A. undeveloped virgin (native) forest properties in the Chaco boreal (Alto Chaco)

While the Chaco in geographic terms also encompasses parts of Bolivia and Argentina we are referring here to the western half of Paraguay, extremely sparsely populated and traversed by only few roads. The central, western and northern parts belong to the semi arid tropics with annual precipitations between 550 and 1000 mm, vegetation being low scrub on sandy soils in the dry (550 mm) utmost west, developing into semi dry higher impenetrable forest on fertile sedimentary loamy soils, well drained, in the central N-S belt of the central and northern Chaco (700-1000mm rainfall).

Productive potential and environmental concerns :
Most of the central and northern Chaco Boreal makes for good cattle pasture when the natural forest cover is cleared and artificial pasture sown (intensive grass feeding). Soil properties in general and rainfall partly, namely in the North East, Agua Dulce, are suitable for crop production, too. However today, distances, lack of proper roads and infrastructure make it not economically viable yet.

Clearing natural forest to convert land into cattle pasture is a highly controversial activity today due to related greenhouse gas emission, bio diversity loss and soil erosion concerns.
Paraguayan laws have over the last 5 years gradually restricted deforestation in the Chaco. Today owners can legally cut 40-50% of the virgin forest they own. A projected law making all cutting of native forest illegal in the Paraguay Chaco did not pass parliament in 2009. A future concern may be beef needing eco certification to be marketable in the first world and beef from cattle grazing on deforested land failing to get certified.

Land banking and carbon credits :
The biomass you are purchasing in form of forest with 1x hectare land probably for fills a more valuable task then 1x head of grazing cattle will, and a virgin forest owner will probably at one point get paid for that.
1x hectare dense virgin Chaco forest, costing US$200, might store in the range of 200 tons of Carbon, it may sequester in the range of 2 tons per year, though such estimates are far from exact. Carbon credits (1t CO2e) traded in the US$15-25 range over the last 2 years. Presumed a global scheme of trading "avoid deforestation credits" (REDD) will be established within the next couple of years, a fair guess is that one such hectare could generate an annual income of US$40 (20% p.a.) plus appreciations. A voluntary market for REDDs, still lacking proper standards, does exist allready as of June 2010 ECONOMIST article "hostage to fortune" and "money grows on trees"

The Chaco’s general remoteness is a limitation when you want to work the land, it can be a welcome feature when your approach is land banking. Virgin land properties do not require any attention, the ones we list here are in areas (still) sufficiently remote to be left completely alone without risking squatters.

B. Properties in the Bajo Chaco

The South and the East parallel to the Rio Paraguay river belong to the semi humid tropics with rainfall between 1000 and 1400 mm, vegetation mostly being a more open high grass and palm tree savannas on heavier improperly drained lowland soils, with inlays of more elevated lands, with dense forest and well drained lighter agricultural soils.
Cattle ranching is done in the Bajo Chaco profitably and more environmentally viable than above both extensively on natural rangeland (cow/calf) and more intensively on sown pasture (grazing/fattening) with no need to cut palm trees when sowing.

The Chaco is not for the family farmer

Buyers are typically land bankers, agro corporations, individual farmers residing in Asuncion or abroad. The extreme remoteness, lack of schools, shops, villages makes it rather sacrificing for families to live in the Chaco.

Transactions, restrictions, taxes

foreign landownership is not restricted in any way,
a public registry of property titles exist,

transaction costs :
buyer commission : 3-4% of sales price
notary fees, stamp fees, taxes : 2% of sales price in total

property taxes : One example - 4000 hectare land consisting of virgin forest, as of 2010, US$400 annually.
Taxes, general : personal income tax 10% (though parliament suspended income tax completely during recent years), 10% VAT/sales tax

There usually do not exist photos of the tracts of virgin land offered here, but since landscape and vegetation is not varying much, the photos to the right give a fair idea of the properties.
We don't give coordinates of the properties by email. However, our local partners will show the properties to any interested buyer.
Access by dirt road can become very ardous during rainy season, Nov-March, you do however have allways the possibility to rent a pilot and a small plane.

Peer Voss
pvoss@pvoss.de

Barron’s cover story about farmland mentiones Marc Faber considering arbitrage opportunities in farmland-rich Russia, Paraguay and Uruguay.
Read copy here

Paraguay Ministry of Commerce /Riedex reports that the Karanda'y palmtree's (which covers huge areas of the eastern Chaco as native tree) suitability a Biodiesel crop is currently studied. The palm's seeds have a high content of non edable oil.

market update 19.Nov.2011

Prices for farmland and virgin land rose substantially and continuously in Paraguay (and Latin America in general) for a couple years until September 2008, weakened 10-20% in 2009 during the global crisis and have since reached new height again.
Most foreign buyers come from neighbouring South American countries, this being an indicator that Paraguay still offers the region’s best price/value in farmland.