• Panama’s Agricultural Trade
• SWOT Analysis of Panama’s Agricultural Sector
• Competitiveness of Panama’s Agricultural Export in Northeast Asian Market
• Analytical Methodology
• Export Competitiveness of Panama’s major tropical fruits
• Melon
• Banana
• Watermelon
• Pineapple
• Policy Recommendations to Expand the Exports of Tropical Fruits
• Development of strategic action plans with establishing tropical fruits export complex
• Development of food processing industry
• Diversification of overseas markets
• Expanding Research and Development (R&D) to facilitate Agro-food exports
• Capacity-building for International Regulation (SPS measures)

As the Table 1 indicates, approximately 30% of the land in Panama is occupied by agricultural production and the rural population consists of 25% among 3.5 million populations in Panama and accounts for more than 17% of the total employment. The agricultural sector plays vital role for Panama’s economy where its agro-food sector also contributes more than 75% of their total merchandise exports. However, the share of agricultural sector in gross domestic product (GDP) has been declined from 10.5% in 1995 to 4.6% in 2010. Many of Panamanians are still involved in subsistence farming where they only grow food to feed their families. Therefore, deterioration of this sector with respect to production and employment could lead to their economic and social instability.

Table 1. Selected economic indicators of Panama.

According to the statistical data provided by Food and Agriculture Organization (FAO), the value of gross agricultural output in Panama has reached USD 1,502 million in 2009. This amount is nearly doubled compared to the value in 1995. As the Table 2 shows, the crop cultivation industry output amounted to USD 543 million and livestock industry output amount to USD 958 million, which accounts for 36.2% and 63.8% of gross agricultural outputs value in 2009, respectively.

Table 2. Agricultural gross output in Panama.

The main crops produced in Panama are banana, rice, sugarcane, plantains, pineapple, coffee, orange, tomatoes, watermelons, melons, palm oil, vegetables, onions and yams as shown in Table 3. Banana and rice accounts for more than 16% and 12% of total agricultural production value, respectively. The bananas are mainly export to other countries. In terms of production volume, sugarcane, plantains and watermelons takes the largest share of their total agricultural production. The main meat production in Panama consists of beef, chicken, and pork. Beef and chicken accounts for 21% and 17% of total agricultural production value, respectively.

Table 3. Agricultural production in Panama (2009).

Generally the agricultural sector suffers from low productivity in most of their agricultural products. As the Table 4 indicates, the yield of cereal in 2009, for example, was 2,735 kg/hectare. This is well below the amount of yield in other regions and countries. Panama’s yield is less than the world average and less than 50% compare to the OECD member countries (i.e. USA, UK, Korea, etc.).

Table 4. Cereal yield by regions and countries.

There are a number of factors which affected the low productivity in Panama’s agriculture sector: 1) lack of capital investment, 2) constrains in crop growth due to tropical climate condition, 3) erosion of soil that caused nutrient depletion in agricultural lands, 4) rapid population growth where they overuse soils and practice improper agricultural methods, and 5) lack of agricultural input supply, such as fertilizer, pesticide, machinery, and water irrigation. As an example (in Table 5), Panama’s fertilizer utilization is only 35 kg/hectare, which is significantly below the world average of 119 kg/hectare. Panama is ranked 127^thout of 136 countries in fertilizer utilization.

Table 5. Fertilizer utilization.

Panama’s Agricultural Trade

 As shown in the Table 6, the total value of Panama’s merchandise trade was USD 8,749 million and agro-food trade was USD 1,743 million in 2009. The total import of agro-food products was USD 935 million whereas total export was USD 808 million. The agro-food trade accounted for 19.9 percent of total merchandise trade and imports and exports accounted for 12 percent and 85.2 percent of total value of merchandise trade in 2009, respectively.

Table 6. Panama’s imports and exports (1995~2009).

The total merchandise imports in Panama increased more than 300% from USD 2,510 million in 1995 to USD 7,801 million in 2009. The total merchandise exports, however, are slightly increased from USD 625 million in 1995 to USD 948 million in 2009. Steady and healthy growth in agro-food import and export were driven by strong domestic and external demand. The agro-food imports are sharply increased from USD 290 million in 1995 to USD 935 million in 2009 whereas the exports are slightly increased from USD 471 million to USD 808 million. Although the agrofood imports are increased more significantly compared to the exports, the share of total merchandise imports changed from 11.5% in 1995 to 12.0% in 2009 whereas the share of total merchandise exports changed from 75.3% in 1995 to 85.2% in 2009. The balance of payment in agricultural trade, however, changed from surplus of USD 182 million in 1995 into deficit of USD 127 million in 2009.

