Edited by Ronaldo Seroa da Motta
Chapter 9: Economic incentives and forest concessions in Brazil
Claudio Ferraz and Ronaldo Seroa da Motta 9.1 INTRODUCTION The deforestation process in Brazil, mainly in frontier areas, is a result of economic and social factors, along with institutional failures. In the past, structural problems, such as highly concentrated income distribution and land tenure, worked in conjunction with policy failures, such as favourable credit and ﬁscal systems to agricultural activities and regional development programmes in frontier areas, to create a deforestation process driven mainly by the synergy between agricultural and logging activities. The association between these activities plays a crucial role in the deforestation trend by ﬁnancing land clearing for agricultural purposes in exchange for timber extraction. Economic agents move to the frontier, clear the land, sell the timber and start an agricultural or cattle-raising activity expecting to get the title for the land. Such an exploitation pattern, identiﬁed as typical dynamic behaviour in open access areas, is a direct consequence of the lack of perception of scarcity associated with the forest value. Consequently, the privatisation of the forest and its land through the assignment of private individual rights, has been very harmful for sustainable purposes in the region.1 Some of these factors cannot be easily reverted since it would require longterm structural adjustments to alleviate social inequalities, accomplish a satisfactory land reform, create the proper incentives and enhance the planning capacity of human resources in governmental agencies. Because of these failures, regulation on sustainable logging practices and economic instruments such as funding mechanisms, forestry taxes and ﬁscal incentives...
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