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Colonization: Paraguay

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The Political Economy of Agricultural Booms
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Paraguay exhibits a dire pattern of dual economies, where indigenous and landless peasants are systematically marginalized. The soybean model of production is secured institutional capture from private economic interests. In this case, there is a coalition of colonizing interests: MNCs and Brazilian and brasiguayo—Brazilian settlers in Paraguay and their descendants—landowners, overwhelmingly supported by the Paraguayan landlords. Although the formal structure is that of a unitary state, the agricultural sector has achieved de facto decentralization by state capture. Taking advantage of power asymmetries and weak initial institutional conditions, there has been colonization by particular and foreign interests. These are the determining factors of the political economy coalitions during the Lugo and Cartes administration.

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  1. 1.

    Correo de la UNESCO, August 1977, 56–59.

  2. 2.

    The company was owned by Argentine Carlos Casado and funded by English capital. There were others, like Brazilian Mate Larangeira-Mendes and Domingo Barthe. Interestingly, not even the 1963 decree by President Stroessner could expropriate a single hectare from Casado’s property. To this day, these companies have a pre-eminent position in the Paraguayan agricultural sector.

  3. 3.

    Brasiguayo (Spanish) or brasiguaio (Portuguese) refers to Brazilian settlers in Paraguay and their descendants. It can also be a person who is of both Paraguayan and Brazilian parents and a Brazilian who spent many years or has many interests in Paraguay. The fluidity of the concept is reflective of the fluidity of the borders and interests between both countries.

  4. 4.

    “Colonization and Colonialism, History of”, International Encyclopedia of the Social & Behavioral Sciences (2004), 2240–2245.

  5. 5.

    “Public-regardedness refers to the extent to which policies produced by a given system promote the general welfare and resemble public goods (that is, are public-regarding) or tend to funnel private benefits to certain individuals, factions, or regions in the form of projects with concentrated benefits, subsidies, or tax loopholes (that is, are private-regarding). This dimension is closely tied to inequality, particularly since those favored by private-regarding policies tend to be the members of the elite, who have the economic and political clout to skew policy decisions in their favor”. Scartascini et al. (2008a: 10)

  6. 6.

    The decree defines (Art. 2, §1°) foreign aggression as “threats or injurious acts that harm national sovereignty, territorial integrity, the Brazilian people, or national institutions, even when they do not constitute an invasion of national territory”.

  7. 7.

    John. S. Galbraith, “The turbulent Frontier” as a Factor in British Expansion”, Comparative Studies in Society and History, Vol. 2, Jan 1960: 150–168.

  8. 8.

    Even in the presence of starkly non-reciprocal conditions. For example, in 1979, Brazil passed law 6.634/79, which established a 150 km buffer zone from its borders, within which no foreigner is allowed to buy rural properties.

  9. 9.

    In the year 2000, the Unification Church headed by Korean Reverend Sung Myung Moon paid US$24 million for 6,000,000 hectares of land from the heirs of Carlos Casado (Alto Paraguay region) for agricultural activities of “La Victoria” company.

  10. 10.

    Producer Virgilio Moreira, who arrived in Paraguay in the 1971, remembered that in those times, selling a soybean hectare in native Paraná state yielded the price of 3–4 ha of Paraguayan land. Fogel and Riquelme (2005) reported that in Río Grande do Sul, Brazil, a soybean producing hectare costs US$2,500, while in Paraguay an equivalent tract is US$1,000.

  11. 11.

    For farmers in Brazil, the prevailing rate was 22–24 % annual for five year period with a one-year grace period, while in Paraguay the BNF agricultural loan rate was 13 % over eight years and a three-year grace period.

  12. 12.

    Neupert (1991), (Laino 1977), and Fogel and Riquelme (2005) agree that the lack of structural reforms evinces that it was never the Paraguayan state’s intention to level the playing field for small farmers or go beyond simple spatial redistribution of the population.

  13. 13.

    The 2008 Agricultural Census of the Ministry of Agriculture finds 8,954 rural producers of Brazilian nationality and 267,180 Paraguayans. Rural Welfare Institute (Instituto de Bienestar Rural—IBR) sources estimate 350,000–400,000. Migrations officers say there are 118,000 legally inscribed immigrants, while Brazilian consular figures are between 400,000 and 500,000 out of a total Paraguayan population of 6.3 million people. Brazilian historian Marta Izabel Schneider Fiorentin in her 2012 “Imigracao Brasil-Paraguai” book puts the figure at more than 500,000, also stressing that the exact figure cannot be determined.

  14. 14.

    Presidente Hayes, Central, Cordillera, Paraguarí and Guairá.

  15. 15.

    Campesinos are empowered—symbolically—when the antagonism is framed in terms of nationality. Then, national kinship takes over and reframes the struggle as foreign encroaching landowners vs. citizen-peasants.

  16. 16.

