The announcement is considered an important political statement since a significant number of Brazilian nationals exploit farmland in Paraguay, mainly for the production of soy, and they are referred to as "brasiguayos," a mix of "Brazilian and Paraguayan."
"We have guaranteed all brasiguayos who live in Paraguay their residence in the country under all possible security, as long as it is in the framework and respect for Paraguayan law," said President Lugo addressing the Organization of American States in Washington where he is on an official visit.
Landlocked Paraguay has pending problems with huge neighboring Brazil, mainly land held by Brazilians farmers and which Paraguayan landless peasants are claiming, and the dispute over payment for the electricity generated in South America's largest dam, Itaipu, shared by both countries.
Lugo revealed that the technical negotiating teams looking into a possible review of the Itaipu agreement signed in the seventies and ruling the management of the dam, has been meeting regularly as had been agreed.
Paraguay is demanding a more "update" price for the surplus Paraguayan electricity share absorbed by Brazil and which is rated at prices established originally in the bilateral Itaipu agreement.
"The President is well aware of all conflicts and talking with all sectors involved, and for the first time in decades all sides involved have sat round a table to talk about these issues, which can be considered a historic event," underlined Lugo.
"The so called big farmers, experts, landless peasants' organizations, the government have met and we've found out we're not enemies. We found out that there is much common ground and talking we can find a way out to a fair distribution of land which satisfies all sides," said the former Catholic bishop
Lugo took office last August after having won elections with a catch-all coalition that dislodged the Colorado party which had ruled Paraguay for six uninterrupted decades and made the country famous for its corruption, smuggling and land snatching. During the electoral campaign Lugo promised plots to peasant families.
Last week the Paraguayan government reinforced security in rural areas in coincidence with the beginning of the soy season following threats from landless peasant organizations who said they were planning to break into the farms of brasiguayos, who hold huge patches of land planted with oil seeds.
The Lugo administration also announced earlier this month it had purchased 22.000 hectares of land belonging to eleven Brazilian farmers, in the San Pedro area in the center of the country to be distributed among 1.800 peasant families, in an attempt to deactivate the growing conflict.
The Brazilian government has also been playing its role having organized massive military exercises (10.000 men) all along the Paraguayan border when the brasiguayos-landless peasant conflict seemed to the getting out of control.
The exercises began three weeks ago with 3.000 men and escalated to 10.000 on the day Lugo was chatting with President Bush in the White House, this past Monday.
Brazil is also particularly concerned because Itaipu generates 25% of all electricity consumed by the country.
Paraguay together with the other landlocked and poorest country of the continent, Bolivia, which supplies most of the natural gas to the Sao Paulo powerhouse have exposed the vulnerability of Brazil's energy equation.
In a related question, President Lugo said Paraguayan relations with the US have been good and will continue as such, no matter who wins in the coming presidential election.
"It's not a temporal relation of the government, and does not depend on the temporal office administrator," said Lugo.
"It's an institutional relation, country to country, not only between leaders."
Mercopress