Soy Provides Opportunity, Challenges for Paraguay

The global production of soybeans is on the rise, thanks to increasing demand. The fastest growing soy producer in the world is Paraguay, the landlocked country in South America still recovering from years of dictatorship and corruption.



Twenty-five hundred miles south of Venezuela, across Brazil and Bolivia, lies the landlocked nation of Paraguay. Paraguay is still recovering from years of dictatorship and corruption. Now, it's going through what some are calling a revolution. And others are calling an invasion. The hero or culprit, as the case may be, soybeans.

Charles Lane has the story.

CHARLES LANE: Paraguay is famous for not being famous about anything. A small country with no coveted natural resources, it is one of the poorest nations in South America. In fact, the biggest thing to ever hit Paraguay is soybeans - lots and lots of soybeans.

(Soundbite of machine engine)

Mr. CESAR PIZOLI(ph): (Spanish spoken)

LANES: Showing off the 10,000-acre soy plantation he manages in eastern Paraguay, Cesar Pizoli is pointing to a pair of tractors worth $140,000 each. Pizoli says he has the capacity to cultivate more than 700,000 acres a day, which he then stores in nine brand-new grain silos imported from America.

Mr. PIZOLI: (Through translator) No other crop exists in the summer time as is profitable as soy in Paraguay. It's a good crop and gives money to the country.

LANE: Soy is Paraguay's biggest export, and production has jumped 69 percent in the last five years. There are a few things here not touched by soybeans. This farm Pizoli runs is owned by an Italian investor. It's one of about 300 multinational companies that had flocked to Paraguay in the last 10 years.

Down the road is the town of Santa Rita. It didn't even exist before the boom. But because of soybeans, it's now home to more than 14,000 people. There are upscale clothing boutiques, teenagers with iPods and posh hotels that cater to visiting agribusiness executives.

All exists in a country where most farmers have less than 50 acres. And 40 percent of them live in poverty.

(Soundbite of dogs barking)

LANE: There aren't any solid numbers on those left out of the boom. But one can get a sense of the scale by visiting Cateora(ph), one of the three shanty towns outside Paraguay's capital Asuncion. Cateora is a filthy maze of shacks and concrete houses with open sewers and no city planning.

Mina Serbio(ph) has lived here for 15 years with the Legal Pacific Group trying to bring more city services to the slum.

Mr. MINA SERBIO (Farmer): (Through translator) This was full of animals, and even crocodiles. There was a pond and lots of trees. Many of us immigrated here and did everything ourselves. It is us, the community, who recover the land meter-by-meter.

LANE: Cateora is named after the landfill of the same name that looms in the background. Everything here was built from that dump. The streets are carved through garbage buried long ago, and the dwellings are a patchwork of recycled metal and wood thrown out by Asuncion's wealthier residents.

Mr. SERBIO: (Through translator) Most of us came from the countryside, about 80 percent of us came from there. We work in the city dump, and we eat from the garbage. Sometimes the children will earn money by carrying things for people in their carts.

LANE: Nearly everyone in Cateora has moved here because of soybeans.

Julio Reviola(ph) and his wife Florencia(ph) moved from the countryside three years ago. Standing in his windowless two-room house, Julio says he sold his land to a Brazilin soy grower.

Mr. JULIO REVIOLA (Resident): (Through translator) We used to work with small equipment, small machines. When the foreigners - the Japanese, the Italians, the Germans, and Brazilians came in - we were already doing all the work in this place. We were very good. But we couldn't match them because we are poor. They planted 300 to 1,000 city blocks at a time.

LANE: The Reviolas say big soy growers drive down crop prices and increased the cost of land. They say it's difficult to compete, forcing many small farmers to go to the city to find other work.

Another difficulty with big soy is the pesticides. Mina Serbio says everyone who moves from the countryside complains.

Mr. SERBIO: (Through translator) Planting soy is very dangerous. There are other toxins we use give us lots of problems on the skin. Many infants are born with problems.

LANE: The peasants blamed the sickness on the herbicide glyphosate. Glyphosate is widely used around the world and in the U.S. The EPA says it is safe when used properly.

Hector Custodo went to Paraguay's 22,000 strong agriculture union. He says his organization recognizes the concern and is trying to educate farmers on how to use agrochemicals safely.

Mr. HECTOR CUSTODO: (Through translator) It's what we call bad use. We promote the good use. It's like having someone and doesn't know how to drive and keep behind the wheel and kill someone. You can't blame the car. We are working hard, who are given more than 500 courses about how to handle the agrochemicals.

LANE: Custodo's organization volunteered to organize the classes back in 2000, and he says things have gotten much better. The government has also enacted a number of environmental laws similar to those in the U.S. However, enforcement is a problem. Paraguay has 40 agriculture compliance officers. The State of Florida, which has about the same amount of farmland, has 200.

Sheila Abad(ph) is a lawyer and executive director for the Environmental Law and Economics Institute.

Ms. SHIELA ABAD (Executive Director, Environmental Law and Economics Institute): When you have a country with have very low law enforcement and you don't have the institutional support to create educational programs in handling agrochemical, then you are in a problem. But that's why we are working more and more in good governance programs and trying to combat corruption because I think that there is the root of all the problems.

LANE: Abad says that soy beans have added more than a billion dollars to Paraguay's economy and that there is still room for production to grow. While Paraguay has already begun facing the environmental impact of soybeans, very little has been done to address the social impact on the country's poor. However, it has become a hotly debated subject leading up to next year's presidential election.

For NPR News, I'm Charles Lane.