P e e r . V o s s . Paraguay Farmland Real Estate
Offers virgin land in the Chaco - Estancias / Ranches / Farms - bio fuel crop agriculture investments

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Peer Voss

Rappstr.24
20146 Hamburg
Germany
tel +49-40-457121
pvoss@pvoss.de

Uruguay mobile
099-590922
Paraguay mobile
0981-543158


farmer and
farmland realtor
in southern South America
since 1997

Buyers are sometimes a bit over-awed by low land prices in South America. Land can be very cheap, but if it has no agricultural value (and no scenic value) it is still no investment
Below I would like to present a land investment option that combines good productivity/fertility and low prices.
Amongst the world's countries that allow foreign land ownership without any restrictions, Paraguay has the best price/value
Brazilian, argentinian, chilenian and uruguayan farmers are investing here significantly.

The Paraguay Chaco region is one of the world´s last agricultural frontiers.

While settlement and farming started in the Central Chaco in the 1920´s, in the northern part the opening up for farming and lifestock is starting slowly only now.

The area is still extemely sparcely populated, covered mostly by impenetrable forest and traversed by few dirt roads that become hard to navigate during the 6 month rainy season.

The following brief characterisation refers to the northern part of the Paraguayan Chaco, Provinces of Boqueron and Alto Paraguay.

The area´s western two thirds belong to the semi arid tropics with annual precipitations between 550 and 1000 mm, vegetation being low scrub to semi dry forest.
The eastern third belongs to the semi humid tropics with rainfall between 1000 and 1300 mm, vegetation being taller, tropical semi dry forest.
A belt about 50 km in bridth along the Rio Paraguay again has a different evergreen vegetation of wetlands and palmtree forests (“Bajo Chaco”)

Annual evaporation is around 1500 mm and there is a very pronounced dry season May-Oct and a wet season Nov-Apr when the vegetation turns green and abundant.

The deep sedimentary soils of the Chaco are in general very fertile, rich in nutrients and apt for sustainable agriculture and pasture (allways presumed that responsible and sustainable techniques are applied), more so then most of the world´s tropics, more so then the easily depletable soils of the amazon rain forest.

Price of virgin land
Currently, November 2008,
virgin land (completely covered by natural vegetation, not fenced) is sold between US$ 80,- and US$ 250,- per hectar (1,00 hectar = 2,47 acre).
Valuations are roughly half of those in neighboring Brazil.

Farming options :
Crops planted in the Chaco include cotton, peanut, sorghum. On a smaller scale you find corn, soya, sugar cane etc. The eastern Rio Paraguay river flats should be apt for rice cultivation

A few bio fuel crop varieties are apt for the Chaco´s climate, amongst others :
Jatropha which requires no more than 600 mm of rainfall and might be apt for the entire Chaco including the dry west (Int.Herald Tribune article about Jatropha),
tall tropical grasses (Guinea Grass, Elephant Grass, Pasto Tanzania) that are allready widely cultivated, so far only as cattle feed, while outside Paraguay it is equally seen as an ethanol crop,
sorghum varieties with a high sugar content, where you have no less then 1000 mm rainfall, (agribusinessweek article about sweet sorghum),
sugar cane in a range of above 1200 mm rainfall, to name a few
Soils are basically apt for farming in most parts of the Central Northern Chaco, in that sence excluding a belt about 50 km in width along the Rio Paraguay, which is poorly drained but still good grazing land, and the extreme western part, which has very sandy and rather poor soils.
Some fractions of the Agua Dulce Area stand out for their soil fertility.

cattle ranching and forestation
Cattle ranching can be done in most parts of the Chaco, profitably and sustainable, be it cow/calf operation or, on better land, grazing/fattening on improved pasture. Environmentally more viable may be forms of forestation (Teak may be an option in the northern most Chaco), or a forest/pasture combination that leaves a tree cover on pasture lands

Limitations for agriculture and environmental aspects
Water scarcety is the Chaco's main limitation, there are no permanent streams (apart from the border rivers Rio Paraguay and Rio Pilcomayo), and two thirds of the Chaco lack sufficiant sweet ground water. But note that various properties we list do have ground water.
Another limitation is the Chaco´s remoteness, its lack of reasonable roads , making transportation costly, tiring, and at times during rainy season impossible.
Since being so sparcely populated, labour might need to be brought from further away.
As said, the Chaco is an agricultural frontier, and that, by definition, means that the necessary infrastructure is just starting to be established.

