Growth of landlocked coffee.

Landlocked Paraguay, in the center of South America and the size of California, is South America's most rural nation. It is also one of world's most sparsely populated with 29 per square mile. Divided in half by the Paraguay River, the western inhospitable Chaco carries 2% of the population while the remaining 98% live in the fertile eastern area. It is in the rich eastern and southeastern regions bordering Argentina and Brazil that development is at its greatest and this includes coffee production.

The main coffee growing areas have shifted slightly north during the 200-year history of coffee growing in the country and now straddle the Tropic of Capricorn. Here lies a Paraguayan coffee plantation which could soon become one of the largest in the world. The plantation belongs to the Brazilian-based company Eximpora S.A. which is owned by Syrian-born Abdo Jamil Georges.

Abdo started his Paraguayan venture in 1989. By June 1993, 2,500 hectares had been planted out to 8 million coffee trees. A further 1,000 hectares were ready to be planted out to 3 million seedlings in the plantation's nursery. The final project includes 18 million trees which will make it substantially bigger than the 11-million-tree plantation in Brazil's state of Minas Gerais.

The plantation site was carefully chosen in gently rolling hills not far from the Paraguayan town of Yby Yau (guarani for coffee town), itself 130 kms. from the town of Pedro Juan Caballero on the Brazilian border. Geoffrey Bishop, chairman of the Paraguayan Coffee Growers' Association said "this is a tremendous project, probably unique in the coffee world at this moment with its depressed market."

The 500-strong permanent labor force lives in houses built and furnished with timber cleared from the plantations. Five artesian wells provide running water for the villages scattered throughout the plantation and for the coffee trees. Electricity is provided by generators. Additional labor is contracted during harvesting which is done by hand, and starts at the end of June lasting for about three months.

The first harvest in 1992 yielded 50,000 (60-kg) bags; the 1993 harvest will be 75,000 bags. When the plantation is in full production, it is expected to yield up to 140,000 bags. The Arabica varieties planted are Mundo Novu and Catuayi.

Three Brazilian agronomists and one technician oversee the plantation. Geraldo Caetano, chief agronomist, told Tea and Coffee Trade Journal, "With such a large area, the layout of the plantations is important. Coffee trees are planted out in rows in glebas which are separated by windbreaks of grevilla trees. In low-lying areas, eucalyptus trees are planted for wood for the processing plant and for ecological purposes."

By the end of 1993 construction of one of the most complete and technologically advanced complexes in the world will be complete. The two buildings housing the processing plant cover 9,000 square meters and two hectares of drying areas. Machinery for the plant is being manufactured by Pinhalense in Brazil. It is hoped finally to install roasters enabling the company to produce the final product in the same facility.

Until the Eximpora trees started bearing, 24,000 hectares of coffee were under cultivation to coffee in Paraguay with an estimated 29 million bearing trees and 3 million non-bearing. Eximpora's trees have brought this up substantially.

Looking to the future, Abdo believes that the price of coffee will go up. But for the present, Fernando Mendonca, head of the Paraguayan Coffee Exporters' Association said; "Paraguay has the climate and soil to become a bigger and better exporter but there has to be a change in price. As green coffee is a nonperishable item, big growers can wait to sell but in the meanwhile it is a marginal business."

He expects total Paraguay production for 1992/93 to be in the region of 670,000 bags. Accumulated exports for 1992 to June 1993 were only 110,000 bags.

Paraguay is home to yerba mate (Ilex paraguayensis) a popular South American beverage which is becoming increasingly important in world markets. At present, 20,560 hectares are under cultivation producing an average of 43,933 tons a year with yields of 2,137 kgs. a hectare. Experimental units have produced yields of between 5,000 to 12,000 kgs. per hectares.

Abdo Jamil Georges is investing heavily in this too with 1,000 hectares of yerba mate under cultivation near Pedro Juan Caballero. His project is for 6,000 hectares which will make it the biggest in the world. Four hundred hectares of yerba mate nurseries will be planted in the same place as the coffee nurseries. As with the coffee there are plans to construct a factory to produce the final product.

Paraguay has long been known more for its contraband trade than for its legitimate production. These ambitious agro-industrial projects will help change its reputation and also pull Paraguay from the shadows of its two giant neighbors Argentina and Brazil.

Paraguayan President-elect Juan Carlos Wasmosy said on July 6 that foreign investment and fiscal and tax reforms would help curb contraband which accounts for 70% of his country's trade.

"If we institute a system where everyone pays a fair share of taxes and create uniform tariffs among neighboring countries, we can gradually eliminate this scourge," he said.