Paraguay Table of Contents

Export Crops

Soybeans had replaced cotton as the country's most important crop by the 1980s. A relatively new crop for Paraguay, soybeans were not produced in any quantity until 1967, when they were introduced as the summer rotation crop in a national plan for selfsufficiency in wheat. After soybean prices nearly tripled in 1973, however, much of the land slated for wheat was sown with soybeans instead. As the lucrative nature of soybean cultivation and processing became apparent, several large agribusinesses from Brazil, the United States, and Italy engaged in large-scale, commercial production of soybeans and soybean oil. It is difficult to exaggerate the drastic growth soybeans enjoyed in Paraguay. In 1970 soybeans covered only 54,600 hectares and had an annual production of over 75,000 tons. By 1987 soybeans covered some 718,800 hectares, more than any other crop, with an annual output of 1 million tons and export revenues of approximately US$150 million. The soybean crop grew primarily in the newly colonized departments of Itapúa, Alto Paraná, Canendiyú, and Amambay. Soybeans were produced principally for the world market anf sold both as a raw bean and as a processed oil, which was also consumed locally. Soybean prices generally rose beginning in 1970s but experienced significant fluctuations in the early to mid-1980s before recovering in the late 1980s. The major constraint on growth in soybean output, besides price fluctuations, was the lack of storage, drying facilities, and local processing capacity.

Cotton was one of Paraguay's oldest crops, grown since the time of the Jesuit missions. The government encouraged cotton production after the crop was nearly wiped out by the War of the Triple Alliance. Cotton was especially suited to the Paraguayan climate and soils and was grown primarily by small farmers in the central region. Cotton farming also experienced extremely rapid growth in the 1970s and 1980s. In 1970 only 46,900 hectares were sown with cotton, producing a volume of over 37,000 tons. By 1985, however, 385,900 hectares were covered with cotton, yielding almost 159,000 tons. Those figures had dropped to 275,000 hectares and 84,000 tons during the drought of 1986. Foreign-owned, large-scale, commercial production in the eastern border region was surpassing central region production in the late 1980s. Despite the advances in cotton production, cotton cultivation in the 1980s was still characterized by low yields and a low technological level. Even more so than soybeans, cotton suffered wide price fluctuations, and many small farmers who came to rely on cotton revenues in the 1970s became vulnerable to external price fluctuations in the following decade. Some cotton fiber was used domestically, but about 80 percent of the country's crop was processed into cotton lint at more than ten textile-processing factories. Cotton exports in 1987 earned about US$100 million, with most exports going to Uruguay, Britain, France, the Federal Republic of Germany (West Germany), and Japan.

Another key export crop was tobacco. Used domestically for centuries, cigarettes and cigars also earned foreign exchange. During parts of the early 1900s, tobacco was Paraguay's principal agricultural export to Western Europe. Tobacco production slowed in the 1970s with the advent of massive soybean and cotton production. Another reason for the tobacco crop's decline was the inability of the domestic cigarette factories to improve quality control and compete with smuggled brands. Wide price fluctuations of tobacco also explained dwindling production. Despite these difficulties, tobacco made a slight recovery in the 1980s. The area cultivated rose from 7,600 hectares in 1980 to over 8,000 hectares in 1987. Output increased from 11,500 to 12,000 tons. Tobacco was grown throughout Paraguay, mostly by small farmers. Cigarettes and cigars were exported to Argentina, France, and Spain. Tobacco exports were valued at approximately US$9 million in 1987.

Coffee was another export crop but of much less importance. Cultivated since the times of the Jesuits, coffee was grown in the central and eastern border regions for local and export markets. Most modern coffee production methods derived from the practices of German colonists in the eastern region. Coffee production boomed in the late 1970s but waned in the early 1980s. In the late 1980s, coffee output rose again, following a pattern of fluctuating production based on price movements. In 1987 approximately 9.2 million hectares of coffee yielded 18.4 million tons of exports with an estimated value of US$44.7 million.

Sugarcane remained an important cash crop for small farmers in the late 1980s. Unlike many countries in the Western Hemisphere, Paraguay saw sugarcane as a crop of the future, not because of its use for refined sugar and molasses, but as an input to ethanol, an increasingly popular energy alternative for the country. Sugarcane was planted in Paraguay as early as 1549 with seedlings from Peru, and sugar had been exported since 1556. After the devastation of Paraguay's two major wars, however, local output did not meet domestic demand until the mid-1900s, after which exports were revived. Since then, sugar production has fluctuated with price changes but generally has increased. Paraguay's climate is appropriate for sugarcane cultivation, but traditional methods and inefficient small-scale production limited harvests. Besides low yields, the industry suffered from outdated milling facilities and high production costs. Sugar production, however, was expected to be modernized and increasingly commercialized as a result of its high government priority as an input to an alternative energy source. Some 65,000 hectares of sugarcane produced 3.2 million tons of sugar in 1987, including 7,500 tons of sugar exports valued at US$2.3 million. These figures were highs for the decade.

