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 dry scrub/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 Boquerón 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 dry scrub.
The eastern third belongs to the semi humid tropics with rainfall between 1000 and 1300 mm, vegetation being taller, tropical 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 soils of the Chaco are in general very fertile and apt for agriculture and pasture (allways presumed that responsible and sustainable techniques are applied), more so then most of the world´s semi arid tropics.

Price of virgin land

At the time of writing this, Jan 2008,
virgin land (completely covered by natural vegetation, not fenced) is sold between US$ 35,- and US$ 100,- per hectar (1,00 hectar = 2,47 acre) If you relate that to the cost of converting the land into improved cattle pasture land or farmland, which for simplicity´s sake I calculate here at US$350 per hectar, you get the virgin land allmost for free.
Valuations are about a third of what you pay for comparable land in Brazil or Argentina.
I personally estimate that prices will triple in the Paraguay Chaco over the next 3 or 4 years.

Farming options :
Crops that are being planted allready are : cotton, peanut, sorghum. On small scale you find corn, citrus fruits, etc

There are a few bio fuel crop varieties that are apt for the Chaco´s semi dry tropical 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, see this Int. Herald Trebune article about Jatropha
Tall tropical grasses. Guinea Grass (aka Elephant Grass, Pasto Tanzania) is allready widely cultivated in the north eastern Chaco, so far only as cattle feed, while outside Paraguay it is more seen as an ethanol crop.
Sorghum varieties with a high sugar content, where you have no less then 1000 mm rainfall
Sugar cane in a range of above1200 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.

In any case, soils of the Chaco are delicate and very wind&water erosion prone. Appropriate knowhow must be applied for sustainable management.

Life stock / cattle ranching options
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.

Limitations for both farming and lifestock
A main limitation is lack of water for irrigation, there are no permanently running surface waters in the Central Chaco (no creeks, rivers) and subsurface water is often, but not allways, too salty for irrigation. Most of the properties I list do have sweet water subsurface.
Another important limitation is the Chaco´s remoteness, its lack of reasonable roads and dirt roads, making transportation costly, tiring, and at times during rainy season allmost impossible.

Since the Chaco is 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.
A limitation that should indeed be welcomed is the Paraguayan environmental law that obliges every farmer/rancher to leave untouched a 25% fraction of his land.

Private Nature Reserve option
While the low valuations attract farmers and ranchers, they equally attract conservationists. Not few of current foreign buyers are actually buying to conserve the land.
There are few places left on earth where money buys such a large amount of nature.
The Chaco landscape can be a bit dull, but wildlife abounds, and you do see it when you drive around.

Carbon Credit Trade option
By the time of writing this, it is premature to predict if and how the global carbon sequestration / carbon credit trade will evolve. It could be based more on what you own, or more on what you do, or ormit to do.
What can be said is that with very small money you can currently buy in the Chaco a lot of biomass that sequests a lot of carbon.

Why then costs land so much less
then in neighboring countries ?
Possible explanations may be
lack of local agro-entrepreneurship,
low domestic purchasing power for assets of any kind,
Paraguay being less known to global investors, compared to Argentina and Brazil, therefore lagging behind by a couple of years as the continent's land price development is concerned

Some transaction aspects,
foreign landownership is not restricted in any way,
a public registry of property titles exist,
transaction costs, ontop of 5% buyer commission are in total (notary fees, stamp fees, taxes) below 2% of sales price.

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