South American Real Estate News

Agricultural land in Alto Paraná is now more expensive than in the US

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An investigation by the Center for Analysis and Diffusion of the Paraguayan Economy (Cadep) revealed that the average price of agricultural land in Paraguay is similar to that of productive areas in the United States and even higher in some cases, such as the price of land in Alto Paraná, whose price is USD 14,858 per hectare; almost double that of the US state of Iowa.

The gap is even more notable in the Central Department, characterized by high real estate growth, although it is also an important fruit and vegetable production area. The average price in the area reaches USD 36,399 per hectare, practically four times more than the values of USD 7,350 and USD 8,100, corresponding to agricultural lands in Illinois and Iowa, United States.

In Alto Paraná, where the largest soybean sowing area is concentrated with around 100,000 hectares, the land represents almost double the price of the North American country, according to the comparison that Cadep analyzed in its research Agrarian transition in Paraguay. Empirical evidence and theoretical explanations, recently published.

The book highlights that for almost thirty years there has been a sustained increase in the prices of agricultural land, especially in the Eastern Region, while in the Chaco they began to rise a little more than a decade ago.

Although data were collected from all over the country, the research focused on three agricultural areas of the Eastern Region. “It can be observed how the prices of Itapúa (USD 6,945), a department with little urban territory, are close to the prices of the states with the highest grain production in the United States. While Caaguazú (USD 8,857) and San Pedro (4,608) show, successively, lower values per hectare of land ”, highlights the analysis.

Regarding the characteristics of these departments, he explains that in Itapúa there is a nucleus of agribusiness development, while in Caaguazú a transition is observed where the same level of agrarian development is quickly consolidated, unlike San Pedro, where the economy and society peasant are still in force.

PROPOSALS. The comparison of land prices is just one of the socio-economic aspects that researchers Belén Servín, Cynthia González, Dionisio Borda and Gustavo Setrini decided to investigate through various sources, including surveys of producers, where access to data from farmers was difficult on a large scale. Among the findings, the greater employment generated by small farms in relation to large areas of crops stands out.

In this sense, the authors warn that a transition based on large-scale agriculture will concentrate wealth in a few hands and will generate a vulnerable and unequal urban economy, while the impulse of a transition led by small and medium producers promises a better distribution through the agricultural labour market, capital and wealth generated by efficiency improvements and productivity and innovation.

Fuente: Ultimahora

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