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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Peer Voss

Rappstr.24
20146 Hamburg
Germany

tel +49-40-457121
pvoss@pvoss.de

Uruguay mobile
099-590922


farmer and
farmland realtor
in southern South America
since 1997

Buyers are sometimes a bit over-awed by low land prices in South America. Land can be very cheap, but if it has no agricultural value (and no scenic value) it is still no investment
Below I would like to present a land investment option that combines good productivity/fertility and low prices.
It is the best price/value worldwide that I personally am aware of.
There is a lot of talk about farmland investment opportunities to be found in Brazil. What I describe below actually is where brazilian farmers and brazilian smart agro money go.

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 updating this introduction, 25.Aug.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) and the cost of converting the land into improved cattle pasture land or cropland can be calculated at US$400/500 per hectare.
Valuations are roughly half of those in neighboring Brazil.

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 equally seen as an ethanol crop.
Sorghum varieties with a high sugar content, where you have no less then 1000 mm rainfall, see this agribusinessweek article about sweet sorghum
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 might as well attract conservationists.
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 how exactly the global carbon credit trade will evolve. It could be based more on what you own, or more on what you do, or ormit to do.
However, figures are remarkable, giving an aproximate example :
1x hectare virgin Chaco dry forest, costing US$150, stores in the range of 200 tons of Carbon (not to be mixed up with sequesting it), in mid 2008 1x ton of Carbon(credit)trades around US$25. Hence with one hectare you are buying stored Carbon worth US$5000.

Land Banking option
While remoteness is a limitation when you want to work the land, it can be a welcome feature when your aim is land banking.
The virgin land properties we list here are (still) sufficiently far away to be left completely alone without risking squatters.

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.

January 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


market update Sept.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.


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.Dec.2008

Prices for farmland and virgin land rose substantially and continiously in Paraguay (and Latin America in general) for a couple years until September 2008.
Over the last three months prices of executed sales weakened slightly, by 10-15%

Demand side :
Demand weakened due to the global liquidity crunch, as well as due to global investor’s attention currently being consumed by a multitude of other issues. Agricultural commodities have dropped significantly in value over the last months. The long term trend of scarcer and higher priced agri-commodities should still be intact. For the moment operational return per hectare farmland has dropped.
A contrarian, a supporting effect on demand might be global investors presently shunning financial assets, opting instead for the most conservative, the most sustainable of all assets – land.

Supply side :
Supply remained stable, apparently not many owners are pressed to sell, some withdrew their property, again prefering land holding over financial assets. A few new properties entered the market. Nominal asking prices have not decreased much, but margin for negotiation has broadened to the advantage of buyers.

“map

“Paraguay

dry season, typical vegetation, Palmar de las Islas

“Paraguay

dry season, typical vegetation, Palmar de las Islas

“Palmar

rainy season, typical vegetation, Palmar de las Islas

“bajochaco“

“Bajo Chaco” wetland vegetation, eastern Chaco

“a

a modest estancia / ranch

“cattle

extensive cattle ranching, note the Karanda'y palm tree native forest, interestingly this palm tree's suitability as a Bio Diesel plant is currently studied

“arial

advance of agriculture, Agua Dulce area

“arial

Rio Paraguay, southern Chaco

“cattle,Chaco“

cattle on improved pasture

“soil

global soil fertility, dark green indicates highest fertility

“Paraguay

Paraguay anual precipitations
however rainfall in the northern Chaco proved to be much higher over last two decades
land for sale
Chaco

(ha = 1 hectare = 2,47 acre)
amounts spelled continental way
500.000 = five-hundred-thousand

buyers commission : 4-5%


virgin land, or
semi-virgin (fenced):

03) Palmar de las Islas
8.000 hectare
US$145,-/ha, US$ 1.160.000
++2x lots 4000 hectare that can be bought separately++
soils sandy/loamy of high fertility (Luvisols/Regosols)
1000 mm annual rainfall, probabilty of sweet ground water
virgen, semi dry high growth forest w.some hard wood, access thru cleared strip/track
photos and detailes


110a) Palmar de las Islas
4.000 hectare
US$125,-/ha, US$ 500.000
soils sandy/loamy of high fertility
1000 mm annual rainfall, probabilty of sweet ground water
virgen semi dry high forest w.some hard wood, access thru cleared strip/track (bordering 03)


90a) Infante Rivarola / Boqueron
5.000 hectare
US$115,-/ha, US$ 575.000
sandy soils of fair fertility
600mmm annual rainfall
virgin dry thorn scrub / forest.
abundant sweet ground water,
earth road , paved road at 20 km


94c) north of Tte Picco
=SOLD=
8.400 hectare
US$145,-/ha, US$ 1.218.000
800mmm annual rainfall
Virgen. entirely sandy/loamy high fertility soils with semi dry virgen forest (some tropic.hardwood),
access by cleared track, 140 km from paved road


96c) northwest of Tte Picco
5000 hectare
US$100,-/ha, US$ 500.000
700mmm annual rainfall
Virgen. sandy, average to lower fertility soils with semi dry virgen low forest / scrub
access by cleared track, very remote


