In the Central Region of Paraguay, soils have been used intensively for decades by small farm families with an almost complete lack of fertilisation and soil conservation. These soils, which are now classified as extremely degraded, are concentrated in the Departments of Paraguari, Central, Cordillera, Guaira and approximately half of Caaguazu (see Map 1). Soil organic matter content is normally less than 0.2%-0.4%, nutrient levels are extremely low and soils are in many cases badly compacted. Intensive use of animal-powered mouldboard and disc ploughs and inappropriate cropping practices, combined with the burning of crop residues and an almost complete absence of soil conservation measures, has resulted in high rates of soil erosion with severe depletion of organic matter and soil nutrients. Soil structure has been destroyed and in many cases soil compaction has become a major problem impeding root development and crop production. Mineral fertilisers have only been used in minute amounts and the use of organic manure has been confined to tiny areas used for intensive vegetable production.

The area of extremely degraded soils in Central Paraguay is estimated at about 367,000 hectares. This estimate is based on 1991 Agricultural Census data of the total areas that were cultivated in the five departments concerned and incorporates assessments by personnel of the MAG-GTZ Soil Conservation Project of the percentages of the cultivated areas in each of these departments that are extremely degraded (see Table 23).

According to the 1991 Agricultural Census, the total area of small farms (those with 1-20 ha) across the five departments concerned is about 297,000 ha. Assuming that all of the small farms have extremely degraded soils, about 81% of all the degraded soils in Central Paraguay are on small farms. Almost half (47%) of these small farms are in Caaguazu. Next most important is Paraguari (19%), followed by Guaira (15%), Cordillera (14%) and Central (5%).

1 Data sourced from 1991 Census, Direccion de Censos y Estadisticas Agropecuarias, MAG

The number of small farm families dependent on these degraded soils for their livelihood is estimated at 103,120. This estimate is based on 1991 Census data of the number of small farms in the five departments concerned as shown in Table 24. The distribution of these small farms across the departments is Caaguazu 35%, Cordillera 24%, Paraguari 20%, Guaira 14% and Central 7%. Assuming 6 persons per family, a total of 618,720 people have their livelihoods directly affected by the extremely degraded soils in Central Paraguay. While probably a significant number of families living on farms of less than 5 ha will be reliant on income earned off their farms in order to survive, they will nevertheless benefit from any efforts to restore soil fertility on their land. Besides directly benefiting from increased production from their smallholdings, these families may find employment opportunities on the larger small farms in their neighbourhoods and in rural service industries which would be stimulated by a more buoyant small farm sector.

Source: Direccion de Censos y Estadisticas Agropecuarias, MAG, 1991 Census

The problem of soil degradation has now reached catastrophic proportions and there is no doubt that this is a main cause of urban drift and consequential mounting social tensions. The number of rural migrants arriving in urban centres is leading to widespread urban poverty, worsening human nutrition and health, and to an increasing number of slums. Social tension is rapidly on the rise, especially in and around Asuncion.

Readily available demographic data further highlights the mounting problems of urban drift. Nationally, over the last 20 years, the Paraguayan population has been increasing at 2.9%. This is relatively high for Latin America where population growth rates over the same period have averaged only 1.5%. In addition to this high rate of population growth, there has been rapid urban drift reflected in the high urban population growth rate relative to that of the rural population – which have averaged nationally 3.2% and 1.3% per annum respectively during the period 1982-92.

Urban and rural population statistics for the years 1972, 1982 and 1992 confirm that there has been rapid urban drift in Central Paraguay. Statistics shown in Table 25 show that, for each of the departments with extremely degraded soils, rural populations have been decreasing at a much faster rate than the national average. Nationally the total population has increased 1.79 million or 76% from 1972 to 1992 while the percentage of urban dwellers increased from 37% to 50%. Over the same period, the population of Asuncion city increased by almost 112,000 persons, an increase of 29%. However, in Paraguari the total population slightly decreased although the percentage of urban people increased from 15% to 21%, while the total population of Cordillera only slightly increased but the number of people living in urban areas increased significantly from 19% to 31%. In Caaguazu there was an increase in the total population of almost 176,000, up 83% from 1972 with a large jump in the proportion of population living in urban areas increasing from 16%-27%. However, the most striking demographic change has been in Central, where the total population increased almost 556,500, up from 310,390 to about 866,900. At the same time the percentage of urban people in Central increased from 44% of the population to 80%.

