Paraguay Farming Technology
Harvesting bananas in Santa Catalina
Courtesy Inter-American Development Bank
In the 1980s most farmers held small plots of land, used low
levels of agricultural inputs, such as equipment, fertilizer, and
irrigated water, and produced primarily food crops for domestic
consumption and some cash crops for additional income. Large
holdings, many foreign-owned, operated with much higher levels of
farming technology and produced almost exclusively cash crops for
the export market. Although agricultural colonization and greater
cultivation of cash crops by small farmers were modifying this
pattern, the basic agricultural dichotomy generally continued in
the late 1980s. Although farming techniques were steadily
improving, Paraguay continued to display some of the lowest yield
rates in all of Latin America, indicating that agricultural
modernization was still far away.
The Mennonite colonies in the central Chaco offered a notable
exception to the country's low yields. When Mennonites first
arrived in 1926, the central Chaco was a virtual desert. Mennonite
pioneers suffered great hardship for at least a generation to make
the region's semiarid soils fertile. With time, the Mennonites
converted the central Chaco Filadelfia into the major supplier of
food for the entire Chaco and made it self-sufficient in almost
every crop. The success of the Mennonites was generally attributed
to their dedication, superior farming techniques, and access to
foreign capital.
A "land without people and people without land," a phrase often
used to describe Paraguay, helped explain the country's
longstanding farming methods. As a traditionally underpopulated
nation, Paraguay suffered from labor shortages and negligent soil
practices that favored clearing new land rather than preserving
cultivated land. Because of the poor distribution of land, many
farmers could not obtain sufficient income from working their own
land and often engaged in seasonal wage labor in Argentina.
Cultivation practices typically were slash and burn with little use
of crop rotation. New forestlands were then cleared by axe, and the
cuttings were burned; little plowing was done before planting.
These practices became increasingly impractical in the 1980s as the
market for fertile land tightened, especially in the eastern border
region. The need for maintaining and improving soil fertility was
greater than ever by the late 1980s.
The use of purchased inputs in agriculture, such as fertilizers,
insecticides, farm equipment, and irrigated water, remained low in
Paraguay in the 1980s and occurred mostly on large estates. The
country's aggregate level of fertilizer use stood at five kilograms
per hectare in the mid-1980s, one of the lowest in Latin America.
Some fertilizers were produced locally; most were imported from
Brazil. Most fertilizer use was targeted at a few specific crops
such as wheat, cotton, and soybeans. Although Paraguay's lands were
naturally fertile, most agronomists felt there was an increasing
need for higher yields rather than more colonization. Insecticide
and herbicide use was even less prevalent than fertilizer use. Weed
and insect damage was considerable among some crops, another factor
contributing to low agricultural productivity. Because most farms
were small, the use of mechanized equipment generally was not
appropriate for most farmers, and small farmers tended to use
simple hand tools, rudimentary vehicles, and animal-pulled plows.
By contrast, tractor use was common among large landholders,
accounting for nearly all of the 4.4 tractors per 1,000 hectares
that were reported in the mid-1980s. Irrigated farmland represented
only 3 percent of all land under cultivation; this figure also was
low by Latin American standards.
One of the principal reasons for the continued use of
traditional farming practices was the limited scope of government
extension services. Although the Ministry of Agriculture and
Livestock was dedicated to improving extension services and
increasing productivity, its greatest obstacle remained a lack of
financial commitment on the part of the central government, which
allocated only 2 to 4 percent of the national budget to agriculture
in the 1980s, despite the sector's fundamental role in the economy.
The Ministry's Agriculture and Livestock Extension Service
(Servicio de Extensión Agrícola y Ganadera--SEAG) operated only in
the eastern border region through 13 extension offices with a staff
of under 500. SEAG was able to reach only approximately 15 to 20
percent of the subregion's farmers, offering mostly crop-specific
advice rather than more general technical assistance. Livestock
extension was generally neglected, and few efforts were made to
integrate crop and livestock activity. Only limited technical
assistance was available from international development
organizations. Other constraints to increased productivity were the
lack of necessary support services in rural areas, such as health
clinics and schools. Likewise, a lack of basic infrastructure,
including feeder roads and rural markets, hindered output.
The Ministry of Agriculture and Livestock also played the
leading role in the country's agricultural research. Most research
took place inside the Department of Agriculture and Forestry
Research. Research was oriented toward specific crops, mainly
cotton, soybeans, wheat, rice, sugarcane, tobacco, and certain
fruits and vegetables. The principal goals of agricultural research
were greater soil conservation and the introduction of highyielding seeds. As with government extension services, the prime
obstacle to expanded research efforts was financial.
Credit was another structural constraint limiting agricultural
productivity. Aggregate levels of financing to agriculture were
insufficient to provide the necessary capitalization of the sector.
Furthermore, small farmers received a disproportionately small
share of credit, thus exacerbating technological backwardness and
skewed land and income distribution. The principal financial
institutions providing credit were the National Development Bank
(Banco Nacional de Fomento--BNF), the Central Bank, and the
Livestock Fund (Fondo Ganadero--FG), as well as about twenty-two
commercial banks. The BNF was by far the largest lender to farmers,
accounting for 45 percent of the sector's financing. Much of BNF
lending did trickle down to short-term financing for small and
medium farmers, but little BNF lending went to capital investment.
The Central Bank offered approximately 25 percent of the sector's
credit, followed by the commercial banks at 23 percent and the FG
at 7 percent. Commercial bank lending went to large exporting farms
to cover processing and marketing costs. Some smaller cotton and
soybean farmers also received commercial bank credit to purchase
necessary inputs. The majority of all lending to the livestock
sector originated from the FG--the only agricultural government
credit-lending institution that was expanding significantly in the
1980s.
Data as of December 1988
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