Aid to producers and debt financing: Paraguay’s response to drought

RIO DE JANEIRO, BRAZIL – Paraguay’s president Mario Abdo Benítez held a press conference to announce the measures, after a meeting held with his economic team to discuss the country’s agricultural and livestock sector, in a complex situation due to the severe drought.

“These are contingency measures we will implement for the productive sector due to the drought affecting agriculture and livestock,” the head of state said.

Ministry of Agriculture and Livestock (MAG) and Itaipu and Yacyretá Binationals assistance programs for 21,200 producers, credit deferral facilitation until the end of September 2022 for the agricultural sector, credit support from public financial entities and tax payment deferrals comprise the announced program.

Abdo Benítez said that Paraguay is “experiencing a significant and marked economic recovery,” after 8 consecutive months of economic growth.

However, and although both the Economic Commission for Latin America and the Caribbean (ECLAC) and the Central Bank of Paraguay have a good outlook for the country’s growth (between 4% and 3.7%, respectively), Benítez said that the “climate factor” and “the advance of Covid” are two major risks threatening these figures.

“We have encouraging numbers, but they are not certain,” he said.

The drought has impacted the harvest of thousands of agricultural producers, one of the Paraguayan economy’s drivers, as well as electricity production.