These population data indicate that most of the people abandoning their farms have been moving into the urban satellite centres in Central, Caaguazu and Asuncion. Based on these statistics, the number of people who have moved to urban centres in these three locations alone total 844,500, which is 47% of the total national population increase from 1972-92.

Source: Compendio Estadistico, Presidencia de la Republica, Paraguay, 1994

The extent of the urban drift that has been occurring into the Central region of Paraguay, cannot be explained only by the small farm families who are abandoning their farms on the severely degraded soils. Clearly there are also people migrating from other parts of the country.

Developing appropriate technologies for restoring the fertility of severely degraded soils offers a realistic way of substantially slowing down urban drift. This is because these technologies offer a practical, economical, social and environmentally sound means of reversing what have become increasingly marked trends of declining soil fertility and small farm productivity with consequential lowering of farm incomes. However, besides developing these technologies, it will be necessary to provide other complementary incentives to small farm families to encourage them to adopt them and to stay on their farms. Additional and complementary incentives would include:

• efficient extension services;

• improved grain storage facilities;

• more competitive marketing services for the purchase of farm produce and the supply of farm inputs;

• improved and more readily available credit facilities;

• better health and education services.

In 1997, MAG in association with GTZ through the Proyecto Conservacion del Suelo, installed 11 one hectare parcelas on 11 farms in the Department of Paraguari. The aim was to test and develop appropriate technology together with small farmers for economically raising the fertility of degraded soils in Central Paraguay. Each parcela is to be accompanied by MAG for three years. Initial results have been particularly promising and farmers are most interested and willing to continue. First year results have shown maize yields of between 4,000 – 6,000 kg/ha. The guandu has grown to heights in excess of 2 metres and will probably yield at least 6,000 kg dry matter per hectare. Some 75% of the cost of seeds and fertilisers have been provided free to the farmers, being financed by GTZ. In addition, the MAG-GTZ project has supplied free of charge to participating farmers matracas, lime spreaders, sprayers and rollo cuchillos.

Details of the parcelas are given in MAG-GTZ (1998). In brief, the proposal involves initially conventionally tilling the soil and planting hybrid maize in association with Guandu with relatively high levels of fertiliser and lime (400 kg/ha NPK, 100 kg/ha of urea and 750 kg/ha of lime) to initially raise the levels of organic matter and soil fertility. In the second year maize is to be directly planted with mucuna with much lower levels of fertiliser (100 kg/ha of formula 15-15-15, 50 kg/ha triple super, a further 100 kg/ha urea and possibly 100 kg/ha of potassium chloride on 50% of the parcelas). Alternative options have been proposed for the third year, depending on the preferences of each participating farmer. Possible options include (i) mandioca/mani, (ii) cotton, (iii) maize chipa/mani, (iv) maize Guarani V312/poroto. Lime would most likely be needed on all parcelas (probably 500 kg/ha) and formula (225 kg/ha) and urea (100 kg/ha) have been allowed for on all parcelas except those planted with mandioca/mani.

4.2.1. Small Farms in Paraguari

According to the 1991 Agricultural Census there were a total of 20,613 small farms in Paraguari occupying 57,643 hectares. The area occupied by small farms in Paraguari was 60% of the total agricultural area. The number of farms and the area they occupy by farm size are shown in Table 26. In terms of numbers of small farms, 60% were from 1-5 hectares, 25% 5-10 hectares and 15% 10-20 hectares. Most small farms are less than 5 hectares and the average size of all small farms was 2.8 hectares.

