By Tiago Mali and Paulo Silva Pinto
The report “Delicate Balance for the Brazilian Legal Amazon”, which the World Bank published on Tuesday night (9), says it is only possible to defuse deforestation pressures in the Legal Amazon by increasing productivity in the region and Brazil as a whole.
Read the executive summary and the complete study (3 MB) here.
The international body lists distorted rural credit rules, inefficient taxes, and poorly targeted subsidies as factors that encourage an unproductive economy.
CHANGING RULES
Here are the World Bank’s suggestions for the region:
- Rural credit – should be focused on smaller, higher-productivity farmers. Modalities such as insurance would have to be expanded. When offered to large properties, credit should be linked to low-carbon agriculture;
- ITR – the agency asks for a deep reform of the rural tax to a) remove self-declaration from owners, b) not punish owners of large areas that preserve a high percentage of forests and c) stimulate intensive livestock farming instead of extensive livestock farming;
- Free Trade Zone – is expensive and stimulates misallocation of resources. The agency suggests redirecting spending. It also says that an agreement with the European Union (removing protections on manufactured products) can benefit the Amazon region;
- Landholding regularization – doubts about the legal definition of 29% of the Legal Amazon lands (equivalent to Norway, Sweden, and Finland). Since deforestation is concentrated in these areas, regularizing them should promote development and reduce illegal occupation.
ANALYSIS
The World Bank study presents information and analyses with the potential to help preserve the Amazon.
It is in line with an environmental defense with an eye on growth.
It recognizes the large poor population in the region.
It identifies inefficiencies and suggests specific solutions so the economy grows without cutting down the forest.
The study is quite propositional. But all the ideas come up against huge political obstacles.
And, of course, there are no indications of how to overcome them.
Any mention of reducing or ending incentives to the Manaus Free Trade Zone would create a big political problem for the government (the then Minister of Economy Paulo Guedes tried this during the last administration but could not move forward).
Conditioning credit for large producers to environmental indicators or changing rural taxes would also be a delicate point in the (not bad) government relationship with the rural caucus.
It is important, however, to put proposals on the table that improve the efficiency of state policies for the region.
In her first term as the head of the Environment Department (2003-2008), Minister Marina Silva adopted some of these ideas to initiate the largest cycle of deforestation reduction ever recorded in Brazil.
The report indicates that the new times will require additional measures for Brazil to meet the goal of zero deforestation by 2028 without losing economic development.
Information in this report was previously published exclusively by Drive.
With information from Poder360
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