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[edit] History

Subsidies sponsored by SUDAM often granted 50% tax exemptions for investments in agriculture and livestock in the Amazon. By 1974, these subsidies had increased to 100% (Hall 1989). Indeed, a representative of the American company, Swift Armour, optimistically predicted that the Amazon Basin "was destined to be the great meat exporting center of the world" (quoted from Hall 1989).

Throughout the 1970s INCRA established programs to take advantage of newly developed highways to translocate hundreds of thousands of Brazilian citizens from northern and eastern states westward into the Amazon. The idea was analogous to homesteading on the American frontier in the 19th century. People moving to the frontier were given land practically for free so long as they showed evidence of "productive use," which, unfortunately meant clearing the forest for agriculture or pasture. These people represented mainly a class of peasant farmers, who lacked the financial support of Brazil's banks to start their own large-scale cattle or agricultural operations. Consequently, they practiced local forms of agriculture, the most popular of which has been slash-and-burn agriculture (Fig. 4).

A typical slash-and-burn program involves cutting a small patch of forest, usually 3 to 4 hectares, burning the vegetation, perhaps after selling a minor fraction of timber, and growing and harvesting 2 to 3 years worth of crops. After the third year, farms are usually abandoned because of nutrient-depleted soils and the invasion of weedy species. Slash-and-burn agriculture produces about 80% of the human food supply in the Amazon as other, more intensive agriculture programs focus on crops for export (Serrão and Homma 1993).

It appears that no one, including the government, farmers, ranchers, or lending agencies, foresaw perhaps the largest impediment to Amazon development: soil degradation. Soils in tropical regions are millions of years old, having escaped major disturbances like glaciation that reset the clock on soil development (Richter and Markewitz 1995). Old soils are highly weathered aluminum and iron oxide clays that are acidic and deficient in plant nutrients, especially phosphorus. Tropical ecosystems are adapted to nutrient-poor soils as evidenced by the relatively large fraction of ecosystem nutrients stored in vegetation (compared to soils) and widespread plant adaptations like evergreen leaves that conserve nutrient loss (Vitousek and Sanford 1986). Many attempts to bring land under cultivation or conversion to pasture for cattle have failed in the long run without supplements from fertilizers and pesticides (Fig. 5). Cattle numbers decline from an average of two healthy head per hectare following clearing to less than 0.3 head per hectare 20 years following clearing (Serrão and Homma 1993). After just two years of grazing, some cattle exhibited 20% mortality and complete reproductive failure due to a lack of phosphorus in pasture grasses (Buschbacher 1987). Land reclamation efforts often require $250 to $475 per hectare for fertilizers and weed management, an enormous sum compared to a cost of $70 to clear an additional hectare of virgin forest (Serrão and Homma 1993, Southgate 1998).

Even with a bounty of unclaimed natural forest, peasant farmers found it difficult to coexist with cattle ranchers in the Amazon. In addition to the problems of soil fertility, land grabbing followed the appropriation of the Amazon frontier, leading to many bloody clashes between cattle owners and peasant farmers. A recent estimate suggested that of the 4 million residents of the Amazon, 150,000 or 4%, are forcibly evicted from their land each year (Hall 1989). From the perspective of cattle ranching, it is cheaper to appropriate pasture by the forced removal of farmers than to clear forest. High-profile efforts to secure land rights for peasant farmers, including those by a group of rubber-tapping agriculturists, led to the assassination of their popular leader, Chico Mendes, in 1988. Amazon specialist Anthony Hall states, "It goes without saying that for farmers everywhere, access to land is the single most important factor in securing a livelihood." Forced eviction from their land meant that rural poor simply carved deeper into primary Amazon forest. Without government support to legitimize land rights, and with constant pressures from land grabbers, colonists greatly discounted the value of their land. Environmental consultant Douglas Southgate notes that "habitat will never be safe as long as the rural poor are neglected."

Eviction and land grabbing grew worse throughout the 1970s and '80s as land prices grew faster than Brazil's inflationary economy. Between 1966-1975 Amazon land values skyrocketed 100% per year (Hall 1989) because of high beef prices and newfound access to the Amazon via roads (Southgate 1998). Farmers and ranchers alike were clearing land and staking claims, many of which were heavily subsidized by the government. A careful evaluation of cattle productivity in 1978 indicated that SUDAM subsidies successfully led to land clearing but were not so successful in generating beef production. In fact, cleared forests supported only 36% of the cattle that were supposed to have been put to pasture (Hall 1989). Clearly, with soaring real estate value and subsidies, ranchers were driving land speculation and hoarding instead of cattle.

In addition to agriculture and cattle ranching, the Amazon offers an abundant supply of timber, which is cut for fuelwood and industrial uses (sawnwood, plywood, and vaneer). Timber industries and some peasant farmers have employed a variety of forest extraction practices: selective cutting, non-timber extraction, and agroforestry. The particular practice used is determined by its opportunity cost, forest species composition, and the decision to extract resources from primary or secondary-growth forests. In addition, forestry options support different levels of employment: 300 people per vaneer plant, 34 people per sawmill, and 13 people per logging firm (Serrão and Homma 1993, Southgate 1998). Hundreds of indigenous Amerindian populations have survived in the Amazon for thousands of years from the sustainable use of forest products (Grainger 1993).

