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INDIRECT LAND USE CHANGE and the FUTURE of the AMAZON By INDIRECT LAND USE CHANGE AND THE FUTURE OF THE AMAZON By Peter Daniels Richards A DISSERTATION Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Geography 2012 ABSTRACT INDIRECT LAND USE CHANGE AND THE FUTURE OF THE AMAZON By Peter Daniels Richards In this research I consider several of the less understood aspects of agricultural land use change, an issue at the heart of a broader discussion on the tradeoffs between economic development and environmental conservation. I focus specifically on a region of rapid agricultural change, namely the Brazilian Amazon, where agricultural and beef production have tripled in recent decades, and more than 200,000 square kilometers of forest areas have been destroyed. Specifically, this dissertation contributes to our understanding of the impacts of land use change by focusing on the so-called indirect effects associated with expanding agricultural production, or how production changes in one location may lead to changes in behaviors and land uses in another, potentially distant location. To date, much of the work on indirect land use change has conceptualized the process as a series of indirect effects originating from market dynamics and policies. Here I present another conceptual element to this process, namely an investment effect where skills and capital are liquidated and spatially (re)distributed over a landscape, perpetually in flux and in chase of rents and investment opportunities. The Brazilian Amazon, a region that has undergone rapid changes in forest cover, pasture, and cropland, serves as an example par excellence of indirect land use change, given the pace of land cover change within the area. Conceptually, I draw from migration theories to understand the movement of capital resources. I situate Sjaastad’s neoclassical theory of labor mobility within the context of the rent or location based economic landscape associated with von Thünen to suggest that the market dynamics that continually reshape an economic landscape also paint a dynamic canvas of opportunity costs and migration incentives. These incentives act to both distribute and redistribute not only land uses, but also the skills and capital essential to rural production. At its core, this dissertation seeks to clarify how the globalization of the Amazon and the soybean expansion of the past decade have acted both directly and indirectly to push back forest cover and pull in capital. I approach the problem through a mixed method, multi scale approach that combines field work with an innovative spatial econometric model. The results suggest a positive and significant linkage between the expansion of soybean production across Brazil and deforestation in the Amazon. The field level dynamics that underlie this linkage are, evidently, driven by the relocation of skills and capital, with farmers and ranchers from consolidated agricultural and pastoral regions seeking to maximize their utility by acquiring larger parcels in the Amazon. The dissertation provides evidence to suggest that land use change occurs upon the transfer of land between owners of different skill sets, and that former landowners relocate their production strategies to new locations upon displacement from their former properties. The research is expected to contribute to the broader discussion of land use and land policy, and on the relationships between land use and global markets. It has clearly connected land use to migration patterns, and has done so by situating migration within the context of a globalizing economy, and one which is rapidly incorporating the Amazon into its midst. Copyright by Peter Daniels Richards 2012 . ACKNOWLEDGEMENTS To all of those who supported me and this dissertation project over the past four years, I would like to extend my sincerest gratitude. In particular, I would like to acknowledge the invaluable support of Dr. Robert Walker, the principal advisor to this research and my Ph.D. studies, and who was tireless in his support of this project and ensured that I would see it through to its completion. Drs. Scott Swinton, Joseph Messina, and William McConnell all provided advice on key areas of this dissertation and in the pursuit of this Ph.D. more generally. Dr. Ricardo Shirota also offered invaluable help on this project, both with respect to its direction and development and in obtaining the required documentation for field work in Brazil. The support of these individuals was essential, and without them this project would not have taken the shape that it did. I also would like to acknowledge the support and assistance of my graduate student peers and the Departmental staff in the Departments of Geography and Agricultural, Food, and Resource Economics. Personally, I would like to thank my family and those close friends who for are as close as family for their encouragement to me to not only pursue a Ph.D., but to see it through. The Conter de São José family in Sinop, MT also was of enormous assistance to me during the field work portions of this research, and I would like to thank them for the warmth of their hospitality and for their sincere friendship. Finally, I would like to thank Dr. Donald Merrihew, M.D. Ten years ago in a waiting room at Convenient Medical Care, with a copy of Crime and Punishment in hand, Dr. Merrihew planted in me the idea and confidence that would set me on my path to pursue a career in academia. v Several organizations provide key funding support to this research. I would like to acknowledge the financial support of Michigan State’s Center for Advanced Studies in International Development, the North American Regional Science Association, the Inter- American Foundation, the Mellon Foundation, the Social Science Research Council, the National Science Foundation, the Michigan State University Graduate School, and the Department of Geography. Without their support this research would not have been possible. vi PROLOGUE Here at least we shall be free; the Almighty hath not built Here for his envy, will not drive us hence: Here we may reign secure, and in my choice to reign is worth ambition though in Hell: Better to reign in Hell, than serve in Heaven. Inferno (lines 258-263) Dante Poor men want to be rich Rich men want to be kings And a king ain’t satisfied until he rules everything “Badlands” Bruce Springsteen August 2008, BR-163. Somewhere south of Santarém, Brazil’s Federal Highway Number BR-163 reverts to little more than a daring channel of dusty velocity and fast approaching obstacles, a dirt highway that parts a sea of green. To our front, a mist of lifted airborne sand, the remnants of the soils that in a previous generation provided the foundations to the mighty Amazon forest, obscures their provocateur. From our perspective the cloud is yet another obstacle to BR-163, an obstacle that, just as with the sand traps and the log bridges that we have already overcome, constitutes only another chapter in our southbound journey. Several times we pull close to the vehicle ahead with an intention to pass, but we are repeatedly stymied by the natural and numerous impediments that appear fast and close from behind the opaque wall of dust. At some point, vii however, we will have to cross our fingers and accelerate blindly into this unknown. Though fully aware that an unseen rut, any washed out bridge, a sudden swerve by the driver ahead, or perhaps most dangerous of all, a rare but absolutely undetectable pickup coming headstrong on its own barreling journey northward would immediately spell our doom, we are determined to push ahead. Passing clouds of dust is a task we have completed before, and one which we will have to repeat dozens of times on this journey. As always, pass we must, as to remain in the wake of this rust colored inferno is impossible. To remain behind would mean not only slowing our progress, but also remaining in the same choking mist that has forced our windows closed, sealing us within this sweaty heat of our vehicle. So onward we must go, and we steel ourselves for the nervous moment of acceleration. With pauses in our breath and in the beats of our hearts, the accelerator is pressed hard and our Mitsubishi pickup lurches ahead. Seconds later, we are closing on the cloud and passing that dangerous point of no return. The hulking form of a fuel truck emerges and our tires spin faster as our truck edges to the left in an intensified shower of red earth. The truck driver, now only a few feet to our right, finally detects our presence, slows and moves, if only slightly, to the right in recognition of our attempt. And in moments he will exist only within the lesser than life stature of our 4x6” mirrors, continuing his own weaving course through the rutted decay of BR- 163. And indeed, a minute later the fuel truck is well in our wake; and we are quenching our thirst for fresh air, vigorously drawing down our windows with the dirty plastic knobs that have bruised our knees for the past hours, bumping our legs with each bustle and sway of our pickup. And the journey continues. We are left once more to breathe dust free air and to absorb the magnificence of the big sky of the expansive Amazon range, a panorama that proudly reassumes its role of rolling past viii our windows. Now well south of Santarém, we are in search of recently arriving farmers and the supposedly emerging agricultural fields located here, in the heart of the Amazon. The refreshment of the early day, however, is soon replaced by the acidic pungency of smoke and cinder.
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