ABSTRACT
The deforestation frontier in the Brazilian Amazon is driven by the demand for agricultural land, which in turn reflects the distribution of land rents and the characteristics of farmers arriving in the region. Historically, the Brazilian government increased agricultural rents by building roads and subsidizing farmers through the tax and credit systems. Although the government has scaled back policies that directly encourage deforestation, these have been effectively replaced by new drivers, including international commodity markets, improvements in agricultural production technologies and the socio-cultural as well as economic value of cattle ranching. In contrast, forest management has not been a competitive land use from a private perspective, and old-growth timber has essentially been ‘mined’ by the logging sector. This reduces the net cost of deforestation, through both improved access and significant revenues from sale of old-growth timber. Current policy initiatives seek to change the incentives facing landowners by increasing tenure security for forest land, imposing penalties for illegal deforestation and creating new opportunities to earn revenue from standing forest.
