who planted 71,000 hectares and harvested 64,000 hectares (7,000 hectares were lost to dry weather). Total production was 285,091 metric tons, rough basis in 2000–2001, compared to 269,500 tons in 1999–2000. These figures include only mechanized production and that some small volume is produced by traditional labor.
As production of rice barely supplies total consumption, stocks run very low each year prior to harvest in September.
Rice is the main staple and can be seen at the table at all hours, including at breakfast in some areas of the country. Therefore, politicians have made a tradition of including protection to rice farmers in all political platforms. Asian immigrants add to traditional high per capita consumption.
Sugar Panama is expected to produce 2 million tons of sugar cane in marketing year 2000 yielding 185.6 tons of raw sugar. All four Panamanian sugar mills are private with the last two government-owned mills privatized in 1999. Two of the new players have created tension within the sector by introducing innovative business practices thereby increasing competition and triggering a battle with the more traditional mills. One result is that there is no longer the exchange of information that used to take place, which in turn makes it more difficult to collect accurate information.
Although production has been increasing, Panama had been exporting smaller quantities in recent years and has even been importing refined sugar. For example, in 1999, Panama imported 3,500 tons of refined sugar with a value of $1.7 million from Mexico and 153 tons with a value of $23,000 from Colombia, both refined sugar.
Bananas
In 1997, the value of banana exports from Panama was $59.8 million.
Shrimp With approximately 40 shrimp farms covering an area of 9,000 hectares, combined with efficient high technology and good management practices, the Panamanian shrimp farming industry is responsible for 80% of fish products exports. This amounted to a total of $165 million exported during 1998. In that year, shrimp exports were bigger than traditional banana exports for the first time.
Coffee
For the export season ending in 2007, Panama generated $15.1 million in sales. The majority of these exports went to the U.S., with Canada, Europe and Asia being purchasers as well.
Livestock The main livestock products in Panama are beef, veal, chicken, and pork. Panama has the highest rate of chicken consumption per capita in Latin America.
Cattle
As of 1997, there were 1,362,000 head of cattle in Panama. That year, Panama slaughtered 320,803 head and exported 5,280 head. Panama only imported 40 head of breeding cattle during 1997. Panama exported $7.8 million of beef products in 1997 and imported $1.4 million.
Poultry and eggs Average annual poultry slaughter is 41 million birds, which yield approximately 48,000 MT of poultry meat. Panama imported $2.2 million worth of poultry meat during 1997, while exporting $0.4 million. Panama imported over $900,000 eggs for incubation during 1997, mainly from the United States. The poultry industry continues growing at a strong pace, covering local demand and allowing exports to Central America and the Caribbean.
Panama depends on imported corn to feed its flocks and thereby the competitiveness of its poultry production is dependent on the world price of feed grains. In 1997, Panama exported mainly to Curazao and a smaller quantity to San Andres (Colombia). The total, including whole, parts, and offal, amounted to approximately $418,000. Panama exported $3,089 worth of turkeys to Curazao.
Panama produces approximately 500,000 commercial eggs per day. Production and export of fertile eggs is picking up, since high quality of breeders from Panama is gaining recognition. Panama exported $1.3 million worth of eggs for incubation in 1997, mainly to Central America and also to Colombia.
Vegetables Panamanian vegetable production is concentrated in the highlands of Chiriqui province. Until recently, there has been little competition with the result that there has been scant incentive in improve production and marketing techniques. Moreover, little thought given to the consumer with prices often high and quality low. This situation created an opportunity for dependable suppliers of high quality produce. Over the past year, as Panama has gradually shifted its trade policies to more open markets, local importers have started bringing in increasing quantities of produce, particularly from the United States.
Beans Panama has been a traditional importer of lentils, dry beans and kidney beans. There is some domestic kidney bean production that supplies much of the market when international prices climb and compete for the market the rest of the time. There is no lentil production in Panama and no demand for black beans.
Forestry Panama has significant stocks of timber, mainly mahogany. There are also 61,000 hectares of planted forests, mainly teak and pine. However, concerns over deforestation have led to increased regulation of the timber industry. During the 1990s, Panama annually lost 2.1 percent of its forested areas to logging. However, after 1996, timber production dropped by 50 percent. There are 3 major timber companies which own 41 sawmills. Annual output is now around 60,000 cubic meters of forest products.
