Spatially complex land change: The Indirect effect of Brazil's agricultural sector on land use in Amazonia

Highlights

• Agriculture indirectly affects deforestation through its impact on regional land prices.

• Indirectly, agriculture accounted for one-third of Amazon deforestation from 2002 to 2011.

• The indirect impacts of agriculture have declined markedly since 2006.

Abstract

Soybean farming has brought economic development to parts of South America, as well as environmental hopes and concerns. A substantial hope resides in the decoupling of Brazil's agricultural sector from deforestation in the Amazon region, in which case expansive agriculture need not imply forest degradation. However, concerns have also been voiced about the potential indirect effects of agriculture. This article addresses these indirect effects for the case of the Brazilian Amazon since 2002. Our work finds that as much as thirty-two percent of deforestation, or the loss of more than 30,000 km² of Amazon forest, is attributable, indirectly, to Brazil's soybean sector. However, we also observe that the magnitude of the indirect impact of the agriculture sector on forest loss in the Amazon has declined markedly since 2006. We also find a shift in the underlying causes of indirect land use change in the Amazon, and suggest that land appreciation in agricultural regions has supplanted farm expansions as a source of indirect land use change. Our results are broadly congruent with recent work recognizing the success of policy changes in mitigating the impact of soybean expansion on forest loss in the Amazon. However, they also caution that the soybean sector may continue to incentivize land clearings through its impact on regional land markets.

Introduction

Over the last decade Brazil's expansive soybean sector has reshaped the nation's physical and socioeconomic landscape. While evidence indicates positive socioeconomic changes associated with soybean production (VanWey et al., 2013, Weinhold et al., 2013), researchers and policy makers have nonetheless fretted over the environmental implications of expanding soybean agriculture in the tropics (Searchinger et al., 2008). Most notably, research has tied Brazil's soybean sector to more than 5000 km² of deforestation in State of Mato Grosso alone (Morton et al., 2006); and, through statistical correlations, to land use change more broadly across tropical Amazonia (Barona et al., 2010, Lapola et al., 2010, Arima et al., 2011).

In this article we follow work addressing the indirect effects of the agriculture sector, which we refer to as indirect land use change (ILUC).We define ILUC as a land use change in one location that is responsive to a land use change in another, potentially distant location. We theorize that this occurs through two mechanisms: (1) through the spatial relocation of key agricultural and ranching inputs, including human and financial capital (Barona et al., 2010, Lapola et al., 2010, Arima et al., 2011); and (2) through land appreciation in frontier areas linked to high returns to soybean production.

In our models we estimate that Brazil's soybean sector has contributed, indirectly, to as much as thirty-two percent of forest loss in the Brazilian Amazon since 2002. We tie one-third of this indirect deforestation to agricultural expansion and land valuation in Brazil's distant agricultural strongholds in its southern states. We then argue that work to date on indirect land use change has largely overlooked the broader impacts of the agricultural sector on the demand for land in Brazil, and on land speculation and appreciation on the frontier. We also argue that policy makers must pay close attention to the complications that arise from spatially complex land change, which links environmental change in remote frontiers such as Amazonia to land use and land values in established agricultural regions.

We organize the paper as follows. First, we engage with the growing body of literature that considers ILUC in Brazil's Amazon region. This then leads to our conceptualization of the indirect effect, which we argue is driven by increasing land values and the growing demand for land. We then present a statistical analysis of ILUC where we spatially distribute the indirect effects of the agricultural sector through Brazil's road network, and where we pay particular attention to temporal shifts in economic conditions and environmental policies. Finally, after a discussion of our statistical results we draw out several important policy implications.