Spain’s Ministry of Industry has announced it will not implement the import restrictions on Argentine biofuels it put forward less than six months ago.

Spanish Industry Minister José Manuel Soria said “the measure can have a negative effect on oil prices” and explained that “in order not to harm those affected” by a price hike the measure had been scrapped.

“This announcement goes in the right direction, it is positive because it leaves the implementation of quotas without effect,” Gustavo Idígoras, adviser to the Argentine Chamber of Biofuels, told La Nación.

Five months ago the Argentine government, under President Cristina Fernández de Kirchner’s lead, expropriated 51% of YPF, the Argentine branch of Spanish owned oil company Repsol. The Spanish government initially retaliated by announcing it would impose restrictions on the import of biofuels, a measure that would mainly affect Argentina and Indonesia, the two main exporters of biofuels to the Iberian country.

President Fernández had reacted to the restrictions by saying that “if the Spanish government wanted to pay biofuels at a higher price it was their sovereign decision”.

The Spanish government was due to make public the import quotas it would ask from EU producers next Monday, and Spanish energy companies were anxious for an announcement of the nature that took place today.

Spain is the destination of approximately 50% of the biofuel Argentina exports, a market that amounted to €750m in 2011.

According to Pagina 12 Spain’s announcement comes after pressure had been applied by the World Trade Organisation to reach an agreement of this nature during talks held earlier this month.

A biofuel company in Brazil owned by Shell has signed a landmark agreement that means they will not purchase sugar cane grown on indigenous lands.

According to the environmental news source Ecoticias, the company running the project – Raízen – was established in 2010 as a joint venture between Shell and Brazilian ethanol giant Cosan to produce biofuel from sugar cane.

The land in question is in territory where Guarani indigenous group hold claims. The Guarani in the area report that rivers are polluted by the pesticides used in plantations. BBC reports that indigenous activists say farmers in Mato Grosso do Sul – the land in question – frequently use violence and threats to force them off their ancestral territory, and that the local authorities do little to protect them.

The NGO Survival International led the campaign, and director Stephen Corry said other companies should follow suit and stop funding the theft of lands.

“It is great news for the Guarani, who are abandoned at the risk of death on the roads,” he said.

Paraguay is not often highlighted for its economic achievements. Yet after 20 years of stagnation at the end of the 20th century, the landlocked country has enjoyed almost a decade of economic growth, and in 2010, GDP expanded by 15%, the fastest rate in Latin America.

Soy in Paraguay, the fastest growing crop in the region (photo: Scott Bauer)

Driving this impressive expansion is a thriving agricultural sector, and its principal product: soybean. Taking advantage of recent rises international prices, spurred by demand from China and the purchase from EU countries to produce biodiesel, Paraguay is now the world’s sixth largest producer and fourth largest exporter of soybean. Given the country’s relative size compared to the top three exporters—US, Brazil, and Argentina—it is fair to say that nowhere is the local impact of soybean so significant.

However, while the soybean boom has created some historic opportunities, it is also today at the heart of the country’s most difficult challenges.

Countryside Changes

Paraguayan life has always been linked to the rural world. Even during Pre-columbian times, the indigenous Guaraní culture was a rural one, developing their civilisation in the subtropical woodlands and leaving no heritage of urban life.

During the colonial era, a vast majority of the Province´s population was rural, with Asunción, the capital of modern Paraguay, the only important urban centre. Things were slow to change after independence and according to the 1982 census, 52.7% of the population was still rural.

This figure has since declined, according to more recent census, to 49.7% in 1992 and 43.3% in 2002; a fall that seems to coincide with profound changes that have been taking place in the Paraguayan agricultural sector since the 1970s.
Until the 1970s, rural production in Paraguay relied on a few key products such as cotton, tobacco, wood, yerba mate and cattle. While the exploitation of wood and cattle was typically performed in big private properties, the growth of cotton and tobacco was largely developed in small lots by local farmers.

