IDEAS home Printed from https://ideas.repec.org/a/spr/envpol/v27y2025i2d10.1007_s10018-024-00421-4.html

The relationship between rural credit policy and deforestation: evidence from Brazil

Author

Listed:
  • Weslem Rodrigues Faria

    (Universidade Federal de Juiz de Fora)

  • Felipe Morelli Silva

    (Universidade de Brasília, UnB, FACE - Faculdade de Administração, Contabilidade, Economia e Gestão Pública)

  • Alexandre Nunes Almeida

    (Universidade de São Paulo - Escola Superior de Agricultura “Luiz de Queiroz” (Esalq))

  • Admir Antonio Betarelli Junior

    (Universidade Federal de Juiz de Fora)

Abstract

This study proposes the use of empirical estimates to identify if the National Rural Credit System has any relationship with the level of deforestation in the country. Using information from 5.354 Brazilian municipalities between 2013 and 2019 and focusing on livestock activity, we concluded that the form of capture and distribution of resources may affect deforestation in different levels. Our evidence indicates that credit destined for investment would be negatively correlated with deforestation in Brazil, while other purposes would not have significant effects. Other drivers that characterize agricultural credit as subsidy and uncontrolled credit tend to positively affect deforestation. Estimates for the Legal Amazon in general indicated a negative relationship between credit and deforestation. Estimates for the Cerrado and Pantanal biomes indicated a positive relationship between subsidized and uncontrolled credit and deforestation.

