Ecological Economics 31 1999 63 – 76
METHODS
Estimating the loss of agricultural productivity in the Amazon
Diana Weinhold
De6elopment Studies Institute, London School of Economics, Houghton Street, London, WC
2
A
2
AE, UK Received 23 November 1998; received in revised form 30 April 1999; accepted 7 May 1999
Abstract
We propose a procedure to obtain a general estimate of the rate at which agricultural productivity declines on newly cleared land in the Brazilian Amazon. This estimated parameter has two advantages over conventional
estimates. First, it is a general, average estimate that can be used in macro-scale economic analysis. Second, the estimate is derived from regional data accessible to economists rather than from remote scientific stations. In the first
stage a model is estimated that tracks the transition of land use from period to period for each municipality, allowing the process to vary according to different characteristics of each municipality and time period. From this land use
transition model the percentage of crop land in each municipality that is recently cleared, 5-years old, 10 years old or previously used for other purposes is calculated. These land vintage estimates are used with labor as inputs in a
Cobb – Douglas production function which is estimated using GLS. The estimated elasticities are allowed to vary by relevant municipality characteristics and are then converted into a measure of productivity for each land vintage. It
is shown that the productivity of land drops in the first 5-years after clearing land and stabilizes thereafter. Several economic arguments are given to support the empirical results. © 1999 Elsevier Science B.V. All rights reserved.
Keywords
:
Agricultural productivity; Amazon; Panel data; Heterogeneity www.elsevier.comlocateecolecon
1. Introduction
Over the past 15-years both the scientific estab- lishment and the general public have become in-
creasingly concerned about deforestation in the Brazilian Amazon. The possibility of global cli-
mactic change and the loss of biodiversity are only two of the more serious consequences of the
clearing of virgin forest. Although estimates of the extent of deforestation vary depending on the
methodology of the study
1
, there is good evidence
1
As of 1985 estimates of the total percentage of land cleared ranged from 5 to 12 depending on whether land-based
measures or satellite information was used and how it was interpreted. For more discussion about the range of measure-
ment see Andersen et al. 1996. Tel.: + 44-171-9556331; fax: + 44-171-9556844.
E-mail address
:
d.weinholdlse.ac.uk D. Weinhold 0921-800999 - see front matter © 1999 Elsevier Science B.V. All rights reserved.
PII: S 0 9 2 1 - 8 0 0 9 9 9 0 0 0 5 5 - 5
Table 1 Literature values for decay rates of yields following land clearing
a
a Paddy
Rice Ground-nuts
Cassava Crop
MaizeCassava Zaire
Zaire Ghana
Zaire Location
Malaysia kgha
kgha kgha
Yields lbacre
1750 2341
1363 45000
Year 1 X
30000 191
565 Year 2
1200 Year 3
800 X2
Year 8 9
76 86
33 Decay rate of yield
32 b
Maize Cattle
Crop Yucca, pineapple, plantain
Maize Honduras
East Amazonia Venezuela
Guatemala Location
Yields lbacre
thayr headha
X 5.1
0.4 900
Year 1 700
X2 Year 2
500 3.1
0.2 Year 3
Year 8 50
Decay rate of yield 26
30 22
a
Source: Robert Schneider 1995.
that after a decade of relatively slower rates of deforestation, clearing activity in the Amazon has
shown a marked increase over the last 2 years. Generally, the cleared land is used for agricultural
purposes, with land use following patterns dis- cussed below. Many scientists have argued that
the economic benefits accruing from the agricul- tural output and associated activities will not
compensate for the costs of deforestation.
2
Other researchers, however, have estimated that in some
cases land clearing can provide a net benefit to the local economy.
3
Given the sensitive nature both figuratively and literally of this situation there is
an acute need for policy makers to have accurate information about the economics of deforestation
in order to make policy decisions with socially desirable outcomes. Although such policy advice
is well beyond the scope of this paper, we attempt to contribute to the stock of relevant knowledge
by providing an estimate of the mean rate at which agricultural productivity declines after land
clearing. The proposed methodology may be used for estimating a variety of parameters when di-
rect, time series data is not available. Previous estimates of rates of agricultural pro-
ductivity decline have relied on careful field stud- ies conducted at many different tropical scientific
stations around the world. Schneider 1995 sum- marizes several of these studies and we reproduce
his results here in Table 1 for convenience.
In general these studies are characterized by careful, controlled experiments focusing on partic-
ular agricultural methods and crops over a period of 1 – 3 years.
4
As can be observed, the rates of land degradation range anywhere from 9 to 86
per year. Given the existence of these studies, one possible way to estimate a general average rate of
land degradation for the Amazon would be to pool the results of these studies one would either
have to assume similar agricultural conditions across tropical countries or limit the analysis to
studies from the Amazon and conduct a meta- analysis. From an economist’s point of view there
2
See, for example, Mahar 1989.
3
See Andersen 1996.
4
For another recent example of this type of study see Moran et al. 1996.
are several limitations associated with this ap- proach, however. The first obstacle is a practical
one. Many of the relevant studies conducted at scientific stations in Bolivia, Peru, and Brazil in
Spanish and Portuguese have never been pub- lished in the U.S.
5
Second, since these studies use very specific crop varieties and agricultural tech-
nologies such a meta-analysis would require a careful pooling methodology and special technical
knowledge. In addition, the rate of land degrada- tion thus calculated may or may not reflect actual
rates of land degradation faced by common agri- culturists following normal patterns of land use in
the Amazon.
This paper provides an alternative measure of the rate of agricultural productivity decline that
can be estimated from less specific data that is more widely available. We do not intend the
proposed methodology to serve as a substitute for careful field analysis, but rather as a complemen-
tary form of analysis. As we shall discuss, our approach lacks the ability that field studies have
to provide advice on optimal cropping patterns, for example on how to improve productivity.
However it does have the advantage of being a more general, average measure that is relatively
easier to compute.
The paper continues as follows. Section 2 pro- vides a very brief history of agricultural policy in
the Amazon. Section 3 describes the data set and outlines the basic procedure to calculate the rate
of degradation. Section 4 discusses some specific estimation and data issues and presents the main
results.
Finally, Section
5 summarizes
the conclusions.
2. A brief economic history of agriculture in the Amazon