100a) Agua Dulce
3400 hectare
US$300,-/ha, US$1.020.000
1.050mmm annual rainfall
in its totality loamy/sandy soils of high fertility covered by high semi dry forest (w.some hard wood) (where not cleared)
perimeter fence, 500 hectare cleared, 4x fenced subdivision
staff buildings, stable, air strip, access by earth road


103a) Nueva Asuncion, extreme west of Boqueron province
5.000 hectare
US$42,-/ha, US$ 210.000
500mmm anual rainfall
sits ontop Aquifer Irendá with abundant ground water
fragile sandy soils, low fertility, very erosion prone
virgin scrub vegetation
too dry, too fragile soils for any presently known and proved form of (sustainable) agriculture
access by cleared strip/dirt road


106d) western Agua Dulce
12.000 hectare
US$135,-/ha, US$ 1.620.000
soils sandy/loamy of high fertility
950 mm annual rainfall, possibility of sweet ground water
virgen semi dry forest w.some hard wood


107c) northwest of Tte Picco
30.000 hectare
US$160,-/ha, US$ 4.800.000
750-800 mmm annual rainfall
Virgen. entirely sandy/loamy high fertility soils with semi dry virgen forest (some tropic.hardwood),
access by cleared track


108a) Agua Dulce
12.000 hectare
US$250,-/ha, US$3.000.000
1.000mmm annual rainfall
in its totality loamy/sandy soils of high fertility covered by high semi dry forest (w.some hard wood) (where not cleared)
perimeter fence, 600 hectare cleared with improved pasture
modest ranch buildings, access by earth road


109d) north of Fuerte Olimpo
17.900 has
US$140,-/ha, US$ 2.500.000
Rio Paraguay riverfront
1250 mm annual rainfall
60% elevated fraction high fertility soils covered by high virgin forest (some tropical hard wood)
40% lowlands w. open palm savanna and high grass vegetation , natural grazing land. Some wet lands
Some modest buildings for caretaker, perimeter fence of unknown condition, access thru primitive earth track and river,

operating ranches :


62a) Fuerte Olimpo inland
7.270 hectare
US$380,-/ha, US$ 2.763.000
1200 mm annual rainfall
60-70% comparably elevated parts covered by virgin medium high dry forest (some precious hard wood, Palo Santo, Quebracho Colorado), loam-clay soils, apt for improved pasture, some(feed-)crops.
30-40% lowlands, with more open “Bajo Chaco” vegetation w. palmtrees, wetlands, being good quality natural grazing land.
all perimeter fenced, all having barns and staffs buildings, water reservoires for cattle. A minimum of 1.000 hectare cleared with sown pasture.
1x air strip, access thru cleared strip/ track, (currently extensive cattle operation)


77a) Bahia Negra
8.500 has
US$200,-/ha, US$ 1.700.000
22 km Rio Paraguay riverfront
1200 mm annual rainfall
50% elevated fraction high fertility (agricultural) soils loamy/sandy covered by high virgin forest (some tropical hard wood)
50% lowlands heavyer soils w. open palm savanna and high grass vegetation , natural grazing land. Some wet lands
access thru earth road and river, close to village, currently cattle ranch with some buildings and livestock installations, fencing, airstrip, all modestly maintained


86d) Southern Chaco, Pde Hayes Province
4.750hectare
US$400,-/ha, US$ 1.900.000
operating cattle ranch, 600 hectare sown improved pasture
photos and detailes


101a) eastern Pde Hayes Province
6.950 hectare (3400+3150+400)
US$370/ha, US$ 2.572.000
1300 mm anual rainfall
40% sandy loamy high fertility soils apt for agriculture, covered with high growth virgin forest, 60% heavyer lowland soils with open palm savanna vegetation used for cattle grazing.
extensivly operated cattle ranch
owners residence with lake view, out stations, airstrip, distance Asuncion 300 km paved highway + 100 km earth road


102b) Fte Olimpo
7600 hectare
US$220,-/ha, US$ 1.670.000
1300 mm annual rainfall
50% river sedimentary lowland, 4 month per year flooded, remaining time best imaginable natural pasture land, or could be prime crop land (rice, sugar cane etc) if dammed. 50% other lowlands w.open palm savanna used as natural grazing land, Rio Paraguay river front, sweet water lake, some creeks
2x cascos (ranch centers) 2x airstrip, 6x fenced subdivisions, complete cattle instalations, currently cow/calf operation (1700 head), public eletricity in process, access thru gravel road


104a) between Agua Dulce + Filadelfia
5.000 hectare
US$250,-/ha, US$1.250.000
950mmm annual rainfall
70% elevated sandy/loamy fertile soils with semi dry virgen forest (some tropic.hardwood), 30% lowlands w . fair fertility heavyer soils w. open palm savanna
6 km off main earth road, 200 km from paved road, Extensively operated cattle farm, fenced, modest installations

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