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Paraguay AG Invest Plantation Tour Review by Bob Howse

Mr. Bob Howse and owner Carsten Pfau at the La Colmena plantation in Paraguay

By Bob Howse

Halifax, Nova Scotia

Feb. 17, 2019

Early in February, 2019, my son Joe and I had the opportunity to visit Paraguay as guests of Agri Terra KG, a farm investment company through which our family has made a modest investment in orange growing.

Along with five other current or prospective investors, we were part of a tour of Agri Terra’s farm operations conducted by David Smith, the company’s sales agent in Panama, and Carsten Pfau, Agri Terra’s general partner.

Carsten is the driving force behind the company’s business plan to grow oranges in Paraguay for the local market — which now imports large quantities of citrus — in partnership with foreign direct investors. The investment provides title to a parcel of land in an Agri Terra plantation, plus the benefit of a farming agreement under which Agri Terra plants and maintains the trees and harvests and markets the crop for its partners.

How did a family of Nova Scotians come to invest in farming in faraway Paraguay?

Joe’s software business increasingly brings him to Panama and we met David through a mutual colleague who first introduced us to this farming investment concept.

Joining the Agri Terra Paraguay tour in Panama was a convenient opportunity for us to actually see the farmland in which we were investing, assess the condition and operations of the farm and talk first-hand with our Paraguayan partners about all aspects of the business.

Everyone, from Carsten, to David, to Federico — the farm manager who has hands-on responsibility for planting and caring for some 85,000 trees already in the ground — was eager to show us what Agri Terra has accomplished in four years and to answer any questions about costs, competition, marketing and, of course, the intricacies of orange farming, in great detail.

Agri Terra covered our accommodations in Asuncion — very pleasant rooms in the Sheraton — and hosted a number of enjoyable dinners in which we newcomers to Paraguay were able to learn not only about the orange business but about the economy and culture of this peaceful, stable and friendly country that none of us had ever expected to visit.

We had a memorable excursion on the Paraguay River, which is a formidable ride when the wind whips up the current — even for Nova Scotians who are used to the North Atlantic.

The highlight of the tour, however, was the trip to the two plantation sites, La Colmena, about 120 kilometres south of Asuncion, and Nueva Italia, about 38 kilometres from the capital.

Mr. Bob Howse with his son Joe and owner Carsten Pfau at the La Colmena plantation in Paraguay

Mr. Bob Howse (center) and owner Carsten Pfau (left) at the La Colmena plantation in Paraguay

La Colmena, where our land is located, is the company’s original plantation. Planting began three years ago and the site is now almost fully planted, with the first commercial crop due to be harvested later this year.

The plantation is on a richly fertile plain, dominated by farmland but dotted with little forested hills that look like wooded pyramids. Nearby is the town of La Colmena, home to some 5,200 residents, many the descendants of Japanese immigrants who founded the community in the 1930s and made it a centre of honey production.

For an orange farm, there are no better neighbours than bees — an essential factor in pollination. But the town is also a reliable source of skilled farm workers. Their abilities are evident in the healthy trees and neat, orderly, carefully planned fields of the orange plantation.

The plantation is an impressive sight. The most mature fields are very green, with three-year-old trees that are about to yield marketable fruit. Planting in other fields ranges from little trees set out a few months ago to adolescents in their third season. The last plots, including ours, will be planted in a few weeks.

The fields are planted in eleven orange cultivars grafted to two varieties of dwarf rootstock to provide for year-round production and to ensure the best yield for each field.

The farm is well-watered, even in the current dry season. Several year-round streams provide reliable water, supplemented by reservoirs and underground storages built by Agri Terra. The young trees are watered initially by trucks. As they mature, piped water is installed between the rows.

Federico, the farm manager who lives with his family on the property, took us to the gently sloping field where our orange trees will be set out soon. He proudly showed us the new reservoir that will ensure this field never lacks for water. To further make the point, black clouds suddenly rolled over and showered us with a healthy orange-friendly soaking.

We left feeling that our future oranges are in good hands.

The tour included a visit to the larger Nueva Italia site, where Agri Terra is offering investments in greenhouses producing organic vegetables in addition to open-field plantations of oranges. The greenhouses, which provide a faster turnover of crops, will be assembled in a few weeks. The first orange fields will be planted this year.

The company plan is to eventually plant some 2,000 hectares of oranges, mostly at this site, which would support an investment in a processing plant, also at Nueva Italia.

I make no pretence of being a qualified investment advisor — if you are interested in this opportunity you should do your own homework and due diligence in the context of what is an acceptable risk level for you. But I can say that Joe and I were very satisfied by our meetings with Agri Terra personnel and by our inspection of the orange plantation.

We were also impressed by the personal efforts of David and Carsten to bring potential investors to Paraguay — not an easy task when, despite its many assets, it is a country little known to North Americans and a long way for the average investor to travel. But they did make this adventure both feasible and enjoyable for us and we are well pleased with the result.

Bob Howse is a retired newspaper editor and columnist. He lives in Halifax, Nova Scotia, Canada.