Panama’s most favorite nation (MFN) tariffs are relatively low compare to the other countries. On average, Panama’s rate is 13.4% on all agricultural products in 2009¹⁾, however it is relatively high²⁾ compare to non-agricultural products. Thet ariff rates on agricultural products range from 0% to 260%. Approximately 44% of total agricultural tariff lines are ranged from 10% to 15%, and approximately 26% are dutyfree. The products of animal, dairy, sugars and confectionary, and coffee are relatively sensitive goods in Panama because of higher tariffs levied on these products as shown in the Table 7. 

¹⁾ Simple average MFN applied tariff rates on agricultural products is 34% in developed countries and 25% in developing countries.
²⁾ In 2009, Panama’s simple average MFN applied tariff rates on non-agricultural products is 6.2%.

Table 7. Panama’s tariffs and imports by product groups.

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Table 8 indicates the Panama’s major agricultural commodity for trade. Most of imported agricultural products in Panama are processed foods and grains (such as maize, wheat, rice, malt et al.). Cereals and preparations imports consist about 6.1% of total merchandise imports. Major agricultural exports are coffee and fruits (such as melons, bananas, watermelons, pineapples et al.). Other agricultural exports include beef, fresh vegetables, raw sugar, yams, and fruit juice.

Table 8. Panama’s major import and export commodity (2009).

 Most of the Panama’s exported agricultural products are concentrated on a few countries in EU and North America as shown in Table 9. Top five importing countries’ share of Panama’s other melons, banana, watermelons, pineapples and coffee are 99%, 96%, 98%, 89%, and 88%, respectively. There are several structural reasons for Panama having a difficulty to diversify exporting partners: i) high transport cost for countries in a long distance, ii) low quality of agricultural products due to old technology and lack of coordination for standardization, iii) currency appreciation against US dollar, and iv) insufficient development of value added products and food processing industry.

Table 9. Top-five destination of Panama’s major exports (2009).

Table 10. SWOT analysis of Panama’s agriculture.

SWOT Analysis of Panama’s Agricultural Sector

 Panama has a number of advantages and excellent prospects in their agricultural sector: i) consistent economic development and stable political system in the last 15 years, ii) a large scale of the land has been partly tapped, iii) highly competitive products of fruits and coffee due to excellent climate and geographical condition, iv) high willingness to support by the government for the agricultural sector, v) comparatively low labor and land cost.

However, Panama’s agricultural sector is still fragile and has a numerous weaknesses and limitations: i) low productivity compared to other countries, ii) long distance and marketing difficulties to its potential export markets, iii) currency appreciation against US dollar which makes their export products less competitive and import products cheaper. iv) lack of important agricultural input industry such as seeds, fertilizer, pesticide, breeding and agricultural machinery, v) lack of food processing industry, and vi) insufficient agricultural infrastructure such as irrigation. Among these limitations and weaknesses, low productivity is the most important and immediate problem that need to be solved. Even with high willingness to support by the government, they are still lack of investment in agricultural and food industry sector.

To prepare for the free trade agreements (FTA) with major trading partners, such as USA and Canada, the Panama’s government needs to identify strategic areas that may require reforms and needs to effectively design the agricultural policy with long term perspective. The government should focus on production capacity and promote valueadded production and agro-food exports for the sustainable and enhanced agricultural sector development. Therefore, it is important for the Panama’s agricultural sector to have an improved infrastructure and competitive domestic industry for basic agricultural inputs.

Competitiveness of Panama’s Agricultural Export in Northeast Asian Market

Analytical Methodology

 Export competitiveness or international competitiveness can be measured by various methods such as Market Share (MS), price competitiveness, Revealed Comparative Advantage Index (RCA), and Comparative Advantage by countries (CAC). Because of small share of Panama’s export in Northeast Asia countries (Korea, China and Japan) it is difficult to draw a meaningful conclusion using MS and CAC methods. Therefore, in this study, the export unit price and RCA are used to evaluate and analyse the competitiveness of Panama’s agro-food exports in Northeast Asian countries.

