Increasing agricultural productivity can have ambiguous effects on forest protection in theory: it can expand the scope of farming, which is detrimental to the forest, but it can also induce farmers to intensify their production. The authors examine these predictions using county-level data from five waves of the Brazilian Census of Agriculture. The authors identify productivity shocks using the expansion of rural electrification in Brazil during 1960-2000. The authors show that electrification increased crop productivity, and farmers subsequently both expand farming through frontier land conversion, but also shift away from land-intensive activities and into capital- and labor-intensive activities. The net effect depends on the county’s land use prior to the increase in agricultural productivity, but it reduces deforestation in the typical county in the sample.
Agricultural Productivity and Deforestation in Brazil