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Asunción, Paraguay
Mennonite businesses helped by MEDA


The Chaco is a vast region of Paraguay occupying 60 per cent of the country’s space but containing only a tiny fraction of its five million people. Early chroniclers described this region as dry, scrubby and hostile, “green hell”. The Paraguayan government wanted settlers in the Chaco to bolster its claim to the area and serve as a “buffer” against neighbouring Bolivia.

The first Mennonite immigrants arrived in 1927 from Canada. They were ideal settlers who painstakingly cleared land by hand and axe, at a rate of five acres per year, transforming this ochre-coloured land into a virtual garden. They formed Menno Colony, one of three large colonies in the Chaco. Three years later, they were joined by refugees from Russia who could not get into Canada. They formed Fernheim Colony. World War II refugees arrived in 1947 and they started Neuland Colony.

Today the three Chaco colonies have 12,000 Mennonites. Another 15,000 Mennonites live in numerous smaller colonies scattered throughout Paraguay. The majority seem comfortable; many have become prosperous. The drive from the capital of Asunción to the Mennonite colonies is about 250 miles. However, the trip is made easy thanks to the Trans-Chaco Highway, built 40 years ago by an unlikely coalition of the Paraguayan and US governments and Mennonite Central Committee.

Mennonite Economic Development Associates (MEDA) first began operations in Paraguay in the early 1950s. In February 2001, the MEDA Board held its meeting in Paraguay, where it visited with members of MEDA Paraguay, which was established five years ago, and toured some of the sites of MEDA’s early and present activities.

Compared to the rest of the country, the colonies in the Chaco are in a different agricultural zone. The bush gives way to neatly fenced pastures and well-groomed row crops of corn, peanuts, castor beans, cotton and sesame seed. In each colony, the local cooperative seems to be the epicentre of everything. Each cooperative operates its own version of a department store, provides a sophisticated banking function and even finances certain social institutions. Cattle and dairy products dominate. Much credit for this is given to MCC, and later MEDA.

Early on, MCC assigned US agronomist Robert Unruh to work on the Chaco’s experimental farm. He had read about buffel grass, an African crop that flourished in hot climates. He placed an initial order for 10 pounds to see how it would fare. The buffel grass worked like magic, fattening cattle quickly. Many more orders followed.

When MCC leader Orie Miller invited North American businessmen to help out in Paraguay (an invitation that led to the formation of MEDA in 1953), it was quickly decided that the first step would be to improve the livestock. The bush cattle being used produced little milk. MEDA brought in Holstein stock and began cross-breeding. This was the beginning of the Sarona dairy, which continued to operate under private ownership until the end of last year. Local producers built on these initiatives. The result has been astounding.

The Mennonite colonies furnish 60 per cent of the country’s entire supply of dairy products. The familiar clover-shaped logo of the Trebol dairy (located in Loma Plata, the capital of Menno Colony) can be seen all over the country. The leading hotels in Asunción stock yogourt and chocolate milk from Trebol.

Besides their dominance of the dairy industry, Mennonites in Paraguay reportedly produce 30 per cent of the peanuts and 11 per cent of the meat. Each year, trucks transport 200,000 tons of produce from the colonies to Asunción. The per capita income of the Mennonite colonies is said to be $10,000 US; in the rest of the country it is $1,600.

The first three MEDA projects were interrelated: The Sarona dairy herd (1954), a tannery to process leather (1954), and the Fortuna shoe factory in Filadelfia (1956). However, only Fortuna still remains, though it long ago paid off the MEDA loan that helped get it going. At one time, it produced a range of leather products, from shoes to cowboy chaps to motorcycle seats. Locals are quick to praise the importance of the shoe factory in meeting community needs.

The Fortuna shoe factory in Filadelfia. A partnership between MEDA and the original owner helped get the factory going; the loan has long since been repaid.

“When we grew up the only shoes we could afford were from Fortuna,” says Rudolf Duerksen, executive director of MEDA Paraguay. He also has high praise for another early MEDA partnership, the Fundicion Foundry (1956), which manufactured affordable machinery, farm implements and spare parts. “In those days, all of our equipment came from the foundry,” he says. “It had a big economic impact.”

The co-op in Filadelfia is a beehive of activity.

Another MEDA testimonial comes from Basilio Torres, a church and community leader at the Campo Alegre Indian village. He says the system of agricultural production credits still being used by the colonies’ extension program among the Indians is a continuation of what MEDA started many years ago.

MEDA’s work in Paraguay began with milk. Now, nearly half a century later, it’s back in the milk business. MEDA has a behind-the-scenes involvement in the Primavera dairy, a small operation along the main highway to Brazil. The dairy was launched near the end of 1998 in order to give poor Paraguayans a market for their milk.

Rudolf Duerksen directs MEDA in Paraguay.

Although there is a modern Mennonite dairy just down the road, small operators can’t always meet the plant’s rigorous standards. Primavera was built with an investment of $400,000; $50,000 was lent by MEDA’s Sarona Global Investment Fund to MEDA Paraguay, to be used for Primavera. The dairy caters to producers who have only one or a few cows.

Efforts are underway to boost output by buying high-quality Holsteins from farmers in the Chaco, similar to what MEDA did in the Chaco in the early 1950s. Production has been rising. At first, the dairy processed 1500 litres of milk per day; today it is up to 5000. It also processes about 3500 litres of yogourt every day, as well as cheese and sweetened condensed milk. The present facility can handle up to 20,000 litres a day, but is happy with 13,000. Schools are a good market for the sealed milk pouches and fruit-flavoured yogourt that Primavera produces.

