La Chorrera, Panama – Farmfolio’s Panama Golden Pineapple project proudly received its first visit from Panamanian president Laurentino Cortizo at our La Chorrera pineapple farm in Panama on Friday, August 14th, marking a major milestone for the project and for Panama as an origin for premium pineapples.
“It was a huge honour and opportunity to meet President Cortizo,” explains Paul Vergara, Project Manager at PGP. “I had the chance to speak directly with him for a short time about our farm, how it works, how our pineapples are produced, and our Air Pineapple business.”
President Cortizo Meets With Paul Vergara
“Although President Cortizo already knew that we’re Panama’s biggest exporter of pineapples by air, he was impressed with our operations and our business model. He loved the farm and what we’re doing here,” Paul continued.
“President Cortizo thought our Air Pineapple business is a great avenue to promote a very high quality product, and to promote Panamanian pineapples overseas. Some other agricultural products have gone a similar route, such as Panamanian coffee, and the President encouraged us to continue on this journey, and to keep putting Panama on the map,” added Paul.
President Cortizo toured pineapple fields and packing facilities, observing soil preparation, pineapple washing, and other activities on the farm. The president also presented agricultural subsidies to small, local businesses affected by the pandemic, as well as academic scholarships to some fortunate students.
Paul Vergara and President Cortizo Deliver Remarks
“In my speech I was very truthful about the conditions faced by Panama’s pineapple industry,” Paul explained. “The industry, which was once a success story, has been decimated over the last decade, and it’s crucial that we go back to what we were doing 10 years ago when Panama was exporting a lot more pineapples.”
The total planted area for pineapples has fallen a dramatic 80% since 2009, while Costa Rica has emerged as the world’s largest producer. But an oversupply of low-color fruit in 2015 has put downward pressure on prices, creating an opportunity for premium, air-freighted fruit.
“Panama’s competitive edge is our logistical advantage, our weather and our soils. In Costa Rica the cost of pineapple production is 30-40 per cent cheaper. This forced us to reinvent ourselves, and that is when the La Dona Air Pineapple business was born,” Paul stated.
Paul Vergara and President Cortizo Tour the Packing Facility
“On top of that, there was a slow down in the distribution of the export incentives that have been paid out by the government for the last 20 years,up to two years in some cases. It affected a lot of pineapple growers who relied on the export incentives to sustain their businesses,” he continued.
“This is exactly why Farmfolio created CANs (Collateralized Agribusiness Notes). Agricultural exporters like us need to receive capital from their tax credits within a shorter time horizon, because quicker access to inputs and infrastructure leads to larger sales in the future. We know that this model is going to be as attractive to other producers as it is for us, and will be able to generate returns for investors through the future sale of issued tax credits,” added Paul.
The initial series of Farmfolio’s CANs has already been fully reserved, however, a second series was launched this week (August 20) and is expected to sell out quickly. The opportunity will provide trade financing for the many time-intensive transactions at the downstream phases of the agribusiness supply chain, not only tax credit issuance, but accounts receivables, warehouse receipts, etc.
CANs will be administered through Finca Funds SAS, a Panamanian entity that will handle the due diligence, management, and underwriting processes for CANs. With close ties to the government and the Panamanian agriculture sector through Paul Vergara, the president of the Exporter’s Association of Panama, Finca Funds SAS is an ideal administrator and issuer of the notes.
“As agricultural exporters ourselves, we really understand the value of the CANs project,” said Dax Cooke, founder and CEO of Farmfolio. “Being able to receive advance funding for our tax credits will provide us with capital to expand our business, and we want to extend that opportunity to other exporters,” he stated.
“CANs are Farmfolio’s first foray into the debt space. These notes are going to be able to provide investors with a high-yield, short duration debt instrument that is collateralized and ideal for diversification. These instruments are designed with ESG benefits in mind, and will also have a significant social impact for regional exporters,” Cooke continued.
To learn more about CANs, please visit farmfolio.net/cans/