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The introduction of soybeans to the southern and eastern parts of Paraguay in the early 1970s, followed by wheat in the mid-1970s, using conventional mechanised soil preparation practices with disc ploughs and harrows, initiated a process of widespread soil degradation and erosion. The technique of no-tillage was first used in Paraguay in the late 1970s. Following a slow start, its adoption by Paraguayan farmers gathered momentum increasing from 20,000 ha in 1991/92 to an impressive 250,000 ha in 1995/96, accounting for about 19% of the land cultivated mechanically. In 1993, the Ministerio de Agricultura y Ganadeira (MAG) and the Deutsche Gesellschaft fur Technische Zusammenarbeit (GTZ) started a project aimed at adapting and further disseminating no-tillage in combination with rotations of both cash and green manure crops in the major grain producing departments of Paraguay. Since very little was known about the economics of these technologies in Paraguay, MAG in association with GTZ, initiated a detailed study which was guided by the FAO Investment Centre. In this paper, the findings of the study are summarised and discussed.