In a remote part of eastern Paraguay, off the main highway near Tres Palmas, stands a new starch processing plant built by MEDA Paraguay. Its remote location is intentional, according to Duerksen. The reason for the starch plant’s existence is to help small rural farmers who grow more manioc than they need for food. Many of these farmers are the same ones who produce milk for Primavera. Their need was presented to MEDA Paraguay by a group of Sommerfelder Mennonites in the area who wanted to find ways to provide help.

The new starch plant provides a cash-crop market for hundreds of small farmers in eastern Paraguay.

Manioc is a tough tuber that is 23–25% starch; the rest is useless pulp, says Duerksen.

“If you transport 100 kilograms of manioc, you are only transporting 23 kilograms you can use. We felt that the factory should be located in the middle of the production centre.”

A much larger manioc plant, owned by a North American company, is located on the main highway. But that’s too far and expensive for small farmers to haul their product.

The plant managers are in contact with 320 to 400 small farmers in this area. When in full production, the plant can process 4000 to 5000 kg of manioc per hour.

Starch has many commercial uses, from conventional use in baking to serving as a binding material in everything from paper to aspirins. While much of the world’s starch comes from corn, manioc starch fetches a premium in some applications as it does not discolour when cooked.

The plant is a joint venture of three levels of investment. Mennonite businesspeople in Paraguay (with help from a Canadian Rotary Club) invested $225,000 for half the plant’s equity, and MEDA’s Sarona Global Investment Fund put in $212,000. The Denver MEDA Chapter has lent the project $225,000.

Today the Mennonites of Paraguay work closely with the needy in their midst. Now there are new opportunities for mutual exchange. MEDA is negotiating to utilize Paraguay’s dairy expertise to help the small-scale dairy sector in Nicaragua. Other such relationships may also be possible in specialized crops like sesame seeds. When it happens, it will be an example of development assistance coming full circle.

 – Wally Kroeker, MEDA

Business chaplain helps set new course

Many say the biggest challenge facing Mennonite businesspeople in Paraguay is corruption. They don’t enjoy the relatively level playing field enjoyed by their counterparts in North America. Their terrain is scarred with ruts and craters. It’s hard to run a competitive business when you’re up against a long tradition of kickbacks, bribes and tax evasion. Nordahl Siemens is one of a growing number of Mennonite businesspeople who are staking out new ethical territory. He and his family own a thriving company, Atlanta, that distributes building supplies, hardware and housewares. He operates at a disadvantage on at least two counts: He pays all taxes while his competitors take shortcuts, and has to compete with black market goods from Brazil. All of his employees get more than minimum wage, and Siemens sets aside a tenth of his profits for charitable efforts like buying school supplies for the children of his employees. Siemens says he treats all his employees as family. C. Paul Amstutz is a regular visitor to Atlanta. He is a business chaplain on the payroll of a number of Mennonite-owned businesses, including Atlanta, several importers and distributors, a cooperative, Business chaplain C. Paul Amstutz, with his wife Hildi. two accounting firms and a car dealership. They range in size from five to 300 employees, perhaps 750 in all. The business chaplaincy program is endorsed by Concordia Mennonite Church, a joint Mennonite Brethren/Mennonite church. On a typical day, Amstutz makes an early stop at one of the companies and leads a short devotional. Then he makes his rounds, circulating from office to warehouse to sales room, making contact, keeping in touch. Last year, he and the three other chaplains averaged 18 sessions per week – either short devotionals, Bible studies or chapel services. This year, more companies have signed onto the chaplaincy program. Today the program has four full-time staff. As Amstutz makes his rounds, he tries to pick up on signals of problems from employees. Amstutz takes the initiative whenever he senses a need. Some employees keep their distance because they fear Amstutz will tattle on them to their bosses. Others suspect he will try to get them to change religions (many of them are Roman Catholic). Amstutz deals with a wide-range of issues, from work-related matters to marriage counselling to leading someone to Christ. Some managers resent the freedom he has to talk with people at work. But if he left it to off-hours he would interfere with family life. “If it itches now, you have to scratch it now,” he says, “Some things can’t wait until 4 p.m. Then it won’t itch anymore, and they won’t come.” To grasp the intricacies of a Christian business witness in Paraguay, one needs to recall the decades-long reign of military leader Alfredo Stroessner, under whom business corruption was a way of life. Businesses routinely kept an accurate set of books and a fictional set for the state. Many transactions would go unrecorded, and thus, untaxed. Paying bribes was cheaper. The state knew what was happening and would set exorbitant tax rates to compensate. The overthrow of Stroessner in 1989 opened the door to new beginnings. A new constitution in 1992 moved the country along the road to democracy. The legal system began to improve. The business chaplaincy program was connected to these changes. Mennonite businesspeople had been troubled by the climate they worked in; not all were proud of the concessions they had made in order to survive. Encouraged by the church, they resolved to become a more visible Christian counter-culture and to lobby the government for better, transparent laws. For Amstutz, the success of the business chaplaincy hinges on a consistent witness by Christian owners and employees. When the chaplaincy began in 1991 some local Mennonites were skeptical, viewing it as a gimmick. Today the Concordia church is proud of this ministry. Three years ago, the program added monthly luncheon meetings for company owners to brainstorm over issues ranging from lifestyle and spirituality to how to take a clear stand on corruption and paying taxes. The meetings have led to greater sharing and trust among the businesspeople themselves. “They feel they know each other better and can help each other make decisions,” says Amstutz. “Between one meeting and the next they’re more free to call each other on the phone and ask for advice or share information.”  – Wally Kroeker, MEDA

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Last modified November 30, 2001.

© 2001 Mennonite Brethren Herald.
Published by the Canadian Conference of MB Churches.
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