Paraguay is exporting more soybeans than it produces in a tell-tale sign of a booming contraband smuggling trade that utilizes the same cross-border blindspots as drug trafficking in the region.
An investigation by Argentine television news show Periodismo Para Todos (PPT) has revealed how smugglers are moving soya from Argentina into Paraguay so they can export for free instead of paying Argentina’s 30 percent export tariffs.
According to PPT, Paraguayan boats pass into Argentina along the Paraná River and either collect soya loads from Argentine boats or moor up in clandestine ports and await the arrival of trucks bringing the beans.
The boats, which tow convoys of containers that can hold up to 900 tons of soya, then travel north along the barely monitored waterway until they reach Paraguay. Once in the country, the soya is recorded as Paraguayan production and shipped abroad.
The contraband boom has been fueled by rising production costs in Argentina and falling global soybean prices, which have made selling to smugglers the only way for many farmers to make a profit, Rolando Muñez from Argentina’s Nelson Mandel Center for Studies and Social Research (Centro de Estudios e Investigación Social Nelson Mandela) told PPT.
The impact of the illicit trade is visible in industry statistics. According to PPT, between 2011 and 2015 Argentina’s soybean production increased 8 percent but exports fell 6 percent. In Paraguay, meanwhile, production rose 10 percent but exports increased by a dramatic 62 percent.
InSight Crime Analysis
The contraband soybean boom in the Southern Cone is an example of organized crime capitalizing on an ideal combination of factors.
Firstly, there is the economic. Discrepancies between tax regimes — like the disparity between soybean tariffs in Paraguay and Argentina — are commonly at the heart of contraband smuggling. When economic pressures are added to this, such as growing production costs and falling prices that squeeze producers, then there is major motivation for turning to contraband.
SEE ALSO: Coverage of Contraband
While economic factors provide the incentive, geography provides the method. The Paraná River stretches from Brazil to Argentina, running through the Paraguayan capital Asunción and connecting with the Argentine capital Buenos Aires. It is also largely empty of customs checks and only lightly monitored.
These advantages have made the river a major artery for drug trafficking, especially for Paraguayan marijuana moving into Argentina. As is commonly the case throughout the region, smugglers have been quick to recognize that a good route for trafficking one illicit good is also a good route for other illicit products.