Agriculture in Paraguay - Land Reform and Policy

Land Reform and Policy

After decades of public controversy over government land policy, two important agrarian laws were enacted in 1963 that guided land policy through the late 1980s. The Agrarian Statute, as the laws were called, limited the maximum size of a single landholding to 10,000 hectares in Eastern Paraguay and 20,000 hectares in the Chaco, with landholdings in excess of this size subject to taxes or possible purchase. This law, however, like many of the laws involved in economic policy, was enforced only loosely or not at all. A more fundamental component of the Agrarian Statute was the creation of the Rural Welfare Institute (Instituto de Bienestar Rural—IBR). The IBR, which superseded the Agrarian Reform Institute, became the central government agency mandated to plan colonization programs, issue land titles to farmers, and provide new colonies with support services such as credit, markets, roads, technical assistance, and other social services as available. From 1963 to the late 1980s, the IBR titled millions of hectares of land and created hundreds of colonies, directly affecting the circumstances of roughly one-quarter of the population. In the late 1980s, the IBR remained the key government agency, along with the Ministry of Agriculture and Livestock, in serving the land needs of small farmers.

Although the IBR played an important role in stimulating the celebrated "March to the East," the exodus from Paraguay's central zone to the eastern border region that began in the 1960s was a spontaneous process. The task of the IBR was so enormous and its resources so limited that many of the country's farmers bypassed the institute in order to participate in the eastward land grab. Thousands of Paraguayans took it upon themselves to trek eastward to the abundant, fertile, but forested land of Alto Paraná, Itapúa, and other eastern departments. Many of the colonists were pioneers in the truest sense, clearing densely forested areas for farming mostly by axe. Few farmers had access to institutional credit, and these newly colonized areas generally lacked schools, roads, and other amenities.