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Panama’s agriculture minister felt it necessary to reassure Panama’s agriculture exporters that there will be sufficient credit from Banco Nacional Panama and other private banks to allow farmers to plant their water melons and other melon crops. Panama’s conservative banks did not get into sub prime mortgages like their USA counterparts. Thus there seems to be money to lend in Panama and farmers can go ahead and plant their crops.

In countries such as Canada and the United States the governments sponsor or support farm credit associations which in turn provide credit to farmers for seed, fertilizer, and crop insurance so that in bad years they can plant their crops. In some cases the buyers will advance money to farmers to plant, taking the advance out of crop payments at harvest time.

The concern in Panama seems to be that agricultural exporters are concerned that those who need credit for buying seed, fertilizer, or gas for their tractors will not get credit. Thus the reassurance of Panama’s agriculture minister tells growers that Panama’s private banks will provide credit where needed.

Panama has to import food. In times of inflation this becomes an increasing hardship. Thus private bank support and credit for Panama’s farmers should keep local food production up and imports to a minimum.

In recent years Panama inflation has driven up the “canasta basica” which is the cost of a range of staples purchased at the grocery store. The cost of gasoline has just gone down and the cost of electricity is about to drop. However, the cost of food and retail items produced with a high of cost fuels needs to work its way through the supply chain. Economists expect it to take six months from November of 2008 to a drop in prices in the department stores and grocery stores in Panama. Hopefully farmers will get their credit, start planting with cheaper gas and diesel fuel and send us cheaper food next spring.

Panama Agriculture, Exports, and Credit

Panama is currently negotiating a free trade deal with Canada. Much of what Panama has to export to Canada consists of farm produce such as melon, which do not grow well in cold Canada. In light of the importance that Panama places on free trade and the need for that free trade to be bilateral there is additional impetus for Panama’s ministry of agriculture to make sure that Panama’s banking system follows through with loans as needed. A problem unique to agriculture is that when it is time to plant it is time to plant. The kind of system that works to properly appraise real estate loan requests could delay planting and reduce farm exports for Panama. To keep Panama’s trade with foreign countries on an even basis a little timely credit to Panama agriculture would be a good thing.