As one drives east across the endless soya fields of Paraguay, at first glance, there is little to differentiate one village from the other. But if you are a close observer, you will soon realise that, while you are still in Paraguayan territory, everything feels, looks and sounds as if you are actually in Brazil. Radio stations broadcast the latest Brazilian pop music, and in most restaurants or roadhouses, the waitresses will welcome you saying ‘oi,’ rather than ‘hola,’ while handing you a menu written in Portuguese. In many towns it has become common to conduct trade transactions in both currencies, guaranies and reais, and it is not uncommon to see the neighbouring country’s yellow and green flag hanging from farm roofs. This phenomenon – the privatisation of land by foreign ownership – is not new, yet it adds another layer of complexity to the many challenges Paraguay faces in terms of land tenure.

The land issue in Paraguay is one of the most controversial problems faced by the country – over  80% of the land is owned by 2% of the population. However, the problem is not only unequal land distribution, but also ownership. According to the latest national agricultural census, completed in 2008, 19% of the country is held by foreign owners. To put this number in perspective, 19% of the land is about 77,000 km2 (approximately 7.8 million hectares) of the entire Paraguayan territory – a chunk slightly larger than the entire territory of Panama. Marcos Glauser, who has written a book on the topic, says: “4,792,528 acres belong to Brazilians, and 3,096,600 to foreigners of other nationalities, giving a total of 7,889,128 hectares. This is 25.3% of the best farming and cattle raising land in the country.”

The privatisation of land through foreign ownership in Paraguay has a historical background – after the Triple Alliance War, large tracts of land were sold to foreigners so that the national government could raise funds needed to reconstruct the country – but it was during the 1970s and 1980’s, under the military dictatorship of General Stroessner, that the fire sale of government land increased exponentially.  Large extensions of land were given to cronies, and thousands of hectares of public land were sold at basement prices to so-called private investors. More recently, increased concentration of land in the hands of an elite – phenomenon at least partially due to industrial monoculture farming – has exacerbated the problem.

According to the UN Food and Agriculture Organisation, there are two rotes for the privatisation of land in Paraguay: a) Successive purchases by large companies of small plots until enough land has been acquired for industrial farming. The plots are purchased from smallholders, who are often forced to sell their properties after being surrounded by what many call a ‘sea of soya.’ This method has also been used to target highly productive indigenous land, in turn displacing native populations; b) the purchase of Paraguayan farmers’ land by international agents. So far, the most affected territories are to be found in the states of Canindeyú, Alto Paraná and Caaguazú, where 63% of the owners of farms over 1,000 hectares in size are now foreigners. In Amambay, a bordering state with Brazil, the level of foreign ownership is 41%, while in Itapúa, which borders Argentina, foreign owners account for 44% of land holdings.

The current process of land concentration and foreign ownership has led to a growing number of peasant families being unable to have access to the land. This has led to confrontations between affected farmers’ groups and regional and national peasants’ organisations, on the one hand, and foreign business owners and their representative agents, on the other. The lack of access to land has also displaced thousands of peasants to the cities, where they have joined the ranks of the impoverished living in urban slums. It is a paradox that in Paraguay, a country whose primary economic activity is agriculture, half of the rural population is living below the poverty line without access to said agricultural activity. The concentration and privatisation of land, primarily for soya cultivation, is strongly correlated with an intensification of poverty. Furthermore, these developments have raised major issues of food security, environmental degradation and sovereignty.

Peasant unrest

President Cartes talking to Brazilian investors Credit ABC ColorThe negative impact of land privatisation hasn’t gone unnoticed amongst peasant communities; feeling disenfranchised and neglected by the government, they have been forced to take extreme measures to fight the situation. The take-over of land has also fostered a strong wave of anti-Brazilian sentiment, which threatens investments in the country.

Little has been done to address these issues, let alone to take action towards a working resolution. Former President Fernando Lugo, once a left-leaning, Catholic bishop, was unable to deliver on his promises of land reform and his failure buried any hope of substantive change in the status quo. Current President Horacio Cartes is clearly not interested in pursuing the reform path and instead has aligned his administration with the big producers – recently vetoing a bill to introduce a tax on soya bean exports, and instead enacting a 5% VAT tax. Earlier in February this year, President Cartes invited Brazilian investors to come to Paraguay “to use and abuse us”, a joke that speaks volumes about the government’s outlook. This followed previous remarks in October 2013 with Uruguayan investors when he referred to Paraguay as an “easy woman”, implying that the country was ripe for foreign exploitation.

The issue of land privatization via foreign ownership is a thorny one, a problem that can’t continue to be swept under the rug as it has been so far. While properly managed private investment can help increase economic growth and prosperity, an unbridled, unregulated free-for-all can have devastating consequences on the national economy. Paraguay will undoubtedly need foreign direct investment to help unleash its potential for positive economic growth and development, but this should not come at the expense of the rights and well-being of its citizens. The government needs to urgently address land reform – and the land privatisation entangled in this issue. A refusal to do so risks deepening and widening social tensions that have the potential to escalate to violence. A comprehensive solution that benefits not only the economic elite, but also millions of peasants across the country is becoming an increasingly pressing issue. Cartes may not realize it, but Paraguay is clearly running out of time.