April 26, 2017
Just yesterday, the National Assembly voted.
And it voted yes.
Finally, after many delays Del Monte can grow bananas in Puerto Armuelles.
This is excellent news for the economy of Puerto Armuelles and its district of Baru.
It will also be good for many folks in Bocas del Toro.
Which is why all the Chiricanos and Bocatoreños deputies in the Legislature voted yes on it.
Our very own Porteño, deputy Carlos Motta (see photo) of the Democratic Revolutionary Party (PRD), was a major proponent for this bill. I hear he is very happy that jobs and more bananas are coming to Baru.
(Note: Baru is a district in the Chiriqui Province. Puerto Armuelles is the principal town in Baru)
Jobs are why locals were so eager for Del Monte to get the final go ahead by the National Assembly.
- 3,100 jobs directly hired by Del Monte (or rather by its subsidiary, Banapiña Panama)
- 12,000 jobs indirectly generated in related industries.
The agreement requires that Del Monte put 900 hectares into banana production each year. (Note: the banana fincas are mostly located in the hills above Puerto Armuelles.)
On average, a hectare of land produces 2,725 boxes of bananas a year.
This means alot more bananas. Maybe we will finally be able to find bananas for sale in Puerto Armuelles on a regular basis.
The Contract between the State and Banapiña details a “Banana Reactivation Project”.
- Leasing of 5804 hectares land
- Cultivation of bananas and plantains
- Installation of irrigation system
- Construction of infrastructure for the packaging and export of fruit
- Other improvement necessary for the development of banana activity,
- A minimum investment of $ 100,000 by Banapiña for the above, within 7 years.
The contract is for 20 years, and automatically extendable for another 20. However, its tax exemptions must be reviewed by the state after the initial 20 year term.
The 5804 hectares that Del Monte will lease include 4030 State-owned hectares and 1,774 hectares owned by individual owners (including Coosemupar) who will lease them to the State. The State in turn will sublease those 1774 hectares to Del Monte (aka Banapiña). There may be an option for Del Monte to buy those 1774 hectares in the future.
The land must be leased since 90% of the banana plantations are less than 10 kilometers from the border. Foreigners (like Del Monte) are forbidden by the Panamanian constitution to own titled land within 10 kilometers of the border.
Rocky Road To Approval
Until very recently, there have been continual delays in Del Monte getting permission to grow bananas in Baru.
The Government has made promises & then broken them.
- By July 2016 an agreement will be submitted to the National Assembly, said the Minister to the Presidency, in April 2016. But the agreement was not submitted until April 17, 2017, almost a year later.
- By early 2017 Del Monte will be growing bananas in Puerto Armuelles, promised President Varela when he visited Puerto on September 8, 2016.
Some progress was made.
- On December 1, 2016, the Cabinet Council finally approved the contract.
- It was suppose to go on the the National Assembly (the Legislature) for approval after that.
But then it was stuck.
The “by early 2017” promised deadline had come and gone.
In March & April 2017, Portaneos took to the streets over the delay.
They organized marches and other peaceful protests to put pressure on the government. They wanted the deal approved by the legislature so that Banapiña Panama, a subsidiary of Del Monte, could finally produce bananas in Puerto Armuelles and other parts of Baru.
The protests seems to have worked.
- April 17th, President Varela finally submitted the agreement (Bill 488) to the National Assembly and asked them to pass it.
- April 19th, the committee on Trade and Economic Affairs of the National Assmebly voted yes
- April 19th, the bill was submitted to the full legislature for the 2nd debate on the bill
- April 25th, the majority of the deputies in the National Assembly voted yes!
FYI – they voted yes on Bill 488, the contract between the State & Banapiña Panama to reactivate banana production in Baru
It is now fully approved!
Del Monte (Banapiña) can now start to grow and harvest bananas in Puerto’s banana plantations and in other areas of Baru.
Why It Took So Long
The negotiations have involved many factors and obstacles.
- 90% of the banana plantations are less than 10 kilometers from the Costa Rica border. In Panama, foreigners (like Del Monte) are not allowed to own titled land within 10 kilometers of the border.
- Coosemupar, a local banana cooperative, and other local banana producers were involved in the negotiations. At first they did not want Del Monte on their lands, and then they decided to lease the lands to them.
- Negotiating the price at which the government will lease these lands caused a further delay.
- Del Monte (or rather Banapiña Panama) insisted that the final contract/agreement be approved by the government to ensure that there will be no issues in the future.
History of Bananas in Puerto
Puerto Armuelles was once synonymous with bananas. Starting in 1928, Puerto was built as company town. And it’s company was Chiquita Banana. Unfortunately, racism by the company and worker unrest lead to its workers striking and sabotaging Chiquita Banana’s crops.
Finally, in 2003, Chiquita sold its now unprofitable Puerto Armuelles banana business to a local cooperative, called Coosemupar. Due to a number of factors, Coosemupar was not successful, although it still limps along in a very limited fashion.
Chiquita’s departure had a dramatic impact on Puerto Armuelles’ prosperity and population. The town went from having close to 50,000 people to alittle more than 20,000 in 2010. The government has not done a census since 2010. But anecdotally, Puerto’s population is more than 25,000 these days. Because even without a banana company, Puerto Armuelles’s economy has been steadily improving over the last 5 years.
Adding Del Monte to Puerto Armuelles’ economy will be a tremendous boost to its prosperity. Both Puerto and Del Monte have been counting on this. Del Monte has been in Puerto for awhile now getting things into place so they would be able to start work once they got the okay from the National Assembly.
It will be exciting to see what happens once the green gold of bananas is seen in the streets of Puerto Armuelles once again.
Interested in living in our charming beach town? Check out our Puerto Armuelles real estate.
To learn more about the backstory of Del Monte coming to town on my site, read about the Minister of the Presidency, Alvaro Aleman, visit to Puerto Armuelles in July 2016. President Varela also touched on the status of Del Monte on his visit to Puerto in September 2016.