Wednesday, September 20, 2006

Amazon deforestation and soya prices - supply and demand

An interesting link to a study published online in Proceedings of the National Academy of Science using data from NASA's Moderate Resolution Imaging Spectroradiometer (MODIS) on the Terra and Aqua satellites and information from field observations. Sounds like hard work to me.

In this paper the authors examined cropland expansion in Mato Grosso (the Brazilian state with the highest deforestation and soybean production rates). They found that more than 20 percent of the state's forests were converted to cropland in 2003.

Studying Impacts of Amazon Deforestation

Now for the economics -

In addition to mapping the change in land use type over Mato Grosso between 2001 and 2004, the researchers compared these changes with shifts in agricultural prices in the region. The study found a strong correlation between the amount of land deforested and the average annual soybean price. As soybean prices rose in 2003, the conversion from forest to cropland increased, while the amount of land converted to pasture declined.

"In 2005, soybean prices fell by more than 25 percent and some areas of Mato Grosso showed a decrease in large deforestation events, although the central agricultural zone continued to clear forests," said Morton. "But, deforestation rates could return to the high levels seen in 2003 as soybean and other crop prices begin to rebound in international markets."

This result will be no surprise to an economist of course. The authors also mention that deforestion and land use is also related to the price of other products such as beef and timber.

Of more concern to the "climate change" debate is the following quote:

Converting forests to cropland also has a more pronounced ecological and climate impact than other land conversions because it involves the complete removal of land biomass, including tree trunks, stumps and woody roots. "The carbon once contained in the living material and soil is released into the air from multiple fires during the clearing process, causing atmospheric carbon dioxide concentrations, a primary greenhouse gas, to increase," said co-author Ruth DeFries, University of Maryland. Of all land uses and types, croplands are also one of the least efficient at absorbing carbon from the air.

It might be interesting to look behind this data and find out whether multinational organizations are behind this land clearance. One may not have to look to far to find the hand of US and western multinationals searching for a source of cheap food.

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