ASUNCION (Reuters) – Paraguay announced on Wednesday new measures to support the agricultural sector, including credit lines to refinance debt and tax cuts, as a severe drought affects farm output in the world’s fourth-largest soybean exporter.
Paraguay President Mario Abdo said the new measures seek to provide “relief and predictability” to the sector as the country’s economy bounces back from the COVID-19 pandemic.
The program, which aims to support 21,000 small-sized farmers, includes a cut in the corporate income tax in the first quarter and debt refinancing credit lines through state-run lender Banco Nacional de Fomento and other state agencies.
The country was expecting to harvest a crop of about 10 million tonnes of soybean in 2021/22 but some producers warned this week – less than a month before the harvest is expected to kick off – that the figure would likely drop due to a lack of rain.
Paraguay, which is also one of the 10 largest beef exporters in the world, expects its gross domestic product to grow 3.7% this year, after a 5% rise reported in 2021.
Much of the country’s economic growth is supported by the agricultural sector and hydroelectric power generation, which was also affected by the drought.
(Reporting by Daniela Desantis; Writing by Peter Frontini; Editing by Mark Porter)
