Summary.
The bill amends the preferential interest system established by Law 4 of May 17, 1994. Article 1 proposes new wording for Article 1 of that law: local loans for the qualifying agricultural sector and the agroindustrial sector exporting nontraditional products would be entitled to a discount on the interest rate agreed with the lending bank or financial institution. The discounts would be reimbursed through the application of withholdings made by banks and financial institutions under the law.
To qualify, the maximum loan amount per production cycle and per category, defined by activity and purpose, would be one million balboas, with an exception for loans granted to producer associations. Eligible borrowers would be individuals or legal entities engaged in agricultural production or the production and processing of domestic sea salt. Each borrower could receive up to three loans per production cycle and category. Failure to meet these conditions would trigger the sanctions established in Article 9 of the amended law. Loans made to the Agricultural Development Bank (Banco de Desarrollo Agropecuario) by banks and financial institutions would also qualify for the interest discount.
Article 2 replaces Article 8 of the same law and lists the qualifying activities. Agriculture covers a broad range of grains, vegetables, root crops, fruits, plants, flowers, fodder, mushrooms, and spices. Livestock activities include breeding, dairy production, and fattening of cattle, buffalo, pigs, sheep, and goats, including high genetic quality stock. The list also covers poultry raised for meat, eggs, and breeding; fish and shrimp farming and artisanal fishing; forest cultivation; beekeeping; rabbit farming; and the production and processing of domestic sea salt. It further includes agroindustry that transforms agricultural products and byproducts produced entirely in Panama (Panamá).
Article 2 also specifies the purposes for which loan proceeds could be used. Input purchases include machinery, equipment, work vehicles and vehicles for transport within agricultural projects, irrigation systems, solar panels, biodigesters, silos, and other capital goods, including equipment and technologies for agroindustry. Eligible uses also include working capital for labor, domestic raw materials for agroindustrial processing, grain for feed, fertilizers, agricultural chemicals and veterinary products, packaging, and other inputs. Funds could support planting and crop work, as well as improvements to productive facilities through sheds, greenhouses, pens, fences, roads, storage buildings, wells, nurseries, irrigation infrastructure, and aquaculture works.
Other eligible purposes include purchasing animals for breeding, dairy production, or fattening, genetic material, shrimp larvae, fish fingerlings, and poultry. They also include acquiring productive agricultural land by purchasing farms or shares in the companies that own them, excluding speculative use. Investments in the listed activities or purposes could be reimbursed if their period does not exceed one year. The Agricultural Cabinet could expand the activities, purposes, and uses of funds. Article 3 identifies Articles 1 and 8 of Law 4 of May 17, 1994 as the provisions being amended; Article 4 provides for the bill to take effect on the day following promulgation.
The public bodies connected with the bill’s provisions are the Agricultural Development Bank and the Agricultural Cabinet. Its provisions could interest or affect banks and financial institutions, crop and livestock producers, producer associations, artisanal fishing, aquaculture, forestry, beekeeping, rabbit farming, sea salt producers, and agroindustries processing domestic raw materials.
What it proposes.
- Interest discounts on local loans for the agricultural sector and exporters of nontraditional agroindustrial products.
- Eligibility conditions, qualifying activities, and permitted uses of loan proceeds.
- Authority of the Agricultural Cabinet to expand eligible activities and uses.
Who it would affect.
- Agricultural producers who are individuals or legal entities.
- Producers and processors of domestic sea salt.
- Producer associations and agroindustries covered by the qualifying activities.
- Banks and financial institutions making the loans.
Key points.
- Eligible local loans would receive a discount on the interest rate agreed with the lender.Art. 1
- The maximum amount would be one million balboas per production cycle and category, except for loans to producer associations.Art. 1
- Each eligible borrower could receive up to three loans per production cycle and category; breaches would be subject to the sanctions in Article 9 of the amended law.Art. 1
- Loans made to the Agricultural Development Bank by banks and financial institutions would also qualify for the discount.Art. 1
- Qualifying activities would include agriculture, livestock, poultry, aquaculture, artisanal fishing, forestry, beekeeping, sea salt, agroindustry, and rabbit farming.Art. 2
- Funds could be used for inputs, planting, productive infrastructure, animal purchases, productive farmland acquisitions, and reimbursement of certain investments.Art. 2
- The Agricultural Cabinet could expand the listed activities and the purposes and uses of funds.Art. 2
- The bill would amend Articles 1 and 8 of Law 4 of May 17, 1994 and take effect on the day following promulgation.Arts. 3-4