Research Memo: Agricultural land retains its value 15+ years after being cleared

By Corrie Monteverde and Katrina Mullan

Property value per hectare does not consistently decline with age according to fixed effects regressions. Standard errors noted with error bars, n = 351 (Mullan et al. 2021)

Highlights

• This research estimates the trajectory of land values after the land is converted from forest to agriculture in the Brazilian Amazon

• Deforested land retains its value over periods of more than 15 years after deforestation

• The relative value of standing forests increased during a period of stronger forest protection

Interview with the lead author

I asked Katrina Mullan, the lead author of this research, some questions about her 2021 collaborative paper titled, Sustainability of agricultural production following deforestation in the tropics: Evidence on the value of newly-deforested, long-deforested and forested land in the Brazilian Amazon (https://doi.org/10.1016/j.landusepol.2021.105660). Here is what she had to say:

Corrie: What was the motivation for this paper?

Katrina: There was a widespread conception that clearing tropical forest land for agriculture only brings short-term benefits because of poor-quality soils. However, this doesn’t account for the choices farmers make about whether to improve their soils. So one motivation was to look at how long agricultural land is valuable to farmers after it has been cleared, allowing for how the land is actually managed in practice. We also felt it was important to provide evidence on the time horizons over which agriculture is profitable after deforestation to more accurately estimate the costs of preventing deforestation.

Corrie: Were there any surprising findings that came from the results?

Katrina: We were surprised that agricultural land retains its value more than 15 years after it was first cleared. It was also interesting to know that the value of forested land has increased over time, which may be related to policies such as the CAR that require forest in particular areas of the property.

Corrie: What was the most informative figure from the paper?

Katrina: Figure 4 is the most informative. Figure 4 (above) shows that the value of cleared land does not continue to decline over time (15+ years).

Corrie: What's next for this research?

Katrina: Through the Water Production Connections project, we are working on using satellite data to directly estimate the productivity of pasture, after accounting for the presence of woody vegetation (that can affect the measurement). We want to combine survey data on farm management practices with this remote sensing information to understand who invests in improving the productivity of cleared land and how effective those investments are.

Learn more about Katrina's research here

Katrina Mullan, lead author

Katrina, M., Caviglia-Harris, J., Sills, E. (2021). Sustainability of agricultural production following deforestation in the tropics: Evidence on the value of newly-deforested, long-deforested and forested land in the Brazilian Amazon. Land Use Policy, 108:105660. https://doi.org/10.1016/j.landusepol.2021.105660