UncategorizedThe Benefits of Going Organic

The Benefits of Going Organic

By Gaspar Victoria
Fotos: Carlos Gómez, Javier Pinzón

The service industry has always been a significant part of the Panamanian economy; the small country, known as a Latin American colossus, moves people and goods by means of its inter-oceanic logistics, shipping, trade, and banking clusters. But the colossus may have feet of clay, since the agricultural and industrial sectors have weakened owing to a lack of technological innovation and business strategy. Several years ago, however, we saw the beginning of what looks very much like a revolution that has the potential to change this situation. Hints of this development can be seen in growing consumer demand for organic products and at organic farms like El Jade, nestled among the mountains of the central province of Coclé.

If we cast our untrained eye on El Jade, the farm might seem to be fallow land. Located in the town of Sabana Larga, the farm shows no orderly rows of crops; on the contrary, plants and trees are scattered seemingly at random, creating an exuberant, untamed landscape. However, it is a very productive property that produces delightful harvests of coffee and Persian limes that are eagerly snapped up by the country’s food industry. The farm is run by former airline executive Adolfo Sen, who now applies his management expertise to improving and marketing what he produces, and sharing his knowledge and experience with his fellow organic producers.

“I bought this farm sixteen years ago with my sister, more to indulge her hobbies and projects than anything else,” remembers Sen. “I was always interested in organic farming, but at that time no one was really doing organic agriculture. I had to learn and experiment. There are not enough agronomists in Panama. I started studying agronomy so I could take charge of the farm myself and start to envision what could be done with it.”

A lack of agronomists is only one of the symptoms of the crisis in which the Panamanian agriculture and livestock sector has been mired. Data from Panama’s National Statistics and Census Institute (INEC) shows that the economy’s primary sector (agriculture, livestock, hunting, and forestry) employs 14.7% of the country’s economically-active population; nevertheless, its percentage of Panama’s GDP has been steadily falling since 2011 —when it reached 4.6%— to 0.4% in 2015.

The consequences of this imbalance are, of course, felt more strongly in the country’s rural areas. “I was struck by the fact that we had to leave the car by the side of the road and walk more than a mile to reach the farm. Mud houses lined the path. I later hired these people to help me turn the farm into a success. I had heard that people lost money in farming, but I could not believe that these people would not plant crops, given that they needed food. I sat down with my sister and we drew up a plan. We decided to plant less pineapple, and instead, using organic techniques, we would plant yucca, plantains, and other products commonly found on Panamanian tables. We wanted the community to grow along with us.” And it did grow: the mud houses were gradually replaced by cement-block homes. The Sen siblings also helped rebuild the Sabana Larga school and the community soccer field, among other improvements.

Today, the farm covers nearly 200 acres and supplies a diverse clientele, including restaurants and small shops that are betting on the growing consumption of organic products. One example is the Mercadito Biológico, which is both shop and restaurant. Raquel Marco, one of the owners, explains their hopes for the business: “We are a platform for producers who want to introduce their products, whether they are soap and cosmetics or meats and vegetables. We have very high quality standards and our producers must have organic certification; we would ruin the market if we sold non-organic products,” she emphasizes.

It is a small but promising market. To cite an example from Panama’s Ministry of Agriculture and Livestock Development (MIDA), in 2015 the country allocated some 79,000 acres to the commercial cultivation of four main fruits: oranges, pineapples, plantains, and bananas, but less than 7% of that land was worked with organic farming methods, according to the Research Institute of Organic Agriculture (FiBL is its German acronym), an international agency that monitors the development of these agricultural technologies around the world. Such a small piece of the pie can perhaps be explained by the perception that organic farming is done on an almost artisan level by small producers, while industrial agriculture focuses on extensive single-crop farming using ordinary agrochemical processes.

Producers seeking to change this perception and show that organic crops can be commercially viable began to emerge. For example, in late 2014, Sen founded Grupo Verde Agroindustrial S.A. (GRUVASA), a company that offers comprehensive advice to producers in Panama’s central provinces. GRUVASA can offer help with all phases of farming, from the assessment of financial and technical viability to marketing, including obtaining capital and managing properties. “I am a kind of agricultural broker,” says Adolfo. “Our farmers are artists of the land: they lovingly sow the seeds, patiently care for them until they sprout, and carefully harvest the fruit in optimum condition, but the farmers are not marketers and they often lose out on the profits from their work. We want to avoid that.”

GRUVASA focuses on projects involving organic products, guiding its customers through the process of certification through companies like Biolatina, headquartered in Perú. This not only ensures that organic principles are followed during production, but also provides access to the markets that demand this type of food. El Jade workers are even using organic techniques on their own land, and some have qualified for a farming assistance program, sponsored by the local company Café Durán, to grow Robusta coffee. José Tamayo is one of them. “I have four children and one enjoys farming, so he helps me. This is a way of life, and more so on a chemical-free farm,” he explains.

Ricardo Tovar, supply manager for Café Durán, describes what the company hopes to achieve with this partnership. “We need to encourage coffee growing. Adolfo wants to develop projects that help lift producers out of poverty and he thought that coffee would be a good business opportunity, especially since Robusta coffee is in greater demand now.” Although Café Durán is more of a coffee buyer than grower, it has an Agricultural Development Department to help producers develop their farms. “Our farmers want to work their land. The only thing we need to do is to give them a little push to get them going,” notes Tovar. Café Durán agrees upon a purchase price with the producer. This covers the latter’s operating costs plus a profit. The company pays this price even if the market price of coffee is below the agreed-upon figure. If the bean is valued above market price, Durán passes the profit on to the producer. “This way we provide an incentive for the producer to invest in unused farmland and we ensure our supply of coffee for processing,” concludes Tovar.

The role of organic farming in redistributing wealth outside the canal region is also evident to the Panamanian government. According to Eduardo Carles, Minister of Agriculture and Livestock Development: “Although 90% of our economy is based on services, there is a very strong agricultural component in the country’s interior. Organic farming is particularly useful in weaning small producers off of so-called ‘subsistence farming’ and moving them into family farming, which is more diversified and profitable. We do not want to create pockets of poverty in the interior of the country and have the residents migrate to Panama City to then be subsidized by the government.”

The focus of this new push goes beyond supplying the rising and sustained internal demand for organic products caused by the country’s economic growth (the small country has six hypermarkets, two hundred supermarkets, and 12,000 grocery stores); there is hope of using organic agriculture to help spearhead development of the country’s agricultural exports. “The market for organic products has grown rapidly in the first world. It represents a 12 billion-dollar market in the United States and triple that in Europe. The Dominican Republic and Costa Rica are numbers 5 and 6 on the list of principal organic exporters, and these are countries fairly similar to our own in size, population, and economy,” explains Carles.

This is a huge opportunity for our country. Agriculture in general and organic agriculture in particular allows for more rapid export of products, better profit margins, more jobs in rural areas, and greater diversification of products on less land. For example, “The Dominican Republic, the fastest-growing economy in Latin America this year, has one thousand organic producers certified for export to the United States. They don’t have the canal or the kind of rivers we have, but they do have ingenuity and tenacity. Can you imagine where we would be if we combined our financial and logistics service sector with stronger agriculture?” asks the Panamanian Minister. If the bets laid by Adolfo Sen and other Panamanian agribusiness entrepreneurs pay off, we will soon know.