Paraguay: Soybean Area To Grow

Posted by Matt Hopkins|29 April 2008

Paraguay’s 2007/08 soybean area is expected to be 2.6 million hectares (m. Ha), with the crop about 98% harvested. While the southern growing area – which represents about a third of the country’s total production – saw yields below the national average, higher yields have been reported in the north due to good rains during the growing season.

The US Dept. of Agriculture’s Foreign Agriculture Service (USDA-FAS) forecasts that the 2008/09 soybean planted area will rise by a little over 5% to 2.75 m. Ha due to high international prices and increased investment from abroad, particularly Argentina. Soybean production has been expanding into new areas, replacing cotton in some areas.

The election of a new president on April 20, who will take office in August, leaves some uncertainty about the future direction of government policies regarding soybeans. President-elect Fernando Lugo’s campaign platform included agrarian reforms and establishing a policy environment that would favor alternatives to Paraguay’s extensive cultivation of soybeans. USDA-FAS reports that some of its contacts are speculating that the new government could implement a limited export tax on soybeans.

Since 2005, Paraguayan farmers have paid royalties to Monsanto Co. for the intellectual property in its biotech soybeans. Each season, the price is negotiated between Monsanto and the farmers’ unions, informing the government of Paraguay once the price is set. A portion of these royalties is used to fund the Agricultural Biotechnology Institute (INBIO), which carries out crop research and germplasm improvement programs within the country. The payment for 2008 is currently set at US$4.40/ton for soybeans exported.