Despite the importance of tropical moist forests for conserving biodiversity and storing carbon, forests continue to fall, because the private benefits of clearing land for agriculture far outweigh tangible economic gains from retaining forests. This report measures the financial disparity between forested and cleared land for small-scale farmers in two settlements in the western Brazilian Amazon where pastures are expanding and forests receding. Considering smallholder land use decisions--when and how much to deforest and for what purpose--the report weighs the trade-offs and complementarities among three development objectives: economic growth through agriculture, environmental sustainability, and poverty alleviation. Drawing on field data collected in the mid-1990s, it uses multivariate analysis to explore how factors such as soil quality and market access shape deforestation and use of cleared land. It introduces a farm-level bioeconomic linear programming model to illuminate how such factors influence land use over time, taking into account soil fertility shifts and exploring policy and technology options that give farmers incentives to slow deforestation without decreasing farm household income.

Stephen A.Vosti has studied the welfare, activities, and investments of small-scale agriculturalists in the northwestern Brazilian Amazon since 1985. He was a research fellow in IFPRI's Environment and Production Technology Division from 1987 to 1998. He currently teaches in the Department of Agricultural and Resource Economics at the University of California, Davis, where he is also a member of the Center for Natural Resources Policy Analysis. He received his Ph.D. in economics from the University of Pennsylvania.

Julie Witcover was a research assistant and then research analyst in the Environment and Production Technology Division at IFPRI from 1988 to 1999. Her work focused on small-scale agriculture in Ethiopia and in the northwest Brazilian Amazon, and on the world food situation. She is currently working toward a Ph.D. in the Agricultural and Resource Economics Department at the University of California, Davis.

Chantal Line Carpentier is acting head for the Environment, Economy and Trade program of the North American Commission for Environmental Cooperation in Montreal, Canada. During 1996-98 she was a postdoctoral fellow at IFPRI, outposted to Rio Branco,Acre, Brazil, where she managed the field-based research program. Her work focuses on bioeconomic modeling and trade and their links to the environment. She holds a Ph.D. in agricultural and environmental economics from Virginia Polytechnic Institute and State University.

• Table of Contents, Tables, Figures, Foreword, Acknowledgements, and Summary
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• Chapter 1: Introduction
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• Chapter 2: Research Site and Sample Characteristics
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• Chapter 3: Multivariate Analysis
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• Chapter 4: A Farm-Level Bioeconomic Model
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• Chapter 5: Conclusions
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• Appendix A: Regression Variable Statistics and Comprehensive Regression Results
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• Appendix B: The Farm-Level Bioeconomic Model
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• References
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