New strategies to support the farming sector are proposed in Bill 014, July 23, 2018 to create jobs and increase investment in production, such that capital remains inside the country. The aim is to provide immediate, interest-free financing for farmers, enabling them to import machinery, equipment and inputs tax free. Some of the key aspects of this bill worth highlighting are:

Financing

• The proposal that for the first 3 years in which the regulation is in force, the Savings Bank, Panama' central bank and the Agricultural Development Bank (BDA) should set aside all their profits exclusively for the agricultural sector, offering interest-free loans. This type of loans would consist solely of property mortgages and collateral pledged against equipment or future production.
• Loans granted by state-run banks to producers may not be refused on the grounds of the client's credit history, a proposal which would mean another amendment to the 2002 Act 24 regulating the provision of information on consumers' and clients' credit history.
• The State will acquire all national agricultural produce that the private sector, for whatever reason, has not been able to buy. Farmers will be paid through Panama's central bank no later than 60 days after reception of such produce.

Duties

• Import duties will be set by the State in conjunction with national producers' associations.
• Third party intermediaries may not import. The State will import all agricultural sector products directly, dispatching all earnings in full to the BDA, to be used to grant zero-interest loans.

Tax breaks

• Companies or natural persons who normally work in the agricultural sector will be granted a 3-year tax holiday, on both their national and municipal taxes.
• The exemption will apply to import taxes and taxes on the transfer of goods and services for importing machinery, seeds, fertilizers and all inputs required for agricultural activity.
• Fuels and oils used by agricultural companies will be exempted from paying tax. Every quarter, the State will refund the producer the sums paid on these taxes.
• To be eligible for the benefits offered in the regulation, agricultural producers must be certified by Panama's Chamber of Commerce, Industries and Agriculture and by a Chartered Accountant, validating that they are engaged in this activity.

Location and border control

Since the Central Provinces and the inner heartland of the country are the areas that produce all the food consumed domestically, the regulation proposes a 90-day work plan to relocate and create some governmental institutions. Part of this work plan will involve drafting a list that includes all the administrative districts in the country where farming takes place or may take place, so that their needs, the solution and its execution can be specified.

Impact in the administrative arena

• Non-compliance with this regulation on the part of civil servants will be cause for dismissal, without prejudice to the criminal action applicable for delay in the exercise of their functions.

It is important to remember that this Bill is closely linked to the provisions contained in Act 4, May 17, 1994 establishing a preferential interest-rate system for the agricultural sector and other measures, since it shares the same aim of supporting the country's agricultural sector. If the Bill is passed, it would be a major boost for the sector and have a beneficial impact on Panamanian families, whose households are suffering the economic impact of their product; it would provide the possibility of developing employment in the sector.