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Panama Farmland - A Guide to Agriculture Investment in Panama

Panama Farmland – A Guide to Agriculture Investment in Panama

By in Blog with 16 Comments

Considering an investment in Panama farmland and agriculture? Panama offers a tropical climate very suitable to a variety of agricultural activities, and farms for sale in Panama may be easy entry into this small but very lucrative market. The key to this type of investment in Panama farmland is to find a good management team who can operate quality farmlands with sophisticated farming experience and market channel knowledge.

Why Panama? – An investor friendly country

When considering an agriculture investment in Latin America, a foreign investor needs to take into account the investor framework a country provides. When looking more closely, Latin American countries vary significantly in their investor friendliness.

Brazil – the famous member of the BRIC countries – offers an attractive growing market but when considering a direct investment in a Brazilian business, the foreign investor is faced with a complicated tax system, some restrictions on foreign ownership as well as exchange controls, which makes it cumbersome to invest. Other Latin American countries like Argentina and Venezuela have a history of nationalizations of foreign owned assets, basically putting these destinations on a blacklist for many foreign investors.

Investing in Panama on the contrary is straightforward: The economy is dollar based, there are no restrictions on foreign ownership and no exchange controls. Panama’s economy is one of the strongest growing economies in Latin America, experiencing 11% GDP growth per annum from 2005 to 2010.  Foreign investments in Panama amount up to 9% of GDP, which is the largest share in the Americas and clear proof of the country’s investor friendliness.

 Agriculture in Panama

Panama’s tropical climate is very favorable to agricultural activities, as the humid climate allows crops to grow quickly and even for 2 cycles per year with the right farming techniques.

In the countryside Panama’s economy still strongly depends on the agricultural sector, although many of the countries farmers are facing increased competition.  For this reason, there are often opportunities to buy farms for sale in Panama directly from the cash strapped farmers who need to liquidate holdings they may have had for generations.

The most widely planted farmland crops in Panama are rice, maize and sugar cane according to the data of the Food and Agricultural Organization of the United Nations (FAO).  One third of Panama’s harvested area alone consists of rice farms.

Panama – Harvested area 2010 (000 hectares)
Panama Farms - Harvested area
Source: FAO Stat Feb 2013

Rice is a basic consumer staple which is nearly only produced for the domestic market in Panama. Rice is part of the national diet and is one of the cheaper food alternatives for the poor population in Panama. Maize is another important crop in Panama; produced to be used as a basic staple or also as animal feed. Sugar cane is the third most important crop in Panama, produced to supply sugar to the domestic market and also exported abroad.

Unlike Brazil, Argentina or Colombia, Panama is not on the radar of many large institutional farmland investors, as land prices are a bit higher in Panama and their sponsors like them to focus on the biggest markets in Latin America only. Thus local players mostly dominate the agricultural sector in Panama and they operate the land with less foreign know-how, thus leading to some inefficiency in the local agricultural sector.

Currently local producers are challenged with rising inflation costs and the number of producers for some crops decreased significantly over the years. Data from FAO shows that Panama produces less efficient for basically all of its major crops when comparing harvest yields per hectare to other leading producer nations such as the USA or Australia.

Maize – Metric tons per hectare (2011)
Panama Farms - maize
Source: FAO Stat Feb 2013

Rice, paddy – Metric tons per hectare (2011)
Panama Farms - Rice
Source: FAO Stat Feb 2013

Sugar Cane – Metric tons per hectare (2011)
Panama Farms - Sugar Cane
Source: FAO Stat Feb 2013

Given the inefficiencies in the local agricultural sector, it is understandable that for certain crops Panama’s government still insists on import tariff and quotas to protect its local sector. This leads to a situation where prices for certain crops actually can be quite attractive compared to the world market.

The opportunity in agriculture

Lower harvest yields in the domestic sector in Panama can be an opportunity for the experienced investor. Bringing in sophisticated agricultural know-how and transforming underutilized quality farmlands into higher-yielding assets can be an attractive economic business proposition with the right know-how and management team. The result is steady cash flow generation at less risk to local peers when done right.

