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11. Setting up a Plan for the Use of Caarendy Port

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11. Setting up a Plan for the Use of Caarendy Port 11. SETTING UP A PLAN FOR THE USE OF CAARENDY PORT 11.1 NECESSITY OF DEVELOPMENT OF CAARENDY PORT FACILITIES 11.1.1 Present Condition of Water Transport Using the Paraná River (1) Increase in the Volume of Grain Export As an infrastructure of transportation for overseas commerce, Paraguay, a land-locked country, has river transportation using the Paraná and Paraguay Rivers (52%), road transportation leading to neighboring countries (44%), railroad lines and airways (4%) (in 2004). However; most means of transportation depend on river and road transportation. In comparison with data in 1997, land transportation has decreased and river transportation has increased. It is expected that the volume of production of soybeans, one of the main exports, will expand up to 2.2 times that of the present, in 2015. It is also assumed that exportation using the Paraná River will expand up to 1.9 times that of the present. The Itapúa and Alto Paraná provinces, both of which are located along the Paraná River, are main soybean-producing centers. (2) Private Port-Centered Transportation System The role of private ports in river transportation accounts for a very high percentage; 82% in exports and 54% in imports (in 2001). In the total of eight ports (excluding Caarendy Port) located along the Paraná River, seven are private. (3) Imbalance between Exports and Imports Transportation using the Paraná River is extremely imbalanced; the volume of exports is 1,449 thousand tons while that of imports is 67 thousand tons. (In the case of transportation using the Paraguay River, the volume of exports is 1,843 thousand tons and that of imports is 1,553 thousand tons, which is almost balanced.) The imbalance between exports and imports in the use of the Paraná River brings about an increase in transportation costs of exported grains due to the reduction of efficiency in the use of ships and vessels. Fuel, fertilizer, agricultural chemicals, and other products, necessary for agricultural activities, most of which are imported articles, depend on land transportation requiring high transportation cost from Argentina, Asunción, and others. (4) Small Farmers In the present state, a transportation system for commodities, and other products, produced by small farmers has not been established. Therefore, they have no option but to engage in the cultivation of 11-1 low-price raw cotton and/or stockbreeding, and are forced to negotiate business in a way which does not allow them to foresee freeing themselves from poverty. 11.1.2 Issues to be settled (1) Necessity of Public Ports 1) Response to Increase in Export of Grains It is expected that the volume of production of soybeans, one of the main exported articles, will expand up to 2.2 times of the present volume, in 2015. It is also assumed that exportation by means of the Paraná River will expand up to 1.9 times of the present volume. The Itapúa and Alto Paraná provinces located along the Paraná River are main soybean-producing centers. Although eight ports in total are maintained along the Paraná River, their sizes are small and it is necessary to strengthen functions of the existing port facilities and to establish new port facilities in order to address future increases in the export of grains. Table 11.1-1 Production and Export Volume of Soybean and Wheat in Paraguay Soybean Wheat 2004 2015 2015-2004 2004 2015 2015-2004 Production volume (t) 3,911,415 8,424,578 2.15 715,000 840,730 1.18 Export volume (t) 3,656,184 7,904,344 2.16 307,648 382,163 1.24 (93.5%) (93.8%) (43.0%) 45.5%() Export volume using the Paraná River 1339569 2563755 1.91 107286 116487 1.08 (36.6%) (32.4%) (34.9%) (30.5%) Table 11.1-2 Situation of Ports along the Paraná River (in 2004) Main facilities Distance Owner or Loading Loading Utility from Location Port name Storage facilities Remarks Operator capacity capacity rate ($/t) Buenos (t) (t/day) (t/hour) Aires (km) Grains 27,000 Tres Fronteras OTS Company 6,000 300 30 1,918 Alto Paraná Oil 6,000 TOTEM Trocua 20,000 4,000 250 27 1,848 Company Puerto del Sur Dos Fronteras 18,000 4,000 250 25 1,807 Company Ministry of Agriculture and Triunfo Stock Raising 16,000 4,000 250 23 1,740 (Cargill Company) Cargill La Paloma 21,000 4,000 400 23 1,736 Company Itapúa Trans Agro Don Joaquín 25,000 4,000 - 21 1,697 Company Pirapo Caarendy Agricultural - - - - 1,690 No facilities Cooperative Paredón Gical Company 16,000 3,500 250 21 1,658 Preliminarily in common use Campichuelo ANNP - - - 1,600 (without achievements) 11-2 2) Structure of Exports Seven of the eight ports located along the Paraná River (excluding Caarendy Port) are private. Reviewing the system