Other grains Panamanian corn production, including both mechanized and non-mechanized production, was 105,000 tons in 1996–97. Panama imported 182,676 tons, all from the United States. Use for human consumption amounted to 103,676 tons and for animal production 184,000 tons.
There is no wheat, barley, or oat production in Panama, due to unfavorable climatic conditions.
Panama normally produces an average of 2,000 tons of sorghum per year, which is sold to industries that process animal foodstuffs. This supplies about 90% of total demand.
Farmers use only a low level of technology and expect that industries will acquire the grain immediately after harvest. Since farmers do not have sufficient storage capacity for the entire harvest, they are at a disadvantage when marketing their product in a hurry. Moreover, with international prices usually lower than local prices, industries prefer to import the grain.
History For centuries, agriculture was the dominant economic activity for most of Panama's population. After construction of the Panama Canal, agriculture fell as a proportion of total GDP. Agriculture represented 29 percent of Panamanian GDP in 1950, and just over 9 percent in 1985. In 2009 agriculture and fisheries made up 7.4% of Panama's GDP. Agriculture employs many Panamanians (in relation to its percentage of Panama's GDP) because many farmers are engaged in subsistence farming. The percentage of Panama's labor force in agriculture has fallen from 46 percent in 1965 to 26 percent in 1984.
Between 1969 and 1977 the government undertook agrarian reform and attempted to redistribute land. The expanded role of the state in agriculture improved social conditions in rural areas, but long-term economic gains arising from the agrarian reform were modest.
In 1985, crops accounted for 63.3 percent of value added in agriculture, followed by livestock (29.5 percent), fishing (4.3 percent), and forestry (2.9 percent). Despite its relative decline, agriculture was the main supplier of commodities for export, accounting for over 54 percent of total export earnings in 1985. The agricultural sector satisfied most of the domestic demand. The principal food imports were wheat and wheat products, because climatic conditions precluded wheat cultivation. In 1985 the value of food imports was US$108.7 million (8.8 percent of total imports), with half of that being food exports.
In the early and mid-1980s, the government sought to reverse the decline of agriculture by diversifying agricultural production, lowering protection barriers, and reducing the state's role in agriculture. In March 1986, the government instituted major changes in the agricultural incentives law and removed price controls, trade restrictions, farm subsidies, and other supports.
Throughout the 1990s, agricultural production increased by an average of 5 percent per year, with the exception of 1998 when Hurricane Mitch caused extensive damage to crops. In 1998, agricultural exports were valued at US$409.3 million (out of Panama's total exports of $640 million), while imports totaled US$397.7 million. That same year bananas accounted for 33 percent of Panama's exports, shrimp 11 percent, sugar 4 percent, and coffee 2 percent.
In 1999, sugar cane production was at 2.05 million metric tons, bananas at 650,000 metric tons, rice at 232,370 metric tons and corn at 89,806 metric tons. The main export crop was bananas with exports worth US$182 million in 2000. There has been a steady increase in tropical fruit exports which were worth US$14 million in 2000.
Land use
About half of the land in Panama is used for agriculture. Panama's land area totals approximately 7.7 million hectares, of which forests account for 4.1 million hectares, followed by pasture land (1.2 million hectares), and permanently cultivated fields (582,000 hectares). About 2 percent of the land was used for roads and urban areas. Nearly all of the cultivated and pasture land was originally forested. A large amount of virgin land has been opened up for cultivation by the Pan-American Highway.
Panama's climate and geology impose major constraints on the development of agriculture. Heavy rainfall throughout the year prevents cultivation of most crops on the Atlantic side of the continental divide. The Pacific side has a dry season (December to April) and accounts for most of the cultivated land. The mountainous terrain also restricts cropping.
In addition Panama does not have high quality soils. Most of the areas classified as cultivable are so considered on the assumption that farmers will practice conservation measures, but many do not. The topsoil is thin in most areas, and erosion is a serious problem. Most of the nearly level areas conducive to cultivation are in the provinces of Los Santos, Coclé, Veraguas, and Chiriquí.
Slash and burn agriculture