Soybeans had replaced cotton as the country's most important crop by the 1980s. A relatively new crop for Paraguay, soybeans were not produced in any quantity until 1967, when they were introduced as the summer rotation crop in a national plan for selfsufficiency in wheat. After soybean prices nearly tripled in 1973, however, much of the land slated for wheat was sown with soybeans instead. As the lucrative nature of soybean cultivation and processing became apparent, several large agribusinesses from Brazil, the United States, and Italy engaged in large-scale, commercial production of soybeans and soybean oil. It is difficult to exaggerate the drastic growth soybeans enjoyed in Paraguay. In 1970 soybeans covered only 54,600 hectares and had an annual production of over 75,000 tons. By 1987 soybeans covered some 718,800 hectares, more than any other crop, with an annual output of 1 million tons and export revenues of approximately US$150 million. The soybean crop grew primarily in the newly colonized departments of Itapúa, Alto Paraná, Canendiyú, and Amambay. Soybeans were produced principally for the world market anf sold both as a raw bean and as a processed oil, which was also consumed locally. Soybean prices generally rose beginning in 1970s but experienced significant fluctuations in the early to mid-1980s before recovering in the late 1980s. The major constraint on growth in soybean output, besides price fluctuations, was the lack of storage, drying facilities, and local processing capacity.

Cotton was one of Paraguay's oldest crops, grown since the time of the Jesuit missions. The government encouraged cotton production after the crop was nearly wiped out by the War of the Triple Alliance. Cotton was especially suited to the Paraguayan climate and soils and was grown primarily by small farmers in the central region. Cotton farming also experienced extremely rapid growth in the 1970s and 1980s. In 1970 only 46,900 hectares were sown with cotton, producing a volume of over 37,000 tons. By 1985, however, 385,900 hectares were covered with cotton, yielding almost 159,000 tons. Those figures had dropped to 275,000 hectares and 84,000 tons during the drought of 1986. Foreign-owned, large-scale, commercial production in the eastern border region was surpassing central region production in the late 1980s. Despite the advances in cotton production, cotton cultivation in the 1980s was still characterized by low yields and a low technological level. Even more so than soybeans, cotton suffered wide price fluctuations, and many small farmers who came to rely on cotton revenues in the 1970s became vulnerable to external price fluctuations in the following decade. Some cotton fiber was used domestically, but about 80 percent of the country's crop was processed into cotton lint at more than ten textile-processing factories. Cotton exports in 1987 earned about US$100 million, with most exports going to Uruguay, Britain, France, the Federal Republic of Germany (West Germany), and Japan.

Another key export crop was tobacco. Used domestically for centuries, cigarettes and cigars also earned foreign exchange. During parts of the early 1900s, tobacco was Paraguay's principal agricultural export to Western Europe. Tobacco production slowed in the 1970s with the advent of massive soybean and cotton production. Another reason for the tobacco crop's decline was the inability of the domestic cigarette factories to improve quality control and compete with smuggled brands. Wide price fluctuations of tobacco also explained dwindling production. Despite these difficulties, tobacco made a slight recovery in the 1980s. The area cultivated rose from 7,600 hectares in 1980 to over 8,000 hectares in 1987. Output increased from 11,500 to 12,000 tons. Tobacco was grown throughout Paraguay, mostly by small farmers. Cigarettes and cigars were exported to Argentina, France, and Spain. Tobacco exports were valued at approximately US$9 million in 1987.

Coffee was another export crop but of much less importance. Cultivated since the times of the Jesuits, coffee was grown in the central and eastern border regions for local and export markets. Most modern coffee production methods derived from the practices of German colonists in the eastern region. Coffee production boomed in the late 1970s but waned in the early 1980s. In the late 1980s, coffee output rose again, following a pattern of fluctuating production based on price movements. In 1987 approximately 9.2 million hectares of coffee yielded 18.4 million tons of exports with an estimated value of US$44.7 million.

Sugarcane remained an important cash crop for small farmers in the late 1980s. Unlike many countries in the Western Hemisphere, Paraguay saw sugarcane as a crop of the future, not because of its use for refined sugar and molasses, but as an input to ethanol, an increasingly popular energy alternative for the country. Sugarcane was planted in Paraguay as early as 1549 with seedlings from Peru, and sugar had been exported since 1556. After the devastation of Paraguay's two major wars, however, local output did not meet domestic demand until the mid-1900s, after which exports were revived. Since then, sugar production has fluctuated with price changes but generally has increased. Paraguay's climate is appropriate for sugarcane cultivation, but traditional methods and inefficient small-scale production limited harvests. Besides low yields, the industry suffered from outdated milling facilities and high production costs. Sugar production, however, was expected to be modernized and increasingly commercialized as a result of its high government priority as an input to an alternative energy source. Some 65,000 hectares of sugarcane produced 3.2 million tons of sugar in 1987, including 7,500 tons of sugar exports valued at US$2.3 million. These figures were highs for the decade.

