The Context

Paraguay is a landlocked country in central South America. Despite significant economic growth over the past decade, the country is still characterized by high levels of inequality, with poverty levels reaching 24% of the population. Agriculture and livestock sectors account for 17 per cent of gross domestic product.

Although urban poverty has declined, rural poverty continues.  Between 2010 and 2019, rural poverty decreased from 50% to 34.6%. However, poverty in rural areas remains two times higher than in urban areas (17.8%)Rural poverty particularly affects women and indigenous populations. The main causes of poverty among family farmers are unstable prices, inadequate pay, low productivity, limited use of technology, deteriorating soil fertility, lack of access to financial services, weak and isolated rural organizations, limited supply of public goods and services and difficulties in accessing land.

Women are particularly disadvantaged because of inadequate access to public goods and services, and deterioration of family farms caused by migration of men to urban areas. In many cases, their income is either non-existent or insufficient to cover basic needs.

Indigenous peoples are another marginalized group. 8 out of 10 indigenous people live in poverty. Most indigenous communities suffer from food insecurity, and lack access to safe water, electricity and other basic services. In addition, the infant mortality rate is extremely high.

Paraguay’s environmental situation is serious, with high rates of deforestation and soil degradation. Declining yields for the country’s major crops are expected if agricultural practices are not made more sustainable.

The Strategy

In Paraguay, IFAD Strategy (2016-2022) aims at achieving two objectives: i) ensuring sustainability in production and trade; and ii) strengthening social capital by building human and social capital and empowering rural organizations. In this regard, IFAD loans focus on empowering smallholder farmers and indigenous families by creating and strengthening rural organizations – in terms of governance, organizational administration and service capacity – to provide members with the tools they need to manage their own development.

Training and funding allows rural organizations’ members to increasingly use technology in agricultural production in a number of areas:

• sound input use techniques
• soil conservation practices
• efficient irrigation
• use of appropriate genetic resources.

Special attention is also paid to financial inclusion. IFAD’s work in Paraguay supports facilities that give smallholder farmers access to rural financial services, including savings, credit and insurance.

An important targeting feature of our approach in Paraguay is our increasing focus on indigenous communities.

At the same time, all of the IFAD-supported programmes have an environmental component to guarantee resilience to climate change. Measures include the setting up of climate information and early warning systems.

Key activities include boosting the capacity of smallholder farmers and indigenous communities to set up sustainable, profitable rural enterprises with access to local, national and, in some cases, international markets.

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