The Paraguay Chaco
Why Paraguay ?
The Republic of Paraguay has a land area of 406,752 km2, a population estimated of 6.5 million inhabitants, from which 43% are living in rural areas.
The population is mostly young, almost 66% of the population are below 30 years old.
The indigenous peoples make up less than 2% of the total (87,100 people).
The country is divided by the Paraguay River into two clearly distinct and unique regions.
The Eastern region, inhabited by over 98% of the population holds 39% of the land area (159,827 km2), and the Western or Chaco region which has 61% of the area (246,925 km2) only has 2% of the total population.
In the last 20 years, the Paraguay Chaco has been under strain of deforestation for cattle land development. Reforestation was limited due the legislation that requires landowners to keep a minimum of 50% of all land as native vegetation.
The Paraguay Chaco is the best suited place in south America for pongamia based silvopasture reforestation programs for a multitude of reasons.
The Paraguayan Chaoc climate is very suitable for pongamia as the trees do not resist frost and require a sub-tropical to tropical climate.
Pongamia is not a « fussy » tree with respect to soil.
Pongamia grows a vigorous root system both deep and broad to extract water and soil nutrients. Once established, Pongamia trees tolerate water logging, saline and alkaline soils which is the case in some of the areas in the Paraguay Chaco.
Paraguay has introduced reforestation land lease legislation that provides defined advantages to current land owners and international investors. Legislation in Paraguay does not exclude foreigners from leasing and purchasing farmland. Local legislation permits to invite a large range of investors; from private individuals to investment funds, family offices, and agriculture enterprises.
Why the Chaco?
Paraguay has tremendous reserves of abundant and best valued non-crop land available in the western part of the country called the Chaco.
The Paraguay Chaco is similar to southern India from where Pongamia originates and thrives. It is not a coincidence that the most used cattle race in the Chaco is the Brahman breed which also originating from India.
The planting of 400,000 hectares (approx. 2% of the Chaco) with Pongamia trees would make Paraguay fully self-sufficient in its crude oil needs whilst continuing to grow its current livestock business.
Key facts of a booming country
Population: 6,5 Mio (less than 2% live in the Chaco)
Paraguay is the 4th largest soybean and 8th largest beef exporter in the world
The political and economic environment has recovered and notably improved
The country is expected to grow at annual rate of over 9% over the next years
Good environment for foreign investors:
No foreign investment restrictions on farmland (BR, AR)
No additional taxation for large lands holdings (UY)
Lowest tax rates on agriculture in South America
Agriculture in the Chaco
Tropical pastures used, suited perfectly for the subtropical conditions
Heat resistant cattle breeds (India Zebu)
Large water retention basins assure sufficient water reserves throughout the year
Extraordinarily well educated, young and motivated local work force
A region for investment
Economies of scale through large scale production
Low labor cost
Beef production in the Chaco has steadily increased since 2005
US$ 3 billion investment forecasted until 2020