Paraguayan laws require to leave between 25 and 40% of a property's virgin forest untouched. Responsable land owners would probably exceed current legal requirements and leave even more forest intact. Agricultural and environmental research advances continously. Praxis proven and environmentally sound techniques of forestation and agriculture are available for the responsable producer.

Carbon Credit Perspective
1x hectare dense virgin Chaco forest, costing US$100, 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 sceme of trading "avoid deforestation credits" (REDD) will be established by the end of 2009, a fair guess is that one such hectare could generate an annual income of US$40 (40% p.a.). A voluntary market for REDDs, still lacking proper standards does exist allready as of June 2009. ECONOMIST article "hostage to fortune" and "money grows on trees"
You certainly get, per each US$100, a huge amount of biomass
Should your aim be nature protection, each US$100 buys more protection then possibly anywhere else on earth.

Land Banking
While 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 (still) sufficiently far away to be left completely alone without risking squatters.

Some transaction aspects,
foreign landownership is not restricted in any way,
a public registry of property titles exist,
transaction costs, ontop of 4 or 5% buyer commission are in total (notary fees, stamp fees, taxes) below 2% of sales price.
property taxes for a 4000 hectare lot consisting of virgen forest are, as of 2009, US$250 anually

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.

November 2008
Peer Voss
pvoss@pvoss.de

Barron’s cover story of 31.Dec.07 about farmland mentiones Marc Faber considering arbitrage opportunities in farmland-rich Russia, Paraguay and Uruguay.
Read copy here


Oct.2008

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.

A report currently circulating the web, stating that Paraguay is going to limit sale of land to foreigners is wrong. It is based on a misunderstanding when Paraguay authorities announced to better enforce an existing law prohibiting brazilian nationals to hold land in a 50km belt bordering Brazil.


Financial Times August 23 2008 article titled "Paraguay moves up food chain" says : "Take record commodities prices, add a subtropical climate that gives farmers five harvests every 24 months and vast tracts of virgin arable land and it is no surprise that tiny Paraguay has emerged as one of the big beneficiaries of the global food crisis..... illustrate how often-overlooked Latin American countries such as Paraguay, Guyana and Uruguay have the potential to help feed the world while reaping big rewards for their underdeveloped economies"
Read article here


market update 19.Dec.2008

Prices for farmland and virgin land rose substantially and continiously in Paraguay (and Latin America in general) for a couple years until September 2008.
Over the last three months prices of executed sales weakened slightly, by 10-15%

Demand side :
Demand weakened due to the global liquidity crunch, as well as due to global investor’s attention currently being consumed by a multitude of other issues. Agricultural commodities have dropped significantly in value over the last months. The long term trend of scarcer and higher priced agri-commodities should still be intact. For the moment operational return per hectare farmland has dropped.
A contrarian, a supporting effect on demand might be global investors presently shunning financial assets, opting instead for the most conservative, the most sustainable of all assets – land.

Supply side :
Supply remained stable, apparently not many owners are pressed to sell, some withdrew their property, again prefering land holding over financial assets. A few new properties entered the market. Nominal asking prices have not decreased much, but margin for negotiation has broadened to the advantage of buyers.

