Financial and economic feasibility of sugar cane production in northern La Paz

During the last three decades northern La Paz has experienced the arrival of migrants establishing settlements and clearing forest lands for agriculture. Increasing forest conversion for agricultural projects is the basis of several national and local government development schemes. Today, the most significant development proposal includes installation of a sugar cane mill in San Buenaventura to produce sugar and ethyl alcohol. This research aims to assess the financial and economic feasibility of this project. The initial investment is expected to exceed US$ 90 million with an additional US$ 40 million invested later. These figures include financing costs and supply of agricultural machinery to the farmers. The study’s goal is to contribute to the decision-making process on public policies that will promote efficient and equitable development and conservation of environmental resources. At the same time, the research cannot cover all key questions; it does not determine whether the investment analyzed represents the most efficient use of public resources nor does it analyze the potential social and cultural changes that would occur due to the introduction of this new crop to the region.