In the 1970s, and in close relationship to the country’s first soybean boom, Paraguay’s agricultural landscape began to change in a drastic way. Since that decade, millions of hectares of subtropical woodlands in Eastern Paraguay have been cleared to grow soybean. At the same time, the expansion of the agricultural frontier brought big changes in land ownership, which became much more concentrated, especially in the Eastern departments of Alto Paraná and Canindeyú, where thousands of Brazilian settlers arrived with the necessary funds and means to set up the large-scale farms.

In this new pattern of agricultural production, small farmers and landowners, mainly Paraguayan nationals who did not have the personal capital or state support necessary for mass soybean production, were gradually displaced. They went in high figures to the outskirts of the main cities, becoming the dwellers of rapidly-growing slums. Others remained in the countryside, forming an active landless peasant movement, and gaining increased participation in political life.

One Man´s Meat is Another Man´s Poison

Today, there is an increasing debate within the Paraguayan society about the pros and cons of soybean production. Those in favour of the sector claim that revenues for soybean exports provide a unique opportunity for Paraguay to start a development process that has been long postponed. They show a handful of impressive figures which show the pace of growth in agricultural production and exports and its impact on the most important sectors of the national economy, especially in the building, commercial and financial sectors. Indeed, during 2010, the activity in the building sector grew by 13% while the commercial and services sector grew by 9%.

Soy fields in Paraguay (Photo: Patty P)

Alongside cattle rearing, another booming sector due to international demand, the soybean industry accounted for accounted for 55.3% of Paraguayan exports in 2010. According to the Central Bank of Paraguay, of exports totaling US$4.53bn in 2010, the exports of soybean reached US$1.59bn and those ones of meat peaked US$920million.

The contribution of soybean to the economic recovery of Paraguay has been undeniable. The country´s economic performance during the last ten years has been far better than that one during a great part of the 1980s and the 1990s. At the same time, soybean production has helped the international insertion of some economic sectors and has boosted the appearance of a modern service sector related mostly to this boom (banking, communications and construction).

On the other hand, however impressive the growth figures are, soybean has also caused very deep changes in both the economic and social structure of the country, and not necessarily in a positive aspect.

Critics of the present model of soybean farming claim that such a boom may be a house built on sand as Paraguay has become so reliant basically on two products: soybean and meat, and therefore vulnerable to changing climate conditions, volatile international prices and the outbreak of foot and mouth disease (FMD). In the case of FMD, some economic analysts estimate that the country could lose between US$1bn and US$2bn in 2012 due to the closing of some export markets for the Paraguayan meat.

Moreover, the expansion of soybean production has brought as a consequence dramatic environmental damage due to intense deforestation, the astonishing increase in the use of chemical and fertilizers, which have been poisoning the land, the water and the surrounding land of small farmers with the subsequent health problems of the affected communities.

Indeed, these local communities have been most affected by the changes brought by the soybean boom, and are among the biggest critics of the current model of farming. For them, a decade of economic growth has come without social development, as the widening of the agricultural frontier forced many Paraguayan farmers to sell their land. Meanwhile, much of the richest soil fields of Alto Paraná and Canindeyú (near the frontier with Brazil) became the property of Brazilian owners and their descendants, leading to the term Brasiguayos in local slang.

Part of this lack of development is due to the fact that a high percentage of soybean production is exported just as beans, with no added value. Figures are impressive: according to CAPECO, the Paraguayan Chamber of Cereals and Oilseeds Exporters and Traders, of the 7.4million tons of soybean harvested in 2010, 5.7million tons were exported as beans, while only 1.5million tons were industrialised and 221,906 tons used as seeds.

Soybean Production Grows…and so do Conflicts

Many of the displaced farmers have organized themselves in social grass root movements such as Mesa Coordinadora Nacional de Organizaciones Campesinas (MCNOC), Movimiento Campesino Paraguayo (MCP), Movimiento Agrario Popular (MAP) and Organización Campesina del Norte (OCN). At first, they started to claim for land ownership on huge unproductive estates (latifundios) in the San Pedro and Concepción Departments. But since then, they set their eyes on the rich farms alongside the Paraná River bank, saying that much of that land was acquired by the ‘Brasiguayos’ in an illegal way: either by forcing locals to sell their land (by extortion or pressure) or by occupying the land that once belonged to the national state, which was later illegally transferred to the foreigners.

