Abstract
The extent of deforestation in the Brazilian Amazon grew significantly in the last 20 years. Approximately 400,000 square km of tropical forest were cleared from 1978 to 1998. Land conversion to pasture and crop areas were the main sources of deforestation, though the contribution of logging increased significantly in the nineties. This paper uses panel data for eight states of the Brazilian Amazon, from 1980 to 1998, to estimate a model of the determinants of crop area and cattle herd expansion within the region. Results show that the expansion of crop area is determined by changes in land prices, government agriculture credit and roads while the growth of cattle herd is mainly driven by the decrease in the price of cattle head and the expansion of the road network.
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