Agricultural subsidies augmented tropical deforestation in the state of Campeche, Mexico

Stopping tropical deforestation is required to achieve climate change adaptation, conserve biodiversity and preserve forest livelihoods and cultures across the globe. We evaluate the causal impact of crop and livestock production subsidies (PROCAMPO and PROGAN) on deforestation in the state of Campeche, Mexico, with the highest national rate of forest cover loss. A quasi-experimental design was applied using covariate matching methods, specifically Mahalanobis distance matching, to evaluate the average treatment effect on the treated (ATT) on deforestation between subsidized (treated) and unsubsidized (control) community-based land production territories (ejidos), while controlling for relevant geographical and socioeconomic covariates characterizing the ejidos and representing the main regional deforestation drivers. Sensitivity analyses were conducted applying the Rosenbaum test and using alternative matching estimators to assess the robustness of the statistical comparisons. ATT results estimate that PROCAMPO augmented deforestation in subsidized ejidos by a mean of 165 ha between 2004 and 2018 and PROGAN by a mean of 334 ha between 2011 and 2018. Sensitivity analyses confirmed these programs may have had a significant and positive effect on deforestation. Up to 30 % of tropical forest loss in Campeche during the study period may be attributed to these subsidies. To achieve national and state level forest conservation outcomes, effective enrollment, assistance and monitoring procedures need to be in place, ensuring that enrolled land uses are not converted forest land. Moreover, integrating past forestry programs, such as payments for environmental services (PES) and community forest management (CFM), could help halt deforestation.