Conflicts grow between ‘Brasiguayos’ and locals for the land. (Photo: Olmo Calvo Rodríguez)

This explains a great part of the current conflict in the Ñacunday region in Alto Paraná, where carperos (landless peasants living in tents) just outside the farm of Tranquilo Favero (a powerful, originally Brazilian landowner, who became a naturalized Paraguayan 25 years ago) have been threatening to invade the land if the illegal acquisition is proved to be true. The unrest in the countryside is growing quickly and threatens to spread to the northern part of Itapúa Department. Itapúa and Alto Paraná are the two richest departments of Paraguay and the epicenter of soybean production.

The issue is becoming more controversial as days pass by. Besides the current tension, natural in a situation where landless peasants threaten to invade property and landowners are claiming their right to defense, there is an escalating verbal war. For instance, in an interview for Folha de Sao Paulo, Favero said that peasants should be given a beating “as a criminal´s woman” and defended Alfredo Stroessner´s dictatorship (1954 – 1989), claiming that the country was a safer place during those years.

These words caused great criticism from the media, the political parties, and feminist and campesino organisations. The Municipal Council of Asunción unanimously declared Favero persona non grata and there were some attempts from some political parties in the council to spur a proposal to deprive him of his Paraguayan citizenship.

There is even some concern that the conflict between Paraguayan campesinos and Brasiguayos landowners could also create a difficult international panorama for the country as the Brazilian government is carefully observing what is happening on the other side of the frontier. There is no doubt that the issue of the ‘Brasiguayos’ and the land ownership conflict are currently in the agenda of both the Brazilian government and media.

Another Question?

While the majority in Paraguay are still trying to answer if soybean is a blessing or a curse for them, there is a new question arising out of this problem: Whither Paraguay? It is a question that comes to mind due to increasing tensions, deteriorating social conditions, and most serious of all, the lack of willingness in many of the involved actors to tackle these long-standing problems in a legitimate way.

Photo by Hayden Lewis

The Biofuel Process

Biodiesel boasts a number of benefits; it is an alternative to fossil fuel, and it is reduced in toxicity – carbon neutral, in fact. It is renewable and biodegradable.  It’s cheaper than petrol, and, if you’re really keen, you can actually make it yourself.

The concept of biodiesel is pretty straightforward. You ‘generate used vegetable oil’ (an excuse to fritter off those deep fry potato wedges), then deposit the used oil into a suitable container; old plastic water bottles are recommended. You then take your old plastic water bottle full of old cooked vegetable oil to a ‘reception centre’ (which are located mainly provincially at the moment, in places such as Tigre, Merlo and La Matanza).

Then, along comes the transport to cart off all the used vegetable oil to a biodiesel plant, where the miraculous conversion from used vegetable oil into combustible fuel takes place, and presto: you got yourself a car running on old fat. (We’ll leave the miraculous conversion at miraculous; the actual process involves something called biolipid transesterification, which seems a little heavy duty for the moment.)

Environmental and Social Awareness

On the other side of the environmental coin, various projects have cropped up whereby disadvantaged social organisations can get involved. Plan BIO is one of these, and its slogan is about working for a cleaner environment, whilst ‘helping the people who need it’. I get wind of a soup kitchen based in Tigre that is involved with plan BIO in a seemingly symbiotic scheme. The oil from the soup kitchen is collected by plan BIO, who take the used oil to a factory to convert it into combustible fuel, giving a part of the profits made from selling the fuel back to the soup kitchen.

Photo by Hayden Lewis

Biofuel extraordinaire and soup kitchen owner, Santos Cabrera or “Toto”

Pointing out the road we are headed for on a map, a baffled looking tourist office operator explains a bus route, so naturally, we jump into a taxi. We show the map to the taxi driver, who in turn is similarly baffled (“I have never seen this road before”), although he does manage to get us to our destination soup kitchen. On an apparently infinite stretch of dusty road that wouldn’t be out of place on the set of a spaghetti Western.