Suggested Citation

  • Weslem Rodrigues Faria & Felipe Morelli Silva & Alexandre Nunes Almeida & Admir Antonio Betarelli Junior, 2025. "The relationship between rural credit policy and deforestation: evidence from Brazil," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 27(2), pages 231-263, April.
    • Handle: RePEc:spr:envpol:v:27:y:2025:i:2:d:10.1007_s10018-024-00421-4
    DOI: 10.1007/s10018-024-00421-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10018-024-00421-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10018-024-00421-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Müller-Hansen, Finn & Heitzig, Jobst & Donges, Jonathan & Cardoso, Manoel F. & Dalla-Nora, Eloi L. & Andrade, Pedro R. & Kurths, Jürgen & Thonicke, Kirsten, 2019. "Can intensification of cattle ranching reduce deforestation in the Amazon? Insights from an agent-based social-ecological model," SocArXiv x5q9j, Center for Open Science.
    2. Francisco Fontes & Charles Palmer, 2018. "“Land Sparing” in a von Thünen Framework: Theory and Evidence from Brazil," Land Economics, University of Wisconsin Press, vol. 94(4), pages 556-576.
    3. repec:osf:socarx:x5q9j_v1 is not listed on IDEAS
    4. Müller-Hansen, Finn & Heitzig, Jobst & Donges, Jonathan F. & Cardoso, Manoel F. & Dalla-Nora, Eloi L. & Andrade, Pedro & Kurths, Jürgen & Thonicke, Kirsten, 2019. "Can Intensification of Cattle Ranching Reduce Deforestation in the Amazon? Insights From an Agent-based Social-Ecological Model," Ecological Economics, Elsevier, vol. 159(C), pages 198-211.
    5. Edward B. Barbier, 2001. "The Economics of Tropical Deforestation and Land Use: An Introduction to the Special Issue," Land Economics, University of Wisconsin Press, vol. 77(2), pages 155-171.
    6. Walker, Robert & Moran, Emilio & Anselin, Luc, 2000. "Deforestation and Cattle Ranching in the Brazilian Amazon: External Capital and Household Processes," World Development, Elsevier, vol. 28(4), pages 683-699, April.
    7. Carole Megevand, 2013. "Deforestation Trends in the Congo Basin : Reconciling Economic Growth and Forest Protection [Dynamiques de déforestation dans le bassin du Congo : Réconcilier la croissance économique et la protection de la forêt]," World Bank Publications - Books, The World Bank Group, number 12477, April.
    8. Juliano Assunção & Clarissa Gandour & Romero Rocha & Rudi Rocha, 2020. "The Effect of Rural Credit on Deforestation: Evidence from the Brazilian Amazon," The Economic Journal, Royal Economic Society, vol. 130(626), pages 290-330.
    9. Binswanger, Hans P., 1991. "Brazilian policies that encourage deforestation in the Amazon," World Development, Elsevier, vol. 19(7), pages 821-829, July.
    10. repec:fth:stanho:e-92-3 is not listed on IDEAS
    11. Jorge Hargrave & Krisztina Kis-Katos, 2013. "Economic Causes of Deforestation in the Brazilian Amazon: A Panel Data Analysis for the 2000s," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(4), pages 471-494, April.
    12. Weslem Rodrigues Faria & Admir Antônio Betarelli Júnior & Rosa Lívia Gonçalves Montenegro, 2019. "Multidimensional characteristics and deforestation: an analysis for the Brazilian Legal Amazon," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(4), pages 1959-1979, July.
    13. Assunção, Juliano & Gandour, Clarissa & Rocha, Rudi, 2015. "Deforestation slowdown in the Brazilian Amazon: prices or policies?," Environment and Development Economics, Cambridge University Press, vol. 20(6), pages 697-722, December.
    14. Nelson B. Villoria & Derek Byerlee & James Stevenson, 2014. "The Effects of Agricultural Technological Progress on Deforestation: What Do We Really Know?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(2), pages 211-237.
    15. Angelsen, Arild & Kaimowitz, David, 1999. "Rethinking the Causes of Deforestation: Lessons from Economic Models," The World Bank Research Observer, World Bank, vol. 14(1), pages 73-98, February.
    16. Edward B Barbier, 2019. "The concept of natural capital," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(1), pages 14-36.
    17. Silva, C.A. & Lima, Mendelson, 2018. "Soy Moratorium in Mato Grosso: Deforestation undermines the agreement," Land Use Policy, Elsevier, vol. 71(C), pages 540-542.
    18. Paula Bustos & Bruno Caprettini & Jacopo Ponticelli, 2016. "Agricultural Productivity and Structural Transformation: Evidence from Brazil," American Economic Review, American Economic Association, vol. 106(6), pages 1320-1365, June.
    19. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
    20. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brandão, Frederico & Befani, Barbara & Soares-Filho, Jaílson & Rajão, Raoni & Garcia, Edenise, 2023. "How to halt deforestation in the Amazon? A Bayesian process-tracing approach," Land Use Policy, Elsevier, vol. 133(C).
    2. Faria, Weslem Rodrigues & Almeida, Alexandre Nunes, 2016. "Relationship between openness to trade and deforestation: Empirical evidence from the Brazilian Amazon," Ecological Economics, Elsevier, vol. 121(C), pages 85-97.
    3. Bortolotti, Luca & Marson, Marta & Saccone, Donatella, 2024. "Food and the forest: A spatial analysis on the nexus between foreign direct investment and deforestation," Forest Policy and Economics, Elsevier, vol. 169(C).
    4. Sonia SCHWARTZ & Jean Galbert ONGONO OLINGA & Eric Nazindigouba KERE & Pascale COMBES MOTEL & Jean-Louis COMBES & Johanna CHOUMERT & Ariane Manuela AMIN, 2014. "A spatial econometric approach to spillover effects between protected areas and deforestation in the Brazilian Amazon," Working Papers 201406, CERDI.
    5. Pascale COMBES MOTEL & Jean-Louis COMBES & Catherine ARAUJO BONJEAN & Claudio ARAUJO & Eustaquio J. REIS, 2010. "Does Land Tenure Insecurity Drive Deforestation in the Brazilian Amazon?," Working Papers 201013, CERDI.
    6. Cisneros, Elías & Kis-Katos, Krisztina, 2024. "Unintended environmental consequences of anti-corruption strategies," Journal of Environmental Economics and Management, Elsevier, vol. 128(C).
    7. Miranda, Bruno Varella & de Oliveira, Gustavo Magalhães, 2023. "Assessing the performance of voluntary environmental agreements under high monitoring costs: Evidence from the Brazilian Amazon," Ecological Economics, Elsevier, vol. 214(C).
    8. Choumert, Johanna & Combes Motel, Pascale & Dakpo, Hervé K., 2013. "Is the Environmental Kuznets Curve for deforestation a threatened theory? A meta-analysis of the literature," Ecological Economics, Elsevier, vol. 90(C), pages 19-28.
    9. K. Herve DAKPO & Pascale COMBES MOTEL & Johanna CHOUMERT, 2012. "The environmental Kuznets curve for deforestation: a threatened theory? A meta-analysis," Working Papers 201216, CERDI.
    10. Philip Fearnside & Adriano Figueiredo & Sandra Bonjour, 2013. "Amazonian forest loss and the long reach of China’s influence," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(2), pages 325-338, April.
    11. Weslem Faria & Alexandre Almeida, 2011. "Agricultural Expansion, Openness to Trade and Deforestation at the Brazilian Amazon: A Spatial Econometric Analysis," ERSA conference papers ersa11p1013, European Regional Science Association.
    12. Robert Innes & George Frisvold, 2009. "The Economics of Endangered Species," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 485-512, September.
    13. Yoshito Takasaki, 2011. "Economic models of shifting cultivation: a review," Tsukuba Economics Working Papers 2011-006, Faculty of Humanities and Social Sciences, University of Tsukuba.
    14. Allen N. Berger & Cristina Ortega & Matias Ossandon Busch & Raluca Roman, 2024. "Banking on Deforestation: The Cost of Nonenforcement," Working Papers 24-21, Federal Reserve Bank of Philadelphia.
    15. Daniella Tiemi Sasaki Okida & Osmar Abílio de Carvalho Júnior & Osmar Luiz Ferreira de Carvalho & Roberto Arnaldo Trancoso Gomes & Renato Fontes Guimarães, 2021. "Relationship between Land Property Security and Brazilian Amazon Deforestation in the Mato Grosso State during the Period 2013–2018," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    16. Berman, Nicolas & Couttenier, Mathieu & Leblois, Antoine & Soubeyran, Raphael, 2023. "Crop prices and deforestation in the tropics," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    17. Yoshito Takasaki & Oliver T. Coomes & Christian Abizaid & Stéphanie Brisson, 2014. "An Efficient Nonmarket Institution under Imperfect Markets: Labor Sharing for Tropical Forest Clearing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(3), pages 711-732.
    18. West, Thales A.P. & Fearnside, Philip M., 2021. "Brazil’s conservation reform and the reduction of deforestation in Amazonia," Land Use Policy, Elsevier, vol. 100(C).
    19. Tanguy Bernard & Sylvie Lambert & Karen Macours & Margaux Vinez, 2023. "Impact of small farmers' access to improved seeds and deforestation in DR Congo," Nature Communications, Nature, vol. 14(1), pages 1-14, December.
    20. Bowman, Maria S., 2016. "Impact of foot-and-mouth disease status on deforestation in Brazilian Amazon and cerrado municipalities between 2000 and 2010," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 25-40.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:envpol:v:27:y:2025:i:2:d:10.1007_s10018-024-00421-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.