Deforestation and Global Markets

Forest clearing on Amazonia's expanding frontiers is not about desperate poor people clearing the forest to eat. It is about land sharks fighting it out over the best parts and forcing the little fish to pick over the remains. In the wake of forest clearing, ranchers, agribusiness, and small farmers become established, more forest is cleared every year -- and the frontier moves on.

Deforestation per se is relatively easy to monitor and measure using satellite data, and Brazil's National Institute for Space Research (INPE) has been doing so accurately since 1988. Historically the rate of deforestation has varied with fluctuations in the economy and the weather, but the long-term average is about 6,900 square miles per year. The frontier got its start in the 1970s with the military government's geopolitically inspired roads, harebrained colonization schemes, and fat subsidies for cattle ranching, then cruised through the '80s and early '90s when placer gold mining and mahogany logging kicked in. In the first years of the millennium, however, the level of development rose dramatically. While Brazil's economic growth stagnated, deforestation climbed steadily to 10,500 square miles in 2004, the second highest year on record.

This dramatic and historic change came about when global markets began to reach out and touch the Amazon. China's soaring demand for soy (pig and chicken feed for an increasingly prosperous population) coincided with increased demand for soy in Europe following the outbreak of mad cow disease. Beef prices also spiked, and with a weak real (the Brazilian currency), Brazilian exports were cheap. Agribusiness exports from the Amazon brought Brazil record trade surpluses even with limp GDP -- but drove deforestation higher.

Now it's showtime for Brazil's burgeoning participation in global commodity markets. Brazil could overtake the United States as the world's biggest soy producer. The Amazon now produces 2 million tons of soy a year. In 1995 it wasn't even 200,000. Brazil's cattle market is about to boom as well, though the country has yet to eradicate hoof-and-mouth disease in its cattle herd. Hoof-and-mouth disease rarely bothers people, but it wreaks havoc on livestock, so the United States and the European Union won't take fresh meat from the Amazon region of Brazil. However, the region is on the verge of being certified by an international, industry-financed watchdog, which will open up these rich markets. In the meantime, there is burgeoning demand from Russia and the Middle East. And since researchers have developed new strains suited to the hot, wet Amazon in recent years, soy in the Amazon has only just taken off.

There is plenty to be worried about here. Clear-cutting and burning ranch-sized swaths of forest is easy enough to detect from space. But there is a lot of other damage that is harder to see from a distance that is potentially just as bad. Selective logging, for rapidly dwindling supplies of mahogany and other high-end hardwoods, may affect as much land as is deforested every year. Even very selective logging (a tree per 2 acres or less) can have serious effects. Some forest-climate models predict that half the Amazon could turn into savanna by midcentury if global CO2 emissions continue unabated.

Oil development in Peru and Ecuador, the expansion of soy farming in Bolivia, and coca cultivation, cattle ranching, and civil war in Columbia are also threatening the ecological stability of the region, and in some cases, the lives and livelihoods of indigenous and local peoples. But because of Brazil's large-scale clear-cutting of the Amazon, no country has yet approached the magnitude of that country's threat to the environment and its own people.