Contact us if you want to know more about interesting agricultural investment opportunities in the agriculture sector in Panama. Or check out are listings for Panama farms for sale and land for sale in Panama.


About The Author

Kent Davis, founder and Managing Director at Panama Equity real estate, has been widely quoted in publications such as Wall Street Journal, Time Magazine, The Miami Herald and the Financial Times for his unabashed views on the Panama real estate market. Panama Equity is regarded as one of the most active real estate agencies in Panama and Kent’s articles, reports, and market research projects have been syndicated by press agencies including Bloomberg and the Associated Press.   Connect with the Author via: Email | LinkedIn | Facebook | Google+

16 Comments

  1. David Blanks says:

    Hi Kent, I would like to know if there are currently any medium to large scale commercial avocado initiatives in Panama? We would be interested in commercial a project of between 100ha and 300ha.

    • Kent Davis says:

      David, thanks for your inquiry regarding commercial avocado farms in Panama. I’ve got Carlos reaching out to you, I imagine he has already, regarding availability. I like the market and think that given the new relationship with China and increased government support for the farm industry, agricultural land for sale in Panama is going to start heating up again.

  2. Ramesh says:

    Hi sir, glad to meet u, i would like to know the cost of one hector land and how much a foreign investor should invest to get the panama visa to do agriculture there.

  3. Nomvula says:

    Hi

    Please could you send me prices of sugar cane farms and distance to the sugar mill.

    Many thanks

    • Kent Davis says:

      Good morning, and thank you for your inquiry regarding sugar cane farms for sale in Panama. I’ve passed your inquiry along to one of our Panama farm properties experts who should be getting back with you shortly!

  4. guy craig says:

    I am looking to lease or buy 1000 hectares of land that is presently being used or previously used for rice production or land that is flat and could be used for rice production in the dry season. I am looking near the Arco Seco area right now…. or near Las Tablas.

    • Kent Davis says:

      Guy, thanks for your email I’ve passed the inquiry over to our farmland specialist in the rice farming region. His name is Tedd Tennis and he is out of our Pedasi office.

  5. Gustavo says:

    I’m interested in buy a sugar cane farm I’m panama ! Between 100 and 150 hectares

    • Kent Davis says:

      Good morning Gustavo. I understand you are looking to purchase a sugar cane farm in panama. We’ve made some inquires through our channels and will be getting back to you on the email address you provided. Thank you for your message, Carlos Camano our Panama farmland specialist will be getting back in touch with you shortly!

      • Gustavo says:

        I would like to follow up my inquiry on purchasing land to grow sugar cane.
        Please provide more information.
        Thank you

        • Kent Davis says:

          Gustavo, you should now be in touch with our Panama farmland expert and Panama farm properties agent Carlos. If you need anything else, please give me a call. I sent all information to your email.

  6. Guy Craig says:

    Looking very seriously at buying more farmland in Panama… let’s talk

    • Kent Davis says:

      Guy, thanks for your call and your message on purchasing farmland in Panama. You can expect a call from both Carlos Camano and Tedd Tennis, two of our agents who handle farmland properties for sale.

  7. John Falkner says:

    I am interested in learning about farming opportunities within Panama.

    • Kent Davis says:

      Hi John, I’ve asked Tedd Tennis to provide an answer to your question. You can reach him at Tedd@panamaequity.com.

      Thanks for your inquiry. My name is Tedd Tennis and I have spent the last five years based in Panama’s Azuero Peninsula helping investors purchase land and homes.

      Recently we have become more involved in agriculture projects, and by coincidence I am currently in Panama City meeting with lawyers and accountants to help structure a large investment for an American client who is purchasing a rice operation in the Province of Los Santos.

      Because of the complexities of structuring the corporate entities that hold the land assets and operate the farms and the amount of “boots on the ground” attention this type of investment demands, it is definitely not for everyone.

      I have a wealth of information available to you regarding opportunities for purchasing specific farms. I can also provide information on subsidies, tax breaks, reimbursements, etc. offered by the government of Panama to agriculture companies here. I can also put you in touch with attorneys and accountants with the right experience to help structure your investment.

      Can you tell me a little about what you are interested in doing? The more I know, the more we can get right to the heart of the opportunities.

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