Systems for grouping agricultural production and processed products
Systems for grouping agricultural production and processed products
Business Model Description
Invest to add smallholder production and processing centers for grains and associated products from sustainable crops. Producers and / or cooperatives will provide production to these aggregation and processing centers to add value. The crops can be; sesame, chia, among others, and reprocessed products can be oils, flours, etc.
Expected Impact
Providing new productive ,models to increase agricultural income, reduce poverty and vulnerability and contribute to a more sustainable 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: San Pedro
- Paraguay: Canindeyú
- Paraguay: Concepción
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
Systems for grouping agricultural production and processed products
Invest to add smallholder production and processing centers for grains and associated products from sustainable crops. Producers and / or cooperatives will provide production to these aggregation and processing centers to add value. The crops can be; sesame, chia, among others, and reprocessed products can be oils, flours, etc.
Business Case
Market Size and Environment
In the 2019/2020 campaign, the sowing of 50,000 ha of sesame was achieved throughout the country (2).
Indicative Return
> 25%
For an agricultural project for morinda citrifolia in the Arroyos y Esteros district of Paraguay, in 2013, for production and marketing in the national market, the IRR is 64% after 10 years (3).
Investment Timeframe
Short Term (0–5 years)
For an agricultural project for morinda citrifolia in the Arroyos y Esteros district of Paraguay, the total investment recovery period occurs before year 3 of operation (3).
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
The number of sesame producing families is approximately 40,000, making it difficult for the private sector and the State to cover all families (5).
One in two people in rural areas lives in poverty, and one in three in extreme poverty, with even higher rates in female-headed households (6).
Gender & Marginalisation
Rural women depend fundamentally on agriculture and most of them work on their own account or on family farms as unpaid labor (6).
One in two people in rural areas lives in poverty, and one in three in extreme poverty, with even higher rates in female-headed households (6).
Expected Development Outcome
Increase the proportion of the agricultural area in which productive and sustainable agriculture is practiced
Reduce diseases caused by pesticides Reduce the pollution of rivers, channels, surface water and underground waters
Improve protection of the environment and ecosystems in Paraguay and expand sustainable agricultural production
Gender & Marginalisation
Reduce rural population and women poverty
Primary SDGs addressed
2.4.1 Proportion of agricultural area under productive and sustainable agriculture
3.9.1 Mortality rate attributed to household and ambient air pollution
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
Planet
Indirectly impacted stakeholders
Public sector
Outcome Risks
Risk of injury and illness in grouping and processing centers (7).
Generation of waste, odors, noise and dust (7).
> Decrease in soil quality (7).
Impact Risks
Execution risks:> Lack of organization among small producers (8).
Drop Off: Lack of training for small and medium producers to use inputs, machinery and risk systems, e markets, mainly Japan (8).
Impact Classification
What
The outcome is likely to be positive because organizing and assisting small producers by bundling products to add value will help increase their income
Who
Small farmers are underserved due to a strong dependence on less efficient traditional systems
Risk
Although the model is proven for these types of crops and others, the principles of fair price must be considered, technical training and financial assistance must be provided
Impact Thesis
Providing new productive ,models to increase agricultural income, reduce poverty and vulnerability and contribute to a more sustainable environment
Enabling Environment
Policy Environment
The National Development Plan 2030 - Its goals include increasing the productivity of family farming and increasing the share of household income (9).
The 2013 Agrarian Strategic Framework - includes within its objectives to contribute to the process aimed at improving the quality of life with substantive reduction of poverty in Family Farming (10).
National Plant and Seed Health and Quality Service (SENAVE), Rodrigo González Navarro, highlighted that the institution under his charge will continue to work on the processes to improve the quality and safety of sesame Paraguayan exports (11).
Financial Environment
The Development Finance Agency (AFD) - PROCRECER - Financing for investment projects. It finances projects such as - Rural, industrial, commercial and service development projects (15).
Credit Agrícola de Habilitación (CAH) - public entity that provides financial services and that promotes technical assistance and marketing through alliances with the public and private sectors (16).
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 (17).
Regulatory Environment
Forestry Law 422/73 - All rural properties of more than twenty hectares in forest areas must maintain 25 percent of their natural forest area (12).
Law N ° 385 Seeds and protection of cultivars - aims to promote an efficient activity of obtaining cultivars; production, circulation, commercialization and quality control of seeds, among others (13).