To provide an understanding of the current status of conventional cultivation systems in Paraguari, five typical small farmers were interviewed in detail by the study team. A summary description of their farming systems is presented in Table 27. The farms, four of which were in Paraguari and one in Ybycui, ranged from 3 ha to 10 ha. One farmer owned a pair of work oxen, another had his own horses for work purposes, while the other farmers hired work oxen for soil preparation. One farmer had formed contour terraces over part of his farm, but the others have not undertaken any soil conservation measures. The four farms in Paraguari had been cultivated intensively for 60 years while the Ybycui farm had been cultivated for 30 years. Maize and cotton provided income on all of the farms while two also grew tomatoes, one of these also batata. Only a very small number of small farmers grow tomatoes, probably less than 5%. While tomatoes can be highly profitable, they are costly to grow and very risky as yields and prices vary widely. Not only are tomatoes susceptible to disease attacks, they also need a lot of water, making it imperative in most situations to have irrigation. Small farmers have only rudimentary irrigation systems which require an enormous input of labour.

Crop yields in Paraguari are very low by Paraguayan standards. Detailed crop budgets have been prepared for the major crops grown and are tabled in Appendix A3.1, Tables 1-9. Crop yields and net incomes are shown in Table 28.

Enter table 27 here (File: Farmsystable.doc)

The extremely low crop yields of cotton, mandioca, mani and maize can be seen in Table 28. All crops except batata and tomato have negative net incomes and negative returns to labour. Because of the capital outlay and risks involved, very few small farmers are able to grow batata or tomatoes.

The detailed crop budgets demonstrate that for all crops except tomato, soil preparation and weeding are the most significant production costs. From Table 29, it can be seen that the costs for each of these operations vary from US$21/ha to US$118/ha accounting for 12% to 35% of total production costs. The use of no-till would eliminate the cost of soil preparation. Prudent use of green manure crops and strategic use of herbicide, as has been demonstrated in Edelira, would further reduce production costs on small farms in Paraguari.

A typical farm model prepared for Paraguari confirms the low income and profitability status of small farms in Central Paraguay. The results of the analysis for a 5-hectare farm, based on the detailed crop budgets presented in Appendix A3, are summarised in Table 30. The farm, which is typical of most small farms in Paraguari and Ybycui, has 1.5 ha of cotton (not fertilised which is most common practise), 1 ha of maiz chipa, 0.75 ha of mandioca, 0.5 ha of mani and 1.25 ha reserved for cattle.

1 1 ha of natural pasture plus 0.25 ha elephant grass and sugarcane

The results indicate that cotton is the main source of farm income, although cattle are also important. All activities except cattle are uneconomic when all resources used on the farm including family labour are costed. Family labour has been costed at the market rate for farm labour of Gs15,000 per person-day (equivalent to US$5.36/person-day). Annual net farm income is estimated at minus US$176. The total annual labour requirement is estimated at 126 person-days. Assuming family labour contributes 110 person-days, net farm income, excluding the cost of family labour, would be US$414. Compared to the net incomes estimated for small farms in Edelira and San Pedro (see Tables 14 and 22), the incomes of small farmers in Paraguari are extremely low and confirm why many small farm families leave their farms in search of a better life.

One interesting aspect of the results is that cattle production is shown to be an economic activity. This probably explains why land, after it is abandoned from cropping, is used for cattle production. After being abandoned from cropping naturally regenerated pasture species appear. Cattle are fed mostly on natural pasture, although small areas of elephant grass and sugarcane are used as supplementary feed for young stock as well as milking cows and working oxen. See Appendix A3. Table 3 for details of the cattle budget.

Commonly parts or small farms, and in other instances complete small farms, are sold to neighbouring small farmers who then use the land for cattle production. Occasionally medium- sized farmers purchase the land to increase the size of their land holdings. Small farms close to urban centres, especially Asuncion, are usually purchased by urban people who use them for recreational purposes. In Paraguari, there have been two instances where whole communities of small farms have been purchased by rich individuals for the purpose being used for extensive cattle ranching (L. Gomez, pers. comm).