    Monsanto and Syngenta, operating directly or through subsidiaries. Also, Brazilian Embrapa and argentines Don Mario, Relmó and Nidera.

  17. 17.

    Cargill, ADM, Dreyfus, Noble, and Bunge

  18. 18.

    The biggest Argentine players in the Paraguayan soybean market are Carlos Casado (who already owned large soybean extensions in Paraguay) and Cresud. They also allied and created joint venture Cresca. Other players include Grupo Los Grobo (through Tierra Roja), El Tejar, and Pérez Companc. The largest Brazilians player is the Grupo Espiritu Santo. An interesting example of local agribusiness group is Kimex SRL, owned by the Kress group.

  19. 19.

    Argentine oil company Vicentín buys most of Grupo Espiritu Santo’s Paraguayan production. However, imports were damaged on April 6, 2009, when the Argentine government eliminated the import benefit on Paraguayan soybeans which excluded importers from paying value-added and earnings taxes.

  20. 20.

    On occasion of the December 16, 2008 tractorazo.

  21. 21.

    Since Rodríguez de Francia forced the colonial elite to intermarry, the very concept of indigenous identity is fuzzy in Paraguay. Differences between indigenous groups are often greater than the ones between natives—if that category can be properly applied—and the rest of society. To make matters worse, there is no indigenous collective consciousness component in the national creed, as is the case in Bolivia.

  22. 22.

    As an anecdotal example, machinery used in brasiguayo or Brazilian controlled fields is made entirely in Brazil. It is brought—many have argued illegally—into Paraguay and returned afterwards.

  23. 23.

    Albuquerque, José; Campesinos paraguayos y “brasiguayos” en la frontera este del Paraguay, in Fogel and Riquelme (2005).

  24. 24.

  25. 25.

    Among the “VIP” list are: Stroessner´s private secretary Mario Abdo Benítez, Chief of intelligence Pastor Coronel, Defense Minister Marcial Samaniego, Itaipú director Enzo Cesare Debernardi, Vice President Luis María Argaña, Public Works and Communications Minister José Alberto Planás, current Senator Bader Rachid Lichi, current Judge Wildo Rienzi Galeano, Stroessner’s son’s lawyer Hirán Delgado Von Lepel, Paraguayan Workers Confederation leader Sotero Ledesma, Finance Minister César Barrientos, former Colorado Party president Eugenio Sanabria Cantero and Generals Alejandro Fretes Dávalos, Otello Carpinelli, Enrique Duarte Alder, Humberto Garcete, Orlando Machuca Vargas, Gerardo Alberto Johansen and Roberto Knopfelmacher.

  26. 26.

    District Attorney Rosa Talavera is yet to determine if it was a skirmish gone awry or an ambush, but she ordered the detention of capataz Leoncio Esquivel Domingo Fernández, José de Jesús Vallejos and Venancio Fernández. After the occurrence, Rojas told radio 780 AM he was sorry his employees were jailed and he appealed for their release on the grounds they were workers and not hired guards. He accused Talavera of being partial and committing the “huge injustice” of detaining his employees and not the peasants under usurpation charges.

  27. 27.

    Landless movements announcewhich of the estates they plan to occupy. Targets are chosen on the basis of the claim that landlords have idle land or that they have not offered satisfactory proof of rightful ownership.

  28. 28.

    This “pioneer” discourse repeats the colonialist civilizing mission, this time around emphasizing work ethics. What in their own country plays out as a frontier mentality, in Paraguay is recreated as a “Brazilian man’s burden”.

  29. 29.

    “Campesinos iniciarán hoy las ocupaciones masivass”, ABC Digital, August 31, 2009. MCNOC had targeted the Choré district, where it laid claims to 1.510 ha. La Solución SA, and to 1.000 ha. La Fortuna, La Palomita and Agroganadera Jejuí.

  30. 30.

    “It’s the left of Hugo Chavez, the left of the Castros, a left that fanaticised Paraguayan campesinos,” said Aldo Zuccolillo; owner of ABC Color, Paraguay’s largest and most influential newspaper.

  31. 31.

    In May 2009, Congress passed Law Nº 3742/2009, easing regulation (which had been upgraded in April in Decree 1937/2009) on agrochemical use. The Law was vetoed partially in July by Decree N° 2361/2009.

  32. 32.

    “Cultivan soja hasta en el predio de una escuela en el distrito de Aba’I”, ABC Digital, February 05, 2009.

  33. 33.

    Even with the $5.5 billion Petrolão scandal, Brazil appears ranked 76.

  34. 34.

    Granted by the IBR, each derechera corresponds to 7–10 ha and can be paid in five years, after which property title is granted. But this last process can take up to ten years.

  35. 35.

    In such economic organizations of production, the benefits remain confined to an international sector not connected to the wider economy. Linkages are few and weak, as are the distributional effects.


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Turzi, M. (2017). Colonization: Paraguay. In: The Political Economy of Agricultural Booms. Palgrave Macmillan, Cham.

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