The Economics of Deforestation in the Amazon
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The Economics of Deforestation in the Amazon

Dispelling the Myths

João S. Campari

This provocative new book presents the results of twenty years of research on deforestation in the Amazon. By carefully observing the changing character of human settlements and their association with deforestation over such a prolonged period, the author is able to reject much of the ‘perceived wisdom’. He skillfully dissects various models of deforestation and provides hard evidence on what is myth and what is reality.
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Chapter 7: Turnover on Farming Plots

João S. Campari

Extract

7. 7.1. Turnover on farming plots INTRODUCTION Law No. 8629 of 1993, which complements the 1988 constitution, states that beneficiaries of settlement projects can only sell the land they receive after ten years of continued occupation. In practice, this law and all other legal restrictions that preceded it have never been observed by colonists in the Amazon. Even without official documents attesting property rights, settlers have always bought, sold and leased land. Alston et al. (1999) have an interesting explanation for land transactions that occur in the absence of official property rights. They argue that squatters on public land sell their right to be granted the land in the future, and squatters on private land sell their rights to be compensated for any improvements they made on the land in case they are evicted by the owner. Among squatters on public land, deforestation is deemed necessary because during the regularization process they are entitled to a multiple of the land they have cleared. For squatters in private lands, a major component of the so-called ‘improvements’ is deforestation; so that they are likely to be compensated for this improvement at the time of eviction. Ozório de Almeida and Campari (1996) observe that even in the presence of legitimate property rights – e.g., in directed colonization projects where titles are granted to settlers (freely, in public colonization, or purchased by the settler, in private colonization) – turnover is by no means low. Therefore, colonization plots in the Amazon experience changes...

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