Of the 300 or so tree species that may be found in a single hectare of rich Amazon rainforest, only 30 to 50 are commercially attractive (Grainger 1993). For the Amazon, species diversity is a mixed blessing, because Brazil supports the lowest commercial standing volume of any tropical country--a mere 5m3/hectare (Grainger 1993). This low volume of commercial timber makes clearcutting a nonviable option. The Amazon has been logged mainly by selective cutting of a few desirable commercial species, such as mahogany, teak, and Gmelina.

Selective cutting involves traveling across the landscape surveying and cutting valuable trees but implementing practically no forest management practices. Forest management techniques, such as cutting vines to prevent damage to adjacent trees, directional felling, and building low-impact skidder trails, may cost $120 per hectare (Southgate 1998). As with slash-and-burn agriculture in a jungle with seemingly limitless resources, there is simply no incentive to conserve when it's cheaper to move on to the next tract of land. Consequently, for every tree cut, several trees are probably damaged or killed. One estimate puts this number as high as 27 damaged individuals per tree harvested (Southgate 1998). Moreover, logging increases forest vulnerability to future fire and further forest losses (Nepstad et al. 1999).

Another concern with the abundance of forests is that stumpage values (the cost of buying the rights to cut a tree) are very low. In the Amazon, stumpage ranges from $5/m3 for less desirable species to over 70/m3 for mahogany (Southgate 1998). For most species, mills now pay $35/m3 for cut timber (1998 dollars; Southgate 1998). Because of the costs of management and the low stumpage and value of land, sustainable production from primary forest appears futile. Consider that the total value of a regenerating mahogany stand may rise 5% per year, which is much less than current financial interest rates in Brazil (45% in 1999) (Southgate 1998). For slow-growing tropical species that may take over 100 years to establish and grow, the economic reality is alarmingly clear: It is more profitable to harvest a species to extinction and invest the profits in an interest-bearing bank account than to grow the species sustainably in a primary forest (Clarke 1973, Terborgh 1999). Southgate puts it succinctly, "Since timber resources are virtually boundless, market forces are stacked strongly against conservation."

Because of the dimming hope for sustainable timber extraction from primary tropical forests, other work has highlighted the potential value of extractable, non-timber resources as well as intensive agroforestry systems (Fig. 6). One study suggests that annual harvesting of non-timber products, such as Brazil nuts, rubber, varnish, and fruits, may provide an annual income of $422 per hectare (Peters et al. 1989).

However, this value is probably a significant overestimate because it is based on a forest stand containing a high fraction of commercial species, and it does not account for declining prices as more goods are brought to markets (Southgate 1998). Intensive agroforestry programs that farm rapidly growing commercial trees or a mix of trees with crops, such as coffee, are gaining popularity (Grainger 1993, Southgate 1998). Grainger (1993) suggests that a commercial plantation of teak may produce 245m3 of timber per hectare over a 65-year period. Gmelina may produce 150m3 per hectare over a 10-year period. Assuming a tropical timber value of $20-35/m3, this style of production may forestall the widespread destruction of forests while providing an income more attractive than land-clearing alternatives. Whether these yields can compete with the opportunity cost of one year of agriculture ($460 per hectare), especially as increased forest production drives down timber prices, remains to be seen. In addition, peasant farmers without access to investment opportunities may have no alternative to slash and burn agriculture.

It is clear that deforestation in the Amazon is driven by the relative costs and benefits of different land use options. How do value judgments implicit in these decisions reflect current political, social, and environmental conditions? Do these values reflect the true costs and benefits of the forests? How much do these values reflect individual interests and social welfare? This case study examines the valuing process involved in making the decision to clear a plot of primary forest in the Amazon Basin, from the perspective of a peasant farmer, a logger, and a conservation organization.

[edit] Causes of deforestation

Recently, soybeans have become one of the most important contributors to deforestation in the Brazilian Amazon. Thanks to a new variety of soybean developed by Brazilian scientists to flourish in rainforest climate, Brazil is on the verge of supplanting the United States as the world's leading exporter of soybeans. High soybean prices have also served as an impetus to expanding soybean cultivation.

Philip Fearnside, co-author of a report in Science [21-May-04] and member of Brazil's National Institute for Amazonian Research in Manaus, explains, "Soybean farms cause some forest clearing directly. But they have a much greater impact on deforestation by consuming cleared land, savanna, and transitional forests, thereby pushing ranchers and slash-and-burn farmers ever deeper into the forest frontier. Soybean farming also provides a key economic and political impetus for new highways and infrastructure projects, which accelerate deforestation by other actors."

Satellite data from 2004 shows a marked increase in deforestation along the BR-163 road, a highway the government has been paving in an effort to help soy farmers from Mato Grosso get their crops to export markets. Typically, roads encourage settlement by rural poor who look to the rainforest as free land for subsistence agriculture.

Logging

In theory, logging in the Amazon is controlled by strict licensing which allows timber to be harvested only in designated areas. However, there is significant evidence that illegal logging is quite widespread in Brazil. In recent years, Ibama—Brazil's environmental enforcement agency—has made several large seizures of illegally harvested timber including one in September 2003 when 17 people were arrested for allegedly cutting 10,000 hectares worth of timber.

Fires