GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 817 This program is controversial,as formalizing property rightsimplies forgiving the past transgressionsof land grabbers. SomeBrazilian environmentalists fearthat this program may actuallyincrease deforestation, as new landgrabbers see the potential to occupyland illegally and then arguefor legal title.held accountable for illegal logging on their properties (t,3 June 2009).17 It is too soon to evaluate the effects of thisprogram on deforestation rates.Furthermore, the Brazilian state has only recently begunto embrace a sustainable development model in theAmazon. Indeed, from the late 1960s to the 1980s, BrazilianAmazon settlement policy promoted deforestation toensure national security and to expand agricultural production,and settlers in the region were required to deforesttheir lands to lay claim to them and become eligiblefor subsidized credits. Mineral extraction and industrialdevelopment in the Amazon were key economic goalsfor Brazil’s 1964-1985 military dictatorship, and from1965 to 1974, subsistence farmers were expelled fromthe agricultural frontier “to make way for enormous cattleranches, whose pastures required the burning of hugeswaths of forest” (Hochstetler and Keck 2007, 145). In1974, the current agribusiness and ranching model ofdevelopment was consolidated, setting the trajectory ofdeforestation seen today. In addition to national Amazonsettlement policy, subsidized credits and tax exemptionsfor agribusiness lowered production costs and stimulateddeforestation for many years (Binswanger 1991).This suggests that access to credit needs to be morestrongly conditioned on environmental sustainability,but doing so will require more coordination betweenBrazil’s developmental and environmental ministries.Over the last decade, some of the perverse incentivesdriving Amazon deforestation detailed above have beenremoved. At the same time, cattle expansion has becomeprofitable independently of state subsidies – thus, nowmarket mechanisms are the principal drivers of cattleranching expansion and consequent deforestation,rather than policy (Margulis 2004). However, the Brazilianfederal government continues to be a major investorin Amazonian agribusiness, through institutions suchas the Brazilian National Development Bank (BNDES)(Greenpeace 2009, 3), which gives the government conflictingincentives vis-à-vis tradeoffs between productionand environmental sustainability. The Brazilian governmenthas also indirectly subsidized the soy industry inthe Cerrado and Amazon by investing in transportationinfrastructure (Fearnside 2001). Finally, studies findthat the more access farmers and ranchers have to ruralcredit, the more deforestation occurs (IPAM 2008). Thissuggests that access to credit needs to be more stronglyconditioned on environmental sustainability, but doingso will require more coordination between Brazil’s developmentaland environmental ministries.3.3 Mixed results: efforts to fix the systemIn conjunction with the removal of some perverse incentives,federal and state government initiatives havehelped to reduce Amazon deforestation. These initiatives,however, must be combined with productivity enhancements,stronger law enforcement, and domesticand international consumer pressures if they are to contributeto reducing deforestation in the long run.At the federal level, the Action Plan to Prevent andControl Deforestation in the Legal Amazon (PPCDAM)and the Amazon Protected Areas Program (ARPA) havesought to increase law enforcement and land area designatedas environmentally protected. In addition, thefederal government enacted a National Climate ChangePlan in 2008, which includes the ambitious goal of eliminatingdeforestation by 2040 (Governo Federal 2008). Fi-Area of Soy planted by year and regionArea Planted in '000 hectares per year12.00010.0008.0006.0004.0002.000Center-West Region totalMato GrossoMato Grosso do SulGoiasFederal District of BrasiliaFigure 2: Area of Soy Planted in the Center-WestSource: CONAB 2011Green Growth: From religion to reality 89