The RCA is developed by Balassa (1965) and it estimates the international competitiveness by evaluating a form of trade revealed. This index is calculated as a country’s share of world exports of a commodity divided by its share of total world exports. It is similar to the concept of comparative advantage and shows the relative importance of commodity export to a specific country. The advantages of the RCA index are that it embraces the price and quality competitiveness factors and relatively easy data gathering. The RCA index is expressed as follows: 

 RCA = ( X_ij/ X_wj)/( X_it/X_wt)

 where X_ij = exports of product j from country i
            X_wj = total world exports of product j
            X_it = total exports from country i
            X_wt = total world exports

If the RCA index is greater than 1, then it has a comparative advantage in export of j product in i country. Generally, it is interpreted that the greater the index is, the higher the comparative competitiveness is. The international competitiveness of five commodities (melons, bananas, watermelon, pineapple and coffee) that are major agricultural exports of Panama are analysed in this section. The government of Panama considers the Northeast Asian market as a promising and highly potential for their agricultural products. We will also examine current exporting countries of these five commodities as well as potential export possibilities in Northeast Asian countries’ market.

Export Competitiveness of Panama’s major tropical fruits

Melon

Melon is the Panama’s major export item. It is reported that the amount of exports reached USD 117,230,000 in 2008. This is a dramatic increase comparing with the exports in 2000, amounting to USD 11,685,000, and average annual growth rates from 2000 to 20008 are almost 33.4%. However, the amount of exports has drastically decreased since 2008. Melon export in 2010 reached USD 13,261,000 and the average annual growth rate from 2000 to 2010 fell down to 1.3% as shown in Table 11.

Table 11. Panama’s melon export trend (2000~2010).

As shown in Table 12~14, China, Japan and Korea barely import melons from Panama. Based on data during the period from 2006 to 2010, most of the melons imported to Korea are from the U.S and melons imported to China are from the U.S. and Korea. Recently China started importing melons from Myanmar. Japan which is importing much more melons than Korea and China also imports more than 90% of melons from Mexico, the U.S. and New Zealand.

Table 12. Republic of Korea’s melon import trend (2006~2010).

Table 13. China’s melon import trend (2006~2010).

Table 14. Japan’s melon import trend (2006~2010).

Traditionally, Korea, China and Japan have been importing melons from the U.S. and Mexico. It is regarded that the U.S. and Mexico have export competitiveness as one of the top five melon exporters in the world. As shown in Table 15 below, taking into account the global melon markets, the U.S. and Mexico are main exporters ranked high positions among others. Import of Panamanian melon is now prohibited in Korea, China and Japan market due to the reason of the quarantine (i.e., fruit fly). Considering the geographical location of the U.S. and Mexico, it could be expected that there is an export opportunity for Panama, if Panama makes its active efforts to solve the quarantine problem and to secure fruit supply chain in these promising markets. 

Table 15. Top- five melon exporting countries in the world (2006~2010).

 Not only the U.S. and Mexico, which occupy the considerable portions of the melon exports markets in Northeast Asia, but also Spain, Guatemala and Brazil, are considered to be competitors of Panama in the international melon markets. Therefore, it is a task of great importance to analyze the price competitiveness of Panamanian melon in comparison to those of the U.S, Mexico and other main melon exporters in the world.

 Firstly, Table 16 shows the export price per unit of major melon exporting countries. Panamanian melons ranked the 5th out of the 8 countries that we chose to compare in price competitiveness.³⁾ The country which ranks first in terms of price competitiveness is Guatemala, showing that the average export price is just USD 336 per ton during the period from 2006 to 2010. During the same period, the average export price of the U.S. is USD 595 per ton, which represents that the U.S. also has high price competitiveness. In case of Korea and New Zealand, which are exporting melons to Northeast’s Asian countries in a small scale, the price competitiveness is very low⁴⁾ comparing to their export prices and 8 times more expensive than that of Guatemala. The melon exporting countries having higher price competitiveness than Panama are Guatemala, the U.S., Brazil and Mexico, from which we can presume that melons from the U.S. and Mexico with high price competitiveness are exported to Northeast’s Asian markets. However, Guatemala and Brazil which have higher price competitiveness than the U.S. and Mexico have no chance to export their melons to the Northeast Asian market despite their high export price competitiveness. It is assumed that they did not put enough efforts in pioneering export market in the Northeast Asian countries, and have no distribution chain. Therefore, both obtaining price competitiveness and putting more policy efforts in order to enter into the potential markets are required for Panama to export melons in Northeast Asian market. Especially, Panama government needs to make more efforts to release the import prohibition of Panamanian melons in Northeast Asian markets in terms of plant quarantine.