to export soybeans, one of the main exports, farm producers of soybean/wheat conclude sales contracts for nearly 60% of the production volume before cultivation in order to reduce market risks. The existing structure allows them to sell the remaining 40% by making adjustments based on the relation between supply and demand at different points. In many cases, however, medium and small scale farmers cannot sell their products even when advantageous sale times arise, because they cannot use ports and ships when they want. Most port facilities are private and those facilities are monopolized by big traders, the major (agricultural farms), with achievements which allow them to secure the use of ports. As a result, medium and small scale farmers are forced to conduct transactions taking on excessive risks. Therefore, highly public ports which can be used freely and stably by medium and small scale agricultural producers are required. (2) Solution of Imbalance between Exports and Imports Most of the eight ports maintained along the Paraná River are used for exportation of grains and do not have an import function. This brings about an increase in transportation cost due to lowered service efficiency of transport ships and vessels. On the other hand, the present situation is; that fuel, fertilizer, agricultural chemicals, and other necessities, for agricultural activities, most of which are imported articles, depend on land transportation requiring high transportation cost from Argentina, Asunción, and others. Thus, ports with import functions are deemed necessary. Table 11.1-3 Purchase Volume of Fuel, Agricultural Chemicals etc. in the Iinland Area of Caarendy Port (in 2004) Fuel (liter) Fertilizer (t) Agricultural chemicals (liter) Unidas Agricultural Cooperative 17,000,000 25,000 1,300,000 La Paz Agricultural Cooperative 1,700,000 4,000 190,000 Pirapo Agricultural Cooperative 3,500,000 5,000 280,000 Total 22,200,000 34,000 1,770,00 (Data of Pirapo Agricultural Cooperative) 11-3 11.1.3 Importance of Improvement of Caarendy Port Facilities (1) Poverty Group in Paraguay Necessary food expenses of 410.189 Gs per month per family (4.7 persons) in the provinces of Paraguay is set as an extreme poverty line, and the lowest living expenses per family of 643,539 Gs per month is set as a poverty line. In terms of a national average, 41% of the population is on or under the poverty line, about half of which is on or under the extreme poverty line. In Itapúa, which is the study area, the percentage of poverty is close to the national average, but that of extreme poverty is higher than the national average, which reaches 24% of the whole population. (The results of a questionnaire survey carried out from August to December in 2004 in cooperation with IDB.) Figure 11.1-1 Poverty Situation by Area in the Itapúa and Alto Paraná Departments (2) Situation of Small Farmers along the Paraná River Among the people engaged in agriculture, farmers having a cultivated area of 20 ha or smaller are called small farmers. From the aspect of annual incomes, about 98% of small farmers are under the poverty line, and the percentage of those who fall below the extreme poverty line is over 85%. Therefore, it is considered that most small farmers are considered as belonging to the poverty group. Looking at the acreage of people engaged in agriculture in the Alto Paraná and Itapúa provinces along the Paraná River, the percentage of farm families with an acreage under 20 ha. is over 80% and it is 11-4 considered that most of them belong to the poverty group. (3) Contribution to Reduction of the Poverty Group by Maintenance of Port Facilities (at Caarendy Port) Many small farmers in the Alto Paraná and Itapúa provinces along the Paraná River are engaged in the production of agricultural products to be exported, such as soybeans, but do not belong to any agricultural cooperative. For this reason, they are excluded from the reformation of productive techniques and are unhopeful of productivity improvements. The organization of small farmers will prove effective in the reduction in the number of the poverty group. It is said that utilization of existing agricultural cooperatives is necessary for the organization of small farmers belonging to the poverty group. If, with an agricultural cooperative as the central figure, local small farmers are taken in; fuel, fertilizers and herbicides will be bought together as a group; instructions about production will be received; and commodities produced will be accepted, then the said articles to be used by small farmers will be supplied stably and made cheaper, quality of products will be improved, and productivity will also be improved. Thus, it is expected that the production as well as the incomes of smaller farmers will increase.
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