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Debt Peonage and Over-Deforestation in the Amazon Frontier of Brazil

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  • de Almeida, Anna Luiza Ozorio

Abstract

This paper proposes that under the conditions typical of the Amazon frontier of Brazilabsence of a wage labour market and abundant supply of land-farm-family labour is a positive function of debt. This labour supply response, known as "debt peonage," provides for indirect management of farm labour by local merchants via the crop lien mechanism. A microeconomic model of the family farm shows that debt-labour leads to labour-intensive farming but land-extensive farming leads to over-deforestation. Correct colonization policy should then provide for market structures that reduce indebtedness and deforestation. This would also reduce the environmental consequences of settlement in the Amazon.

Suggested Citation

  • de Almeida, Anna Luiza Ozorio, 1992. "Debt Peonage and Over-Deforestation in the Amazon Frontier of Brazil," 1992 Occasional Paper Series No. 6 197891, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaaeo6:197891
    DOI: 10.22004/ag.econ.197891
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    1. repec:cup:jechis:v:32:y:1972:i:03:p:641-669_07 is not listed on IDEAS
    2. repec:cup:jechis:v:30:y:1970:i:01:p:18-32_07 is not listed on IDEAS
    3. Bhaduri, Amit, 1973. "A Study in Agricultural Backwardness under Semi-Feudalism," Economic Journal, Royal Economic Society, vol. 83(329), pages 120-137, March.
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