Production of certified sustainable meats for export through silvopastoral systems of cattle
Production of certified sustainable meats for export through silvopastoral systems of cattle
Business Model Description
Invest to increase and / or invest in new production lines of certified sustainable beef for export, produced in silvopastoral systems with:> Fruit trees> Other tree species for timber or energy purposes
Expected Impact
Increase sustainable cattleraisng and provide a means of living to rural population while benefiting the environment
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Paraguay: Presidente Hayes
- Paraguay: Boqueron
- Paraguay: San Pedro
Sector Classification
Food and Beverage
Development need
76% of the total area of the country is used for agricultural activities. The agro-livestock sector is critical in Paraguay since, in 2010, this sector represented 28% of GDP (I).
Policy priority
The Ministry of Agriculture and Livestock made a Strategic Agrarian Framework in 2013. The objectives are, among others: strengthen the capacity of the agricultural sector and increase competitivity (II).
Gender inequalities and marginalization issues
Rural poverty disproportionately affects women and indigenous communities. Key factors contributing to poverty among family farmers include fluctuating prices, insufficient wages, low productivity, limited technology adoption, declining soil fertility, lack of access to financial services, among others (III).
Investment opportunities introduction
The opportunity to modernize family farming in Paraguay using more inclusive business models can accelerate poverty reduction, increase the productivity of the sector and help close inequality gaps (IV).
Key bottlenecks introduction
Paraguay faces infrastructure gaps that include high transport costs, limited connectivity, disparities in regional development, and health-related impacts (V).
Food and Agriculture
Development need
76% of the total area of the country is used for agricultural activities. The agro-livestock sector is critical in Paraguay since, in 2010, this sector represented 28% of GDP (I).
Policy priority
The Ministry of Agriculture and Livestock made a Strategic Agrarian Framework in 2013. The objectives are, among others: strengthen the capacity of the agricultural sector and increase competitivity (II).
Gender inequalities and marginalization issues
Rural poverty disproportionately affects women and indigenous communities. Key factors contributing to poverty among family farmers include fluctuating prices, insufficient wages, low productivity, limited technology adoption, declining soil fertility, lack of access to financial services, among others (III).
Investment opportunities introduction
The opportunity to modernize family farming in Paraguay using more inclusive business models can accelerate poverty reduction, increase the productivity of the sector and help close inequality gaps (IV).
Key bottlenecks introduction
Paraguay faces infrastructure gaps that include high transport costs, limited connectivity, disparities in regional development, and health-related impacts (V).
Pipeline Opportunity
Production of certified sustainable meats for export through silvopastoral systems of cattle
Invest to increase and / or invest in new production lines of certified sustainable beef for export, produced in silvopastoral systems with:> Fruit trees> Other tree species for timber or energy purposes
Business Case
Market Size and Environment
> USD 1 billion
In 2021, Paraguayan beef exports reached a historical record in both volume and revenue. Throughout the year, from January to December, industries exported a total of 302,393 tons of beef, generating a revenue of US$ 1.475 billion. This marked a significant milestone in the country's beef export industry (2).
Indicative Return
10% - 15%
A thesis study "Analysis of the technical and economic-financial viability of a silvopastoral system with cattle rearing, Colonia Volendam, San Pedro" in Paraguay in 2018, yielded an IRR of around 13% in 10 years (3).
The estimated rate of return for an investor is 11.23%. The rate provided is a benchmark calculated as a cost of capital with the country risk premium that translates into an average return required by active investors in the subsector (4).
Investment Timeframe
Long Term (10+ years)
A thesis study "Analysis of the technical and economic-financial viability of a silvopastoral system with cattle rearing, Colonia Volendam, San Pedro" in Paraguay in 2018, yielded an IRR of around 13% in 10 years (3).
Market Risks & Scale Obstacles
Business - Business Model Unproven
Impact Case
Sustainable Development Need
A report from the Stockholm Environmental Institute indicates that Paraguay has a deforestation risk of 734 hectares for every 1,000 tons of exported beef (5).
Paraguay experiences one of the most rapid rates of deforestation in Latin America. Between 1990 and 2010, the country's total forest cover reduced by 17%, dropping from around 21.2 million hectares to 17.6 million hectares (6).
