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How Contraband Tomatoes are Hurting Paraguay's Economy

ARGENTINA / 8 OCT 2021 BY ALICIA FLOREZ EN

Worsening poverty in Paraguay during the COVID-19 pandemic has led to an increase in food being smuggled into the country through its borders with Argentina and Brazil.

In late September, anti-smuggling officials seized 20 tons of contraband onions that had entered the country irregularly from Argentina. This comes on the heels of Paraguayan farmers sounding the alarm about the domestic market being flooded with cheap chicken, also illegally imported from Argentina.

This year, other contraband alerts have included thousands of boxes of tomatoes seized from Brazil, as well as green peppers, due to a scarcity of the vegetable in Paraguayan markets. All were brought in without the required documentation.

SEE ALSO: All About Contraband

Food sellers told the media that smuggling agricultural products into the country was relatively easy since products from abroad could be packaged as Paraguayan products and sold as such.

Contraband, including food, is almost normalized in Paraguay. But the phenomenon has increased during the pandemic, alarming farmers and officials alike.

InSight Crime Analysis

While the demand for contraband is understandable given the rising poverty rates in Paraguay, the knock-on economic impact is very real. Since these products are usually sold cheaper than domestic options, the brunt of the effect is being felt by producers and food merchants who cannot sell their own produce.

And the country's controls to block food contraband are proving to be ineffective.

For example, legal imports of specific products such as green peppers, a favorite ingredient in the country, are restricted to favor domestic production. But given the current scarcity, the illegal market has stepped in.

This has happened regularly during the COVID-19 pandemic. Paraguay's sugar industry was crippled during the pandemic, with legal sales dropping from 7,000 tons a month prior to quarantine measures to 1,000 tons a month now. In response, tons of sugar, which Paraguay consumes in large amounts, have poured across the border illegally from Brazil.

SEE ALSO: Paraguay Profile

“People don't measure it, but contraband leaves people without work," Francisco Martino, a senior official in Paraguay's industrial union (Unión Industrial Paraguaya - UIP), told newspaper La Nación.

"Small producers of eggs, for example, who have less than 1,000 chickens, are saying they will close because it's not profitable anymore. Companies are beginning to close because of contraband," he added.

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