The agricultural sector is a key segment of the Paraguayan economy, representing 30% of gross domestic product, 40% of exports, and the source of employment for a large majority of the rural population.1 Given the importance of this sector, agricultural risks are key to the economic and social health of Paraguay. Family farmers and their households, representing 90% of the total farms, are the ones most at risk of being trapped or falling into poverty due to external shocks and to the lack of adequate protection mechanisms.

Due to the country’s subtropical temperate climate, characterized by a rainy season in summer and a dry season in winter, it is exposed to harsh impacts of climate change. The vital agricultural sector is particularly affected by a significantly elevated level of exposure to multiple hazards, notably floods and droughts. Income inequality, lack of social and financial protection as well as low soil fertility, and scarcity of fresh water are key drivers of vulnerability.