Deforestation in Paraguay’s portion of the Gran Chaco jumped 23% last year, according to Guyra Paraguay, a leading Paraguayan environmental organization.

The estimate, based on an analysis of satellite images, has fanned concern that the biodiverse region of savannah and low forest will succumb to unbridled clearing of the kind that devastated Paraguay’s eastern Atlantic Forest.

The Gran Chaco covers some 725,000 square kilometers (280,000 sq miles), with over half in Argentina, a third in Paraguay and the rest in Bolivia. It is South America’s largest dry forest and second largest forested area after the Amazon. Having long lacked paved roads and other infrastructure, it had until recently been considered too isolated for large-scale farming.

This state of affairs is rapidly changing. Deforestation in the Argentine Chaco has accelerated enormously as a result of commercial agriculture, particularly ranching and soybean and sunflower cultivation.

In Paraguay’s Gran Chaco, located in the northwest of the country, land clearing also has been intense. The destruction occurred as advertisements placed by large landowners in Paraguay appeared in newspapers and magazines in neighboring nations promoting the Gran Chaco as a paradise of cheap land and unfettered livestock production.

Magnet for agribusiness

Investors from Argentina, Brazil, Uruguay, Korea and China rushed into the once sparsely inhabited area with millions of dollars in hand to set up farming operations. Fire and heavy equipment such as bulldozers have been used to convert woodland to cropland.

Environmentalists say the land clearing, which totaled 286,000 hectares (707,000 acres) in Paraguay’s portion of the Gran Chaco last year, is a direct threat to one of the continent’s most biodiverse areas. The Gran Chaco hosts 500 species of birds and 150 species of mammals ranging from jaguars to giant anteaters.

They also say the leveling of wilderness in the Gran Chaco, with its large extensions of savannah, thorn forest and cactus, could harm tens of thousands of indigenous people who live there, including the Ayoreo-Totobiegosode, a small nomadic hunter-gatherer group of several hundred members that is considered the last uncontacted tribe in Paraguay.

“Paraguay right now is maximizing the profit for the private sector and impoverishing the soil, water and other environmental services that the region could provide for the future,” says Alberto Yanosky, the executive director of Guyra Paraguay, which is based in Asunción. “In the meantime, land clearing is pushing indigenous people who once roamed large extensions of the territory into small communities, where they are losing their traditions and being forced into a lifestyle they have never been accustomed to.”

Some of the rampant deforestation in Paraguay’s Gran Chaco, to be sure, could be attributed to good intentions and the law of unintended consequences.

In 2004, Paraguay passed a zero-deforestation law that prohibits land clearing in the Atlantic Forest, where less than 15% of the original forest cover remains. The law was hugely successful and reduced deforestation there by nearly 90%.

But when similar zero-deforestation legislation targeting the Gran Chaco was introduced in Paraguay’s Congress in 2009, it failed to pass. As a result, large-scale farmers moved from the Atlantic Forest in the east to the Gran Chaco in the west to exploit the looser restrictions.

Dearth of planning

Another problem, environmentalists say, lies with a 1973 forestry law that requires all property owners nationwide to preserve at least 25% of their standing forests. While that law was designed for the Atlantic Forest and aimed to maintain forest cover, it left the decision of what forest areas to conserve in landowners’ hands. As a result, farmers have been cutting down some of the most important forest areas with no consideration for indigenous or environmental concerns.

The only solution now, some environmentalists say, is to bring rational planning to forest management. That, they say, would involve drawing up a national forest inventory and creating a system for forest zoning in which appropriate uses for different forests would be determined and enforced by law.

Where farmers were required to save more than 25% of their forests under such a system, they would be paid from a national fund to preserve environmental services, the environmentalists suggest. A variation on that idea was approved as law for the Atlantic Forest in 2008, but has yet to be implemented.

“We don’t know how payment for an environmental-services system would work at a national level, but it’s a good option,” says César Balbuena, manager of geographic information for the environmental group WWF in Paraguay. “There are a lot of people who have forests and want to protect them but don’t have the resources to do so. And there are many indigenous groups in the Chaco who are protecting their land and should be rewarded.”