The crops category is the largest within agriculture, but its
share has fallen slightly, from 66.1 percent in 1980 to 63.3
percent in 1985. During that period, crop production was erratic,
and annual growth averaged a mere 1.7 percent. The major crops and
foreign exchange earners were bananas and sugar. In the 1980s,
however, crop production became increasingly diversified. The
production of corn, coffee, beans, and tobacco has increased, as
has that of such nontraditional products as melons and flowers.
Fruits (especially citrus), cacao (the bean from which cocoa is
derived), plantains, vegetables, and potatoes were produced on a
minor scale; nevertheless, they were important cash crops for small
Bananas were the leading export item, and in 1985 accounted for
23 percent (US$78 million) of total exports. In that year, the
Chiriquí Land Company, a subsidiary of United Brands (formerly
United Fruit Company), produced 70 percent of all bananas, followed
by private Panamanian producers (25 percent) and the state-owned
Corporación Bananera del Atlántico (5 percent). The volume of
bananas produced in Panama peaked in 1978 and slowly declined in
the 1980s. Observers doubted that United Brands would expand its
production in Panama because bananas could be produced more cheaply
in Costa Rica and Ecuador.
The history of banana production in Panama virtually coincides
with that of United Brands, which has been in Panama since 1899.
The company built railroads, port facilities, and storage areas for
the processing and export of bananas. In the 1930s, a disease
seriously curtailed banana production. In the 1950s diseaseresistant plants were developed, and production increased rapidly.
In the early 1970s, a "banana war" erupted when banana-producing
countries disagreed among themselves and with United Brands about
an export tax on bananas. Panama threatened to take over United
Brands' plantations. An agreement was reached in 1976 to tax banana
exports. In that year, the tax provided the government with US$10
million, nearly 4 percent of all revenues. In addition, United
Brands sold all 43,000 hectares of land that it owned in Panama to
the government; payment was in tax credits. The government leased
back to United Brands over 15,000 hectares for banana production
and export operations. Part of the excess land went to the
government's newly established banana companies.
Sugar has traditionally been Panama's second largest crop in
terms of production and export value. Panama consumed about half
its sugar output and exported most of the rest to the United
States. The production of sugar in Panama increased during the
1970s, peaked in 1982 at 260,000 tons, and fell to 165,000 tons in
1986. The dramatic decline after 1982 was because of low world
prices and the rapid reduction in the United States quota from
81,200 tons in 1983 to 26,390 tons in 1987. Annual sugar exports
earned an average US$40 million from 1975 through 1981 but fell
steadily from US$41.3 million in 1983 to US$33 million in 1984,
US$27.3 million in 1985, and US$22 million in 1986.
The state has been heavily involved in Panama's sugar
production. Under the 1983-84 structural adjustment program,
however, the state has privatized, closed, and tried to sell
numerous sugar mills. Nonetheless, of the six major sugar mills in
Panama, four were still under state control in 1987. The largest
was the Corporación Azucarera La Victoria, which in 1985 accounted
for 64 percent of total sugar production. Several small mills
operated throughout the country, but their output was for domestic
The production of coffee has steadily expanded, from 7,000 tons
in 1981 to 11,000 tons in 1985. Coffee was Panama's third-largest
crop export earner. In 1985 it earned US$15.6 million, which was
4.6 percent of total export earnings.
Rice and corn production also increased in the early 1980s.
Panama imported rice in the 1970s but by the mid-1980s experienced
a surplus, as a result of the expansion of production in the early
1980s, from 178,000 tons in 1982 to 200,000 tons in 1985. Panama
produced 75,000 tons of corn in 1985, but in the same year it
imported about 40 percent of the corn it consumed, some of which
was used for poultry feed. The government granted incentives to
increase corn production.
Data as of December 1987