Numerous crops were grown partially or entirely for their value as exported processed oils. Oilseeds represented one of Paraguay's largest agro-industries. One of Latin America's largest oilseed exporters, Paraguay processed cottonseed, soybean, peanut, coconut, palm, castor bean, flaxseed, and sunflower-seed oils. Industrial countries in particular consumed oilseeds as a lower-priced substitute for more traditional oils, which also were higher in cholesterol. Some oil was used locally as well. Paraguay also produced a number of nonvegetable oils, such as tung oil and petitgrain oil. Tung oil, derived from tung nuts, was used as a drying agent in paints. Petit-grain oil, derived from Paraguay's bitter oranges, was used in cosmetics, soaps, perfumes, and flavorings. In the 1980s Paraguay remained one of the world's leading exporters of petit-grain oil.

Food Crops

Manioc (cassava), maize, beans, and peanuts, the four basic crops of the Guaraní Indians, were still the country's major food crops in the 1980s. Manioc, the staple of the Paraguayan diet, had been cultivated in nearly every area of the country for centuries. Called mandioca in Paraguay, the root crop was the main starch of the diet. Manioc did not experience the rapid explosion of cultivation that cotton, soybean, and maize did. Nevertheless, manioc yields ranked as some of the best in Latin America. In 1986 about 220,000 hectares produced 3.4 million tons of manioc. These figures compared favorably with 1976 data, which recorded 106,500 hectares producing 1.6 million tons.

Maize, or was Paraguay's most rapidly growing food crop. From the early 1960s to the late 1980s, corn output multiplied rapidly, covering more hectares than any crop except soybeans. After the doubling of both hectares cultivated and total output in the 1970s, corn production accelerated even further in the 1980s, mostly because of continued agricultural colonization. In 1980 approximately 376,600 hectares yielded 584,700 tons of corn, compared with an unprecedented 547,000 hectares of corn in 1987, which harvested 917,00 tons. Like manioc, maize was grown throughout the country, but the departments of Itapúa, Paraguarí, Caaguazú, and Alto Paraná were responsible for most of the harvest. White corn was the traditional corn of Paraguay, but yellow, highyield hybrids were increasingly common, especially on larger farms. Most corn went to domestic human consumption; roughly a third of domestic corn consumption took place in the form of feed grain for the livestock sector. In addition, some surplus corn was exported to Brazil and Argentina, depending on weather conditions and annual output.

Other principal food crops included beans, peanuts, sorghum, sweet potatoes, and rice. Many types of beans were grown in Paraguay, including lima beans, french beans, and peas. Since the 1970s, however, bean production had been declining because of the profitability of other crops. Peanuts, a traditional though marginal crop, expanded in the 1970s and 1980s and often were intercropped with cotton. Peanuts also were processed as an oilseed. Sorghum, a drought-resistant crop, was grown primarily as feed for livestock and was considered a potential crop for the arid Alto Chaco. Sweet potatoes, another main staple crop, like many other food crops, did not expand significantly in the 1970s, and harvests contracted measurably in the 1980s. Rice production, by contrast, expanded after high-yield varieties were introduced in the 1960s. Rice is not a dietary staple in Paraguay as it is in many Latin American countries, but it is popular and consumed in ever-greater quantities. Self-sufficient in rice, Paraguay showed potential as a regional exporter because of its rich soils and irrigation potential along the Río Paraná.

After attempting for twenty years to become self-sufficient in wheat production, Paraguay reached wheat self-sufficiency in 1986. For two decades, the government's national wheat program had encountered numerous obstacles: seeds inappropriate for Paraguay's climate, skyrocketing prices for alternative crops, poor weather, blight infection, and a lack of proper farming practices. From 1976 to 1986, however, the number of hectares covered with wheat multiplied some sixfold, from 24,200 to over 140,000. Wheat output reached 233,000 tons in 1986, 33,000 tons above national consumption. In 1987 approximately 175,000 hectares of wheat fields yielded 270,000 tons, a record high. Over half of all wheat was grown in Itapúa, where most soil testing, tractors, and fertilizers were used. Despite the rapid expansion, wheat production in the 1980s was hurt by floods, droughts, and cheap contraband, all of which caused flour mills to operate at about half of capacity. Smuggled Brazilian flour sometimes was half the price of Paraguayan flour. Future growth in the wheat industry was constrained by a lack of adequate grain-cleaning and storage facilities.

Paraguayans cultivated numerous other fruits, vegetables, and spices for both domestic consumption and export. Most common were citrus fruits, which were ideal for Paraguay's subtropical and tropical climate. Paraguay also produced pineapples, which according to some sources originated in Paraguay, and peaches, which were farmed commercially by fruit companies from the United States. Bananas, plums, strawberries, pears, avocados, guavas, papayas, mangoes, grapes, apples, watermelon, and other melons were cultivated to varying degrees as well. Vegetable production included gourds, squash, tomatoes, and carrots. Onions and garlic were widely grown and commonly used in cooking.

A uniquely Paraguayan crop was the yerba maté plant. Yerba maté was grown throughout the country--especially Eastern Paraguay -- for both domestic and regional markets. Large-scale production was traditionally dominated by Argentine and British interests. Despite its popularity, yerba maté output fell significantly in the 1970s and 1980s, as farmers switched to more lucrative crops.

Paraguay was also believed to be an expanding producer of marijuana in the 1980s. One United States Congressional report in the 1980s estimated annual production at 3,000 tons.

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Source: U.S. Library of Congress