The fruit sector employs a less qualified workforce, in less quantity (86,000 families), and less intensive than horticultural, however, it is an interesting generator of labor, at certain times of production, considering its seasonality (7).
Gender & Marginalisation
41.7% of the employed population in rural areas is dedicated to family farming. Half of the population employed in family farming is in a situation of poverty (49.4%), with a higher incidence among women (8).
Expected Development Outcome
Reduce deforestation in the national territory
Increase the export of quality meats to developed markets and increase the production of organic and / or environmentally friendly meats
Reduce CO2 emissions and greenhouse gases associated with meat production and increase the sustainable integration of silvopastoral systems with the environment and ecosystems
Gender & Marginalisation
Create new job opportunities for vulnerable rural population and women
Primary SDGs addressed
2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
15.3.1 Proportion of land that is degraded over total land area
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Indirectly impacted stakeholders
Planet
Outcome Risks
Air pollution due to bad odors generated by the processing plant.
Noise pollution, if noisy machinery is used
In the case of not having adequate hygiene in the production processes and/or storage of final products, they can be sources of bacteria, viruses, etc., and affect the population.
Impact Risks
Stakeholder risk: The profitability of non-organic meats in quantity is higher than that of organic meats,
Shareholder risk: Lack of incentives for silvopastoral production and sustainable meat production (9).
Drop Off: The markets still do not request exclusively "green" meat (9). The lack of training for small producers aimed at organic and sustainable production (10).
Impact Classification
What
The result is likely to be positive, because silvopastoral productions could improve productivity and reduce the environmental impact of expanding livestock
Who
The environment due to the reversal of large deforestation for livestock farming purposes
Risk
lack of skilled labor required and the lack of price competitiveness in the face of traditionally produced meat can limit the extent of the impact
Impact Thesis
Increase sustainable cattleraisng and provide a means of living to rural population while benefiting the environment
Enabling Environment
Policy Environment
National Development Plan 2030 - Its goals include, among others, strengthening the Paraguayan position among the world's leading food exporters (11).
Ministry of Agriculture and Livestock (MAG) - at Expo 2019, the MAG started with an interesting dissertation on the "Situation and Potentials of Organic Production in Paraguay (12)."
"National Strategy for the Promotion of Organic and Agroecological Production of Paraguay," during 2007/2008. This seeks to promote the development of organic and agroecological production in the country (13).
Financial Environment
The Development Finance Agency (AFD) - PROCRECER - Financing for investment projects. It finances projects such as - Rural, industrial, commercial, and service development projects (16).
Credit Agrícola de Habilitación (CAH) - a public entity that provides financial services and that promotes technical assistance and marketing through alliances with the public and private sectors (17).
Exclusive credit for financing the national program of prioritized items for agriculture of the Ministry of Agriculture and Livestock (MAG). For investments directly related to productive activity, operating and marketing expenses at a rate of 10% per year on balance (18).
Regulatory Environment
Resolution 670/13. Establishing and regulating the participatory guarantee system in organic production of plant origin, as well as its processes, within the framework of Law No. 3.481/08 on the Promotion and Control of Organic Production and its regulations (14).
Resolution 250/13 "Establishing registration and maintenance forms for operators and certification companies involved in the organic production system" (15).
Paraguayan Organic Production Standard. Production and marketing chain (14).
Marketplace Participants
Private Sector
Athena Foods (Paraguay), FrigoChaco (Paraguay), Neuland (Paraguay), Chorti (Paraguay), Frigorífico Guaraní (Paraguay)
Government
Ministry of Agriculture and Livestock (MAG), Ministry of Industry and Commerce (MIC), Ministry of the Environment and Sustainable Development, SENACSA, Livestock Fund, National Development Bank, Agricultural Center for Habilitation
Multilaterals
IDB, World Bank ( WB), European Union (EU), Development Finance Agency
Non-Profit
Rural Association of Paraguay, Paraguayan Chamber of Exporters, Paraguayan Meat Chamber, Sustainable Meat Board.