Analysis of agricultural data for the district of Ybycui by the study team together with local extensionists of DEAG confirmed the trend of land being abandoned from cropping by small farmers. Over the last 8 years, the cultivated area in the district of Ybycui had reduced from 50,000 ha to 35,000 ha, a reduction of 30%. According to the 1991 Agricultural Census, 88% of the of the cultivated area in Ybycui was on farms of less than 20 hectares. This further confirms the trend of land being abandoned by small farmers.

4.3.1. Background and Justification

During the course of the study a "First Phase Project Proposal" for recuperating the fertility of extremely degraded soils was formulated. The experiences of the small farmers involved in the 11 pilot parcelas (see Section 4.1.2) were taken in to account in preparing the proposal. Justification for the proposal from technical, environmental and socio-economic standpoints is grounded not only on the experiences of these farmers, but also two other important considerations: 

1. the mounting urban drift over the last three decades of small farm families who have been abandoning their farms as their systems of production have become unsustainable due to the severe degradation of their soils;

2. the positive experiences of small farmers with green manure crops and no-till in Edelira and San Pedro.

4.3.2. Project Description

The overall aims of the project would be to increase the incomes of small farm families on extremely degraded soils throughout Central Paraguay and to reduce urban drift. The project would be a long-term undertaking over at least 10 years. The objective of the proposed first phase of this project is to develop jointly with leading small farmers a fully participative process of cost-effectively restoring the fertility of the extremely degraded soils in Central Paraguay.

The first phase project proposal consists of four components. The components, which are detailed in Appendix A3, Tables 19 and 20, are:

1. parcelas demonstrativas;

2. machinery and equipment;

3. extension;

4. technical assistance.

Parcelas Demonstrativas

The proposed first phase would be over four years. It would install 50 parcelas in the first year and a further 200 in the second year. Each parcela would be of 1 hectare and would involve a three-year development period as described in Section 4.1.2 and in detail in MAG-GTZ (1998).

Parcelas would be installed on small farms in Paraguari, Cordillera and Caaguazu where 79% of the small farm families on the degraded soils in Central Paraguay are concentrated (see Tables 23 and 24). Every attempt would be used to select leader farmers with farming systems and soils representative of the majority of farms in their region.

Participating farmers would have to be prepared to provide the labour inputs required for the parcelas with technical assistance from the project extensionists. They would also need to be prepared to share their experiences and results with other farmers.

The project would provide all of the seeds, fertiliser and chemicals needed for the parcelas. All produce from the parcelas would belong to the farmers on whose farms the parcelas are installed so that they would be free to sell or consume it as they wish. Seventy five percent of the cost of the first year inputs would be subsidised. The remaining 25% of the costs of the first year inputs, plus the cost of the inputs required in the second and third years, would be financed through credit which would be part of a loan to farmers which they would have to repay over a 5-year term. See Section 4.3.4 for details on the financial incentives that would be needed to ensure a successful programme and Section 5 for details on the loan.

The quantities of the inputs needed for the parcelas are substantial. For example, a total of 167 tonnes of formula 15-15-15, 1,700 litres of roundup and 33,483 person-days of labour would be required over the four-year period. Details of the quantities needed of each physical input in each year are provided in Appendix A3 Table 19.

Costs of the technical inputs lime, seeds, fertiliser, insecticide and herbicide are substantial during the first two years. These costs are summarised in Table 31 below for maize hybrid and maize guarani V312 options for years 1 and 2. The costs of these technical inputs are highest in the first year with seeds and fertiliser being the most costly inputs. By using maize guarani V312 rather than hybrid seed, savings of almost US$90/ha can be made. Hybrid maize would need to yield at least 900 kg/ha more than maize guarani to make it worthwhile planting. This calculation is based on the average price received for maize colorado in Paraguari of Gs280/kg (US$0.10/kg). Full details of the cost calculations can be found in Appendix A3, Tables 10-13.