³⁾ Price competitiveness shall be calculated and compared by indexing through various formulas and indicators including production cost, domestic sales price, export price and so forth. However, many researchers have pointed that comparing such indicators have shortcomings since production cost comparison does not include the marketing ability factor, and domestic sales prices comparison does not include marketing, transportation, and trade relationship factors. Hence, we utilized export price, the most inclusive concept, to compare each countries’ price competitiveness.
⁴⁾ We basically assume that every exporter has homogenous quality. However if a commodity is exportable with higher price then it could be interpreted that it has higher quality in a real world.

Table 16. Export unit price of major melon exporting countries in the world.

Next, looking at Panamanian Melon export competitiveness through RCA indices as shown in Table 17, it appears that average RCA index during the period 2006 to 2010 is 597.38 and ranked first place among 8 exporting countries. Comparing with RCA indices in other export countries, Panama’s RCA index has been steadily increasing although it has recently been rather slow. It means that Panama is able to expand its melon exports with its competitiveness of comparative advantage, despite the fact that Panama currently occupies a very small portion of international melon export markets. Moreover, although the U.S. and Mexico’s market share in melon import market in Northeast Asia is high, Panama’s RCA index is higher than U.S and Mexico’s index. It is also expected that the possibility of exporting Panamanian melon to Northeast Asia is quite high. Therefore, if Panama makes more efforts to solve the problem of plant quarantine and reinforces the price competitiveness based on its melons’ relative comparative advantage, there might be good possibility for Panama to export its melons into Northeast Asian markets.

Table 17. Panama and competing countries with RCA indices of melon.

Banana

Panama is the world 17th banana exporter, recording the export amount of USD 66,242,000 in 2010. However, this record shows the significant decrease in the export amount compared to USD 148,328,000 as the world 8^thexporterin 2000, which means that the export of banana has been decreasing by average annual rate of 7.7% as shown in Table 18.

Table 18. Panama’s banana export trend (2000~2010).

As shown in Table 19~21, the bananas from the Philippines are overwhelmingly dominant over three countries of the Northeast Asia, which are Korea, China and Japan. The bananas from the Philippines take about 99%, 88%, and 87% of total banana imports in Korea, China and Japan, respectively. Philippines is the world 5th banana exporter. Ecuador, Belgium, Costa Rica and Columbia are also major banana exporters in the world. Panamanian banana has rarely been exported to Northeast Asian markets. Most of the bananas exported to these countries are from the Philippines and are partly imported from Ecuador, Columbia, Thailand, Vietnam and so forth.

Table 19. Republic of Korea’s banana import trend (2006~2010).

Table 20. China’s banana import trend (2006~2010).

Table 21. Japan’s banana import trend (2006~2010).

Table 22. Top-five banana- exporting countries in the world (2006~2010).

In addition to those traditional banana exporters, some of the bananas imported to China are from the countries like Vietnam and Thailand. Japan is importing banana partly from China thanks to the geographical advantage in terms of transportation cost. Therefore, such countries are likely to be the competitor of Panama. 

Firstly, looking at the export unit price with respect to the price competitiveness as shown in Table 23, Panamanian bananas place second among the 9 countries in total for the comparison of price competitiveness. Vietnam is ranked first place and the average export price of Vietnam from 2006 to 2010 is only USD 107 per ton. Therefore, other than Vietnam, Panama has strong price competitiveness for their banana exports compare to other competitive countries like Philippines, Thailand and China. Given this price advantage and effective strategies by the government and exporting companies, the Panamanian banana could be successfully exported to the Northeast Asian markets, where these countries already imported the bananas from Ecuador and Columbia. 

Table 23. Export unit price of major banana exporting countries in the world.

Next, by observing the RCA indices as shown in Table 24, Ecuador, Panama, Costa Rica and Colombia have high comparative advantage for their banana exports. The average RCA index of Philippine is 25.7, which is high compare to other Asian countries, however Panama’s average RCA index is 160.1 and ranked second among 9 compared countries. Since Panama has experienced continuing decrease in exports for the last 10 years, they need to reinforce its efforts with highly comparative products like banana to effectively develop export markets, such as Northeast Asian markets. It is highly recommended to benchmark successful cases of  other countries, like Ecuador and Columbia, which has already entered into the Northeast Asian market.

Table 24. Panama and competing countries with RCA indices of banana.

Watermelon

Panama is the world 7th watermelon exporting country, recording the export amount of USD 37,062,000 in 2010. This amount has been increased more than 10 times since 2000. The average annual growth rate of watermelon export is 23.5% from 2000 to 2010 as shown in Table 25.

