SAIS Review

SAIS Review 23.1 (2003) 171-180

The Changing Economy of Rural Paraguay:
A Photo Essay on the Economic Opportunities and Threats Facing General Artigas

Marc Douglas

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The economy of General Artigas, a small district in southeastern Paraguay, has been changing over the past decade. Many in rural Paraguay were unprepared for the deepening of regional integration under Mercosur. Trade liberalization has meant stiffening competition for the products that Artigueños once sold with relative ease in local and national markets.

Perhaps the most glaring example of this phenomenon is garlic production. General Artigas has historically been the epicenter of garlic production in Paraguay. In recent years, however, large volumes of garlic from Argentina have flooded the market. Paraguayan consumers have benefited from this development, as the garlic Argentina produces, in addition to retailing at lower prices, is larger and easier to peel. For producers in General Artigas, however, a crucial piece of the local economy has all but disappeared.

Because of the changing economic conditions, many farmers from General Artigas have migrated to national and regional [End Page 171] urban centers in the hopes of finding work, mostly in the informal sector. Others have struggled to make ends meet as day laborers at larger farms in neighboring districts. Most of those who have remained, principally older residents, have turned to subsistence farming. Non-farmers have also felt the pinch, as many service and local light manufacturing jobs depend on a vibrant agricultural sector to stimulate the local economy.

Integration into the regional and global economy also brings opportunity, exemplified by stevia, a sweet leaf native to northern Paraguay with growing global demand, especially in Japan. Producers in northern Paraguay have increasingly exported dried stevia leaves for processing in Japan, where consumers enjoy sweet, calorie-free extract in hundreds of products ranging from toothpaste to ice cream.

Producers in General Artigas have begun to learn from their compatriots in the north. After several horizontal learning experiences, including group field trips of Artigueños to the north and vice-versa, stevia production took root in Artigas in 1998. Those selected Artigueños who visited northern producers agreed to disseminate production methodologies by way of demonstration plots and by regular community radio station broadcasts. By 1999, not only stevia seedlings but also optimism began to grow in General Artigas. [End Page 172] [Begin Page 180]

In spite of the vast potential stevia holds to Paraguay's economy, the government has devoted little research and development to this crop. Paraguay would attract more international investors and buyers by developing higher yield, disease-resistant varieties that contain higher percentages of stevioside, the component of the leaf that is extracted for commercial use. As of December 2002, Paraguay is still waiting for its first stevia processing plant. However, the grassroots stevia movement has expanded nationally, as producers have grown more organized and coordinated. One of the fruits of this organization is an increased ability to influence policy—a key development, as restrictions for stevia producers were originally quite extensive. Though the hoped for processing plant has yet to materialize, producers continue to benefit from this new sector. Stevia production in Paraguay shows how small communities, often seen as the victims of globalizing trade, are adapting to and profiting from a new economic reality.

 

Marc Douglas is finishing an M.A. degree in International Development with a concentration in microenterprise development at the Johns Hopkins University School of Advanced International Studies (SAIS). Mr. Douglas served as a small business advisor with the Peace Corps in rural Paraguay from 1996-1999. While at SAIS, he has worked on domestic microenterprise issues for the Association for Enterprise Opportunity, the national trade association for over 430 microenterprise programs. He is the recipient of the first SAIS Sargent Shriver Peaceworker Fellowship.