El Niño threat to  farmers and the Panama Canal

Failed rains and a dire El Niño threaten the Panama Canal, with farmers selling cattle to survive.

In Azuero,  the crucial rainy season has brought little rain to parched fields.

Panama faces a water crisis. A rainy season punctuated by drought has ravaged large parts of the country.  In August, the government declared a national state of emergency that will remain in place until June 2027. Authorities forecast rainfall deficits of more than 50% in some regions until December.

“The situation is dramatic,” says Panama’s environment minister, Juan Navarro. “Climate change has increased the frequency and also the gravity of El Niño, as well as other climate extremes.”

The latest El Niño, Navarro says, is pointing towards being the worst in history. “We are already starting to feel the impact, but we have seen nothing yet. For Panama, this is life or death for our economy, and for our drinking water supply.”

Panama’s economy relies heavily on the Panama Canal, which accounts for up to 7.7% of Panama’s GDP. The freshwater lakes that supply the canal’s locks also provide drinking water for about 2 million people. A sizeable chunk of Panama’s hydroelectricity generation also depends on the watershed.

The government is funneling $80m towards “resilience actions” to prepare for El Niño. In the long term, it is investing about $1.5bn in a reservoir on the Indio River intended to supply Lake Gatún and meet demand for the next five decades.

The new reservoir is, says Navarro, the most important investment we are making – Indio is the ultimate bet on resilience.

 Damming the Indio River will flood the lands of 550 families in 38 rural communities who live in the basin.  But authorities forecast completion in two to three years.