Table 25. Panama’s watermelon export trend (2000~2010).

However, Panamanian watermelon has not been exported to the Northeast Asian markets as shown in Table 26~28. Import of Panamanian watermelon is now prohibited in Korea, China and Japan market due the quarantine (i.e., fruit fly) concerns from the melons. Since the freshness preservation is very important factor for the watermelon, the importing amount in Korea and Japan is very small. Korea imports watermelon from the U.S., China imports from Vietnam and Myanmar, and Japan imports watermelon from the U.S, and Korea. Therefore, the possibility of exporting Panamanian watermelon to Northeast Asia is relatively low compared to other fruits.

Table 26. Republic of Korea’s watermelon import trend (2006~2010).

Table 27. China’s watermelon import trend (2006~2010).

Table 28. Japan’s watermelon import trend (2006~2010).

Table 29. Top-five watermelon exporting countries in the world (2006~2010).⁵⁾⁵⁾The ranking in this table does not include Panama, the world 4^th~6^th watermelon exporter competing with the Netherlands and Italy.

The U.S., is the third watermelon exporter in the world and has some competitive advantage in the Northeast Asian market. Other top watermelon export countries, except the U.S., have not entered the Northeast Asian markets.

Comparing the export price competitiveness of watermelon of the major exporting countries in the world as shown in Table 30, Vietnam ranked first followed by Italy and Panama ranked fifth. Vietnam is in dominant position with average export unit price of USD 156 per ton. This price is approximately 1/3 of the price in Italy and Mexico. Therefore, with the average price of USD 553 per ton, Panama may not have any potential to enter the Northeast Asian market for their watermelon. The Panama government may need to take policy measures to enhance their watermelons price competitiveness and make strong efforts to release quarantine if they want to enter into Northeast Asian markets.

Table 30. Export unit price of major watermelon exporting countries in the world.

The RCA indicators of watermelon for 8 countries are hown in Table 31. Panama ranked first with an average index of 743.3 between the periods of 2006 to 2010. Vietnam, which has the strongest price competitiveness, ranked fourth with an average index of 5.8. This result indicates that Panama has strong competitive advantage for their watermelon export, however, due to the importance of freshness of watermelon, the possibility is relatively low for them to enter in Northeast Asian markets.

Table 31. Panama and competing countries with RCA indices of watermelon.

Pineapple

Panama is the world 9th pineapple exporter and reached SD 32,093,000 in 2010. The average annual growth rate of its pineapple export from 2003 to 2010 is about 34.6% as shown in Table 32. Pineapple is one the fastest growing exporting commodities in Panama.

Table 32. Panama’s pineapple export trend (2000~2010).

However, like the banana, Korea, China and Japan mainly import pineapples from the Philippines. Korea and Japan import all their pineapples from the Philippines, and China mostly imports from the Philippines and partly from the Taiwan as shown in Table 33~35.

Table 33. Republic of Korea’s pineapple import trend (2006~2010).

Table 34. China’s pineapple import trend (2006~2010).

Table 35. Japan’s pineapple import trend (2006~2010).

The Philippine is the world 4th exporter of the pineapples. Other top five exporters in the global pineapple market are Costa Rica, Belgium, Netherland, and the U.S.

Calculating export price competitiveness of pineapple among seven major countries in the world, Panama places 4^th with an average price of USD 664 per ton between 2006 and 2010 as shown in Table 37. Costa Rica has the lowest price followed by Philippines with an average price of USD 385 and USD 445 per ton, respectively. Therefore, it will be difficult for Panamanian pineapples to compete with Philippines pineapples in the Northeast Asian markets. However, with its continual decrease in export price and higher quality, Northeast Asian countries may open their markets for Panamanian pineapples.

Table 36. Top-five pineapple exporting countries in the world (2006~2010).

Table 37. Export unit price of major pineapple exporting countries in the world.

The competitiveness of Panamanian pineapples looks more promising with RCA indicator. Panama’s RCA index shows an average of 272.6 from 2006 to 2010, which make them ranked second next to the Costa Rica (585) as shown in Table 38. The index has been rapidly increased since 2006 (from 135.4 to 392.1) and is nearly ten times higher compare to the index of Philippines (20.8). Therefore, with greater efforts, Panamanian pineapples have high potential to enter the Northeast Asian markets.

Table 38. Panama and competing countries with RCA indices of pineapple.