Target Locations
Paraguay: Presidente Hayes
Paraguay: Boqueron
Paraguay: San Pedro
References
- (I) Gobierno de Paraguay. 2014. Plan Nacional de Desarrollo Paraguay 2030. https://www.stp.gov.py/pnd/wp-content/uploads/2014/12/pnd2030.pdf (II) Ministerio de Agricultura y Ganaderia. 2013. Marco estratégico agrario. https://faolex.fao.org/docs/pdf/par179001.pdf (III) International Fund for Agricultural Development. 2016. Paraguay. https://www.ifad.org/en/web/operations/w/country/paraguay (IV) UNOPS. 2020. To grow, eat and sell: Modernizing agriculture in Paraguay. https://www.unops.org/news-and-stories/stories/to-grow-eat-and-sell-modernizing-agriculture-in-paraguay (V) OECD. 2018. Multi-dimensional Review of Paraguay. https://www.oecd.org/development/mdcr/countries/paraguay/Paraguay_Vol_1_Overview_En.pdf
- (1) Ministerio de Agricultura y Ganadería. 2013. Marco estratégico agrario. https://faolex.fao.org/docs/pdf/par179001.pdf
- (2) Marcelo Medina. 2022. Cómo evolucionó la exportación de carne bovina de Paraguay en los últimos cinco años. https://www.valoragro.com.py/ganaderia/como-evoluciono-la-exportacion-de-carne-bovina-de-paraguay-en-los-ultimos-cinco-anos/
- (3) Regino Acosta Alfonso. 2018. Análisis de la viabilidad técnica y económica-financiera de un sistema silvopastoril con cría de ganado bovino, Colonia Volendam, San Pedro. http://sdi.cnc.una.py/catbib/documentos/tesis/4866.pdf
- (4) Aswath Damodaran. 2021. Current Data. https://pages.stern.nyu.edu/~adamodar/
- (5) Última Hora. 2020. Gobierno rechaza estudio sobre deforestación, pero no desmiente datos. https://www.ultimahora.com/gobierno-rechaza-estudio-deforestacion-pero-no-desmiente-datos-n2902057
- (6) Interactive Country Fices. s.f. Paraguay Forest. https://dicf.unepgrid.ch/paraguay/forest
- (7) Liz Cramer et al. 2012. Ministerio de Industria y Comercio.
- (8) ONU. 2020. Examen Periódico Universal – Tercer Ciclo - Paraguay. https://uprdoc.ohchr.org/uprweb/downloadfile.aspx?filename=8456&file=SpanishTranslation
- (9) Entrevistas. 2021.
- (10) Ing. Hebe González. 2015. Producción Orgánica en el Paraguay. https://www.abc.com.py/edicion-impresa/suplementos/abc-rural/produccion-organica-en-el-paraguay---ing-agr-hebe-gonzalez--1350097.html
- (11) Gobierno del Paraguay. 2014. Plan Nacional de Desarrollo Paraguay 2030. https://www.stp.gov.py/pnd/wp-content/uploads/2014/12/pnd2030.pdf
- (12) Economía Virtual. 2019. Producción orgánica en Paraguay fue tema principal de ponencia. https://economiavirtual.com.py/web/pagina-general.php?codigo=23241
- (13) Ministerio de Agricultura y Ganadería. 2012. Plan Nacional Concertado de Fomento de la Producción Orgánica y Agroecológica. https://faolex.fao.org/docs/pdf/par210095.pdf
- (14) SENAVE. 2013. Resolution 670/13. http://web.senave.gov.py:8081/docs/resoluciones/senave/RES670-13.pdf
- (15) Decidamos Paraguay. 2017. Sistema Participativo de Garantía (SPG) para la certificación de la producción agroecológica. https://www.decidamos.org.py/wp-content/uploads/2019/11/SGP-web-min.pdf
- (16) Agencia Financiera de Desarrollo. s.f. Acerca de la AFD. https://www.afd.gov.py/que-es-la-afd
- (17) Crédito Agrícola de Habilitación. s.f. Misión y Visión. https://www.cah.gov.py/mision-y-vision
- (18) Agencia de Información Paraguaya. 2021. Fortalecer a productores mediante programas y facilitar el acceso a créditos, desafíos del MAG para el 2020. https://www.ip.gov.py/ip/fortalecer-a-productores-mediante-programas-y-facilitar-el-acceso-a-creditos-desafios-del-mag-para-el-2021/