Why do so many farmers in Amazonia struggle with low incomes and environmental degradation?

Alexander Lees / Manchester Metropolitan University

by Rachael Garrett*

From political speeches to posts on social media, it is customary to justify deforestation in Amazonia by the urgent and inevitable need for economic development and wealth generation. But what happens when scientific analysis demonstrates that most agricultural production in Amazonia does not generate substantial wealth? The truth is that many small and medium-sized farmers living in Amazonia remain as poor than ever due to a reliance on low income and environmentally damaging agricultural activities – in particular cattle ranching.

Cattle ranching in the Amazon is often a low technology enterprise that generates very low returns, becomes less productive each year, and eventually results in land abandonment. This is a major problem because declining land quality and abandonment leads farmers to deforest new areas for production. Given its high environmental costs and low economic returns, researchers long have sought to understand why ranching remains so prevalent in region. My recent paper published in Ecology and Society, shows that part of the answer lies in better understanding farmers’ needs and aspirations. It is not just about the money.

For nearly a decade I have been interviewing farmers in the Brazilian Amazon about the factors influencing their economic returns. I had always assumed that if I could just understand what factors limit the profitability of small producers and more sustainable practices, then I would be able to develop policy recommendations for how to increase their adoption of higher income and more sustainable practices. But over time it became apparent that differences in economic returns do not adequately explain agricultural choices, particularly differences among farmers within regions.

To understand what other factors might influence farmers’ behavior, our international team of scientists from Embrapa Amazônia Oriental, Universidade Federal do ABC, and other institutions, used a comprehensive dataset of more than 600 households in the eastern Amazon state of Pará, collected by the Sustainable Amazon Network. These data included various social and environmental attributes of the rural households such as their assets, networks, agricultural activities, and subjective well-being, that is, how happy they think they are. We first assessed how income varied across different types of farming systems, to see if there were high income opportunities already present in the region. We then sought to explain why some farmers chose lower income land uses versus higher income alternatives and how such choices influenced their well-being.

Source: Ecology and Society, 2017


Our research found that 75% of households in the study region were earning less than $10,000 USD per year. We knew that cattle ranching was a low income activity, but were shocked to learn that properties pursuing ranching were earning just $250 USD per hectare. Soybean, despite being a major export crop, provided a moderate income of $1,000 USD per hectare. On the other hand, farmers engaged in fruit and horticulture production were earning around $3,300 USD per hectare – 12 times more than cattle ranchers.

Using statistical models of farmer behavior, we were able to conclude that farmers were not adopting higher income land uses such as fruit production due mainly to a lack of access to markets and critical infrastructure (roads, refrigerated transport, machinery) and supply chains linked to external markets. But another more surprising finding explaining the prevalence of ranching and crop production turns out to be the disconnect between farm income and the happiness of rural households. Absolute rural income had no relationship to a households’ happiness. Instead farmers’ prioritized safety and life quality over making money.

The truth is the social benefits associated with ranching provided a powerful reinforcing role on land use behavior by making the switch to cropping less desirable.

Farmers prefer to pursue practices in which they are experienced, following the traditions of their family. They tend to avoid complexity and uncertainty, and stick with what they know, even if the returns are lower and their actions contribute to land degradation and deforestation.

These explanations shouldn’t be surprising. After all, many of us prioritize lifestyle benefits over income when making our own career choices. And yet, this more nuanced mental model about what drives farmer behavior is completely absent from the research and discussion about how to reduce deforestation in the Amazon and help the people living there. People do not talk about farmer aspirations and lifestyles when discussing programs aimed at reducing deforestation, instead they focus on changing economic incentives to encourage different behaviors. A key solution is creating economic incentives that are more in alignment with what is socially desirable.

In the last 15 years the Brazilian government has committed substantial resources toward combating deforestation in Amazonia alongside new research and financial incentives for sustainable intensification. The government also provides support for smallholder development, mainly in the form of agricultural extension and credit.

However, a continued focus on financial incentives such as subsidized credit lines to individual farmers is unlikely to solve poverty and environmental degradation because it does not address the root concerns of farmers, which are often not monetary, or the real barriers to change – a lack of adequate infrastructure for more sustainable practices and higher value crops. These social factors have created a lock-in of environmentally damaging behaviors, reducing the effectiveness of any single pronged, “silver bullet” type of incentive program.

There is a need to radically rethink agricultural policy in the Brazilian Amazon. Promising solutions for small properties, such as high value fruit production, will remain inaccessible at scale if access to distant markets is not improved via investments in processing, storage, and market infrastructure.

Ultimately, to effectively move actors out of extensive and unsustainable cattle ranching to higher income land uses, future policies will need to identify and discriminate households based on a broader set of assets, cultural attributes and aspirations than are traditionally applied. These refined characterizations are needed to better match proposed solutions with what actually makes rural households happy.

Rachael Garrett is an Assistant Professor at Boston University and has been working the Amazon for over a decade. She is an expert in sustainable development, agriculture, and tropical conservation. Rachael has a doctorate in Environment and Resources from Stanford University and a master degree in Public Administration from Columbia University.

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