Policy Recommendations to Expand the Exports of Tropical Fruits

Development of strategic action plans with establishing tropical fruits export complex

Panama government needs to develop strategic export commodities that can represent the Panamanian agricultural products such as tropical fruits. There are a number of countries who are successfully established their agricultural commodities in the international market. France, as an example, annually exports their wines with an average amount of USD 7 billion. Norway is also successfully exporting their salmons and New Zealand exports their Kiwis in the international market with an average amount to USD 3 billion and USD 7 billion, respectively. However, the export amount of Panama’s major tropical fruits such as (melons, banana, watermelon, pineapple is less than USD 0.1 billion and is not stable. Therefore, they need effective action plans to expand the export of their major tropical fruits and stabilize domestic production as well as prices.

One of the strategies that Panama government can consider is to establish a tropical fruits export complex. With this establishment, high quality of tropical fruits can be stably supplied and able to provide the incentives for overseas marketing and export financing. Additionally, Panama government needs to create a national brand and encourage using this brand on their exports of tropical fruits. The dependable brand image will provide a symbol for the Panama’s exports as a high quality and safe products.

Development of food processing industry

Most tropical fruits are exporting in the form of freshness without processing. Therefore the exports of tropical fruits have been highly fluctuated annually. Therefore Agro-food processing industry should be developed as a new engine of growth for Panama’s exports of tropical fruits. In order to promote the value-added exports of tropical fruits, government needs to attract foreign direct investment and strengthen research and education in agro-food processing technologies for exports of tropical fruits. This strategy may help the private sector with up-to-date food processing equipment and add more value to the agricultural products. 

One of the limitations that Panama has is its remote location and sparsely distributed population. The high transportation cost of fresh fruits export to potential markets, such as Korea, China and Japan, need to compensate with more value added products. Therefore, with the establishment of agro-food processing industry, more valued commodities can be exported rather than low valued raw products. 

Establishment of reliable and cost-effective infrastructure in rural area is another pre-condition for the successful investment in agro-food processing industry. With careful consideration of the demands of private sector, the government should provide the necessary infrastructures such as energy, transportation and communication. Also, in order to stabilize agro-food price and increase grading and safety, the government needs to provide the facilities of public storage and laboratory testing.

Of course, it is also important to provide improved irrigation, better machinery, highly productive seeds and chemical preparation to enhance the production capacity and promote value-added products. Better marketing ideas and strategies can be adopted with successfully produced agro-food commodities in the potential markets. 

Diversification of overseas markets

Panama government should put more efforts to pioneer new overseas markets for its strategic export commodities such as tropical fruits. Exports of tropical fruits represent more than 20% of total agricultural exports. The country’s major export destinations for tropical fruits are North America and European countries. The exports for these countries account more than 90% of the Panamanian tropical fruits exports. Therefore, diversification of exporting countries as well as products is a vital strategy to increase their exports. The government must promote the overseas trade activities with more diversified export markets for tropical fruits. 

Expanding Research and Development (R&D) to facilitate Agro-food exports

The investment in research and development (R&D) is a very effective way to enhance the agricultural productivity. Based on the experience of other successful countries, the rate of return from R&D investment is exceptionally high that they can improve their products with better quality and more competitive in the international markets. Therefore, the Panama’s government should put more efforts in larger investment of tropical fruits sector R&D to enhance the product quality and competitiveness. However, it is necessary to expand R&D in the whole process from seed to production, processing, distribution and export.

Capacity-building for International Regulation (SPS measures)

The products that are subject to quarantine may not enter into the importing country unless it complies with the import requirements and regulation. Most of the importing countries require pest risk analysis (PRA) on fresh fruits and vegetables. Therefore, in order to confirm quarantine and inspection with scientific evidence as well as satisfying all other importing requirements, a boundless effort and times are required by the exporting country.

Panamanian fresh fruits, such as melons and watermelons, cannot export to the great potential markets such as the countries in Northeast Asia due to the quarantine problems. Since many of the developed countries are using stringent sanitary and phytosanitary (SPS) measures on importing agricultural products, Panama should comprehend higher requirements and strengthen its capabilities for SPS facilities, certification systems and officers’ managerial skills to handle SPS. This will entail large investments in infrastructure and the development of adequate expertise, however it is necessary investment to produce high quality and safe agricultural products and export to the countries with higher standards. Also, Panama needs to have better understanding of the role of international institutions such as Codes, OIE (World Organization for Animal Health) and IPPC (International Plant Protection Convention). These institutions play key roles and develop international standards, guidelines and recommendation for SPS measures.