After a phone call to check that nowhere is the right place, we spot a smiling man, cigarette in hand, stood outside a bit of a ramshackle house. A little plan BIO sign stuck on the wall, amidst various dogs and lots of flies, suggests that we’re in the right place.

Encuentro de Los Abuelos

Santos Cabrera, a.k.a Toto, runs Encuentro de Los Abuelos, a soup kitchen for the ‘older generation’ who live in the surrounding barrio. The 63-year-old has been involved with plan BIO for the last 14 months. Toto, smoking his cigarette, is brimming not only with ecological awareness but an altruistic concern to maintain the environment for generations to come. As well as partaking in the biodiesel scheme, he explains how recycling their cooking oil is a step in protecting the already notoriously polluted river Reconquista, which, along with the Riachuelo, is one of the most contaminated rivers in the country.

Photo by Hayden Lewis

Resident Chef and side-kick, Alejandro Victor Fernandez or “Cuca”

Sure enough, the plan BIO scheme works like it reads on the label. Every Wednesday, Toto, with the aid of his aviator-clad sidekick Alejandro Víctor Fernández, a.k.a Cuca, have an open door from midday. Sometimes up to 20 neighbours turn up to eat Cuca’s food, laughing, chatting, and just spending the afternoon together. Toto explains that many of them live alone and without any real means of income; so the kitchen is an open place for socialising.

The energy inside the kitchen is infectious. Whilst Cuca prepares the meal (matambre de asado is his speciality), the men play cards, and amidst wheezing but hearty laughter, they regale us with stories of their youth. The women are not immune to flinging a provocative comment across the room, giggling like schoolgirls whilst sipping mate. The kitchen is a hotbed of senior citizen charisma.

Having been warmly invited in to sit with the abuelos, Toto tells me:

“We’ve created a lovely familiarity here at Encuentro. We’ve known each other for years. And with the biodiesel scheme, well, we’re just being conscientious citizens. We’re just supporting each other, helping a neighbour out; and we care about the environment. We want to safeguard the future of our grandchildren.”

It does seem a perfectly mutual and interdependent relationship. Toto and the abuelos gain profit from plan BIO to continue the cooking and discarding of oil cycle. Being ecologically aware allows them to enjoy some of the simpler things in life that others often take for granted.

Toto explains to me, however, that the collection of the used oil is not always regular.

Photo by Hayden Lewis

A few weekly regulars of Toto’s and Cuca’s place

“It depends on how much is collected from other collection points; the restaurants around here for example. Also there are a few Catholic institutions, and they receive benefits. We are independent, and obviously do not generate as much oil as some of the bigger organisations.

“But in return for the oil we do store for them, they give us money, so we can keep the place going.”

As time draws for the tight knit little group to lunch, I ask Toto how he would summarise the essence of Encuentro and its involvement with Plan BIO.

“You know, we want to be involved. It is our job to secure a future for our grandchildren. Just because we’re ‘third generation’, it doesn’t mean we can’t play a role.

“We’re not evangelical. It’s like, if people don’t want to dance, they won’t. We won’t force them too. But us, we want to take part. We want to dance!”

With this Toto chuckles and simultaneously two more toothless men arrive at the gate, smiling and joking, just in time for Cuca’s food. We’re warmly invited to stay; and with the vibrancy of these folks you’re almost very tempted to.

Photo by Hayden Lewis

Pouring grease to be used later for fuel

Although Toto recycles his oil for biodiesel production and for the good of the environment; Encuentro de Abuelos and plan BIO are two very separate entities. With the money from the biodiesel project, Toto can keep on with the soup kitchen, bringing the abuelos of the barrio together for some food and a little bit of joy. What these people give each other though, laughing together in this little kitchen in the middle of nowhere, is really something else.

On the way back from Tigre, I ponder their commitment to the environment. It’s entirely selfless. I find myself in a fond little daydream, whereby one day it is these wiry haired abuelos who come to be the super-hero saviours of our planet.

To learn more about biodiesel and plan BIO, and find out how you can take part, visit www.opds.gba.gov.ar

Encuentro de Los Abuelos is an independent organisation headed by Santos Cabrera and Alejandro Víctor Fernández, based in Tigre.