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Conservation issues

The Chaco is one of South America's last agricultural frontiers. Very sparsely populated and lacking sufficient all-weather roads and basic infrastructure (the Argentinian part is more developed than the Paraguayan or Bolivian part), it has long been too remote for crop planting. The central Chaco's Mennonite colonies are a notable exception. Between 2000 and 2019, it was estimated that the Dry Chaco forest cover decreased by 20.2%, including territory in Argentina, Bolivia, and Paraguay, with the latter showing the most dramatic land cover change.

Two factors may substantially change the Chaco in the near future: low land valuations and the region's suitability to grow fuel crops. Suitability for the cultivation of Jatropha has been proven. Sweet sorghum as an ethanol plant may prove viable, too, since sorghum is a traditional local crop for domestic and feedstock use. The feasibility of switchgrass is currently being studied by Argentina's Instituto Nacional de Tecnología Agropecuaria, as is the Karanda’y palm tree in the Paraguayan Chaco.

While advancements in agriculture can bring some improvements in infrastructure and employment for the region, loss of habitat and virgin forest is substantial and will likely increase poverty. Paraguay, after having lost more than 90% of its Atlantic rainforest between 1975 and 2005, is now losing its xerophytic forest (dry forests) in the Chaco at an annual rate of 220,000 hectares (540,000 acres) (2008). In mid-2009, a projected law, initiated by the Liberal Party, that would have outlawed deforestation in the Paraguayan Chaco altogether, "Deforestacion Zero en el Chaco" did not get a majority in the parliament.

Deforestation in the Argentinian part of the Chaco amounted to an average of 100,000 hectares (250,000 acres) per year between 2001 and 2007. According to Fundación Avina, a local NGO, on average, 1,130 ha (2,800 acres) are cleared per day. The soy plantations not only eliminate the forest, but also other types of agriculture. Indigenous communities are losing their land to agribusinesses. Since 2007, a law is supposed to regulate and control the cutting of timber in the Gran Chaco, but illegal logging continues.

Among the aggressive investors in the Paraguayan Gran Chaco are U.S.-based agribusinesses Cargill Inc., Bunge Ltd., and Archer Daniels Midland Co.