Agricultural productivity and forest preservation in the Brazilian Amazon

In recent decades, the northern states of Brazil have experienced high rates of agricultural productivity change and also high rates of deforestation. In this article we examine the impact of the former on the latter. We pose the question whether technical change has been biased toward or against forest preservation decreasing or increasing the amount of agricultural commodities that must be given up to preserve a unit of forest. Here we estimate the rate and biases of technical change for municipalities in the arc of deforestation in the Brazilian Amazon Forest, 2003 to 2015. We represent the production possibility frontier between agriculture and deforestation with a directional distance function with deforestation as an undesirable output. Our results differ by municipality, showing an average annual rate of technical change of 4.9%, and an average bias toward agricultural outputs relative to deforestation, thus reflecting increasing opportunity costs for marginal reductions in deforestation. Acknowledgement