Table 31: Parcela Technical Input Costs in Years 1 and 2

US$ per hectare

Machinery and Equipment

The project would need to provide matracas, manual sprayers, rollo cuchillos, lime spreaders and small (2,000 kg) maize silos. Two matracas (one each for cotton and maize) would be needed per parcela, and one small maize silo per farm so that farmers will have a choice to be able to sell maize outside of the main harvest time so as to capture better maize prices. In terms of the sprayers, rollo cuchillos and lime spreaders, one of each per 25 parcelas would be needed. Credit would be provided, and would constitute part of the loan to individual farmers, for the purchase of the matracas and the silos. The other equipment would be shared between participating farmers and could be donated at the end of the project to groups of farmers, or they could remain the property of the MAG.

Extension

Extension would be an essential and integral part of the project. There would be need for 5 extensionists in year 1, 25 in years 2 and 3, and 20 in year 4. Extensionists would need to be dedicated full-time to the project to ensure that the project is implemented properly and each extensionist would service 10 parcelas. Extension services would be contracted for the purpose of the project, the costs of which would be met by the Government of Paraguay and would not constitute part of the project costs. Extension services may be provided by personnel from DEAG, farmer co-operatives, or from other private sector service providers such as Non-Governmental Organisations (NGOs).

Training would be an important part of the extension component. Training courses for extensionists mainly to Brazil, two national congresses, two local symposia and 10 training courses each involving 6 extensionists and 24 farmers during 2.5 days, would all be organised and financed by the project. Training courses would be run from the Training Centre in San Lorenzo and would involve field visits to the parcelas. The aim of these training courses would be twofold:  

1. to increase the skill base of extensionists and farmers in recuperating the fertility of extremely degraded soils in Central Paraguay;

2. to be exposed to the benefits of soil conservation, green manure crops and no-till.

Training would not be confined only to those extensionists and farmers directly involved with the parcelas, but would also involve other extensionists and farmers to widen the impact of the first project phase.

The project would also provide new Volkswagon vehicles for the extensionists dedicated to the project. One new vehicle would be provided per two extensionists. A 12-seater Mercedes minibus would also be purchased for the exclusive use on the project. The project would pay for the running and maintenance costs of these vehicles.

Study visits for farmers would be financed by the project. These visits would be aimed at farmers from Central Paraguay becoming exposed to green manure crops and no-till in Edelira, San Pedro and southern Brazil. The project minibus would be used for these visits. This vehicle would also be used for the training programmes run from San Lorenzo mentioned above.

Technical Assistance

It will be imperative for the success of this proposal that technical support be available, preferably from GTZ so as to maintain the excellent progress and results to date. High calibre technical support in the use of no-till and green manure crops for small farmers has been initiated in the current MAG-GTZ Soil Conservation Project. Technical assistance and financial support for the 11 pilot parcelas in Paraguari have been provided through this project. It would be most cost-effective if the same MAG-GTZ technical support staff could be maintained for the first phase project proposal.

4.3.3. Economic Impact for Farmers

The economic impact on small farms of the proposed technical interventions has been analysed in this study. Although it will be up to the participating farmers with the assistance of their extensionists to decide on what will be grown in each parcela, based on the experiences of the 11 pilot parcelas and the MAG-GTZ (1998) proposal, the following options were analysed:

1. Hybrid maize/guanda – 1^st year;

2. Maize Guarani V312/Guandu – 1^st year;

3. Hybrid maize/Mucuna – 2^nd year;

4. Maize Guarani V312/Mucuna – 2^nd year;

5. Mandioca interplanted with Mani – 3^rd year;

6. Maize Guarani V312 interplanted with Mani – 3^rd year

7. Maiz chip interplanted with Mani – 3^rd year

8. Cotton – 3^rd year

9. Mani – 3^rd year

Detailed crop budgets have been prepared for each of the interventions that have been proposed for the parcelas over three years. These are presented in detail in Appendix A3, Tables 10-18. Apart from maize in the first year which would be sown conventionally, all other crops would be directly sown without any soil preparation, i.e. no-till would be used. Results of the analysis are summarised in Table 32.