Credit Where It'S Due: Unearthing the Relationship between Rural Credit Subsidies and ...

Deforestation is bad for the environment, but it's also bad for the economy, according to a new study out of Brazil.

The country's main policy for the agricultural sector is a 436 billion-real ($16 billion) package of government subsidies and tax benefits made available to farmers in the 2023-24 agricultural year.

But researchers from the Climate Policy Initiative andPontifical Catholic University of Rio de Janeiro report in the Proceedings of the National Academy of Sciences that 31% of properties that saw deforestation between 2020 and 2022 accessed those subsidies, receiving an average of $14 billion per year.

That's 15% of the volume of subsidized credit.

"Modernization and the adoption of effective production practices in Brazil not only bring economic returns to the agricultural sector, but also reduce the pressure for deforestation, favoring environmental preservation and reducing greenhouse gas emissions," the researchers write.

Only 7% of the 874,000 properties that received subsidized credit each year showed signs of deforestation between 2020 and 2022, meaning that a small fraction of the properties that receive subsidized rural credit are responsible for a significant portion of deforestation.

"The abundance of cleared and underutilized land in Brazil allows for the expansion of agricultural production without the need to clear new areas and deforest," the researchers write.

"As a result, almost

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