Law No. 294/93 on Environmental Impact Assessment - establishes that it will require the presentation of Environmental Impact Studies for public or private projects or activities (14).
Marketplace Participants
Private Sector
Hypergrain CO. (Paraguay), Shirosawa Co. (Paraguay), Dulsan (Paraguay)
Government
Ministry of Agriculture and Livestock, Ministry of Industry and Commerce.
Multilaterals
IDB, Development Bank of Latin America (CAF)
Non-Profit
Fundación Paraguaya, Asociación Rural del Paraguay, Inter-American Foundation, Unión Agrícola Naciona (UAN), Paraguayan Chamber of Exporters
Target Locations
Paraguay: San Pedro
Paraguay: Canindeyú
Paraguay: Concepción
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) Dirección General de Estadística, Encuestas y Censos. 2015. Encuesta Permanente de Hogares Paraguay. https://www.ilo.org/surveyLib/index.php/catalog/6754/related-materials
- (2) ADN. 2020. Sembraron 50 mil hectáreas de sésamo a nivel país. Comenzó periodo de cosecha. https://www.adndigital.com.py/sembraron-50-mil-hectareas-de-sesamo-a-nivel-pais-comenzo-periodo-de-cosecha/
- (3) Chiemi Noemí Sirai. 2013. Proyecto agrícola de la Morinda citrifolia en el distrito de Arroyos y Esteros de Paraguay para la producción y comercialización en el mercado nacional. https://www.eco.una.py/eco/postgrado/tesis/Tesis_NONI_Chiemi_Sirai_G_%20051213.pdf
- (5) Néstor Zárate. 2017. Cadena de valor del Sésamo. https://www.abc.com.py/edicion-impresa/suplementos/abc-rural/cadena-de-valor-del-sesamo---ing-agr-nestor-zarate--1618820.html
- (6) ONU Mujeres. 2015. El empoderamiento de las mujeres rurales a través de los ODS. https://lac.unwomen.org/es/noticias-y-eventos/en-la-mira/rural-women-food-poverty
- (7) Gustavo Pérez. 2018. Uso agrícola para el cultivo de semillas orgánicas de chía blanca y negra, teff y sésamo. https://www.mades.gov.py/wp-content/uploads/2018/10/7231_ACKERLAND_GUSTAVO.P.pdf
- (8) Agencia de Cooperación Internacional del Japón. 2012. Estudio de recopilación de datos sobre cultivos potenciales para la exportación producidos por pequeños productores en el Paraguay. https://www.jica.go.jp/Resource/paraguay/espanol/office/others/c8h0vm0000ad5gke-att/info_02_01.pdf
- (9) Gobierno del Paraguay. 2014. Plan Nacional de Desarrollo Paraguay 2030. https://www.stp.gov.py/pnd/wp-content/uploads/2014/12/pnd2030.pdf
- (10) Ministerio de Agricultura y Ganaderia. 2013. Marco estratégico agrario. https://faolex.fao.org/docs/pdf/par179001.pdf
- (11) SENAVE. 2014. Normativas vigentes de la Dirección de Calidad, Inocuidad y Agricultura Orgánica. http://web.senave.gov.py:8081/docs/web/Compendio-DICAO.pdf
- (12) Congreso de la nación paraguaya. 1973. Ley Nº 422 / FORESTAL. https://www.bacn.gov.py/leyes-paraguayas/2370/ley-n-422-forestal
- (13) Congreso de la nación paraguaya. 1994. Ley Nº 385 / SEMILLAS Y PROTECCION DE CULTIVARES. https://www.bacn.gov.py/leyes-paraguayas/2377/ley-n-385-semillas-y-proteccion-de-cultivares
- (14) Congreso de la nación paraguaya. 1993. Ley Nº 294 / EVALUACION DE IMPACTO AMBIENTAL. https://www.bacn.gov.py/leyes-paraguayas/2374/ley-n-294-evaluacion-de-impacto-ambiental
- (15) Agencia Financiera de Desarrollo. s.f. Acerca de la AFD. https://www.afd.gov.py/que-es-la-afd
- (16) Crédito Agrícola de Habilitación. s.f. Misión y Visión. https://www.cah.gov.py/mision-y-vision
- (17) 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/