Here some thoughts about farmland as inflation hedge

“map

“Paraguay

dry season, typical vegetation, Palmar de las Islas

“Paraguay

dry season, typical vegetation, Palmar de las Islas

“Palmar

rainy season, typical vegetation, Palmar de las Islas

“bajochaco“

“Bajo Chaco” wetland vegetation, eastern Chaco

“a

a modest estancia / ranch

“cattle

extensive cattle ranching, note the Karanda'y palm tree native forest, interestingly this palm tree's suitability as a Bio Diesel plant is currently studied

“arial

advance of agriculture, Agua Dulce area

“arial

Rio Paraguay, southern Chaco

“cattle,Chaco“

cattle on improved pasture

“soil

global soil fertility, dark green indicates highest fertility

“Paraguay

Paraguay anual precipitations
however rainfall in the northern Chaco proved to be much higher over last two decades
land for sale
Chaco

(ha = 1 hectare = 2,47 acre)
amounts spelled continental way
500.000 = five-hundred-thousand

buyers commission : 4-5%


virgin land, or
semi-virgin (fenced):

03) Palmar de las Islas
8.000 hectare
reducedUS$90,-/ha, US$ 720.000
2x lots 4000 hectare that can be bought separately
soils sandy/loamy of high fertility (Luvisols/Regosols)
1000 mm annual rainfall, probabilty of sweet ground water
virgen, semi dry high growth forest w.some hard wood, access thru cleared strip/track
photos and detailes


110a) Palmar de las Islas
4.000 hectare
US$100,-/ha, US$ 400.000
soils sandy/loamy of high fertility
1000 mm annual rainfall, probabilty of sweet ground water
virgen semi dry high forest w.some hard wood, access thru cleared strip/track (bordering 03)


114a) La Gerenza
4.000 hectare
US$75,-/ha, US$ 300.000
soils sandy/loamy of medium to good fertility
800 mm annual rainfall
virgen semi dry high forest w.some hard wood. Property long narrow rectangle with short front to Region´s only (semi permanent) river, Rio Timane, access thru cleared strip/track.


90a) Infante Rivarola / Boqueron
5.000 hectare
US$100,-/ha, US$ 500.000
sandy soils of fair fertility
600mmm annual rainfall
virgin dry thorn scrub / forest.
abundant sweet ground water,
earth road , paved road at 20 km


96c) northwest of Tte Picco
5000 hectare
US$100,-/ha, US$ 500.000
700mmm annual rainfall
Virgen. sandy, average to lower fertility soils with semi dry virgen low forest / scrub
access by cleared track, very remote


100a) Agua Dulce
3400 hectare
US$200,-/ha, US$680.000
1.050mmm annual rainfall
in its totality loamy/sandy soils of high fertility covered by high semi dry forest (w.some hard wood) (where not cleared)
perimeter fence, 500 hectare cleared, 4x fenced subdivision
staff buildings, stable, air strip, access by earth road


103a) Nueva Asuncion, extreme west of Boqueron province
5.000 hectare
US$42,-/ha, US$ 210.000
500mmm anual rainfall
sits ontop Aquifer Irendá with abundant ground water
fragile sandy soils, low fertility, very erosion prone
virgin scrub vegetation
too dry, too fragile soils for any presently known and proved form of (sustainable) agriculture
access by cleared strip/dirt road


106d) western Agua Dulce
12.000 hectare
US$135,-/ha, US$ 1.620.000
soils sandy/loamy of high fertility
950 mm annual rainfall, possibility of sweet ground water
virgen semi dry forest w.some hard wood


107c) northwest of Tte Picco
30.000 hectare
US$160,-/ha, US$ 4.800.000
750-800 mmm annual rainfall
Virgen. entirely sandy/loamy high fertility soils with semi dry virgen forest (some tropic.hardwood),
access by cleared track


109d) north of Fuerte Olimpo
17.900 has
US$140,-/ha, US$ 2.500.000
Rio Paraguay riverfront
1250 mm annual rainfall
60% elevated fraction high fertility soils covered by high virgin forest (some tropical hard wood)
40% lowlands w. open palm savanna and high grass vegetation , natural grazing land. Some wet lands
Some modest buildings for caretaker, perimeter fence of unknown condition, access thru primitive earth track and river,



111a) between Agua Dulce + Filadelfia
3.000 hectare
US$200,-/ha, US$600.000
950mmm annual rainfall
70% elevated sandy/loamy fertile soils with semi dry virgen forest (some tropic.hardwood), 30% lowlands w . fair fertility heavyer soils w. open palm savanna
6 km off main earth road, 200 km from paved road, modestly operated cattle farm, fenced, modest installations


