This paper challenges the recent hailing of agricultural biotechnology as a panacea for food insecurity and rural poverty in countries of the global South. Based on an empirical investigation of the neoliberal soy regime in Paraguay, I document how the profound transformation of this country's agricultural mode of production over the past two decades, spurred by the neoliberal restructuring of agriculture and the biorevolution, has jeopardized rural livelihoods. In particular, I demonstrate how the transgenic soyization of Paraguay's agriculture has led to an increased concentration of landholdings, as well as the displacement and disempowerment of peasants and rural labourers who have been rendered surplus to the requirements of agribusiness capital. At the same time, the consolidation of this new agro-industrial model has fostered a growing dependence on agrochemicals that compromise environmental quality and human health. Thus, I argue, a development policy based on industrial monocropping of genetically modified (GM) soy is inappropriate, unsustainable and unethical.

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This paper offers a political economy interpretation of the “parliamentary coup” that took place in Paraguay in June 2012. It situates this analysis in the wider historical context of the protracted transition to democracy between 1989 and 2008, the rural class structure of the country, the changing character of contemporary agro‐extractive capitalism, and the long‐standing class struggle for redistributive land reform. By examining the Paraguayan agrarian reform impasse under the short‐lived government of Fernando Lugo (2008–2012) through an “interactive state/society” framework, this paper attempts to locate the sources of current social and political conflict in the country, and the demands of rival social groups. In doing so, the paper argues that the rise and fall of Lugo occurred in the context of structural legacies from the Stroessner era (1954–1989) that have remained largely unchanged and that coexist today with an expanding agro‐extractivist development model. They lead to the conceptualization of the continued “predatory” or “oligarchic” state in the country.

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