Forest protection policy boosted Amazon farm production, study shows

Caspar Trimmer

Cattle ranching in Castelo de Sonhos, Pará State, Brazil, photo: Nilo D’Avila

It’s an argument well worn by opponents of forest conservation, in Brazil and elsewhere, that measures to slow deforestation slow agricultural development. The assumption — which spreads far beyond the agribusiness lobby and supposedly business-friendly politicians — is that protecting forests (along with the indigenous peoples whose livelihoods depend on them) imposes a heavy cost on farmers, food security and the national economy, making it a luxury some would say Brazil can ill afford.

The findings of a new study co-authored by Trase collaborator Erasmus zu Ermgassen, with Nicolas Koch from the MCC Institute, Berlin, and the former Director of the Action Plan for Deforestation Prevention and Control in the Amazon led by the Brazilian Ministry of Environment, Francisco Oliveira, just published in the American Journal of Agricultural Economics suggest that this received wisdom is flawed. On the contrary, recent efforts to protect Brazil’s forests have helped boost agricultural production and productivity.

The study

The study evaluated how deforestation rates, agricultural production and a range of other indicators developed over the decade 2004–2014 in Amazon municipalities that were on Brazil’s Priority Municipality list (Municípios Prioritários in Portuguese).

Municípios Prioritários is a flagship policy launched in 2008 as part of a national action plan to curb deforestation. Priority List municipalities have high deforestation rates and are targeted with a package of interventions, including increased field inspections and fines for deforestation. While the policy also explicitly sought to improve farming practices, this aspect has received little attention.

Evaluating the impact of the Priority List isn’t straightforward, because we don’t know how agriculture would have fared if municipalities had not been put on the list in the first place. To overcome the lack of a ‘counter-factual’, the study used novel econometric methods to carefully select similar municipalities for comparison. Remote sensing data was used to measure deforestation and Brazilian agricultural statistics to measure production changes.

Win-win results for cattle farmers and forests

The study found that the policy simultaneously reduced deforestation and boosted agricultural production in Priority List municipalities.

By far the most striking improvements were seen in beef production, with an increase of 14–36% in the stocking rate (animals per hectare of pasture). There has long been a tendency for beef production to expand outwards in the Brazilian Amazon, and cattle pasture makes up around two-thirds of deforested land in the region.

One reason is that expanding ranching into forest areas is a relatively cheap way to increase cattle production compared to investing in new technologies and farming methods. Another is the use of cattle pasture as a means to claim land in regions where land tenure is uncertain. Stricter enforcement and a higher risk of fines in Priority List municipalities makes improving cattle ranching on existing pasture a more attractive option.

In contrast to beef, crop and dairy production followed more or less the same trend as in the non-Priority List municipalities. According to the authors, this is easily explained. Enforcement in Priority List municipalities has targeted large-scale forest clearance, while dairy farming is mainly a smallholder activity, meaning that deforestation by dairy farmers has not become significantly riskier. Meanwhile soy production — the vast majority of crop production in the Brazilian Amazon — was already under pressure before the Priority List policy came into force thanks to the Soy Moratorium in place since 2006.

Implications for policy

“Brazil is the world’s largest beef exporter, but its cattle industry — the main user of deforested land — remains locked in a low-input, low value production model.” says zu Ermgassen. “Our results show that more sustainable ranching is possible — and that both carrots and sticks are needed to modernise it.”

Improving the productivity of the cattle sector is key if Brazil is to reconcile agricultural growth with its climate goals. Pasture intensification is a cornerstone of the Brazilian submission to the Paris Agreement.

One recent study has calculated that Brazil can meet future demand for soy, beef and biofuels without deforestation if the productivity of cattle pasture increases to just 50% of its potential (from around 33% now).

But intensification needs the right incentives. One of those, clearly, is strict enforcement of the Forest Code, but corporate zero-deforestation commitments and efforts to improve supply chain transparency, such as Trase, could also help to break the link between cattle ranching and deforestation.

The findings suggest that the Bolsonaro government’s recent moves to weaken the Environment Ministry and IBAMA might ultimately back-fire on the farming sector, by slowing the adoption of more efficient farming practices.

zu Ermgassen added: “If the government really wants to support farmers it should enforce Brazil’s forest laws and focus on making sure they can access the knowledge and technologies — and the financing — they need to modernise.”

Read more

Agricultural productivity and forest conservation: evidence from the Brazilian Amazon” in American Journal of Agricultural Economics.

Read Erasmus’ and Tiago Reis’s OpEd “Bolsonaro’s plan to undermine the environment ministry would backfire on Brazil’s food production”.