112a) Agua Dulce
12.000 hectare
US$250,-/ha, US$3.000.000
1.000mmm annual rainfall
in its totality loamy/sandy soils of high fertility covered by high semi dry forest (w.some hard wood)
access by earth road

113a) Pozo Hondo (Boqueron)
15.000 hectare
US$90-/ha, US$ 1.350.000
sandy soils of fair fertility
600mmm annual rainfall
virgin dry thorn scrub / forest.
abundant sweet ground water, Rio Pilcomayo RIVERFRONT
70% perimeter fence, access by earth road


115a) General Caballero, SouthWest Chaco
2.500 hectare
US$200,-/ha, US$ 500.000
low lands , with open grassland vegetation, good livestock aptitude, some wet lands
1200 mm annual rainfall
abandoned cattle ranch, no instalations remain, access by earth road,. only roughly 250 km from Asuncion


operating ranches :


62a) Fuerte Olimpo inland
7.270 hectare
US$350,-/ha, US$ 2.550.000
1200 mm annual rainfall
60-70% comparably elevated parts covered by virgin medium high dry forest (some precious hard wood, Palo Santo, Quebracho Colorado), loam-clay soils, apt for improved pasture, some(feed-)crops.
30-40% lowlands, with more open “Bajo Chaco” vegetation w. palmtrees, wetlands, being good quality natural grazing land.
all perimeter fenced, all having barns and staffs buildings, water reservoires for cattle. A minimum of 1.000 hectare cleared with sown pasture.
1x air strip, access thru cleared strip/ track, (currently extensive cattle operation)


77a) Bahia Negra
8.500 has
US$200,-/ha, US$ 1.700.000
22 km Rio Paraguay riverfront
1200 mm annual rainfall
50% elevated fraction high fertility (agricultural) soils loamy/sandy covered by high virgin forest (some tropical hard wood)
50% lowlands heavyer soils w. open palm savanna and high grass vegetation , natural grazing land. Some wet lands
access thru earth road and river, close to village, currently cattle ranch with some buildings and livestock installations, fencing, airstrip, all modestly maintained


86d) Southern Chaco, Pde Hayes Province
4.750hectare
US$400,-/ha, US$ 1.900.000
operating cattle ranch, 600 hectare sown improved pasture
photos and detailes


101a) eastern Pde Hayes Province
6.950 hectare (3400+3150+400)
US$370/ha, US$ 2.572.000
1300 mm anual rainfall
40% sandy loamy high fertility soils apt for agriculture, covered with high growth virgin forest, 60% heavyer lowland soils with open palm savanna vegetation used for cattle grazing.
extensivly operated cattle ranch
owners residence with lake view, out stations, airstrip, distance Asuncion 300 km paved highway + 100 km earth road


102b) Fte Olimpo
7600 hectare
US$220,-/ha, US$ 1.670.000
1300 mm annual rainfall
50% river sedimentary lowland, 4 month per year flooded, remaining time best imaginable natural pasture land, or could be prime crop land (rice, sugar cane etc) if dammed. 50% other lowlands w.open palm savanna used as natural grazing land, Rio Paraguay river front, sweet water lake, some creeks
2x cascos (ranch centers) 2x airstrip, 6x fenced subdivisions, complete cattle instalations, currently cow/calf operation (1700 head), public eletricity in process, access thru gravel road


104a) between Agua Dulce + Filadelfia
5.000 hectare
US$250,-/ha, US$1.250.000
950mmm annual rainfall
70% elevated sandy/loamy fertile soils with semi dry virgen forest (some tropic.hardwood), 30% lowlands w . fair fertility heavyer soils w. open palm savanna
6 km off main earth road, 200 km from paved road, Extensively operated cattle farm, fenced, modest installations


204b) (sold)

Disclaimer : Site content reflects the personal understanding of the matter by the author. Author does not guarantee its correctness and may not be held liable for it.
Property descriptions are from sources deemed reliable but not guaranteed by the broker. Properties are subject to prior sale, price change, correction or withdrawal.

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