Representatives of the Panamanian government and U.S.-based multinational Fresh Del Monte Produce (NASDAQ: FDP) have signed a contract to sublet more than 1,300 farms in order to reactivate banana production in the Central American country's Barú region.

On Monday the sub-lease was signed by Minister for the Presidency, Álvaro Alemán, and Del Monte's vice president of Latin American operations, Jorge Pelaes.

The agreement for production in Barú, located in the Pacific Ocean-facing province of Chiriquí, is renewable after 20 years and for an amount of US$9.9 million establishes farms in the areas of Mango and Juabito which will be first to get started with cultivation and exports. 

In a release, Alemán highlighted there were only a few remaining steps before Del Monte, through its subsidiary Banapiña S.A., could start operations. These include gaining endorsement from the General Comptroller of the Republic and an environmental impact study from the Ministry of the Environment.

"The fact there is not much time to go before the company starts operations in Barú fills us with joy, because it will represent an impact in employment generation in the region, and the company will inject more resources into Barú which will be reflected in the economy," Alemán said.

The project is expected to create 3,100 direct jobs and a further 12,000 indirect positions in trade and services. The company plans to invest a total of US$100 million over seven years.

Banapiña plans to grow on 900 hectares of land each year with an average annual productivity of 2,725 boxes of bananas per hectare.

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