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Deforestation in the Amazon

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Amazon Basin

Amazon Basin

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.
Clearing for Cattle Pasture

Cattle ranching is the leading cause of deforestation in the Brazilian Amazon. This has been the case since at least the 1970s: government figures attributed 38 percent of deforestation from 1966-1975 to large-scale cattle ranching. However, today the situation may be even worse. According to the Center for International Forestry Research

(CIFOR), “between 1990 and 2001 the percentage of Europe’s processed meat imports that came from Brazil rose from 40 to 74 percent” and by 2003 “for the first time ever, the growth in Brazilian cattle production—80 percent of which was in the Amazon—was largely export driven.”
Several factors have spurred recent Brazil’s growth as a producer of beef:

  • CURRENCY DEVALUATION—The devaluation of the Brazilian real against the dollar effectively doubled the price of beef in reals and created an incentive for ranchers to expand their pasture areas at the expense of the rainforest. The weakness of the real also made Brazilian beef more competitive on the world market [CIFOR].
  • CONTROL OVER FOOT-AND-MOUTH DISEASE—The eradication of foot-and-mouth disease in much of Brazil has increased price and demand for Brazilian beef.
  • INFRASTRUCTURE—Road construction gives developers and ranchers access to previously inaccessible forest lands in the Amazon. Infrastructure improvements can reduce the costs of shipping and packing beef.
  • INTEREST RATES—Rainforest lands are often used for land speculation purposes. When real pasture land prices exceed real forest land prices, land clearing is a good hedge against inflation. At times of high inflation, the appreciation of cattle prices and the stream of services (milk) they provide may outpace the interest rate earned on money left in the bank.
  • LAND TENURE LAWS—In Brazil, colonists and developers can gain title to Amazon lands by simply clearing forest and placing a few head of cattle on the land. As an additional benefit, cattle are a low-risk investment relative to cash crops which are subject to wild price swings and pest infestations. Essentially cattle are a vehicle for land ownership in the Amazon.

Some have suggested that agricultural certification could help reduce destructive clearing for cattle pasture.

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