Deforestation in the Amazon

By Rhett A Butler

Between May 2000 and August 2006, Brazil lost nearly 150,000 square kilometers of forest—an area larger than Greece—and since 1970, over 600,000 square kilometers (232,000 square miles) of Amazon rainforest have been destroyed. Why is Brazil losing so much forest? What can be done to slow deforestation?

Why is the Brazilian Amazon being Destroyed?

In many tropical countries, the majority of deforestation results from the actions of poor subsistence cultivators. However, in Brazil only about one-third of recent deforestation can be linked to "shifted" cultivators. Historically a large portion of deforestation in Brazil can be attributed to land clearing for pastureland by commercial and speculative interests, misguided government policies, inappropriate World Bank projects, and commercial exploitation of forest resources. For effective action it is imperative that these issues be addressed. Focusing solely on the promotion of sustainable use by local people would neglect the most important forces behind deforestation in Brazil.

Brazilian deforestation is strongly correlated to the economic health of the country: the decline in deforestation from 1988-1991 nicely matched the economic slowdown during the same period, while the rocketing rate of deforestation from 1993-1998 paralleled Brazil's period of rapid economic growth. During lean times, ranchers and developers do not have the cash to rapidly expand their pasturelands and operations, while the government lacks funds to sponsor highways and colonization programs and grant tax breaks and subsidies to forest exploiters.

A relatively small percentage of large landowners clear vast sections of the Amazon for cattle pastureland. Large tracts of forest are cleared and sometimes planted with African savanna grasses for cattle feeding. In many cases, especially during periods of high inflation, land is simply cleared for investment purposes. When pastureland prices exceed forest land prices (a condition made possible by tax incentives that favor pastureland over natural forest), forest clearing is a good hedge against inflation.

Such favorable taxation policies, combined with government subsidized agriculture and colonization programs, encourage the destruction of the Amazon. The practice of low taxes on income derived from agriculture and tax rates that favor pasture over forest overvalues agriculture and pastureland and makes it profitable to convert natural forest for these purposes when it normally would not be so.


A Closer Look at Brazilian Deforestation

Today deforestation in the Amazon is the result of several activities, the foremost of which include:

1. Clearing for cattle pasture
2. Colonization and subsequent subsistence agriculture
3. Infrastructure improvements
4. Commercial agriculture
5. Logging