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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farmer and
farmland realtor
in southern South America
since 1997

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.

Here some thoughts about farmland as inflation hedge