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

Paraguay : . photos Chaco I & II Chaco geographic data ventacamposParaguay

Uruguay & Argentina : photos Uruguay Uruguay soils/climate offers farmland farmland portal

farmer and
farmland realtor
in southern South America
since 1997

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

The western half of Paraguay, Provinces of Boqueron, Alto Paraguay and Presidente Hayes are referred to as the Chaco.
Settlement and farming started in the Central Chaco in the 1920´s, in the outer regions opening up for farming and livestock is starting slowly only now. The area is still extremely sparsely populated, covered mostly by impenetrable forest and traversed by few dirt roads that become hard to navigate during the 6 month rainy season.

Western and Central Chaco - Chaco boreal (dense forest covered)

The area´s western and central three quarters 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 excellent nutrient rich sedimentary loamy soils, well drained, in the central N-S belt of the central and northern Chaco (700-1000mm rainfall)
Virgin land in the latter mentioned belt is offered at US$150-250 per hectare (=2,5acre) as of June 2010.

Buyers who want to develop and work the land usually clear the forest and sow pasture for cattle ranching / beef production (very recently also crop farming). While cattle ranching is doubtlessly profitable in the Chaco, soils and climate accommodating excellent pasture growth (just as it would with crops like soya or sorghum), it might be more feasible, environmentally-wise, but also considering long term return on investment, not to touch the virgin forest at all.
The biomass you are purchasing in form of forest with 1x hectare land, 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 2010ECONOMIST article "hostage to fortune" and "money grows on trees"

Also, environmental certification of beef is becoming more important, favouring producers who graze cattle on land that was not deforested before.

Eastern Chaco – Bajo Chaco

The Chaco’s eastern N-S belt parallel to the Rio Paraguay river belongs to the semi humid tropics with rainfall between 1000 and 1400 mm, vegetation mostly being a more open high grass and palm tree savanna 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 both extensively on natural rangeland (cow/calf) and more intensively on sown pasture (grazing/fattening) with no need to cut palm trees when sowing. Beef produced in the afore mentioned way should be entitled for “bio” / environmental certification.

Limitations for agriculture and environmental aspects

Water scarcity 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 sufficient 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 sparsely 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.

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 in areas (still) sufficiently remote to be left completely alone without risking squatters.

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

Paraguayan laws require to leave between 30 and 50% of a property's virgin forest (not of the entire property!) untouched,
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 of 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.

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.June.2010

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 the following year of the global crisis and have since reached their 2008 peaks again. Market activity though has not yet reached 2008 peaks again.
As before, more then half of all land investors come from neighbouring south American countries, this being an indicator that Paraguay still offers the region’s best price/value in farmland.

Here some thoughts about farmland as inflation hedge