Numerous crops were grown partially or entirely for their value as exported processed oils. Oilseeds represented one of Paraguay's largest agro-industries. One of Latin America's largest oilseed exporters, Paraguay processed cottonseed, soybean, peanut, coconut, palm, castor bean, flaxseed, and sunflower-seed oils. Industrial countries in particular consumed oilseeds as a lower-priced substitute for more traditional oils, which also were higher in cholesterol. Some oil was used locally as well. Paraguay also produced a number of nonvegetable oils, such as tung oil and petitgrain oil. Tung oil, derived from tung nuts, was used as a drying agent in paints. Petit-grain oil, derived from Paraguay's bitter oranges, was used in cosmetics, soaps, perfumes, and flavorings. In the 1980s Paraguay remained one of the world's leading exporters of petit-grain oil.

Raising and marketing livestock, a traditional source of livelihood in Paraguay, remained a major segment of agriculture and the economy at large during the 1980s. Livestock output accounted for roughly 30 percent of agricultural production and about 20 percent of the sector's exports. The raising of livestock represented more than a quarter of total land use and 80 percent of all capital investment in agriculture. Paraguay's vigorous livestock sector also was responsible for the country's high per capita production and consumption of meat and dairy goods. It was estimated that 40 percent of the country's land was especially suited for livestock and some 20 percent generally suitable. Endowed with plentiful grazing lands, Paraguay had vast potential for livestock development.

After the importation of 7 cows and a bull by the Spanish in the mid-1550s, the country's cattle herds swelled to some 3 million head by the time of the War of Triple Alliance, the largest herds in the Southern Cone. As with every other sector of the Paraguayan economy, the war devastated the country's livestock sector, leaving only 15,000 head. It was not until World War I that domestic demand was met locally and significant exports left the country. By the end of World War II, beef exports had become a major foreignexchange earner. Beef production and exports fluctuated considerably in the postwar period because of international price movements, weather conditions, government pricing policies, and other factors. In 1987 the country's cattle herd stood at about 8 million head with an annual slaughter rate of 1 million head. In that same year, 75 percent of the slaughter went to the domestic market and the remaining 25 percent to the export market.

Cattle, mostly beef cattle, were found throughout the countryside. The Chaco region was best known for its contribution to cattle raising because of its lack of crops and its sprawling ranches. Nevertheless, the cattle population density of Eastern Paraguay, 0.6 head per hectare, was actually higher than that of the Chaco region, 0.3 head per hectare.

The country's breeding stock was primarily Spanish criollo, although over the years considerable crossbreeding with English breeds and zebu cattle from Brazil had taken place. Although cattle were numerous in Paraguay, the country lacked a sufficient number of pure-bred breeding cattle. The livestock sector also suffered from a low calving percentage, a high mortality rate, and a long fattening period for steers. Artificial insemination was increasingly common. To a certain extent, cattle raising reflected the disparities in agriculture in general. There were numerous farmers who owned only a few head of relatively unproductive cattle that were slaughtered for the local market under relatively poor sanitary conditions. By contrast, extremely large cattle ranches typically were owned by expatriates and butchered more productive animals for both national and international markets.

Seventy slaughterhouses for the domestic market and eight for the export market operated in the 1980s. Local slaughterhouses often could not pass sanitary inspections, but government inspection efforts were focused on improving quality control of exports to meet the stringent regulations of foreign beef markets. The country's beef exports expanded until 1974, when Paraguay lost access to European Economic Community (EEC) markets and lower world prices further stagnated output. Beef exports responded strongly but erratically in the 1980s as the government's minimum export price system and contraband activity undercut greater export efforts. For example, beef exports were a mere 3,100 tons in 1985, 48,000 tons in 1986, and 18,000 tons in 1987, the last being the more typical figure. The 1986 boom in beef exports was the direct result of beef shortages in Brazil caused by price controls under its "Cruzado Plan." Paraguay's principal export markets were Brazil, Peru, Chile, the EEC (specialty items only), Colombia, Uruguay, and Saudi Arabia. Missing from official 1987 data, however, was the unregistered sale of an estimated 300,000 head of cattle along the Brazilian border.

Official government policy favored strong cattle development and exports, a view articulated in national livestock programs since the early 1960s. A major policy tool to promote livestock growth was the FG. The FG was not only the major lender to the industry, but it also provided certain veterinary equipment and medicine, encouraged quality control in meat and dairy products, and operated a model farm in the Chaco.

Dairy cattle represented only a small fraction of the total herd. Most milk production occurred at an estimated 400 dairy farms in Asunción, Puerto Presidente Stroessner, Encarnación, and Filadelfia. The best yields came from holstein-friesian dairy cattle followed by crossbreeds and criollo. High feed costs and the general inefficiency of small dairy farmers slowed the growth of the industry. The country produced approximately 180 million liters of milk a year in the late 1980s.

Other livestock activity including poultry farming and the swine industry. Some of the most productive poultry farming took place in the Mennonite colonies, in Japanese colonies in the eastern border region, and in the greater Asunción area. Observers estimated that there were over 14 million chickens, 400,000 ducks, 55,000 turkeys, and several other types of fowl. Egg production stood at 600 million per year in the late 1980s and was growing at about 4 percent a year. Pig farming was a relatively minor activity, engaged in mostly by small farmers. The pork industry's greatest structural problems were the high cost of feed and consumer preferences for beef. Government policy emphasized self-sufficiency in feed grown on small pig farms. Paraguay's swine population amounted to roughly 1.3 million in the late 1980s and had grown at a rate of 6 percent a year in the first half of the decade.