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Paraguay's budding coffee industry a web of intrigue.

Red-and-white license plates in the tiny, unpronounceable town of Yby Yau, Paraguay, proclaim this the "city of coffee." Indeed it is.

Huge, sprawling coffee plantations surround the village -- really not much more than a remote airstrip and a few buildings -- located an hour's flight north of Asuncion near the Paraguayan-Brazilian border.

One of those plantations, Colonia Nueva Esperanza, contains 19,000 coffee trees alone. Some 40 laborers work the fields here, among them Antonio Fuzitto, a Portuguese-speaking Brazilian who came to Paraguay 14 years ago but has been working in coffee since he was 7. Fuzitto says half the workers are Paraguayans, the other half Brazilians, and on average they receive 7,000 guaranies ($5.38) a day for their labor.

Interestingly, Paraguay, which is bigger than California, has only four million inhabitants but 24 million coffee trees. Some 27,500 hectares of Arabica coffee are under cultivation, the average farm size being 20 hectares. Between 30,000 and 50,000 people depend on coffee for a living in this South American nation, which only two years ago began the long road back to democracy after enduring 35 years of ironfisted dictatorship under Gen. Alfredo Stroessner.

Yet violence and lawlessness still permeate some sectors of Paraguayan society. On April 26, radio journalist Santiago Leguizamon was gunned down in the border town of Pedro Juan Caballero -- not far from Yby Yau -- after his station aired a series of investigative reports on contraband trafficking of soybeans, coffee and, to a lesser extent, narcotics, between Paraguay and Brazil. The murder elicited immediate condemnation from both Paraguayan President Andres Rodriguez and President Bush's own anti-drug czar, former Florida Governor Bob Martinez.

"The murder has to do with soybean and coffee producers," said one observer here who asked not to be identified. "Export duties in Brazil are prohibitively high, so they export it through Paraguay."

Fernando Mendonca, head of the 12-member Paraguayan Coffee Exporters Association, and who maintains offices in both Asuncion and Pedro Juan Caballero, freely admits his company buys Brazilian coffee, trucks it over the open border and sells it as Paraguayan.

"We sell 500,000 (60 kg) sacks a year, more than we produce," he said in a recent interview in Asuncion. "Last year, we produced only 435,000 sacks. We have silos where we store Brazilian coffee and sell it as Paraguayan." He added that "Argentina is our biggest customer. Then comes Italy, France, the United States and the Arab world."

At an average $70 a sack, Paraguayan coffee exports come to around $35 million. Yet according to the U.S. Embassy in Asuncion, the United States bought only $738,000 worth of Paraguayan coffee last year.

Paraguay, better known for its export of yerba mate (a tealike drink popular throughout the southern cone of South America) has been cultivating coffee ever since the 16th century, when Jesuit missionaries helped the local Guarani Indians grow it for local consumption.

By 1876, German immigrants had developed coffee plantations of Brazilian origin and had begun exporting coffee to Argentina. In 1950, the first plantations around Pedro Juan Caballero were developed with U.S. and Brazilian capital as well as help from the Paraguayan government's Economic Development Corp.

But perhaps Paraguay's biggest coffee enterprise is yet to come.

Abdel Jamil Georges, the wealthy, Syrian-born director of Exiompora S.A., located just over the border in Punta Pora, Brazil, says he plans to develop the largest coffee plantation in South America.

"Prices for coffee are low now," Jamil told the Tea & Coffee Trade Journal. "In Brazil, they're substituting coffee with oranges and rubber trees. But I have enough money to invest. I'm betting that soon, there won't be enough coffee, and the price will go up."

The continent's largest coffee farm, he says, is currently an 11 million tree plantation in Ipanema, Brazil's Mina Gerais state.

Jamil's Paraguay venture will be twice the size of that farm. By October, he predicts, his 2,590 hectare plantation outside Yby Yua will contain 10 million coffee trees--doubling to 20 million trees by the end of 1994.

Larry Luxner is a freelance writer based in San Juan, Puerto Rico.
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Author:Luxner, Larry
Publication:Tea & Coffee Trade Journal
Date:Aug 1, 1991
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