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News Article – Forbes Centroamérica: Panama´s agribusiness development attracts more investment

Entrepreneurs agreed that Panama has a high potential for exporting agricultural products to international markets, but it requires technological processes. 

Panama could advance its logistics hub to become a major exporter and develop the agricultural sector by attracting more investment and business, but in order to accomplish this goal the country must make some adjustments.

These issues were addressed by Alan Winstead of Simply Natural Farms, Juan Manuel Henríquez, general manager of Lechería Hacienda Santa Mónica and Lorenzo Girlando, marketing manager of Agrosilos.

The representatives of these companies agreed upon the fact that the country has a high potential for agricultural product exports into international markets, however current processes require the application of new technology, the workforce requires upskilling and subsidies require refocusing.  Working internally to support productivity and addressing the need to apply modern technology for production is the key, concluded the panel.

These companies have managed to develop businesses that are in the process of cooperating, and along the way they have had to overcome some paradigms related to technology, value chain and competitiveness as they related during their participation in the panel “New Businesses in the Agricultural Sector” at the Business Summit organized by the Council of Private Enterprise (Conep). The panel was moderated by Leroy Sheffer, Public Policy Expert of the ITAS Consulting Firm.

Alan Winstead, executive at Simply Natural Farms, a company dedicated to planting fruit trees such as mango, lemon, plantain and avocado, and vegetables in greenhouses, said that Panama’s market is beyond the capital city and extends to Canada and Europe.

“We are talking about 500 million consumers that we can take advantage of thanks to the competitive advantages that Panama (via the canal) boasts of, which Peru, Chile, Colombia and even Mexico do not have, which is the logistics center.  One of the things that we can leverage is from the geographical location that favors so many industries.  An example of the advantages offered by this logistics center to the Panamanian productive market is that we can take a container to New York at 3,500 dollars and Mexico costs 7,500 dollars,” said Mr. Winstead.

For his part, Girlando de Agrosilos specified that, “Panama can not only supply national consumption, but in five and seven years it can have a vision of exporting rice to other countries.”  To achieve this, it must look beyond the current situation of the agricultural sector by focusing on the future and analyzing where and how to invest and where to provide encouragement.

In the short term, it is necessary to see how to achieve self-supply and then export, said the executive of Agrosilos, a state-of-the-art agribusiness complex using green technology, destined for the receipt, conditioning, storage, processing and distribution of grains.

Another point of view that they all agreed upon was about the approach to subsidies.  They acknowledged that not knowing whether or not they have a subsidy was not a decisive element in their investment plans.  They recommended that this be focused mostly to address productivity issues.

“I feel that these incentives do have to be distributed in a better way, they should be focused on productivity and not so much on market control,” explained Santa Monica Dairy Manager Juan Manuel Henríquez.

Henriquez also emphasized the need for specializations.  “We have learned from a partnership with a dairy company in the United States that one of the greatest opportunities that exists is specialization in diverse aspects of the chain.  Many of the dairies in Panama today have to deal with all by them themselves from the raising of veal, a completely different process to milk production, as well as food production,” he said.

 Henríquez, Girlando and Winstead said that in order to reach these objectives, education is essential, which could be accomplished through private public associations, even with the private sector, both can move towards technical education as mention by Mr. Winstead.

Carlos Rognoni, vice minister of Agricultural Development of Panama, also highlighted the benefits of the domestic market for agricultural products, such as high purchasing power and the use of the dollar as currency.  He also recommended not to lose sight from the social factor.  “40% of the population is from the countryside where 15% of the workforce of the agricultural sector originates from; therefore they must be taken care of in order to bring social peace.  Peace in the agricultural sector bring peace to our country, ”said Mr. Rognoni

Rognoni said that the Panamanian Government will give all the support to the agricultural sector and that efforts are being done to improve education with plans such as converting the National Institute of Agriculture (INA) into an education cluster for students and producers.

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